and selected documents · 2009-03-12 · in the series of the wto basic instruments and selected...

World Trade organizaTion

BASIC INSTRUMENTSAND

SELECTED DOCUMENTS

Volume 11

Protocols, Decisions, Reports

2005

GENEVA, MAY 2008

in the series of the WTo Basic instruments and Selected documents, the follow-ing publications are available in english, French and Spanish and can be obtained from Bernan associates or from the WTo.

BiSd 1995, Protocols, decisions reports, etc., published in 1995 iSBn 92-870-1226-1 - iSSn 1726-2917 BiSd 1996, Protocols, decisions, reports, etc., published in 1996 iSBn 92-870-3302-1 - iSSn 1726-2917 BiSd 1997, Protocols, decisions, reports, etc., published in 1997 iSBn 92-870-3319-6 - iSSn 1726-2917 BiSd 1998, Protocols, decisions, reports, etc., published in 1998 iSBn 92-870-3334-X - iSSn 1726-2917 BiSd 1999, Protocols, decisions, reports, etc., published in 1999 iSBn 1-59888-133-7 - iSSn 1726-2917 BiSd 2000, Protocols, decisions, reports, etc., published in 2000 iSBn 978-1-59888-143-1 - iSSn 1726-2917 BiSd 2001, Protocols, decisions, reports, etc., published in 2001 iSBn 978-1-59888-150-9 - iSSn 1726-2917 BiSd 2002, Protocols, decisions, reports, etc., published in 2002 iSBn 978-1-59888-160-8 - iSSn 1726-2917 BiSd 2003, Protocols, decisions, reports, etc., published in 2003 iSBn 978-1-59888-191-2 - iSSn 1726-2917 BiSd 2004, Protocols, decisions, reports, etc., published in 2004 iSBn 978-1-59888-193-6 - iSSn 1726-2917 BiSd 2005, Protocols, decisions, reports, etc., published in 2005 iSBn 978-1-59888-249-0 - iSSn 1726-2917

PREFACE

The 2005 volume of the WTo Basic instruments and Selected documents (BiSd) contains Protocols, decisions and reports adopted in 2005. Certain documents have been numbered or renumbered to simplify indexing. WTo panel and appellate Body reports, as well as arbitration awards, can be found in the dispute Settlement reports (dSr) series co-published by the WTo and Cambridge University Press.

vWTo BiSd 2003

Table of Contents

WTo BiSd 2005 vii

TABLE OF CONTENTS

WTO - BISD 2005

Page

Members;Observergovernments................................................................. xi

OFFICERS

officers of Ministerial Conference – Sixth Session, Hong Kong, China 2005 ................................................................................................... 1 officers of other WTo Bodies ......................................................................... 2......................................................................... 2

LEgaL InStRumEntS

Protocol of accession of the Kingdom of Saudi arabia ................................. 5 Protocol of accession of the Kingdom of Tonga ............................................ 7 Certifications of Modifications and rectifications of Schedules of Concessions and Commitments to the general agreement on Tariffsand Commitments to the general agreement on Tariffsto the general agreement on Tariffs and Trade 1994 in 2005 ....................................................................................... 9 Certifications of Modifications and rectifications to appendices i-iV of the agreement on government Procurement (1994) .. 10Certifications of Commitments under the general agreement on TradeinServices...................................................................................... 10

DECISIOnS anD REpORtSaccessionSaudi arabia report of the Working Party ........................................................................ 11 decision of the general Council on 11 november 2005 ............................ 181Tonga report of the Working Party ....................................................................... 182 decision of the Ministerial Conference on 15 december 2005 ................. 255

appellate BodyWorking Procedures for appellate review ..................................................... 256Working Procedures for appellate review – Communication from the appellate Body – new numbering system for documents .......... 285

Table of Contents

WTo BiSd 2005viii

ministerial Conference - Sixth Session, Hong Kong, China - December 2005 doha Work Programme - Ministerial declaration – adopted on 18 december 2005 ....................................................................... 287

general Councila Procedure for the introduction of Harmonized System 2002 Changes to Schedules of Concessions Using the Consolidated Tariff Schedules (CTS) database – decision of 15 February 2005 ......... 340amendment of the TriPS agreement – decision of 6 december 2005 ....... 353Conditions of Service applicable to the Staff of the WTo Secretariat .......... 360amendments to the regulations and administrative rules of the Pension Plan – adopted on 1 december 2005 ........................................... 361Compensation negotiations under articles XXiV:6 and XXViii of gaTT 1994, Proposed Modification to Schedule CXl – european Communities: Prolongation of rights under article XXViii of gaTT 1994 ............................................................................................ 365enlargement of the european Union – Communications from the european Communities ........................................................................ 366

Dispute Settlement Bodyreappointment of appellate Body Members decision of 27 September 2005 ................................................................. 369article 22 of the dispute Settlement Understanding United States – Continued dumping and Subsidy offset act of 2000 - Joint request by australia and the United States - Joint request by Thailand and the United States - Joint request by indonesia and the United States .................................... 370United States – Section 211 omnibus appropriations act of 1998 - Joint request by the european Communities and the United States ........ 372 United States – anti-dumping measures on certain hot-rolled steel products from Japan - Joint request by Japan and the United States ........................................... 372 extension of time-limit pursuant to article 16.4 of the dispute Settlement Understanding United States – laws, regulations and methodology for calculating dumping margins (“zeroing”) - Joint request by the european Communities and the United States ..... 373 european Communities and certain member States – Measures affecting trade in large civil aircraft - initiation of the procedures for developing information concerning serious prejudice under annex V of the SCM

Table of Contents

WTo BiSd 2005 ix

agreement and designation of the representative referred to in paragraph 4 of that annex ............................................................... 374 United States – Measures affecting trade in large civil aircraft initiation of the procedures for developing information concerning serious prejudice under annex V of the SCM agreement and designation of the representative referred to in paragraph 4 of that annex ....................................................................... 375

Council for trade in goods

Committee on Sanitary and phytosanitary measures report on Proposals for Special and differential Treatment - adopted on 30 June 2005 ......................................................................... 376 review of the operation and implementation of the agreement on the application of Sanitary and Phytosanitary Measures – adopted on 30 June 2005 ......................................................................... 391

Committee on Subsidies and Countervailing measures decisions relating to extensions under article 27.4 of the agreement on Subsidies and Countervailing Measures of the transition period under article 27.2(b) for the elimination of export subsidies, pursuant to the procedures in g/SCM/39 ................ 443

Committee on Budget, Finance and administrationabstract of the report adopted by the general Council on 1-2 december 2005 ................................................................................ 445

Council for trade-Related aspects of Intellectual property Rightsextension of the Transition Period under article 66.1 of the TriPS agreement - decision of 15 June 2005 ........................................... 449extension of the Transition Period under article 66.1 of the TriPS agreement for least-developed Country Members – decision of 30 november 2005 ................................................................... 449

Waivers introduction of Harmonized System Changes into WTo Schedules of Tariff Concessions on 1 January 1996 ........................ 451 introduction of Harmonized System 2002 Changes into WTo Schedules of Tariff Concessions ....................................................... 452other waivers: albania - implementation of specific commitments – extension of the staging period of implementation for a number of products ............. 451

x WTo BiSd 2005

Committees under the plurilateral trade agreements Committee on government procurement Modalities for the negotiations on extension of coverage and elimination of discriminatory measures and practices – adopted on 21 July 2005 ..................................................................................... 453 - decision Pursuant to article XXiV:6(a) of the agreement on government Procurement – adopted on 21 december 2005 ............. 453

DECISIOnS anD REpORtS nOt InCLuDED....................................... 457

InDEx ............................................................................................................ 463

WTo BiSd 2005

WTO MEMBERS AND OBSERVERS(as at 31 december 2005)

a. MeMBerS (149)

xi

albaniaangola antigua and Barbudaargentinaarmeniaaustraliaaustria Bahrain BangladeshBarbadosBelgiumBelize BeninBolivarian republic of Venezuela

Bolivia BotswanaBrazil Brunei darussalamBulgariaBurkina FasoBurundiCambodia CameroonCanada Central african republicChad Chile ChinaColombiaCongoCosta ricaCôte d’ivoireCroatia

Cuba Cyprus Czech republicdemocratic republic of the Congo

denmarkdjibouti dominicadominican republicecuadoregypt el Salvadorestonia european CommunitiesFiji Finland Former Yugoslav rep. of

Macedonia France gabon The gambiageorgiagermanyghana greece grenadaguatemalaguinea-Bissau guinea, republic of

guyana Haiti HondurasHong Kong, China

Hungaryiceland india indonesiaireland israel italy Jamaica JapanJordan Kenya Korea, republic ofKuwait Kyrgyz republiclatvia lesotho liechtensteinlithuanialuxembourgMacau, ChinaMadagascarMalawi MalaysiaMaldivesMali Malta MauritaniaMauritiusMexico MoldovaMongoliaMoroccoMozambiqueMyanmar

xii WTo BiSd 2005

WTO MEMBERS AND OBSERVERS(as at 31 december 2005)

afghanistan

algeria

andorra

azerbaijan

Bahamas

Belarus

Bhutan

Bosnia and Herzegovina

Cape Verde

equatorial guinea

ethiopia

Holy See

iran

iraq

Kazakhstan

laos, P.d.r. of

lebanon

libya

Montenegro

russian Federation

Samoa

Sao Tome and Principe

Serbia

Seychelles

Sudan

Tajikistan

Tonga

Ukraine

Uzbekistan

Vanuatu

Viet nam

Yemen

B. oBSerVerS (32)

namibia

nepal

netherlands

new zealand

nicaragua

niger

nigeria

norway

oman

Pakistan

Panama

Papua new guinea

Paraguay

Peru

Philippines

Poland

Portugal

Qatar

romania

rwanda

Saint Kitts and nevis

Saint lucia

Saint Vincent and the

grenadines

Senegal

Sierra leone

Singapore

Slovak republic

Slovenia

Solomon islands

South africa

Spain

Sri lanka

Suriname

Swaziland

Sweden

Switzerland

Chinese Taipei

Tanzania

Thailand

Togo

Trinidad and Tobago

Tunisia

Turkey

Uganda

United arab emirates

United Kingdom

United States

Uruguay

Venezuela

zambia

zimbabwe

1WTo BiSd 2005

OFFICERS OF THE MINISTERIAL CONFERENCE

Sixth Session

(Hong Kong, China 13 - 18 December 2005)

Chairperson:

Mr John C Tsang (Hong Kong, China)

Vice-Chairpersons:

Mrs Billie Miller (Barbados)

Mr idris Waziri (nigeria)

Mr Martin Bartenstein (austria)

2 WTo BiSd 2005

OFFICERS OF OTHER WTO BODIES

(2005)

General Council Mrs amina Chawahir Mohamed (Kenya)

Dispute Settlement Body Mr eirik glenne (norway)

Trade Policy Review Body Mr don Stephenson (Canada)

Council for Trade in Goods Mr Vesa Tapani Himanen (Finland)

- Committee on agriculture Mr Magdi Farahat (egypt) followed by Mr Christian Häberli (Switzerland)

- Committee on anti-dumping Practices

Ms Frida Collste (Sweden)

- Committee on Customs Valuation Mr Joo Ha Woo (Korea)

- Committee on import licensing Mrs Pamela Cooper (Canada)

- Committee on Market access Mr Martin Pospíšil (Czech republic)

- Committee on rules of origin Ms Vera Thorstensen (Brazil)

- Committee on Safeguards Mrs ana novik (Chile)

- Committee on Sanitary and Phytosanitary Measures

Mr gregg Young (United States)

- Committee on Subsidies and Countervailing Measures

Mrs Victoria Campeanu (romania)

- Committee on Technical Barriers to Trade

Mr Margers Krams (latvia)

- Committee on Trade-related investment Measures

Mr antonio Buencamino (Philippines) followed by Mr Suren Badral (Mongolia)

- Working Party on State Trading enterprises

Mr Benjamin Katjipuka (namibia)

- Committee of Participants on the expansion of Trade in information Technology Products

Mr Simon Chan (Hong Kong, China)

Council for Trade in Services Mrs Claudia Uribe (Colombia)

- Committee on Specific Commitments

Mr nicholas niggli (Switzerland)

- Committee on Trade in Financial Services

Mr guido Kemmerling (germany)

- Working Party on gaTS rules Mr Sumanta Chaudhuri (india)

- Working Party on domestic regulation

Mr Peter govindasamy (Singapore)

3WTo BiSd 2005

Council for Trade-Related Aspects of Intellectual Property Rights

Mr Choi Hyuck (Korea)

Committee on Balance-of-Payments Restrictions

Mr Víctor echevarría Ugarte (Spain)

Committee on Budget, Finance and Administration

Mr Jan-Meinte Postma (netherlands)

Committee on Regional Trade Agreements

Mr ronald Saborío Soto (Costa rica)

Committee on Trade and Development Mr gomi Tharaka Senadhira (Sri lanka)

- dedicated Session of the Committee on Trade and development

Mr gomi Tharaka Senadhira (Sri lanka)

- Sub-Committee on least-developed Countries

Mr ian M. de Jong (netherlands)

Committee on Trade and Environment Mr Shree Baboo Chekitan Servansing (Mauritius)

Working Group on Trade, Debt and Finance

Mr Kweronda-ruhemba (Uganda)

Working Group on Trade and Transfer of Technology

Mr Manuel antonio J. Teehankee (Philippines)

Trade Negotiations Committee Mr Supachai Panitchpakdi (WTo director-general) followed by Mr Pascal lamy (WTo director-general)

- Special Session of the Council for Trade in Services

Mr alejandro Jara (Chile) followed by Mr Fernando de Mateo y Venturini (Mexico)

- Special Session of the Council for TriPS

Mr Manzoor ahmad (Pakistan)

- Special Session of the dispute Settlement Body

Mr david Spencer (australia)

- Special Session of the Committee on agriculture

Mr Tim groser (new zealand) followed by Mr Crawford Falconer (new zealand)

- Sub-Committee on Cotton Mr Tim groser (new zealand) followed by Mr Crawford Falconer (new zealand)

- Special Session of the Committee on Trade and development

Mr Faizel ismail (South africa)

- Special Session of the Committee on Trade and environment

Mr Toufiq ali (Bangladesh)

- negotiating group on Market access

Mr Stefán Jóhannesson (iceland)

- negotiating group on rules Mr guillermo Valles galmés (Uruguay)

4 WTo BiSd 2005

- negotiating group on Trade Facilitation

Mr Muhamad noor (Malaysia)

Plurilateral Trade agreements:

Committee on Government Procurement

Mr Tae-yul Cho (Korea)

Committee on Trade in Civil Aircraft Mr didier Chambovey (Switzerland)

- Sub-Committee of the Committee on Trade in Civil aircraft

Mr didier Chambovey (Switzerland)

- Technical Sub-Committee of the Committee on Trade in Civil aircraft

Mr didier Chambovey (Switzerland)

5WTo BiSd 2005

legal instruments

LEGAL INSTRUMENTS

ProToCol on THe aCCeSSion oF THe KingdoM oF SaUdi araBia

(Extract from WT/L/627)

PreaMBle

The World Trade organization (hereinafter referred to as the “WTo”), pursuant to the approval of the general Council of the WTo accorded under article Xii of the Marrakesh agreement establishing the World Trade organization (hereinafter referred to as the “WTo agreement”), and the Kingdom of Saudi arabia,

Taking note of the report of the Working Party on the accession of the Kingdom of Saudi arabia to the WTo agreement reproduced in document WT/aCC/SaU/61, dated 1 november 2005 (hereinafter referred to as the “Working Party report”),

Having regard to the results of the negotiations on the accession of the Kingdom of Saudi arabia to the WTo agreement,

Agree as follows:

ParT i - general

1. Upon entry into force of this Protocol pursuant to paragraph 8, the Kingdom of Saudi arabia accedes to the WTo agreement pursuant to article Xii of that agreement and thereby becomes a Member of the WTo.

2. The WTo agreement to which the Kingdom of Saudi arabia accedes shall be the WTo agreement, including the explanatory notes to that agreement, as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol. This Protocol, which shall include the commitments referred to in paragraph 315 of the Working Party report, shall be an integral part of the WTo agreement.

3. except as otherwise provided for in paragraph 315 of the Working Party report, those obligations in the Multilateral Trade agreements annexed to the WTo agreement that are to be implemented over a period of time starting with the entry into force of that agreement shall be implemented by the Kingdom of Saudi arabia as if it had accepted that agreement on the date of its entry into force.

4. The Kingdom of Saudi arabia may maintain a measure inconsistent with paragraph 1 of article ii of the gaTS provided that such a measure was recorded in the list of article ii exemptions annexed to this Protocol and meets the conditions of the annex to the gaTS on article ii exemptions.

6 WTo BiSd 2005

legal instruments

ParT ii - SCHedUleS

5. The Schedules reproduced in annex i1 to this Protocol shall become the Schedule of Concessions and Commitments annexed to the general agreement on Tariffs and Trade 1994 (hereinafter referred to as the “gaTT 1994”) and the Schedule of Specific Commitments annexed to the general agreement on Trade in Services (hereinafter referred to as “gaTS”) relating to the Kingdom of Saudi arabia. The staging of the concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules.

6. For the purpose of the reference in paragraph 6(a) of article ii of the gaTT 1994 to the date of that agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.

ParT iii - Final ProViSionS

7. This Protocol shall be open for acceptance, by signature or otherwise, by the Kingdom of Saudi arabia until 31 december 2005.

8. This Protocol shall enter into force on the thirtieth day following the day upon which it shall have been accepted by the Kingdom of Saudi arabia.

9. This Protocol shall be deposited with the director-general of the WTo. The director-general of the WTo shall promptly furnish a certified copy of this Protocol and a notification of acceptance by the Kingdom of Saudi arabia thereto pursuant to paragraph 9 to each Member of the WTo and to the Kingdom of Saudi arabia.

This Protocol shall be registered in accordance with the provisions of article 102 of the Charter of the United nations.

done at geneva this eleventh day of november, two thousand and five in a single copy in the english, French and Spanish languages, each text being authentic, except that a Schedule annexed hereto may specify that it is authentic in only one of these languages.

1 not reproduced.

7WTo BiSd 2005

legal instruments

ProToCol on THe aCCeSSion oF THe KingdoM oF Tonga(Extract from WT/L/644)

PreaMBle

The World Trade organization (hereinafter referred to as the “WTo”), pursuant to article Xii of the Marrakesh agreement establishing the World Trade organization (hereinafter referred to as the “WTo agreement”), and the Kingdom of Tonga, Taking note of the report of the Working Party on the accession of the Kingdom of Tonga to the WTo agreement reproduced in document WT/aCC/Ton/17, dated 2 december 2005 (hereinafter referred to as the “Working Party report”),

Having regard to the results of the negotiations on the accession of the Kingdom of Tonga to the WTo agreement,

agree as follows:

ParT i - general

1. Upon entry into force of this Protocol pursuant to paragraph 8, the Kingdom of Tonga accedes to the WTo agreement pursuant to article Xii of that agreement and thereby becomes a Member of the WTo.

2. The WTo agreement to which the Kingdom of Tonga accedes shall be the WTo agreement, including the explanatory notes to that agreement, as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol. This Protocol, which shall include the commitments referred to in paragraph 188 of the Working Party report, shall be an integral part of the WTo agreement.

3. except as otherwise provided for in paragraph 188 of the Working Party report, those obligations in the Multilateral Trade agreements annexed to the WTo agreement that are to be implemented over a period of time starting with the entry into force of that agreement shall be implemented by the Kingdom of Tonga as if it had accepted that agreement on the date of its entry into force.

4. The Kingdom of Tonga may maintain a measure inconsistent with paragraph 1 of article ii of the gaTS provided that such a measure was recorded in the list of article ii exemptions annexed to this Protocol and meets the conditions of the annex to the gaTS on article ii exemptions.

8 WTo BiSd 2005

legal instruments

ParT ii - SCHedUleS

5. The Schedules reproduced in annex i1 to this Protocol shall become the Schedule of Concessions and Commitments annexed to the general agreement on Tariffs and Trade 1994 (hereinafter referred to as the “gaTT 1994”) and the Schedule of Specific Commitments annexed to the general agreement on Trade in Services (hereinafter referred to as “gaTS”) relating to the Kingdom of Tonga. The staging of the concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules.

6. For the purpose of the reference in paragraph 6(a) of article ii of the gaTT 1994 to the date of that agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.

ParT iii - Final ProViSionS

7. This Protocol shall be open for acceptance, by signature or otherwise, by the Kingdom of Tonga until 31 July 2006.

8. This Protocol shall enter into force on the thirtieth day following the day upon which it shall have been accepted by the Kingdom of Tonga.

9. This Protocol shall be deposited with the director-general of the WTo. The director-general of the WTo shall promptly furnish a certified copy of this Protocol and a notification of acceptance by the Kingdom of Tonga thereto pursuant to paragraph 9 to each Member of the WTo and to the Kingdom of Tonga.

This Protocol shall be registered in accordance with the provisions of article 102 of the Charter of the United nations.

done at Hong Kong this fifteenth day of december, two thousand and five, in a single copy in the english, French and Spanish languages, each text being authentic, except that a Schedule annexed hereto may specify that it its authentic in only one of these languages.

1 not reproduced.

9WTo BiSd 2005

legal instruments

CerTiFiCaTionS oF ModiFiCaTionS and reCTiFiCaTionS oF SCHedUleS oF ConCeSSionS and CoMMiTMenTS To gaTT 1994

The following table lists all the modifications and rectifications to Schedules of Concessions and Commitments to gaTT 1994 certified in 2005. Modifications resulting from the introduction of the Harmonized System (HS) and commitments undertaken in the context of the Ministerial declaration on Trade in information Technology Products (iT) have been indicated in brackets after the date of certification.

Member Type date of certification document

Bahrain Certification of Modifications and rectifications to Schedule XCViii

16 February 2005 (iT)

WT/let/488

Canada Certification of Modifications and rectifications to Schedule V

12 January 2005 WT/let/487

guatemala Certification of Modifications and rectifications to Schedule lXXXViii

17 March 2005 (HS96)

WT/let/489

Korea, rep. of Certification of Modifications and rectifications to Schedule lX

12 april 2005 WT/let/492

Malaysia Certification of Modifications and rectifications to Schedule XXXiX

7 october 2005 (HS96)

WT/let/498

Morocco Certification of Modifications and rectifications to Schedule lXXXi

15 September 2005 (HS96)

WT/let/497

Pakistan Certification of Modifications and rectifications to Schedule XV

7 october 2005 (HS96)

WT/let/499

Pakistan Certification of Modifications and rectifications to Schedule XV

26 november 2005 WT/let/502

United States Certification of Modifications and rectifications to Schedule XX

12 May 2005 (HS96)

WT/let/493

Uruguay Certification of Modifications and rectifications to Schedule XXXi

17 March 2005 (HS96)

WT/let/490

10 WTo BiSd 2005

legal instruments

CerTiFiCaTionS oF ModiFiCaTionS and reCTiFiCaTionS To aPPendiCeS i-iV oF THe agreeMenT on goVernMenT

ProCUreMenT (1994)

The following table lists all the modifications and rectifications to the appendices to the agreement on government Procurement (1994) certified in 2005. The appendices are in the form of a loose-leaf system which was given legal effect pursuant to the decision of the Committee on government Procurement of 4 June 1996 (gPa/M/2).

Member Type date of certification document

Hong Kong, China

Certification of replacement pages to appendix i– annexes 1, 2 and general notes

Certification of replacement pages to appendix iii (in english, French and Spanish)

17 March 2005

8 September 2005

WT/let/491

WT/let/496

israel Certification of the note to appendix i

5 January 2005 WT/let/485

Japan Certifications of replacement pages to appendix i– annex 3

5 January 2005

9 June 2005

20 october 2005

20 october 2005

WT/let/486

WT/let/495

WT/let/500

WT/let/501Korea Certification of replacement pages

to appendix i– annex 39 June 2005 WT/let/494

CerTiFiCaTionS oF ModiFiCaTionS and reCTiFiCaTionS oF CoMMiTMenTS Under THe general agreeMenT

on Trade in SerViCeS

The following table lists all the Commitments under the general agreement on Trade in Services certified in 2005.

Member Type date of Certification document

Honduras Certification – Schedule of Commitments

15 July 2005 S/l/230

Colombia Certification – Supplement 2 to the Schedule of Commitments

1 october 2005 S/l/231

nepal Certification – Schedule of Commitments

11 october 2005 S/l/232

11WTo BiSd 2005

accession

DECISIONS AND REPORTS

ACCESSIONS

aCCeSSion oF THe KingdoM SaUdi araBia

Report of the Working Party Adopted by the General Council on 11 November 2005

(WT/ACC/SAU/61)

i. inTrodUCTion

1. on 13 June 1993, the government of the Kingdom of Saudi arabia (hereinafter referred to as Saudi arabia) requested accession to the general agreement on Tariffs and Trade (gaTT 1947). at its meeting on 21 July 1993, the gaTT 1947 Council of representatives established a Working Party to examine the application of the government of Saudi arabia to accede to the general agreement under article XXXiii, and to submit to the Council recommendations which may include a draft Protocol of accession. Membership of the Working Party was open to all contracting parties indicating the wish to serve on it. in pursuance of the decision of the general Council of the World Trade organization (WTo) of 31 January 1995, the gaTT 1947 accession Working Party was transformed into a WTo accession Working Party. The terms of reference and the membership of the Working Party were reproduced in document WT/aCC/SaU/2/rev.22.

2. The Working Party met on 2-3 May and 6-8 november 1996; 29-30 May and 2 and 4 december 1997; 17 and 19 november 1998; 22 September 1999; 5 april and 17 october 2000, under the Chairmanship of H.e. ambassador Mr. J. Weekes (Canada); and on 23-24 october 2003; 25 February, 29 april and 16 June 2004; and 11 and 28 october 2005, under the Chairmanship of H.e. ambassador Mr. Munir akram (Pakistan).

- documentation Provided

3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade regime of Saudi arabia (l/7489) and the questions submitted by members on the foreign trade regime of Saudi arabia, together with the replies thereto (l/7645 and add.1; WT/aCC/SaU/3; WT/aCC/SaU/6, add.1-3 and add.3/Corr.1; WT/aCC/SaU/8 and Corr.1; WT/aCC/SaU/10; WT/aCC/SaU/13, add.1, add.1/Corr.1 and rev.1; WT/aCC/SaU/29, add.1-4, and Corr.1 and 2; WT/aCC/SaU/35 and Corr.1; WT/aCC/SaU/44; WT/aCC/SaU/46; and WT/aCC/SaU/47 and Corr. 1). The government of Saudi arabia also provided the Working Party with information regarding the following:

12 WTo BiSd 2005

decisions and reports

economic development Plans

- Sixth development Plan, decree no. 142 of 19.11.1413H (10 May 1993)

- Seventh development Plan, decree no. 126 of 28.5.1421H (29 august 2000)

economic Policies

- Competition Policies

- law on Competition Policies, issued pursuant to royal decree no. M/25 of 4.5.1421H (22 June 2004)

- Pricing Policies

- Council of Ministers resolution no. 68 of 29.5.1412H (1 december 1991)

- Council of Ministers resolution no. 260 of 23.10.1422H (7 January 2002) (cancelling Council of Ministers resolution no. 68 of november 1992)

- Supreme Council for the Petroleum and Mineral affairs resolution no. 15 of 11.3.1422H (3 June 2001)

- Pharmacy law, issued pursuant to royal decree no. M/18 of 18.3.1398H (25 February 1978)

- Privatisation

- economic reform Program of the Kingdom of Saudi arabia, WT/aCC/ SaU/54 (4 april 2003)

- Council of Ministers decision no. 219 of 6.9.1423H (11 november 2002) (Privatization Strategy)

- Supreme economic Council decision no. 1/23 of 23.3.1423H (4 June 2002)

- Council of Ministers resolution no. 60 of 1.4.1418H (5 august 1997) - Council of Ministers resolution no. 257 of 11.11.1421H (5 February

2001) - royal decree no. 7-B-16941 of 6.11.1417H (15 March 1997) - Council of Ministers resolution 169 of 11.8.1419H (30 november 1998)

(restructuring electricity sector)

- investment regime

- Foreign investment law, royal decree no. M/1 of 5.1.1421H (9 april 2000) and implementing regulations issued 14.4.1423H (24 June 2002) (replacing the 1979 Foreign Capital investment law)

- “negative list”, issued by Supreme economic Council decision no. 17/23 of 1.12.1423H (22 May 1993)

- Foreign Capital investment law, royal order no. M/4 of 2.2.1399H (1 January 1979)

13WTo BiSd 2005

accession

- Capital Market law, royal decree no. M/30 of 2.6.1424H (13 July 2003) - Council of Ministers decision no. 50 of 21.4.1415H (27 September 1994) - Council of Ministers Bureau letter 8/490 of 28.6.1414H (13 december

1993)

Framework For Making and enforcing Policies

- Basic law of governance, royal decree no. a/90 of 27.8.1412H (1 March 1992)

- law of the Shoura Council, royal decree no. a/91 of 27.8.1412H (1 March 1992)

- law of the Council of Ministers, royal decree no. a/13 of 27.3.1414H (20 august 1993)

- Commercial agencies law, issued pursuant to royal decree no. M/11 of 20.2.1382H (22 July 1962)

- Combat of Commercial Fraud law, royal decree no. M/11 of 29.5.1404H (1 March 1984)

- negotiable instruments law, royal decree no. M/37 of 11.10.1383H (24 February 1964)

- Board of grievances law, issued pursuant to royal decree no. M/51 of 17.1.1402H (14 november 1981)

- Council of Ministers resolution no. 165 of 24.6.1423H (1 September 2002) (implementing the Vienna Convention on the law of Treaties)

Policies affecting Trade in goods

- Trading rights - law on Commercial registration, issued pursuant to royal decree no.

M/1 of 21.2.1416H (19 July 1995) - law on Commercial names, issued pursuant to royal decree no. M/15 of

12.8.1420H (20 november 1999) and the associated rules and regulations - Professional Companies law, Council of Ministers resolution no. 16 of

16.2.1412H (26 august 1991) - Commercial agencies law, issued pursuant to royal decree no. M/11 of

20.2.1382H (22 July 1962) - implementing regulations for Commercial agencies law, Ministerial

resolution no. 1897 of 24.5.1401H (29 March 1981)

- Customs Tariffs

- gCC Common Customs law (1999), ratified by royal decree no. M/41 of 3.11.1423H (5 January 2003), and its rules of implementation

- royal decree no. 104 of 20.4.1423H (30 June 2002) (applying gCC Common Customs Tariff)

- royal decree no. 40 of 12.12.1424H (3 February 2004) (tariff rates for sensitive items)

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- Fees for Services rendered

- Council of Ministers decision no. 5-B-57611 of 28.11.1424H (20 January 2004) (terminating requirement for notarization or consularization)

- royal decree no. 7/B/16941 of 6.11.1417H (15 March 1997) (private management of ports)

- Council of Ministers decision no. 5 of 3.1.1406H (18 September 1985) (requirement for notarization or consularization)

- import licensing Systems

- Council of Ministers decision no. 84 of 1.4.1421H (3 July 2000) (import licensing guide)

- The import licensing law, issued pursuant to Council of Ministers decision no. 88 of 6.4.1423H (16 June 2002) (import licensing Procedures)

- Telecommunications act, Chapter 5 - response to Questionnaire on import licensing Procedures, WT/aCC/

SaU/60

- Quantitative import restrictions, including Prohibitions and Quotas

- Ministry of Commerce and industry decision no. 1308 of 27.5.1424H (27 July 2003)

- Customs Valuation

- royal decree no. 190 of 16.12.1409H (19 July 1989) - royal decree M/41 of 3.11.1423H (5 January 2003) (Common Customs

law of the gCC) - response to Questionnaire on Customs Valuation Procedures - Council of Ministers decree no. 162 of 17.6.1423H (28 august 2002) - Ministerial decision no. 1207 of 9.5.1425H (27 June 2004)

internal Policies affecting Trade in goods

- industrial Policy, including Subsidies

- Saudi industrial development Fund law, promulgated by royal decree no. M/3 of 26.2.1394H (20 March 1974)

- Technical Barriers to Trade

- Saudi arabian Standards organization (SaSo) Technical directive, Parts 1 through 4, issued 18 July 2000, as amended on 24 May 2004, and as further amended on 18 June and 19 July 2005

- lists of SaSo standards based on CodeX, iSo, ieC and oiMl standards; list of Saudi standards and their corresponding gulf standards; list of the 2,338 Saudi standards, including a cross-reference to the international

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standards adopted in their entirety as SaSo standards (WT/aCC/SaU/59/ add.5)

- list of standards deemed to be equivalent to Saudi standards, WT/aCC/ SaU/15

- SaSo standards, adopted as gCC Standards and thereby incorporated as national standards in other gCC Countries, WT/aCC/SaU/29 (annex iii)

- Procedures for the development of SaSo standards, WT/aCC/SaU/29 (annex iV)

- Comprehensive guidelines and Procedures concerning the international Conformity Certification Program (iCCP), WT/aCC/SaU/37 and /45

- appeals Procedures, included as an appendix to the iCCP guidelines

- Preshipment inspection

- Council of Ministers decision no. 213 of 3.8.1424H (30 September 2003) (cancelling the iCCP)

- Ministerial decision no. 6386 of 21.6.1425H (8 august 2004) (establishing the iCCP replacement Committee)

- Sanitary and Phytosanitary Measures

- Shelf life of Food Products, WT/aCC/SaU/27 - Ministerial decision no. 943 of 2.5.1424H (1 July 2003) (“Sanitary and

Phytosanitary Unified Procedures”) - Council of Ministers decision no. 109 of 30.4.1424H (30 June 2003) - Council of Ministers decision no. 85 of 1.4.1421H (4 July 2000) - Council of Ministers decree no. 207 of 26.1.1396H (28 January 1976) - royal decree no. M/10 of 3.3.1392H (16 april 1972) - royal decree no. M/3 of 8.2.1423H (21 april 2002) (law of Private

laboratories) and implementing regulations, issued pursuant to Ministerial decision no. M/3 of 21.2.1424H (23 april 2003)

- agricultural Policy

- Tables on domestic support and export subsidies, WT/aCC/SaU/19 and 28; and WT/aCC/SPeC/SaU/1/rev. 1-10

- royal decree no. 58 of 3.12.1382H (6 May 1963) (founding the Saudi arabian agricultural Bank)

- royal decree no. 184 of 24.9.1419H (14 december 1998) (ending issuance by gSFMo of permits for importing or exporting any product)

- royal decree no. 4/B/49434 of 8.12.1423H (10 February 2003) (ending gFSMo receipt of domestic barley)

- Trade in Transit

- Ministerial decree no. 5618 of 15.11.1424H (8 January 2004)

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- Trade related intellectual Property regime

- Copyrights law, issued pursuant to royal decree no. M/41 of 2.7.1424H (30 august 2003), and implementing regulations, issued pursuant to Ministerial decision no. 1688/1 of 10.4.1425H (29 May 2004)

- law of Trademarks, issued pursuant to royal decree no. M/21 of 29.5.1423H (7 august 2002) and implementing regulations, issued pursuant to Ministerial order no. 1723 of 26.7.1423H (4 october 2002)

- law of Trade names, issued pursuant to royal decree no. M/15 of 12.8.1420H (20 november 1999)

- law of Commercial data, issued pursuant to royal decree no. M/15 of 15.4.1423H (25 June 2002), and regulations for the Protection of Confidential Commercial information, issued pursuant to Council of Ministers decision no. 50 of 25.2.1426H (4 april 2005), as amended by Ministerial decision no. 3218 of 25.3.1426H (4 May 2005), and as further amended by Ministerial decision no. 431 of 1.5.1426H (8 June 2005)

- gCC Patents law - law on Patents, layout designs of integrated Circuits, Plant Varieties and

industrial designs, issued pursuant to royal decree no. M/27 of 29.5.1425H (17 July 2004), and implementing regulations, issued pursuant to Ministerial decision no. 118828/M/10 of 14.11.1425H (26 december 2004)

- Border Measures regulations, issued pursuant to Ministerial decision no. 1277 of 15.5.1425H (3 July 2004)

- Policies affecting Trade in Services

- Cooperative insurance Companies Control law, royal decree no. M/32 of 2.6.1424 (31 July 2003), and implementing regulations, issued pursuant to Ministerial decision no. 1/596 of 1.3.1425H (20 april 2004), as amended by royal decree no. 3120/MB of 4.3.1426H (13 april 2005)

- Council of Ministers decision no. 222 of 12.8.1422H (29 october 2001) (Compulsory auto insurance act)

- royal decree no. M/10 of 1.5.1420H (12 august 1999) (law of Cooperative Health insurance)

- royal decree no. M/5 of 17.5.1405H (18 January 1986) (establishment of national Company for Co-operative insurance)

- Banking Control law - labour and Workmen law, royal decree no. M/21 of 6.9.1389H

(15 november 1969)

- gCC documents

- gCC Unified economic agreement, signed 11 november 1981 - rules for the Coordination of industrial establishments in the gulf

Cooperation Council (gCC) States

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- Standard rules for giving Priority in government Purchases to national Products and Products of national origin of gulf Cooperation Council States

- Common Customs law of the gCC States (1999), ratified by royal decree no. M/41 of 3.11.1423H (5 January 2003)

- domestic development Measures and documents

- law for the Protection and encouragement of national industries - Saudi industrial development Fund law

- government Procurement

- government Purchases law, issued pursuant to royal decree no. M/14 of 7.4.1397H (27 March 1977)

- grievance/dispute Measures

- Board of grievances law, issued pursuant to royal decree no. M/51 of 17.1.1402H (14 november 1981)

- rules and Procedures of the Board of grievances, Council of Ministers resolution no. 190 of 16.11.1409H (19 June 1989)

- law of arbitration, royal decree no. M/46 of 12.7.1403H (24 april 1983)

- other Measures and documents

- import Statistics

4. The representative of Saudi arabia stated that, over the last 30 years, Saudi arabia had become a State with a strong economy increasingly based on the private sector with a sophisticated infrastructure. at the same time, government initiatives had been used to influence economic activity when necessary, in order to ensure the protection of the islamic values of Saudi arabian society. economic development of Saudi arabia had largely depended on the utilization of its large oil and gas reserves. Saudi arabia was the largest producer of oil in the world and one of the world’s largest producers of natural gas. The availability of these resources had given rise to an economy typical of oil-producing developing countries characterized by a major concentration of exports on a single exhaustible resource and a high propensity to import.

5. The representative of Saudi arabia informed members of the Working Party that Saudi arabia had adopted free market principles ensuring that private enterprise would always be the main focus of economic activity, and had established an indicative planning approach to economic and social development based on islamic values and principles, which guide the development in a coordinated and balanced direction. economic indicative planning in the Kingdom provided an appropriate

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conceptual, practical and organizational framework for the development process, with all of its economic, social and institutional dimensions. in addition to the underlying objectives of the preservation of islamic values and the provision of national security, the consecutive five-year indicative plans aspired to achieve a number of other broad goals. These included diversification of the economy, particularly through laying more emphasis on industry and agriculture, and developing mineral resources; improvement of living standards and quality of life; achievement of balanced growth throughout all regions of the Kingdom; strengthening the role of the private sector, through encouraging its participation in various socio-economic development projects; achievement of social and economic integration among gulf Cooperation Council (gCC) countries; and supporting economic cooperation with other countries. other objectives include development and sustenance of the country’s physical infrastructure, protection of the environment and development and utilization of human resources through increasing the absorptive capacity of educational institutions. The First and Second Plans had laid the foundation for the Kingdom’s transformation into a modern industrialized State. The Third and Fourth Plans had furthered the diversification of the economy, concentrating on infrastructure projects in educational, health, training and other social services and encouraging the growth of the private non-oil sector. The Fifth development Plan had broadened the main objectives of the previous plans and further strengthened the private sector’s role in economic diversification of the Kingdom’s economy.

6. He further recalled that the Sixth development Plan continued the main objectives of the previous development plans. it set out to meet the Kingdom’s development needs through maximizing the private sector’s contribution in providing jobs, diversifying the economy to lessen its dependence on oil, building new physical infrastructure, improving social services, expanding job opportunities for the Saudi labour force, raising the per-capita income of the population and maintaining a balanced budget over the Plan’s period. The development of the country’s scientific and technological capabilities and the protection of the environment against pollution, as well as the preservation of the country’s natural resources, were also among the general objectives of the Sixth Plan, and later plans. over the past three decades, non-oil gdP increased more than five-fold and private investment increased seven-fold. infant mortality rates dropped by over 80 per cent; the ratio of physicians per person improved by more than 95 per cent. over the same period, school enrolment rose from 600,000 to more than 4.7 million and Saudi arabia had among the lowest pupil-teacher ratios in the world.

7. The representative of Saudi arabia further added that Saudi arabia had also improved its trade with other nations of the world. in 2004, he reported, Saudi arabia was the world’s 26th-largest importer and 16th-largest exporter, with a foreign investment balance of US$ 1.802 billion. The Kingdom’s gross domestic product grew from US$ 20 billion in 1970 to US$ 320 billion in 2004. also, he stated, Saudi arabia maintained one of the least restrictive exchange and trade systems in the

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world. indeed, with limited exceptions noted below in this report, Saudi arabia only maintained trade restrictions for religious, health or security reasons. in his view, these exceptions are permitted under the WTo agreements.

8. Members of the Working Party asked Saudi arabia to provide information regarding the most recent development Plans. in response, the representative of Saudi arabia noted that the Seventh development Plan, decree no. 126 of 28.5.1421H (29 august 2000), covered the years 2000 through 2004. The Plan focused on increasing the size and strength of the private sector, and developing Saudi arabia’s human resources. in addition, the Plan emphasized increasing the level of efficiency of Saudi arabia’s industrial sector. as with prior plans, a primary goal of the Seventh Plan had been to diversify as well as grow Saudi arabia’s economy.

9. The representative of Saudi arabia also described aspects of the eighth development Plan, covering the years 2005-2009, which was underway. He noted that, under the Plan, Saudi arabia continued to focus on higher growth rates and increasing investment, foreign as well as domestic. as with the previous Plan, Saudi arabia continued to develop its human resources. The eighth development Plan emphasised committing to a long-term development strategy linked to time frames and quantitative objectives. This aspect of the Plan, he said, allowed Saudi arabia to measure its progress and to ensure that its policies were appropriate and assisted the Kingdom in achieving its goals.

10. The representative of Saudi arabia stated that the diversification of the economy could only be achieved through much broader private sector participation in the economy. The private sector had already begun to pursue a wide range of business opportunities unrelated to government expenditures and this trend was expected to accelerate as private sector management, production and marketing capabilities strengthened and the competitive atmosphere improved. institutional support for private sector-led growth and diversification would be provided by the government, through liberalization and facilitation of investment and rapid development of Saudi arabia’s financial sector. Saudi arabia also recognized the need to build a technology base. Whilst Saudi arabia had kept up to date with global scientific and technological developments, this had largely been through the import of sophisticated technology owned by foreign partners. Saudi arabia still needed to improve its indigenous technological capabilities to the level of that existing in developed countries. The government planned to assist through the implementation of a twenty-year national science and technology plan to commence with the eighth development Plan and through the expansion and improvement of educational courses and facilities related to science and technology at all levels, as well as improvement of the overall structural support for private sector initiatives. in addition, Saudi arabia was aware of the need to impart to its citizens the knowledge and skills that would enable them to participate effectively in all social, economic and cultural activities, as well as to further develop vocational and technical education so that the country’s

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skilled manpower needs could be met.

11. in their opening remarks, members of the Working Party welcomed Saudi arabia’s decision to accede to the WTo and to implement the WTo agreements expeditiously through the establishment of institutional arrangements and the amendment and adoption of the required legislation and regulations. it was noted that Saudi arabia had played and was expected to continue to play a significant role in contributing to maintain economic and financial stability and growth, both in the region and globally. Saudi arabia’s accession would reinforce the universality of the WTo and strengthen the multilateral trading system.

12. The Working Party reviewed the economic policies and foreign trade regime of Saudi arabia and the possible terms of a draft Protocol of accession. The views expressed by members of the Working Party and the various aspects of Saudi arabia’s foreign trade regime, and on the terms and conditions of Saudi arabia’s accession to the WTo, are summarized below in paragraphs 13 to 314.

ii. eConoMiC PoliCieS

- Monetary and Fiscal Policies

13. The representative of Saudi arabia stated that the Saudi arabian Monetary agency (SaMa) is charged with carrying out the Kingdom’s monetary policy. The objective of monetary policy is the maintenance of domestic price and exchange rate stability. To promote domestic price stability, SaMa takes measures to ensure that the growth in domestic liquidity is broadly in line with the growth and availability of goods and services in the economy and that the banking system is endowed with adequate liquidity so that the credit needs of all the sectors of the economy are adequately met. To maintain the stability of the fixed exchange rate, SaMa monitors the riyal market to ensure its smooth functioning and takes corrective measures if there are any disruptive activities. SaMa has been highly successful in achieving these objectives over the years. domestic prices have remained highly stable for years, with an average annual increase in the cost of living index of less than one per cent per annum over the last two decades. The exchange rate of the riyal vis-à-vis the U.S. dollar has also been maintained at Saudi riyals (Sar) 3.75 per U.S. dollar since 1986. The sustained stability in domestic prices and the exchange rate over a prolonged period of time has greatly facilitated the growth of the Saudi economy.

14. The primary objective of Saudi arabia’s fiscal policy was to encourage economic growth and diversification of the economy and improve living standards through providing education and other public services. diversification of the economy would further integrate Saudi arabia into the global economy. He further noted that the preparations for Saudi arabia’s accession to the WTo had further improved the climate for foreign and domestic investment and trade. The major source of the Kingdom’s revenues was oil, which accounted for roughly 80 per cent

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of total revenue; non-oil revenue consisted of corporate taxes, customs duties and miscellaneous administrative fees.

15. in response to requests for information on the national budget, he further noted that revenues for 2004 were Sar 393 billion; expenditures had been projected to be Sar 295 billion, but, due to emergency expenditures, actual expenditures were Sar 336 billion; the remaining revenue was allocated to retire part of the public debt. in the 2005 budget, total revenues were projected at Sar 280 billion and expenditures also were projected at Sar 280 billion, including Sar 75.5 billion for new projects. The appropriation for the 2005 budget included appropriations for the main development and public service sectors as follows: education and manpower development – Sar 70.1 billion; health and social affairs – Sar 27.1 billion; municipality services – Sar 10.65 billion; transportation and telecommunications – Sar 8.85 billion; and water, agriculture and infrastructure – Sar 19.2 billion.

- Taxation and zakat

16. Some members of the Working Party requested information on how “zakat” applied to Saudi arabian citizens and how income tax applied to foreigners. These members noted that it appeared that the zakat and income tax were applied in such a manner that foreign investors typically carried a higher total tax burden than Saudi citizens. The representative of Saudi arabia stated that there was a general misunderstanding about zakat and income tax. it was not correct to say that the tax burden (as distinct from the nominal rate) was higher for foreigners than for Saudi nationals or Saudi companies. The percentage of corporate income tax applied to a non-Saudi was 20 per cent of net profit, while the percentage of zakat may reach or even exceed 100 per cent of net profit. also, he reported, it was incorrect to say that all Saudi persons are subject only to zakat; just like non-Saudis, Saudis engaged in natural gas investment or oil or hydrocarbons production activities are subject to income tax. a non-resident Saudi person who did business in the Kingdom through a permanent establishment and earned income from a source within the Kingdom was subject to tax. zakat was a religious duty, and because its rate and basis of collection was prescribed by religion, it could not be altered.

17. according to the representative of Saudi arabia, the main features of zakat were the following:- zakat was applied at a flat rate of 2.5 per cent on the net worth of Saudi natural persons, wholly Saudi-owned companies and Saudi partners in joint ventures (except for rain-fed agricultural products and irrigated agricultural products, for which the rate was 10 per cent and 5 per cent, respectively).- The base for levy of zakat, i.e., the assessable amount, was not the income or profits of the assessee. it was much larger and included: capital, retained earnings, reserves and net profits (it did not include fixed assets, investments in other companies, losses carried over from previous years and losses for the fiscal year). There were no exemptions.

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- zakat was payable even if the company did not make a profit.- zakat was payable even if the company ceased its activities; it was non-payable only when the company was liquidated.- non-payment of zakat was punishable by seizure of assets and prohibiting the non-payer from leaving Saudi arabia.

18. in contrast, he noted, income tax and corporate tax had the following features:

- Persons subject to taxation included: (i) shares held by non-Saudis in a company located in Saudi arabia; (ii) a resident non-Saudi natural person who does business in the Kingdom; (iii) a non-resident who does business in the Kingdom through a permanent establishment; (iv) a non-resident on other income subject to tax from sources within the Kingdom; (v) a Saudi or non-Saudi engaged in natural gas investment activities or oil and hydrocarbon production activities.- The maximum rate of corporate tax on net profit had been reduced from 45 to 30 per cent, and now stood at a flat rate of 20 per cent, with the special exceptions described below, as per Council of Ministers decision on 12.1.2004 (in contrast, zakat was payable on net worth). The tax base of a taxpayer engaged in natural gas investment activities was subject to tax at the rate of 30 per cent; internal rates of return higher that eight per cent were subject to higher taxes. The tax base of a taxpayer engaged in oil and other hydrocarbon production is subject to tax at the rate of 85 per cent.- income tax was payable by foreign natural persons, foreign partners and foreign shareholders in business entities, as described above, on their net profit. However, wages and salaries were exempt from taxation.- Corporate tax was payable by non-Saudi corporations operating inside Saudi arabia or both inside and outside of Saudi arabia at the same time, as described above, based on: (i) the total share of foreign partners in the net profits of Saudi corporations (limited liability companies and joint-stock companies); and (ii) the total shares of foreign partners in the net profit of Saudi partnerships.- Unlike zakat, corporate tax was not payable in relation to any year in which the company did not make a profit or was not in operation.- For corporate tax, there was a provision for carry forward of losses for unlimited number of years.

19. Members of the Working Party thanked the representative of Saudi arabia for the above information and requested clarification of how zakat revenues were collected and allocated to the budget, in particular whether they were allocated to the general Fund, and whether zakat revenues were required to be used for particular purposes. in response, the representative of Saudi arabia provided the following information. zakat revenues were earmarked for the welfare of poor and needy people and disbursed by the Social Welfare organization under the Ministry of Social

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affairs. The entities subject to zakat are Saudi individuals who conduct business in the Kingdom, Saudi companies of all types that conduct business in the Kingdom and shares of Saudis in joint companies. in response to a further question from a member of the Working Party, he reported that the department of zakat and income Tax (dziT) was responsible for collecting both zakat and income tax.

- Foreign exchange and Payments

20. The representative of Saudi arabia stated that Saudi arabia maintained no exchange restrictions and imposed no trade restrictions for balance-of-payments reasons. The exchange rate policy of the Kingdom had for a long time been geared to maintaining a stable relationship with the U.S. dollar, which is the intervention currency. as already mentioned, the exchange rate of the riyal had been maintained at Sar 3.75 to the dollar since 1986. This had created a stable exchange rate environment for the private sector and had also been conducive to foreign investment.

21. The exchange rate of the riyal was determined by SaMa in light of the economic, trade and balance of payments situation both at home and abroad. Until the end of 2002, the riyal was effectively (informally) anchored to the U.S. dollar, within the framework of an official link to the Sdr. in pursuance of a decision taken by the gCC Heads of State in december 2001, the riyal, along with other gCC currencies, has become officially (formally) pegged to the U.S. dollar as from the beginning of 2003 in preparation for the monetary union and the single currency for the gCC countries by the year 2010. The choice of U.S. dollar to serve as a common denominator is based on the fact that the U.S. dollar is the intervention currency for all the gCC countries and their foreign reserves for currency cover and balance of payments purposes are largely held in U.S dollars. Moreover, a stable relationship with the U.S. dollar is of crucial importance not only for fiscal management but also for the traders in their business planning.

22. Since the early 1960s, when Saudi arabia undertook the obligations of convertibility under article Viii of the articles of agreement of the iMF, the Saudi riyal has remained fully convertible, with no taxes or subsidies on the purchase and sale of foreign exchange. He reported that currency can be freely purchased and sold in local banks at the official rate. There are no restrictions on payments in Saudi arabia. imports, exports, remittances and capital movements from, or to, the Kingdom are free from restrictions. There are also no currency controls that have a direct impact on imports, e.g., there are no surrender requirements, prior deposit for importation, import prepayment requirements or acquisition fees.

23. He noted that Saudi arabia was a market economy with liberal trade and payment policies. remittances by expatriate workers are also free of restrictions. These totalled US$ 14.9 billion in 2003, equivalent to roughly 8.4 per cent of the nominal gross domestic product (gdP). He added that there were no restrictions on current transfers via specific exchange controls.

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24. Saudi arabia’s balance of payments position has improved remarkably over the past few years. The current account has been in surplus since 1999. The surplus has risen from 0.3 per cent of gdP in 1999 to 13.8 per cent of gdP in 2003 and is expected to rise further in 2004. exports of goods and services during 2003 amounted to US$ 103.6 billion, approximately 48.3 per cent of gdP. imports of goods and services stood at US$ 73.9 billion, or 34.5 per cent of gdP. over the years 1999-2003, the net foreign assets of SaMa, the central bank of the Kingdom, have increased from US$ 37.9 billion to US$ 64 billion. This amount is sufficient to cover 10.5 months of imports of goods and services.

- Competition Policy

25. The representative of Saudi arabia stated that, with the exception of certain sectors discussed below, Saudi arabia’s competition policies were based on free-market principles. a Competition law had been issued pursuant to royal decree no. M/25 of 4.5.1425H (22 June 2004), followed by implementing regulations. The law contained provisions, inter alia, on cartel and monopoly-type practices, on mergers and on unfair commercial practices. in response to a question by a member of the Working Party, the representative of Saudi arabia reported that, although the law is the first statute banning anti-competitive acts, islamic law prohibited a number of anti-competitive practices under the general rule requiring fair dealing in all commercial exchanges.

- Pricing Policies

26. Members of the Working Party requested information regarding restrictions on prices maintained by the government of the Kingdom of Saudi arabia. in response, the representative of Saudi arabia reported that prices for goods and services in every sector in Saudi arabia were freely determined by market forces with the exception of the goods and services listed in annex a of this report, which were subject to price regulation within Saudi arabia to maintain price stability. These policies were pursued to secure the needs and welfare of consumers and preserve important social interests of the Kingdom.

27. The representative of Saudi arabia further reported that price regulations were applied on a non-discriminatory basis, regardless of whether a product or service was supplied by the government or by the private sector and regardless of the nationality of the supplier.

28. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that all petroleum-based and natural gas-based products in Saudi arabia were made available to all users regardless of whether the users were Saudi or foreign owned. He noted that currently domestic sales of heavy naphtha were not subject to any discount and were priced at the prevailing international price. Prices of exports of these products, he confirmed, were based

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entirely on international market conditions.

29. Some members of the Working Party requested information on the pricing of certain feedstock, in particular, methane, ethane, butane, propane and natural gas or liquefied petroleum gas. in response, the representative of Saudi arabia noted that pricing of natural gas (including methane and ethane) was quite different from the pricing of natural gas liquids (ngls) (butane, propane and natural gasoline). natural gas was not sold for export due to the high costs of liquefying, transporting and re-gasifying such gases, and therefore had no international reference price in the gulf region. Previously, natural gas had been burnt as a waste product, but was later collected and made available to all interested users on a non-discriminatory basis (whether Saudi or non-Saudi), currently at a regulated price of 281 Halalas per million BTU (US$ 0.75 per million BTU). This decision was taken based on a combination of commercial reasons and environmental concerns. rather than burn valuable natural resources, Saudi arabia had taken steps to conserve and exploit those resources consistent with WTo disciplines. natural gas was used by many sectors, including power companies, desalination plants, cement manufactures and petrochemical plants.

30. The representative of Saudi arabia originally had noted that Council of Ministers resolution no. 68 of 29.5.1412H (1 december 1991) set ngl prices 30 per cent lower than the export prices charged for those products. at a later stage, the representative of Saudi arabia confirmed that Communication no. 19756/r of 21.11.1422H (4 February 2002) transmitted Council of Ministers resolution no. 260 of 23.10.1422H (7 January 2002), which cancelled Council of Ministers resolution no. 68. He confirmed that Council of Ministers resolution no. 260 served as the basis for applying commercial pricing to ngls used as feedstock in Saudi arabia and required that pricing of ngls supplied to domestic users be commercially based; decision no. 15 of the Supreme Council for Petroleum affairs implemented Council of Ministers resolution no. 260 and reflected a negotiated pricing structure that ensured the full recovery of production costs and a reasonable profit. Under Council of Ministers resolution no. 260, ngls were available to all users within Saudi arabia on a non-discriminatory basis, whether Saudi or non-Saudi.

31. The current commercial pricing structure for ngl sales in Saudi arabia as set out under Council of Ministers resolution no. 260 and decision no. 15 was negotiated between producer and consumers in Saudi arabia and applied to all ngl users in Saudi arabia on a non-discriminatory basis. at the request of consumers in Saudi arabia, the pricing structure was formalized through Council of Ministers resolution no. 260 and decision no. 15, which set out a detailed formula for ensuring that domestic ngl prices are based on international market prices, adjusted for the following cost-based and other commercial considerations:

- Cost savings in infrastructure – exporting ngls requires large investments

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in and maintenance of refrigeration, storage and terminal facilities. Selling to local users simply requires transferring the ngls from local gas recovery plants by pipeline. expenditures in the capital and operating costs of export-related facilities are significant. lower domestic prices in Saudi arabia reflect substantial cost savings that permit the producer to recover the full cost of production.

- Cost savings in marketing – export sales require a sizeable marketing staff both in Saudi arabia and in foreign markets. Marketing costs are not incurred on domestic sales because domestic customers are committed to long-term off-take agreements based on their proximity to ngl supplies and access to local supply infrastructure.

- Commercial advantage associated with long-term contracts – domestic sales reflect additional commercial value because they are based on stable, long-term contracts. These long-term contracts also reduce uncertainty and transaction maintenance costs. export sales contracts lack the permanency of domestic sales because, unlike domestic customers, foreign buyers can easily change suppliers located in different countries. The lack of long-term contracts for export sales also justifies a significant price-cushion to reduce the seller’s business risk.

- Commercial value of reduced volatility – the export market for ngls is based on their use, principally in east asia, as fuel rather than as a petrochemical feedstock. The export market is therefore characterized by large seasonal demand swings, with winter fuel demand (outside Saudi arabia) much higher than summer demand. These variations in demand cause wide seasonal price swings. The domestic demand for ngls, in contrast, is focused on industrial feedstock consumption and therefore is stable throughout the year.

- Commercial value of large-volume purchases – domestic purchasers commit to much larger volumes over the life of long-term contracts than do purchasers under spot or short-term export contracts. Customers who commit to large-volume purchases expect prices to reflect their commitment.

32. The representative of Saudi arabia explained that due to these market differences, local ngl sales have a higher relative commercial value to the producer than sales to seasonal customers in export markets that purchase ngls for uses such as fuel, with seasonal swings in demand. He added that producers consider ngls sold to “industrial” versus “seasonal” customers as different products for purposes of pricing, marketing and corporate planning in general. Since ngls are produced year-round as a by-product of oil and gas production and cannot be stored for long periods, producers of ngls place a high commercial value on long-term “off-take agreements” under which consumers commit to buy specific quantities of ngls year-

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round. although shorter term contracts with, or “spot” sales to, seasonal consumers that purchase ngls for heating or industrial purposes command different prices on international markets depending on seasonal demand, such arrangements are much more variable and therefore have lower relative value to larger producers who must secure off-take for year-round sales. in this sense, the export price of ngls does not represent the commercial value of sales to local consumers. The commercially negotiated sale price of ngls in Saudi arabia reflects the market value to producers of local sales and ensured the full recovery of production costs and a reasonable profit. The representative of Saudi arabia further explained that it was not appropriate, in the case of Saudi arabian ngl supply, to address costs associated with investment in the exploration or development of oil and gas fields, as Saudi arabian ngls were, and would continue to be, produced only as by-products of oil and gas production rather than as a primary product.

33. in response to concerns expressed by a member of the Working Party, the representative of Saudi arabia stated that producers/distributors of ngls in Saudi arabia would operate, within the relevant regulatory framework, on the basis of normal commercial considerations, based on the full recovery of costs and a reasonable profit. He confirmed that his government’s policy was to ensure that these economic operators, in respect of their supplies of ngls to industrial users, would fully recover their production and investment costs (fractionation, overheads, financing charges, transportation, maintenance and upgrade of fractionation and distribution infrastructure) and make a profit in the ordinary course of business. The Working Party took note of these commitments.

34. Some members of the Working Party requested information on the pricing of pharmaceuticals in Saudi arabia. it was these members’ understanding that the government set retail prices for pharmaceuticals and established retail and wholesale margins through law. They requested additional information from the representative of Saudi arabia on pharmaceutical pricing practices, in particular how the government would ensure that its pricing policies would not discriminate against imported products. in addition, members sought information on where price control information was published (now and in the future), and how Saudi arabia made proposals for establishment or change of prices available for public comment prior to implementation.

35. The representative of Saudi arabia confirmed that pharmaceutical products were subject to price and profit regulation in the Kingdom. The Pharmacy law, issued under royal decree no. M/18 of 18.3.1398H (25 February 1978), established rules for registration of pharmaceutical products and required that drugs be priced before their sale in retail pharmacies. Under this royal decree, pharmaceutical wholesalers and retailers were allowed a 10, 15 or 20 per cent profit margin, as set out in annex a, depending on the export price (CiF) to Saudi arabia. He noted that establishing a base price was currently the last step in the registration process for pharmaceuticals. after pharmaceutical products were registered to ensure their safety and quality, registered

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products were imported without restrictions in the form of import licenses or quotas. The representative of Saudi arabia confirmed that locally manufactured pharmaceutical products were subject to the same registration processes, but received an additional 10 per cent margin on pricing. He confirmed that this additional margin would be eliminated prior to accession. The Working Party took note of this commitment.

36. in reply to a question from the member of the Working Party, the representative of Saudi arabia stated that base price for imported pharmaceuticals is determined taking into account: (1) the suggested CiF price for export to Saudi arabia; (2) export prices to other countries; and (3) therapeutic comparison of similar products. Base prices of domestic pharmaceuticals are based on the registered innovated imported products since most of the domestically produced products are generics. innovated products manufactured locally under licence agreements are priced similar to imported products. Form 30 is used to get information on prices of pharmaceuticals sold to other countries. local manufacturers are requested to submit Form 30 for the new innovated products produced locally through licence agreements. He added that proposals from various Ministries to amend the price control setting process had not been adopted. The representative of Saudi arabia further stated that the Ministry of Health and other agencies participating in the price control and registration process would comply with Saudi arabia’s commitments on transparency and would provide adequate opportunities to interested parties to become familiar with and provide comments on draft proposals. The Working Party took note of this commitment.

37. The representative of Saudi arabia confirmed that the prices of goods and services listed in annex a were the only ones currently subject to State price or profit control. He also confirmed that from the date of accession Saudi arabia would apply its price regulations and profit controls in a WTo-consistent fashion, taking into account the interests of exporting WTo Members as provided for in article iii:9 of the gaTT 1994 and in article Viii of the general agreement on Trade in Services (gaTS). He also confirmed that Saudi arabia would publish the price and profit controls of goods and services listed in annex a, as well as any modifications or additions, in the official gazette, the Umm al-Qura, or in another official publication or website accessible to the public, in advance of their implementation. The Working Party took note of these commitments.

- Privatisation and enterprises that are State-owned or –Controlled, or with Special or exclusive Privileges

38. The representative of Saudi arabia stated that a very important component of the economic reform Program of the Kingdom of Saudi arabia (circulated to the members of the Working Party in WT/aCC/SaU/54 (4 april 2003)) was privatisation. an ambitious privatisation strategy was issued by the Supreme economic Council decision no. 1/23 of 23.3.1423H (4 June 2002), to ensure a continued increase in the share of the private sector and to expand its participation in the national economy.

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This would be achieved by adopting the best available modality including transferring certain types of economic activity to the private sector, enhancing the participation of the private sector in economic development and enabling it to carry out its investment and financing role in accordance with the national development plans. The Council of Ministers had approved the privatisation of 20 state-owned utilities, economic activities and services, on the basis of the definition of “privatisation” in Saudi arabia’s Privatisation Strategy approved by the Supreme economic Council (“Privatisation is the process of transferring ownership or management of public enterprises, projects, and services to the private sector, relying on market mechanisms and competition, through a number of methods, including contracts for managing, operating, leasing, financing or selling all or part of the government’s assets to the private sector”). although the percentages of private ownership had not been set, the end result of the process, in each case, would be to ensure a continued increase in the share of the private sector and to expand its participation in the national economy by adopting the best available modality, including transferring certain types of economic activities to the private sector. in reply to a question from a member of the Working Party, the representative of Saudi arabia confirmed that leasing constituted privatisation. The 20 state-owned utilities, economic activities and services subject to privatisation were:

1. Water and sewage: efforts were under way to determine the best type of management contracts and to attract new investors in the field. in Jeddah industrial City, a build-operate-transfer (BoT) contract was granted to a private entity to rehabilitate, maintain and expand a waste water treatment facility.

2. desalination: Studies were being conducted to explore how best to proceed with privatisation of desalination activity. The government was encouraging new investment in the field.

3. Telecommunications: The government already had sold 30 per cent of its share in Saudi Telecom Co. to private owners.

4. aviation services: Studies were being conducted at Saudi arabian airlines to explore how best to proceed with privatisation in this field.

5. railways: Studies were being conducted at the Saudi railways organization to explore how best to proceed with privatisation in this area.

6. roads, including management, operation, maintenance and construction: The government was encouraging private sector investment in managing and operating existing roads. Studies are underway to explore best management modules for constructing new roads by the private sector.

7. airport services: BoT contracts already had been granted to the private sector to rehabilitate and operate facilities at Saudi airports.

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8. Postal services: in January 2003, 100 private sector agencies were set up to handle postal services. The government planned to open this sector to competition.

9. grain silos and flour mills: Studies were being conducted at gSFMo to explore how best to proceed with privatisation in this area.

10. Seaport services: a number of BoT contracts had been granted to the private sector to manage, rehabilitate and provide services at Saudi ports.

11. Services for industrial cities: a joint-stock company had been established in the twin industrial cities of Jubail and Yanbu to operate, maintain, manage and expand the tasks of infrastructure utilities as part of the privatisation program.

12. government shares in corporations such as SaBiC and the Saudi Telecommunications Company: Progress is discussed in paragraphs 44 and 51, below.

13. government shares in joint investment companies with arab and islamic countries: Studies are being conducted regarding how best to issue shares of these companies to the public.

14. government-owned hotels: a committee had been formed to establish the value of the total assets of government-owned hotels and to recommend the best way of selling government ownership in those hotels.

15. Sports clubs: Studies were being conducted regarding sports clubs to determine the best approach of privatizing this area.

16. Municipal services, including slaughterhouses and waste removal: Studies were underway to structure the privatisation of municipal services.

17. educational services, including school construction and transportation and recruitment of Saudis into the private sector: The education sector already had received applications from the private sector to finance the provision of higher-educational services under various management contracts.

18. Social services: Privatisation of these services is underway.19. agricultural services, such as quarantine and operation of

laboratories and clinics: Studies were being conducted regarding agriculture services such as quarantine and clinics to investigate the best privatisation models in this field.

20. Health services, such as operation of health facilities and patient transportation: The management and operation of some hospitals already had been assumed by the private sector on the basis of management contract models.

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39. in response to questions from members of the Working Party, the representative of Saudi arabia stated that the legal basis for the privatisation program was the Council of Ministers resolution no. 60 of 1.4.1418H (5 august 1997). according to this resolution, the objectives of the privatisation strategy were as follows:

i. improving the efficiency of the national economy and enhancing its competitive ability to meet the challenges of regional and international competition.

ii. encouraging private sector investment and effective participation in the national economy, and increasing its share of domestic production to achieve growth in the national economy.

iii. enlarging the ownership of productive assets by Saudi citizens.iv. encouraging domestic and foreign capital to invest locally.v. increasing employment opportunities, optimizing the use of the

national work force, and ensuring the continued equitable increase of individual income.

vi. Providing services to citizens and investors in a timely and cost-efficient manner.

vii. rationalizing public expenditure and reducing the burden on the government budget by giving the private sector opportunities to finance, operate, and maintain certain services that it was able to provide.

viii. increasing government revenues from returns on participation in activities to be transferred to the private sector, and from financing compensation obtained, for example, from granting concessions and from the proceeds of the sale of part of government shares.

40. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the privatisation strategy and program, referred to in the preceding paragraphs, were complementary. They referred to the objectives, scope and modalities of privatisation. The Council of Ministers issued a list of activities to be privatised, and the Supreme economic Council developed a strategic plan and timetable for that purpose.

41. according to Council of Ministers resolution no. 257 of 11.11.1421H (5 February 2001), the Supreme economic Council of Saudi arabia was responsible for supervising the privatisation program and monitoring its implementation. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that a foreign entity could participate as a “strategic partner” and take equity participation through a Saudi limited liability company, but could not otherwise directly purchase shares of state-owned enterprises subject to privatisation. He further stated that objectives (iii) and (iv), above, were complementary and not mutually exclusive. He added that according to the Privatisation Strategy issued by

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Council of Ministers decision no. 219 of 6.9.1423H (11 november 2002), its Fourth objective specifies the policies necessary to encourage domestic and foreign capital investment in privatised enterprises.

42. He further noted that the basic principles that were taken into consideration when implementing the privatisation process were the need for disclosure and transparency, the need for expeditious implementation, the need to change the management pattern and the need to create a regulatory framework for privatised sectors. He further noted that according to the Privatisation Strategy, the criteria for determining priorities in selecting enterprises to be privatised were based on the positive effect on the national economy, the readiness of the enterprise for privatisation, the social benefits of privatizing the enterprise, the inadequacies of the services provided by the public enterprises, and the absorptive capacity of the capital market.

43. The representative of Saudi arabia stated that the following implementation steps had been completed to date:

i. Tasks related to the management, operation and maintenance of port berths, as well as the provision of associated equipment, had been assigned to the private sector in accordance with royal decree no. 7-B-16941 of 6.11.1417H (15 March 1997), which assigned to the private sector a greater role in the management and operation of ports, and called for a review of organizational structures and related procedures, a feasibility study on establishing free trade areas at the ports and the linking of the two ports of Jeddah and dammam by a railroad.

ii. efforts are underway to attract private-sector investment in a north-South railroad connection to increase Saudi arabia’s ability to develop its mineral resources.

iii. The education sector received applications from the private sector to finance the construction of schools and to participate in providing higher education services through private colleges.

iv. Saudi arabia has announced that it will privatise Saudi Post. Competition will be allowed in this sector.

v. Council of Ministers resolution no. 169 of 11.8.1419H (30 november 1998) approved the restructuring of the electricity sector. initial investments are to be made within the next few years.

vi. a Saudi joint-stock utility company had been established in the twin industrial cities of Jubail and Yanbu to operate, maintain, manage and expand the tasks of infrastructure utilities as part of the privatisation program.

vii. The Saudi Telecommunications Company was established as a business-oriented stock company providing all telecommunications

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services previously provided by the Ministry of Post, Telephone and Telegraph (MoPTT). in 2002, a 30 per cent stake was sold to Saudi nationals in the private sector.

viii. in Jeddah industrial City, a concession structured on a BoT (build-operate-transfer) basis was granted to a private entity to rehabilitate, maintain and expand a waste-water treatment facility. This was completed in March 2002.

ix. in Jubail, a pilot concession on a build, renovate and transfer basis was being pursued as a part of a joint venture with a salt water concession company. This model will be used for future desalinization plants.

44. The representative of Saudi arabia gave the following information on enterprises in the Kingdom that are state-owned or controlled, and enterprises with special or exclusive privileges:

i. Saudi arabian Basic industries Corporation (SaBiC):

established in 1976, SaBiC remained the main petrochemical producer in Saudi arabia and the major catalyst producer for a number of downstream petrochemical products. SaBiC is the largest non-oil company in the Middle east, with its industrial complexes operated by 16 affiliates. in 2002, SaBiC’s production capacity reached over 40 million metric tons. SaBiC is also a producer of methanol and MTBe. eight of SaBiC’s production companies are joint venture partnerships with international companies, including such firms as exxonMobil, Shell oil, Hoechst-Celanese and duck energy. SaBiC is a partner in three joint ventures in Bahrain and has two manufacturing plants in germany and Holland. SaBiC has an ownership interest in the Saudi arabian Fertilizer Company, which is an exporter of urea, granular fertilizer and urea fertilizer, and is 57 per cent privately owned. SaBiC also fully owns Saudi iron & Steel Company (Hadeed) which is engaged in the manufacture of a variety of steel products. SaBiC’s paid-up capital is Sar 20.0 billion.

Seventy per cent of SaBiC is owned by the government; the remaining 30 per cent is privatised. The company has been identified for further privatisation, but there is no timetable over which privatisation would occur.

The government appoints the Chairman of the Board, the Ceo and three other Board Members out of a total of seven. The other two Board Members represent the private sector and are nominated and selected by the shareholders’ general meeting. The government is represented on the Board, but does not play any role in setting company policy or in making operational decisions.

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SaBiC conducts its business based on commercial considerations. it does not enjoy any special or exclusive privileges. There are no legal impediments to competition with SaBiC.

ii. Saudi Telecom Company (STC):

Saudi Telecom Company had been established following the decision of the Council of Ministers to transfer the telecommunication division, then operated by the MoPTT, to a public joint-stock company. STC had transformed itself, in a relatively short time, into one of the most technically advanced telecommunication companies in the Middle east region, offering a comprehensive range of services and products that matched other major international telecommunication companies.

Thirty per cent of STC shareholding comprising 90 million shares of Sar 50.00 each has already been sold to the general public (20 per cent) and the general organization for Social insurance (goSi) and Pension Fund (10 per cent). STC’s paid-up capital amounts to Sar 15 billion. The government owns 70 per cent of STC shares. There is no timetable over which further privatisation would occur.

The Board of directors of STC is headed by a representative from the private sector. Five of nine directors are government officials, three are from the private sector and one is a member of the Shoura Council. The government does not play any role in setting company policy or in making operational decisions. STC conducts its business based on commercial considerations. The representative noted that after 2006 no legal impediments to competition with STC will remain as per Saudi arabia’s Schedule of Specific Commitments.

iii. Saudi electricity Company (SeC):

The Saudi electricity Company, a Saudi public joint-stock company, was incorporated by royal decree M/16 of 6.9.1420H (14 december 1999) by merging all the electric power utilities companies and the general electricity Corporation (100 per cent owned by the government) and its regional projects of several government controlled regional electricity corporations into one entity that commenced operation on 5 april 2000. its objectives, as set forth in its articles of incorporation, include electric power services in Saudi arabia; investment in electric power projects within and outside Saudi arabia; import and export of electric power across Saudi arabia’s borders; investment in projects for supply of fuel to its wholly or partially owned subsidiaries and carrying out and support of research for service enhancement, power conservation, performance upgrade, environment protection and cost reduction.

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about 19 per cent and 7 per cent of the company’s shareholding is owned by private investors and Saudi aramco respectively. The paid-up capital amounts to Sar 41.7 billion. about 74 per cent of shares are held by the government.

The company was identified for privatisation on 11 november 2002, but no timetable has been established over which privatisation would occur.

The government appoints the Chairman of the Board of SeC, who is the Minister of Water and electricity. of the remaining eleven directors, six are from the private sector and five are government officials. The Ministry of Water and electricity is not responsible for regulating SeC. The regulating authority for SeC, the electricity and Cogeneration authority (eCra), is not represented on the Board of SeC. The government does not play any role in the setting company policy or in making operational decisions.

SeC conducts its business based on commercial considerations. it does not enjoy any special or exclusive privileges. There are no legal impediments to competition with SeC.

iv. national Commercial Bank (nCB):

The national Commercial Bank is a Saudi closed joint-stock company formed pursuant to royal decree no. M/19 on 31 March 1997. The month of July 1997 had been determined to be the effective date of the Bank’s conversion from general partnership to Saudi joint-stock company.

The Bank operates through its 245 branches in Saudi arabia and two overseas branches (lebanon & Bahrain). The objective of the Bank is to provide a full range of banking services, including islamic financing projects. The Bank’s paid-up capital stood at Sar 6.0 billion.

The government owned 69.30 per cent of the stock of nCB, while the remaining stock is owned privately.

The company was identified for further privatisation, but a timetable over which privatisation would occur has not been established.

The Chairman of the Board of directors is from the private sector. all Board Members, including the Chairman, are elected by the shareholders. Two out of a total of nine directors are government officials. The government does not play a role in setting company policy or in making operational decisions. nCB does not enjoy any special or exclusive privileges, and there are no legal impediments to competition with this company. nCB conducts its business based on commercial considerations.

v. Saudi real estate Company (SreC):

established in 1976, the SreC has a paid-up capital of Sar 600 million. it

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is 64.60 per cent owned by the government (through the Public investment Fund). The company’s operations and functions include:

- ownership development of lands;

- construction of residential and commercial properties for sale or rent;

- management of real estate owned by the company or others;

- purchase and/or production of building materials and equipment for sale or rent.

The government appoints the Chairman of the Board of directors of SreC. it appoints only one of a total of eight Board Members. it does not play any role in setting company policy or in making operational decisions.

SreC conducts its business on a commercial basis, and it does not enjoy any special or exclusive privileges. There are no legal impediments to competition with SreC.

vi. Saudi arabian oil Company (Saudi aramco):

The Saudi arabian oil Company (Saudi aramco) is a State-owned company established by royal decree in 1988. The company conducts its activities on a commercial basis subject to government regulations, including those related to the exploitation of national natural resources. The objective and purpose of Saudi aramco is the exploitation of crude oil and natural gas, including their derivative products. Saudi aramco is the sole concessionaire producing crude oil in Saudi arabia with the exception of one enterprise in the Saudi arabia-Kuwait divided zone. Saudi aramco produced over 95 per cent, by both value and volume, of the crude oil exported from Saudi arabia and is the only supplier of crude oil for domestic refineries. Saudi aramco is not the sole concessionaire in the natural gas sector and significant investments by foreign investors relating to the upstream development of non-associated natural gas have been approved and are underway.

Saudi aramco sells crude oil to domestic refineries, joint venture refineries abroad, and other foreign refineries. The company also sells in Saudi arabia the output of domestic refineries and shares in the marketing of the output from two refineries operated with joint venture partners. although owned by the government, Saudi aramco had always been run by independent management and Board of directors.

in its purchases, the company follows market-based procurement policies consistent with customary business practices. according to Saudi aramco’s official procurement policies, its major contracting objectives are completion of work on schedule, conformance with demanding technical standards and lowest overall cost to Saudi aramco. Similar to the practices of international

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oil companies of WTo Members, Saudi aramco encourages the development of a strong, broad-based local contractor community in its area of operation. To meet these objectives, Saudi aramco conducts its purchasing programs in an equitable manner and maintains an environment intended to attract highly qualified, competitive contractors. The representative of Saudi arabia confirmed that Saudi aramco’s procurement procedures afforded full opportunity for all qualified suppliers of goods and services of WTo Member countries to compete for participation in competitive bidding. The company selects the most technically and financially qualified contractor whose bid represented the least overall cost to Saudi aramco.

Saudi aramco is wholly-owned by the government. The Chairman of the Board of directors (the Minister of Petroleum and Mineral resources) and three of the remaining eleven directors are government officials, four are members of the company’s management and four are from the private sector, including three non-Saudi nationals. although owned by the government, Saudi aramco is run by independent management and Board of directors. The government does not play any role in setting company policy or in making operational decisions.

Saudi aramco conducts its business based on commercial considerations. it enjoys certain concessionary rights and privileges with respect to the production of crude oil, as well as certain exclusive rights and privileges in the gas sector pursuant to Council of Ministers resolution no. 163 of 20.6.1424H (18 august 2003).

vii. Saudi arabian Mining Co. (Ma’aden):

Ma’aden was established in 1997 as a closed joint-stock company, owned by the government with a capital of Sar 4000 million, which would be privatised gradually. it has no monopoly over mineral rights. The company had undertaken several mining activities related to all stages of the mining industry, including development and improvement of the mining industry and products as well as related industries. The company exports gold, copper and zinc, but it does not enjoy a monopoly; exporters in the private sector are allowed to export these products.

Ma’aden is 100 per cent owned by the government. Ma’aden is subject to privatisation under the Saudi Privatisation Strategy which was approved by the Council of Ministers in 2004. The Precious and Base Metals sector is being prepared for privatisation in 2006. The Phosphate, Bauxite and industrial Minerals sectors would be privatised in the 2008-2010 period.

Ma’aden is registered as a commercial enterprise with full management powers given to the Board of directors. The Minister of Petroleum and Mineral resources is the Chairman of the Board of directors. of the

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remaining eight directors, three are officials of the Ministry of Petroleum and Mineral resources, one is the President of Ma’aden, one is from the Saudi arabian Monetary agency (SaMa) and three are from the private sector. The Ministry of Petroleum and Mineral resources regulated the company, but the policy making and operations of the company are the sole responsibility of the Board. The articles of association, including privatisation directives, are issued by the government.

Ma’aden’s by-laws commit it to operate based on commercial considerations. Ma’aden does not enjoy any special or exclusive privileges and there are no legal impediments to competition with this company. a new Mining law has been issued which has opened the mining sector to the local private sector and foreign companies. The law did not discriminate between local and foreign applicants. applicants are treated on a first-come-first-served basis.

viii. Saudi arabian airlines (SaUdia):

SaUdia is 100 per cent owned by the Saudi government. The responsible ministry is the Ministry of defence and Civil aviation. The first steps to privatise SaUdia were taken in 1994, when SaUdia laid the groundwork to allow it to operate in accordance with commercial principles in order to meet the challenges of competition in the market. SaUdia restructured its administrative and executive sectors to reflect commercial principles. SaUdia was subject to privatisation pursuant to the Privatisation Strategy. The privatisation schedule has not yet been set, although the general objective is to carry out initial steps in a three to five-year period. Separate privatisation timetables are being considered for core operations versus ancillary operations such as catering and ground transportation.

SaUdia is a public and independent organisation operating under its by-laws and with legal capacity. The company is managed by a Board of directors, which is presided over by the Minister of defence and aviation and composed of Board Members appointed by resolution of the Council of Ministers. The director general is appointed by a decision of the Council of Ministers. The Board of directors manages and controls SaUdia’s business affairs and sets its general policies, independent of the administrative and financial regulations followed by government departments. of the nine Board Members, three are from the private sector and six are from the government. The Board of directors is composed of nine members, which include the company’s regulating authority, the Ministry of defence and aviation. SaUdia carries out all activities relating to air, commercial and civil transport, inside and outside of Saudi arabia. There are no other factors that indicated government control of the enterprise.

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ix. Saline Water Conversion Corporation (SWCC):

SWCC is 100 per cent owned by the government. SWCC is responsible for all government desalination plants located on the east and west costal areas (red Sea and arabian gulf). Under SWCC, Saudi arabia’s desalinated water output had surpassed one billion cubic meters in 2002. The Kingdom’s desalination plants produce and provide drinking water to major urban areas through over 2,000 kilometres of pipelines.

SWCC was subject to privatisation under the Privatisation Strategy. The company conducted an internal study concerning privatisation options and timetables. once completed, the study was submitted to the Ministry of Water and electricity for review and approval. it was SWCC’s expectation that privatisation would be undertaken within approximately three years.

The government appoints all seven of the members of the Board of directors, including the Chairman, all of whom are from governmental ministries. The Minister of Water and electricity is the Chairman of SWCC Board of directors. The Board of SWCC is responsible for setting the general policies of SWCC. However, operational decisions are made by SWCC management. The Ministry of Water and electricity and the Ministry of Finance provide some regulatory and procedural oversight of the company.

SWCC delivers desalinated water to the various local water authorities, but does not itself distribute, purchase, sell or receive payment of the water. SWCC is an independent entity under the jurisdiction of the Ministry of Water and electricity. SWCC’s funding comes solely from the government with a small contribution from sales of excess electricity to the Saudi electricity Company. SWCC is a governmental organization and did not operate on a commercial basis. SWCC does not enjoy an exclusive concession in this sector, and does not enjoy any other special rights or privileges. inin its purchases, SWCC follows market-based procurement policies consistent with customary business practices.

x. Saudi railways organization (Sro):

Saudi railways organization (Sro) is an autonomous State agency under the jurisdiction of the Ministry of Transportation. The total network consists of 1018 kilometres of railroad line.

Sro is subject to privatisation under the Privatisation Strategy. The company is in the early stages of a process designed to attract private sector developers who will build, own and operate both existing rail lines and newly constructed rail lines within Saudi arabia. The company is scheduled to hold preliminary meetings with potential bidders for these projects.

The Sro was established by royal decree M/3 of 22.1.1386H (13 May

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1966), as a wholly owned entity of the government of Saudi arabia. The Sro budget is covered by the general Budget of the government of Saudi arabia.

The Supreme economic Council of the Kingdom of Saudi arabia issued resolution no. 23/3 on 23.3.1423H (5 June 2002), to upgrade and expand the existing railway network in Saudi arabia through the construction of the Saudi landbridge and the Makkah Madinah railway link on a Build, operate and Transfer basis. Sro was appointed to this project, according to the abovementioned resolution as the executing agent.

The government appoints all six directors, including the Chairman of the Board, who is the Minister of Transportation. The implementing regulation of royal decree M/3 of 22.1.1386H (13 May 1966) named the Minister of Transport as the Chairman of the Board of directors of Sro, and stipulated the structure of the Board of directors to be composed of, predominantly, senior representatives of various Saudi arabian Ministries. of the six directors, four representatives are appointed by the Ministry of Finance, Ministry of Commerce and industry, Ministry of Petroleum and Mineral resources and Ministry of Transportation. The Ministries of Finance and Commerce and industry have some regulatory oversight of the company.

Sro’s policies are set by its Board of directors. The company’s operational decisions are made by the President of Sro. in certain cases, the President obtains the approval of the Sro Board of directors.

in accordance with royal decree M/3 of 22.1.1386H (13 May 1966), Sro is responsible for the implementation and operation of the railways projects in Saudi arabia, and projects that are directly related to transportation via the railways network.

The statutes and by-laws of the Sro empower the organization to enter into contracts and undertake the procurement of goods and services for the realization of its declared objectives and the development of its operation and activities.

Sro conducts its business based on commercial considerations. as provided under royal decree M/3, Sro is the sole agency in charge of railway transport in Saudi arabia and all that relates to the operation of railway transport and development thereof. no other private or governmental organization is empowered to carry out similar competing activities. Sro has no stand-alone financial independence and does not have capital denominated in shares of any type.

xi. national Company for Cooperative insurance (nCCi):

nCCi provides cooperative insurance in the Kingdom. on 29.3.1425H (18

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May 2004), the government announced that it would begin to sell its shares of nCCi to the private sector. The initial public offering of 50 per cent of nCCi’s shares was completed in January 2005. Thus, nCCi is 50 per cent owned by the government. after the initial public offer had been completed, a new Board was elected by the shareholders’ general meeting.

The company was identified for further privatisation, but there was no timetable over which privatisation would occur. The Chairman of the Board of directors is a government official elected by the Board Members. Two of the seven members of nCCi’s Board of directors are government officials. The government does not play any role in setting company policy or in making operational decisions.

nCCi conducts its business based on commercial considerations, and it does not enjoy any special or exclusive privileges. There are no legal impediments to competition with nCCi.

xii. grain Silos and Flour Mills organization (gSFMo):

gSFMo was established by royal decree in 1972 to support the development of the domestic agricultural sector, particularly wheat production for national security reasons, by forming a grain storage and flour production conglomerate, as well as by creating a stable market for grains in order to safeguard farmers from price fluctuations. gSFMo was 100 per cent owned by the government. The Ministry of agriculture is responsible for the operation of gSFMo and the Minister of agriculture is the Chairman of the Board of directors. The government appoints eight directors, of whom six are government officials and two are from the private sector.

gSFMo has eleven facilities in Saudi arabia: six integrated silo, flour mill and feed mill facilities and five silo facilities. Wheat flour produced by gSFMo is subject to price controls with the aim of providing all people (especially the poor) with a stable, low-cost food source.

although the gSFMo facilities represent all of the mills and silos in Saudi arabia, no legal measure prevents the construction and operation of additional facilities by the private sector. in addition, as discussed below, all of these facilities were scheduled for privatisation in accordance with the Saudi Privatisation Strategy. nothing prevents private sector operators from requesting gSFMo to mill their flour, which gSFMo would agree to do at a commercially-agreed rate, although such interest had not arisen in the past because flour was imported by the private sector in processed form.

gSFMo operates on a commercial basis in competition with the private sector. gSFMo had previously imported wheat, wheat flour and barley under special government mandates. gSFMo’s mandate to import wheat

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products was terminated in 1987 by royal decree no. 115/8 of 27.1.1407H (2 october 1986); gSFMo’s mandate to import barley was terminated in 1999 by royal decree no. 184 of 24.9.1419H (14 december 1998). in response to a question, the representative of Saudi arabia stated that eighteen private firms are importing these products following the termination of gSFMo’s monopoly.

Since 1999, gSFMo’s international trading activities have been limited to importing corn and soybeans, which are mixed as feed additives and sold to poultry and dairy farmers as animal feed. gSFMo does not receive any financial support or assistance from the government to import these products, for which it competed with the private sector under international market conditions. gSFMo’s import decisions are informed exclusively by conditions of market supply and demand. Furthermore, gSFMo no longer issues licenses or permits of any kind for importing or exporting any products, pursuant to royal decree no. 184 of 24.9.1419H (14 december 1998). gSFMo procures wheat from Saudi farmers at regulated prices, but does not export wheat or any other product. in response to a question raised by a member of the Working Party, the representative of Saudi arabia confirmed that gSFMo receives support for domestic wheat purchases as indicated in Communication from the Kingdom of Saudi arabia, Domestic Support and Export Subsidies in the Agricultural Sector (WT/aCC/SPeC/SaU/1/rev.9, 28 april 2004).

The representative of Saudi arabia confirmed that all of gSFMo’s operations are subject to privatisation under the Saudi Privatisation Strategy. in this regard, the Minister of agriculture has requested the World Bank to conduct a detailed study of the optimal strategy of privatisation of gSFMo. The specific form and timetable for privatisation would be based on the results of the World Bank study. The representative of Saudi arabia undertook to report to WTo Members on the progress of gSFMo’s privatisation.

There were no legal impediments to competition with gSFMo.

xiii. Specialized Financial institutions (SFi):

in the financial sector, there are five government-owned SFis:

a. Saudi arabian agricultural Bank (SaaB), subject to privatisation (the schedule had not yet been set);

b. Saudi industrial development Fund (SidF);c. Public investment Fund (PiF);d. real estate development Fund (redF); ande. Ministry of Finance lending Program.

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45. The representative of Saudi arabia stated that the role of the SaaB is explained in paragraphs 237-238 of the report; the role of SidF is explained in paragraph 187 of the report. The PiF was originally established to finance projects in the public sector. That continues to be the major focus of the PiF. However, its role had evolved. For very large projects which were strategically important, but for which private-sector investors on their own could not raise financing, the PiF provided long-term financing on a commercial basis on the condition of co-financing by commercial banks. Further, the PiF was the custodian of the shares owned by the government in publicly traded companies. it also managed the sale of the shares of government–owned enterprises as the government embarked on privatisation. He stated that the role of the PiF would gradually shrink as the private sector assumed a leading role in the economy and the privatisation program progressed. The representative further stated that the objective of the redF was to provide interest-free loans to Saudis to build houses for their own use. He also reported that the Ministry of Finance lending Program was started some 30 years ago to provide funding for some essential sectors where the private sector funding was not forthcoming because of a shortage of funds or non-availability of commercial lending at that time. The lending was now for human resource development. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that lending for human resource development was aimed at training and upgrading the skills of Saudi work force in the private sector. The lending is available for Saudi employees of all firms in Saudi arabia, whether Saudi or foreign-owned or joint ventures.

46. The representative said that a major difference in operations of these Funds and in commercial bank lending was that, whereas commercial lending was generally available for short-term financing in Saudi arabia, these Funds provided medium- and long-term financing. The role of these funds, he said, had evolved in tune with developments in the economy. For example, the role of the redF would decline substantially due to the fact that its financial resources were limited, while there was a huge demand for the loans. Thus, the fund could meet only a small percentage of requests for housing loans. Consequently, the loans provided by commercial banks were rising. The role of SaaB and SidF would also keep evolving as the capital market developed and diversified.

47. These funds did not encroach on commercially viable lending, he reported. in fact, they complemented commercial lending. Whereas commercial lending was on a short-term basis in Saudi arabia, these Funds provided financing on a medium- and long-term basis. Co-financing by commercial banks was a prerequisite for lending by the funds. Thus, at least 50 per cent of financing a project had to be arranged from commercial banks.

48. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the specialized financial institutions supplemented lending by the private sector financial institutions and did not

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encroach upon their business. For example, the Saudi arabian agricultural Bank (SaaB) provided loans in the agricultural sector where the private sector banks were traditionally reluctant to offer lending. Similarly, the Saudi industrial development Fund (SidF) provided loans to new industrial enterprises and for replacement and modernization of machinery of existing enterprises focusing principally on segments where private sector banks were shy. as stated earlier, SidF loans were available, for up to 50 per cent of the project cost only and were available to wholly-owned foreign companies and Saudi-owned companies. SidF filled the vacuum left by private sector banks. He further stated that loans by PiF were conditioned on co-financing by commercial banks, which clearly showed that specialized financial institutions were not encroaching on the business of private sector banks.

49. The representative of Saudi arabia further added that the terms and conditions of lending by these institutions were based on viable economic factors, with each institution having its own terms and conditions, tailored to the needs and requirements of particular sectors and ensuring the viability of the financial institutions. in fact, the interest and charges by these institutions are close to the market driven rates.

50. in reply to a further question, the representative of Saudi arabia stated that there were no plans to privatise the specialized financial institutions, except the SaaB. However, as stated earlier, their role was on the decline and that of the commercial banks was on the rise.

51. The representative of Saudi arabia informed members of the Working Party that the public enterprises partially privatised according to the definition in the Privatisation Strategy so far included the following:

i. Saudi electricity Company (19 per cent private ownership);ii. Saudi arabian Fertilizer Company (57 per cent private

ownership);iii. Saudi arabian Basic industries Corporation (SaBiC) (30 per cent

private ownership); andiv. Saudi Telecommunications Company (30 per cent private ownership).

52. The representative of Saudi arabia confirmed that, from the date of accession, enterprises that are state-owned or -controlled, and enterprises with special or exclusive privileges, as defined in paragraph 44, would make purchases of goods and services, which are not for government use, and sales in international trade in accordance with commercial considerations, including price, quality, availability, marketability and transportation, and would afford enterprises of WTo Members adequate opportunity, in conformity with customary practice, to compete for such purchases or sales. He also confirmed that Saudi arabia would notify enterprises falling within the scope of article XVii upon accession to the WTo. With respect

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to privatisation, the representative of Saudi arabia confirmed that from the date of accession, Saudi arabia would provide WTo Members with annual reports on the status of privatisation in the Kingdom. The Working Party took note of these commitments.

- investment regime

53. The representative of Saudi arabia informed the Working Party that a new Foreign investment law, replacing the Foreign Capital investment law, had been promulgated by royal decree no. M/1 of 5.1.1421H (9 april 2000). implementing regulations under the new Foreign investment law had been issued on 24 June 2002. in response to questions from members of the Working Party, the representative of Saudi arabia noted that the Kingdom had started the process of attracting Fdi long ago when it issued the first Foreign investment law in 1956. another law followed in 1962 and, in 1979, Saudi arabia issued a more comprehensive law, which included wide-ranging incentives for investment, such as exemption of customs duties for production inputs, nominal rental rates for land for the establishment of projects, financial assistance in the form of soft loans and exemption of exports from taxes and duties. The 1979 Foreign Capital investment law had granted industrial and agricultural projects a 10-year tax holiday and a 5-year tax holiday for other projects, provided that national capital formed 25 per cent of the project capital and on condition that this percentage did not decrease during the holiday period. The law was amended to grant an addition 10-year tax holiday to expansions of existing projects. But, to enjoy the incentives, the 1979 law required that foreign investments be: (i) at least 25 per cent Saudi; (ii) among the specified projects of the national development plans; and (iii) of high technical content with foreign expertise to facilitate the transfer of technology.

54. The representative of Saudi arabia clarified that, to address developments that took place in the international and regional economic landscape, the investment laws were overhauled in april 2000, by the enactment of a new foreign investment law to build on the strengths of the old law and provide additional incentives to increase the level of Fdi in the Kingdom. The new 2000 Foreign investment law provided the legal structure necessary to attract additional investment. one of the features of the new law was its departure from tariff incentives and use of other Fdi-promoting measures in conformity with the recent global liberalization of trade and investment. a comparison of the old 1979 law and the new 2000 law is attached as annex B (Comparison of the Provisions of the old 1979 and the new 2000 Foreign investment laws). in addition, in response to questions by members of the Working Party, the representative of Saudi arabia confirmed that the Saudi arabian general investment authority (Sagia) imposed no other requirements or criteria for new investments or foreign investments, other than those in the Foreign investment law of 2000 and its implementing regulations.

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55. Members of the Working Party requested information on whether gCC nationals received preferential treatment in Saudi arabia. The representative of Saudi arabia replied that gCC nationals are treated as Saudi nationals for the purposes of investment.

56. Some members of the Working Party requested clarification of whether there were any formal requirements setting a minimum level of Saudi participation in any business venture. The representative of Saudi arabia stated that under the new law on foreign investment there was no requirement of a minimum share for Saudi investors. Therefore, foreign investors are no longer required to take local partners and are permitted to own real estate for company and housing purposes. in the past there had been minimum capital investment requirements of Sar 25 million for agricultural projects, Sar 5 million for industrial projects and Sar 2 million for services projects. However, to ensure compatibility with WTo rules, Saudi arabia had removed these requirements by applying national treatment pursuant to Sagia Board of directors decision no. 1/44 of 19 april 2005, except as noted in Saudi arabia’s Schedule on Specific Commitments in Services. Under the new Foreign investment law, a foreign investment may take one of the two following forms:

i. an enterprise owned by foreign and national investors, i.e., joint ventures, but with no requirement for minimum share for national investors; or

ii. an enterprise wholly-owned by foreign investors, i.e., 100 per cent foreign shareholders’ equity.

57. The Saudi representative stated that a project, whether wholly-owned by foreign investors or a joint-venture, licensed in accordance with the law, enjoyed all benefits, incentives and guarantees available to a national project. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that Specialized Financing institutions were not providing financing for services projects. For example, the Saudi arabian agricultural Bank (SaaB) and the Saudi industrial development Fund (SidF) provided financing for agricultural and industrial projects, respectively. Under the new law, a foreign investor was entitled to transfer, outside the Kingdom of Saudi arabia, the proceeds from the sale of his shares or the excess funds from the liquidation of his assets or the profits earned by the enterprise or from the disposal of the business in any other legal manner. Further, the investor was entitled to transfer outside the Kingdom of Saudi arabia the required funds to settle any contractual obligations related to the project. article 11 of the new Foreign investment law provided legal safeguards against confiscation or expropriation of foreign investments. it was not permissible to confiscate foreign investments, wholly or partially, except by a court order. in addition, it was not permissible to expropriate the ownership of foreign investments, wholly or partially, except for the public interest, and on payment of reasonable compensation in accordance with the law. The representative stated that foreign investment was permissible in all activities, except a

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short “negative list”, which would be revised and shortened periodically. Members of the Working Party also inquired as to the specific content of the negative list. in response, the representative of Saudi arabia stated that the negative list, which was issued by a decision of the Supreme economic Council under article 3 of the Foreign investment law, did not target specific companies; rather, it applied to certain limited industrial and services sectors. The Saudi representative reported that the list would be updated prior to accession, to reflect the commitments in Saudi arabia’s Schedule on Specific Commitments in Services annexed to its Protocol of accession. He further noted that, following accession, Saudi arabia would annually review and remove additional items from the negative list each year (beyond Saudi arabia’s WTo commitments), to further liberalize the economy. in response to a further question from a member of the Working Party, he reported that the negative list currently was being revised by the Supreme economic Council to remove additional sectors from it and was subject to annual review and revision. The negative list, including significant exceptions allowing the provision of certain printing and publishing services and certain telecommunications services, was at annex C.

58. Some members of the Working Party requested clarification of the incentives offered by Saudi arabia to foreign investors to invest in Saudi arabia in order to support the inflow of technology and expertise, in particular whether technology transfer was in any way a condition for investment approval in all or certain areas. The representative of Saudi arabia replied that under the new Foreign investment law of 9 april 2000, technology transfer was not a condition for investment approval. a foreign investor had to approach only one authority - the Saudi arabian general investment authority (Sagia) - to obtain a licence. in reply to a question from a member of the Working Party, the representative of Saudi arabia stated that Saudi investors are not required to apply and obtain from Sagia a licence to invest in the Kingdom, but foreign investors are required to apply and obtain a licence from Sagia. This national treatment limitation was inscribed in Saudi arabia’s Schedule on Specific Commitments in Services. in response to a further question, the representative confirmed that investors could obtain information and assistance, as well as all of the necessary registration forms, including the forms for specific licenses, from Sagia. Sagia was required to decide on the investment application within 30 days from the date all required documents were submitted. Sagia would also serve as the enquiry point on laws, regulations and procedures relating to foreign investment. The Sagia licence provided the foreign investor all of the privileges held by local investors. in response to a question from a member of the Working Party regarding whether the Sagia licence was the only licence or approval required by a foreign investor, the representative from Saudi arabia stated that, after obtaining the Sagia licence, the foreign investor was treated the same as any local investor and, thus, for certain businesses, must apply to the Ministry of Commerce and industry to obtain a commercial registration. For investments in financial, communications, education, information or medical services sectors, investors were required to obtain

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a licence from SaMa, the Telecommunications authority and the Ministries of education, Higher education, information and Culture or Health, respectively. in addition, the Ministry of Commerce and industry issued licenses for foreign investors in professional and consulting services, e.g., engineering and accounting. in other words, he said, a licence was required for each business depending upon the nature of the business. The licensing requirements, he reported, were the same for Saudis and non-Saudis. For example, a company (whether Saudi or non-Saudi) seeking to establish a company and set up a hospital—whether backed by a national or a foreign investor—would need to obtain a company registration and permit from the Ministry of Commerce and industry and a health practice permit for hospitals from the Ministry of Health. Similar requirements would apply to persons seeking to establish a school or a department store. in response to a further question, the representative noted that the new Foreign investment law and the implementing regulations provided that foreign investment ventures had the right to own real estate to the extent necessary to carry out their licensed activities and to accommodate their employees, in accordance with regulations of property ownership for non-Saudis. Further, it was provided that foreign investors had the right to sponsor and bring their non-Saudi employees, subject to the numerical limits set out in Saudi arabia’s Schedule on Specific Commitments in Services and paragraph 66 of the Working Party report. The representative confirmed that individuals contemplating investing in Saudi arabia, and their support staff, could obtain visas for a period of up to six months, for single entry or multiple entries, based on a request to Sagia, the Chamber of Commerce or the Ministry of Foreign affairs, including Saudi embassies.

59. The representative of Saudi arabia further noted that the Foreign investment law allowed foreign investors to invest in local or foreign ventures, provided that general conditions applicable to new investments were met. a foreign investor could apply for multiple licenses permitting different activities, provided that the foreign investor was not the owner of or a shareholder in a project which was in financial default.

60. Some members of the Working Party asked whether the government had issued licenses to 100 per cent foreign-owned operations. in response the representative of Saudi arabia stated that 1,540 licenses had been issued for wholly foreign-owned enterprises. in response to further questions, he noted that, under the new Foreign investment law of april 2000 “national treatment” was given to foreign investors. He further stated that, in the view of Saudi arabia, the Foreign investment law was fully consistent with the WTo agreement on Trade-related investment Measures (TriMs agreement) and that Saudi arabia did not apply any TriMs prohibited by the agreement.

61. in response to questions from some members of the Working Party concerning whether the government of Saudi arabia planned to liberalize its stock market and open it to non-Saudi investors, the representative of Saudi arabia stated

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that Saudi arabia was gradually changing its regulations concerning participation of foreign investors in the stock market. although direct share trading in Saudi arabia was restricted to Saudi and gCC nationals, there were no restrictions on investment by foreign investors in government Bonds, Treasury Bills or Saudi mutual funds. There were non-gCC nationals that held shares of public joint-stock companies which were traded in the equity share market, but those non-gCC nationals were required to receive permission from the Capital Market authority (CMa) prior to buying or selling their shares. in its continuous review and assessment of the development of the financial market, the Kingdom of Saudi arabia had allowed the establishment of a close-ended fund (SaiF) listed on the london Stock exchange through which international investors could participate in the Saudi shares market. in november 1999, Saudi arabia had made further changes to its regulations and now permits foreigners to invest in open-ended mutual funds managed by banks that invest in the Saudi equity shares market. in response to a question from a member of the Working Party, he reported that the rationale for allowing gCC nationals to invest directly in the Saudi Stock Market was the requirement of the gCC Unified economic agreement. given the current level of maturity (size and depth) of the Saudi Stock Market and the volatility of portfolio investment, a policy of gradual liberalization was being followed. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that foreign investors are permitted to participate directly in the following areas of the capital market: corporate debt, government debt and derivatives thereof, and mutual funds, and that the government was considering the implications of allowing the participation of foreign investors in the stock market to buy and sell shares. He said that all the pros and cons would be considered before a decision is taken whether or not to open the stock market to foreign investors. The representative stated that no timeframe had been set for this decision.

62. in response to questions from members of the Working Party, the representative of Saudi arabia reported that the newly adopted Capital Market law, promulgated by royal decree no. M/30 of 2.6.1424H (13 July 2003), established a strong government regulatory body, the CMa. The CMa had rule-making and enforcement powers necessary to guarantee that the Kingdom’s security market was fair, efficient and vibrant. The CMa had the authority to promulgate and enforce rules for the disclosures necessary in connection with the offering of securities, the continuous disclosure obligations of publicly traded companies, disclosures and practices in connection with takeovers of public companies, the regulation of proxy solicitations; and to define and police insider trading and other abusive securities practices. Most notably, the CMa had powers to licence non-bank financial intermediaries engaged in investment banking activities, such as corporate finance, asset management and brokerage activities. non-bank financial intermediaries had been required to incorporate as public joint-stock companies, with a minimum capital of Sar 50 million. in response to a question from a member of the Working Party, the representative of Saudi arabia confirmed that there was a minimum capital

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requirement of Sar 50 million for non-bank financial intermediaries engaged in brokerage business to incorporate as a public joint-stock company. in response to a further question from the same member, the representative of Saudi arabia stated that the Capital Market law had no restriction on investment banks underwriting and brokering the initial public offerings of joint-stock companies in Saudi arabia.

63. The representative of Saudi arabia further noted that the new Capital Market law also stipulated the creation of the Saudi arabian Securities exchange. The exchange was the exclusive securities market of the Kingdom. its nine-member Board of directors included three public directors representing the Ministry of Finance, SaMa and the Ministry of Commerce and industry. in addition, the law empowered the exchange to establish professional and ethical standards for brokers and required the exchange to establish as one of its departments the Securities deposit Centre, which had responsibility for the clearance and settlement of all securities transactions executed on the exchange. The Centre also maintained the record of ownership for all securities traded on the exchange. The law also called upon the CMa to establish and maintain a tribunal with exclusive jurisdiction to resolve all disputes involving securities. (The provisions of the Capital Market law are summarized at annex d (Summary of the Provisions of the Capital Market law).)

64. Some members of the Working Party asked whether Saudi arabia planned to remove its restrictions on foreign investment in exploration and extraction of hydrocarbons. The representative of Saudi arabia replied that significant investments by foreign investors relating to the upstream development of non-associated gas had been approved; others were underway. He noted that, for reasons of important national policies, restrictions on foreign investment in the upstream sector, though relaxed, could not be completely removed.

65. Some members of the Working Party sought a clarification about an article of the implementing regulations which said that licenses granted must not violate Saudi arabia’s regional or international agreements and asked Saudi arabia to indicate where this might occur. They further requested Saudi arabia to clarify the relationship of implementing regulations to the Foreign investment law and enquired whether there were current plans for any additional elaboration of the regulations. in response to these, the representative of Saudi arabia stated that article 5 of the implementing regulations provided that granting a foreign investment licence must not contravene international or regional treaties signed by the Kingdom of Saudi arabia. These included the WTo agreement, the gCC and other treaties signed by Saudi arabia. He explained that, for example, Saudi arabia would not issue any licence to produce chemicals or materials that were restricted under regional or international agreements to which Saudi arabia was a party. Similarly, Saudi arabia would not issue licenses to produce materials that were in breach of a regional or international agreement on environmental protection to which Saudi arabia was a party. With regard to the observations of Working Party members on implementing

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regulations, the representative of Saudi arabia explained that implementing regulations were in the nature of by-laws issued by Sagia, under article 17 of the Foreign investment law, to implement the law. He stated that there were no current plans for additional elaboration of the implementing regulations.

66. Members of the Working Party asked that Saudi arabia clarify its rules regarding employment of Saudi nationals. in response, the representative of Saudi arabia noted that Council of Ministers decision no. 50 of 21.4.1415H (27 September 1994) and Council of Ministers Bureau letter 8/490 of 28.6.1414H (13 december 1993) set forth requirements regarding the hiring and employment of Saudi nationals. He emphasized that the rules were designed to increase the employment of Saudi nationals in the Kingdom, and applied to Saudi as well as non-Saudi investors. The rules were as follows:

i. Companies of all types and activities should endeavour to attract and retain nationals.

ii. Companies employing 20 or more people should increase the proportion of nationals employed by 5 per cent each year. The 5 per cent figure is subject to modification according to workforce availability, the nature and condition of the work and the availability of Saudis to fill the particular position(s).

iii. Companies should, while working to reach this average, employ nationals in a variety of positions.

iv. Companies should not appoint a non-Saudi personnel officer, recruitment officer, receptionist, cashier, civilian security guard and transaction follow-up clerk to government departments.

v. Violations of i-iv, above, could result in penalties ranging from suspension of approval of requests for workers to deprivation of credit or removal from consideration for governmental tenders or bids.

67. in response to a question from a member of the Working Party, the representative of Saudi arabia confirmed that the above-noted requirements were still in effect for Foreign direct investment. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the requirements applied on a national treatment basis whereas the numerical limits set out in the Schedule on Specific Commitments in Services (10 or 15 per cent) applied to foreign service suppliers only and that these were covered by the national treatment limitation on Mode 4.

68. in addition, the Saudi representative reported, under decision no. 50 and Council of Ministers Bureau letter no. 8/490, the Ministry of labour and Social affairs had established a Committee to implement and oversee the provisions set forth above. The Committee was headed by the deputy Minister or a person he appointed, and comprised delegates from the Ministry of interior and the Ministry of Commerce and industry.

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69. The representative of Saudi arabia noted that, prior to accession to the WTo, the hiring and employment restrictions set forth above would be modified, as necessary, to comply with the provisions of the Saudi commitment on services as described in Saudi arabia’s Schedule on Specific Commitments in Services. The Working Party took note of this commitment.

iii. FraMeWorK For MaKing and enForCing PoliCieS

70. The representative of Saudi arabia explained that the Basic law of governance, instituted by royal decree no. a/90 of 27.8.1412H (1 March 1992), set down the law concerning political authority within Saudi arabia. article 56 of the Basic law of governance stated that the King was the Chairman of the Council of Ministers and was assisted by Ministers in the performance of his duties. The Basic law of governance also stated that the law of the Council of Ministers laid down the powers of the Council regarding internal and external policies; the organization and coordination of the various government authorities; and the conditions to be satisfied by, the powers of, the method of responsibility and all affairs of the Ministers.

71. He recalled that, pursuant to article 17 of the Consultative Council law, resolutions passed by the Consultative Council were forwarded to the Chairman of the Council of Ministers, who passed them to the Council of Ministers for consideration. When the points of view of both Councils were in agreement, they were enacted after being approved by the King. in case of a difference of opinion, the King approved what he considered appropriate. article 70 of the Basic law of governance and article 20 of the Council of Ministers law provide that laws were enacted and amended, and treaties, international agreements and concessions were approved and implemented, by royal decrees after having been considered by the Consultative Council and the Council of Ministers, respectively. in response to a question from the members of the Working Party, the representative of Saudi arabia confirmed that, under article 70 of the Basic law of governance (royal decree no. a/90 of 27.8.1412H (1 March 1992)), royal decrees were the legal instrument by which international agreements and treaties were implemented into domestic law. in accordance with the lawmaking process described above, international agreements and treaties were first referred to the Council of Ministers and the Consultative Council for approval. Upon receiving approval of both bodies, the relevant agreement or treaty became part of domestic law by means of royal decree. international agreements and treaties did not take precedence over other provisions of domestic law, nor did other provisions of domestic law take precedence over international agreements or treaties. rather, conflicts or inconsistencies between international agreements and treaties and other provisions of domestic law were resolved in accordance with the same rules of interpretation that were applied to domestic legislation, e.g., more recent laws took precedence over older laws. in response to a question from a member of the Working Party, the representative further noted that the rules of interpretation were as follows: (i) an international agreement could not override a rule of Shari’a (e.g., the prohibition on

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the importation, sale or consumption of alcoholic beverages could not be supplanted by an international agreement); (ii) given an apparent inconsistency between an international agreement and domestic law, the text of each would be interpreted so as to avoid any conflict; and (iii) where the text did not resolve the conflict, recourse could be had to the intent and purpose of the agreement and the law. Where a conflict still existed, he reported, the conflict would be resolved following the rule that a new law or international agreement to which the Kingdom had agreed was superior to previous laws or international agreements (with the exception noted above that no law or international agreement could overturn a Shari’a rule).

72. in response to a question from members of the Working Party, the representative of Saudi arabia stated that trade policies were implemented by means of the enactment of an appropriate new law (nizam). as part of the lawmaking process, the draft legislation was prepared by the relevant government agency (e.g., the Ministry of Commerce and industry), which then submitted it to the Council of Ministers and the Consultative Council for comments. Both bodies reviewed the draft law and either agreed with the text put forward by the government agency or proposed changes to it. if the Council of Ministers and the Consultative Council had divergent views of the draft legislation, then those views were communicated to the King who resolved the matter by deciding which view should prevail. The final text of the legislation was then promulgated in the official gazette (Umm Al-Qura). The representative of Saudi arabia further explained that a new law would originate in the ministry having authority over the subject matter of the law. The ministry would submit the draft law to the Council of Ministers, which would conduct an initial review. if the Council approved the draft, it would send the draft to the Bureau of experts. The Bureau of experts would review the draft to ensure that the draft would accomplish its purpose and comply with international legal and/or technical norms. if the Bureau approved the draft law, it would submit it to the Shoura Council, Saudi arabia’s consultative legislative council. The role of the Shoura in this process was to ensure the compatibility of the draft law with international legal norms and with Saudi arabia’s local and international policies. The Shoura Council would then send the law to the Council of Ministers for its final approval. last, the Council of Ministers, having approved the draft law, would submit it to the King for his assent. after the King issued a royal decree enacting the law, the law was returned to the ministry that drafted the law. Subject to the law and the royal decree, the ministry would be responsible for all aspects of implementation, including the promulgation of implementing regulations required for implementation within the time period specified in the law and the royal decree and, in some cases where necessary, additional laws (subject to approval of the Council of Ministers).

73. The representative of Saudi arabia further clarified that a law itself specified the date on which it took effect (typically on a certain date after publication in the official gazette). it also specified the agency or agencies that were responsible for drafting and approving the implementing regulations. The purpose of the implementing

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regulations was to set out the procedural and administrative details by which the provisions of the new law were implemented. They were drafted by the relevant government agency and published in the official gazette. a function of the legislative process was to identify potential conflicts and inconsistencies between the proposed new law and other applicable laws. Therefore the new law, when finally promulgated, generally dealt with such matters, and superseded any conflicting previous law. occasionally, laws and implementing regulations required further interpretation. These interpretations took the form of ministerial decisions or directives and were generally limited to matters that were not legally significant. The representative of Saudi arabia confirmed that the process of lawmaking and regulation preparation and drafting that applied to the implementation of trade policies was the same process that applied to the implementation of purely domestic policies.

74. The representative of Saudi arabia further confirmed that the Kingdom had acceded to the Vienna Convention on the law of Treaties 1969, pursuant to Council of Ministers resolution no. 165 of 24.6.1423H (1 September 2002). in response to further questions, the representative of Saudi arabia stated that article 70 of the Basic law of governance provided that international agreements entered into force as domestic laws following their ratification by royal decree and enactment by the Consultative Council and Council of Ministers. as a general rule, should Saudi arabia’s laws or other acts be found to contradict international treaties or agreements, Saudi arabia would bring its laws or other acts into conformity with such treaties or agreements, and would respond quickly to instances in which inconsistencies were brought to the attention of Saudi officials. He noted, however, that this principle did not apply in respect of fundamental religious rules and principles, such as prohibiting the consumption of alcohol and pork.

75. a member of the Working Party later inquired as to the hierarchy of Saudi legal instruments. The representative replied that the order was not in all cases firmly established, but generally operated as follows:

i. Shari’a: Shari’a functioned as the supreme law of the land and was not subject to modification by legislation or international agreement.

ii. royal decree: royal decrees were issued by the King to enact primary legislation and amendments approved by the Council of Ministers, and to approve international treaties.

iii. royal order: royal orders were issued by the King and could address any matter.

iv. Council of Ministers decisions: The Council of Ministers had authority to promulgate implementing regulations to address particular matters raised under primary legislation, without a royal decree or order. Council of Ministers decisions, however, cannot amend or change laws enacted by royal decrees.

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v. Ministerial decisions: implementing regulations were made effective through Ministerial decisions. These could not amend or change enacted laws.

vi. Circulars: Circulars were issued by Ministries to clarify to the public the rules and regulations that applied pursuant to a particular piece of legislation.

76. The representative of Saudi arabia described the role and functions of the following cabinet-level councils and authorities:

i. The Supreme economic Council (SeC) was established in august 1999 to evaluate economic, trade, industrial, agricultural and labour policies to assess their effectiveness. The SeC also oversaw economic restructuring and privatisation aimed at opening Saudi markets and attracting investment.

ii. The Saudi arabian general investment authority (Sagia) was created to further promote foreign investment and serve the business community as a one-stop shop.

iii. The Supreme Commission of Tourism was established to promote the tourism sector.

iv. The Food and drug authority was established to secure consumer protection regarding the safe use of all foodstuffs, pharmaceuticals and medical equipment.

77. The representative of Saudi arabia stated that the role and functions of different Ministries and agencies concerned with WTo issues was as follows:

i. The Ministry of Commerce and industry was the principal government agency concerned with formulation and conduct of trade policies, and with the development, support and encouragement of commercial activities within the Kingdom. it implemented the laws and regulations relating to trade, in particular the Companies law, the law on Commercial registration and the law on Commercial agencies. The Ministry also formulated policies and procedures for the development and promotion of industries. it was responsible, through the Saudi arabian Standards organization (SaSo), for standards and technical regulations and for ensuring that imported and domestically produced goods meet the technical regulations. The Ministry was also responsible for applying the Trademarks law, as well as policy overview for import licensing.

ii. The Ministry of Finance was concerned with formulation and conduct of financial and fiscal policies and with international economic issues. it was also the parent Ministry of the department of Customs (which was charged with the responsibility of implementing the Customs law and the Customs Tariff of

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Saudi arabia), department of zakat and income Tax, Saudi arabian agricultural Bank, Saudi industrial development Fund, real estate development Fund and Public investment Fund.

iii. The Ministry of Petroleum and Mineral resources formulated and implemented the oil policies of the Kingdom and supervised concessions in the oil and mining sectors.

iv. The Ministry of agriculture was the principal government body responsible for the development and encouragement of the agricultural sector in Saudi arabia. it formulated and implemented agricultural policies and was responsible for matters relating to sanitary and phytosanitary measures.

v. The Ministry of Health was responsible for supervising the health industry and for matters related to the import and sale of medicines and medical supplies.

vi. The Ministry of information and Culture was responsible for implementation of the Copyrights law and matters relating thereto.

vii. The King abdulaziz City for Science and Technology (KaCST) was responsible for implementation of the Patents law and matters relating thereto.

viii. SaSo established and approved voluntary standards and mandatory technical regulations for imported and domestically produced goods. it was also concerned with the sampling, inspection and testing of goods to ensure conformity with standards.

ix. The Saudi arabian Monetary agency (SaMa) acted as the central bank of Saudi arabia. it was responsible for monetary and exchange rate policies and the supervision of the banking and cooperative insurance industries.

78. Members of the Working Party inquired as to the role of the Chamber of Commerce in Saudi arabia. in response, the representative of Saudi arabia reported that each of the principal commercial centres in Saudi arabia had its own Chamber of Commerce. He clarified that “commercial centres” were distinct from administrative areas (e.g., provinces); one province might have several commercial centres. each local Chamber was a private association to which local businesses (including traders, professionals and industrialists) belonged. The Chambers funded their operations by means of annual membership subscriptions, which varied depending on the size (registered capital) of the member business, but were the same for international (i.e., foreign invested firms and joint ventures) and domestic firms. Hence, larger businesses paid higher membership subscriptions than smaller ones; dues ranged from Sar 330/year (smaller retail stores, e.g., a grocery which was not part of a chain) to Sar 900/year (small businesses, e.g., a real estate broker) to Sar 2,100/year (medium-sized businesses, e.g., partnerships and limited liability companies with a registered

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capital of less that Sar 5 million) to Sar 5,200/year (the largest businesses, e.g., joint-stock companies, banks and limited liability companies with a registered capital of Sar 5 million or more). apart from paying dues, there were no other Chamber obligations. The requirement was administered by means of the fact that each business (apart from very small businesses) was required to produce evidence of Chamber of Commerce membership in order to obtain commercial registration from the Ministry of Commerce and industry. a properly completed application form could not be rejected; the Chamber of Commerce was required to accept all applications that were properly submitted. Commercial registration was required for the reason that it allowed the government to establish the true identity of the business for the purposes of enforcing business-related laws; it allowed the government to ensure that it would track each business, hold the correct business accountable and, if appropriate, prosecute it. Membership in the Chamber was required because the Chamber, by its nature, imposed peer pressure which increased compliance with the laws.

79. The representative of Saudi arabia further reported that each Chamber was governed by a Board of directors. The Minister of Commerce and industry appointed one-third of the directors; the rest were elected by the members. Chambers of Commerce and industry were under the supervision of the Ministry of Commerce and industry which, inter alia, provided guidance and monitored the accounts. in reply to a question from a member of the Working Party, the representative of Saudi arabia stated that the Ministry of Commerce and industry cooperates with the Chambers of Commerce and industry in Saudi arabia in the following areas: (i) gathering and disseminating information; (ii) soliciting their comments on draft laws and regulations; and (iii) creating bilateral business contacts with businessmen in other countries. The Ministry, however, does not influence the decisions of the private sector. He stated that the Chamber performs a valuable notarial service for members by authenticating signatures. He further stated that membership in the Chamber was required because it was a pre-requisite to obtaining association membership in the business community and, therefore, could not be refused. annual dues for the Chamber varied with the size of the business and members had the right to participate in the organization and administration of the Chamber by means of voting for membership in its governing body. There were currently fourteen Chambers in the Kingdom, located in the following cities: abha, ahasa, dammam, Hail, Jeddah, Majama, Makkah, Medina, najran, Qassim, Quariyat, riyadh, Tabuk and Taif.

80. in response to questions from members of the Working Party, the representative of Saudi arabia stated that the primary legal basis for the trade regime of Saudi arabia was provided by the following laws, decrees and implementing measures:

i. Companies law and implementing regulationsii. Professional Companies law and implementing regulations

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iii. Commercial register law and implementing regulationsiv. Commercial agencies law and implementing regulationsv. Trade names law and implementing regulationsvi. negotiable instruments lawvii. Trademarks law and implementing regulationsviii. Composition with Creditors lawix. Combat of Commercial Fraud law and implementing

regulationsx. Commercial Statements lawxi. import licensing guidexii. import licensing Proceduresxiii. Patents of inventions law and implementing regulationsxiv. Trade Secrets lawxv. Copyrights law and implementing regulationsxvi. gCC Common Customs law, implementing regulations and

Principles of determination of Customs Valuation

81. The Saudi representative reported that a complete list of the principal laws and regulations that form the basis of the Saudi trade regime appears at paragraph 3, above.

82. The representative of Saudi arabia stated that Saudi arabia provided for a wide range of judicial, arbitral and administrative procedures with respect to trade matters. an aggrieved party had a final right of appeal against all administrative decisions in matters of trade to a judicial body known as the Board of grievances. The first channel of redress was to appeal administrative bodies. For example, with regard to matters under the jurisdiction of the Customs department, such as classification and valuation, there was an administrative system for appeal against rulings. disputes pertaining to valuation of goods for customs purposes were under the authority of the standing Committee within the Customs department. Similar dispute settlement systems had been established, for example, with regard to sanitary and phytosanitary measures, licensing, standards and intellectual property rights. Ministries and/or agencies involved had established internal standing committees of senior officials to review initial administrative decisions. all decisions made by these “standing Committees” could be appealed to the head of the Ministry or agency concerned.

83. He further stated that if the decision under appeal was maintained by the head of the Ministry or agency concerned, these decisions were subject to appeal to the Board of grievances under article 8(a) of the Board of grievances law, issued pursuant to royal decree no. M/51 of 17.1.1402H (14 november 1981). The Board of grievances was an independent tribunal to which appeals were made from all governmental administrative decisions. The jurisdiction of the Board included appeals against all administrative decisions of government departments and government officials, and its decisions were binding on the government office concerned. it was composed of a President, Vice-Presidents and Members. The President was appointed

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by and reported to the King. The Vice-Presidents and Members were appointed by royal decree on the recommendation of the President. The time frames for hearing of appeals and handing down of decisions depended on the volume of work with the Board and on the nature of appeals. although there were no fixed time frames, the Board was required to supply to all parties to any appeal a judicial judgment which included the reasons for the decision. The time required depended upon the complexity of the case and similar other factors. article 47 of the Board of grievances law provided for the publications of the judicial decisions.

84. He also noted that the Board’s decisions could be challenged and appealed to the appeals Court (Scrutiny Commission) within the Board of grievances, which would either confirm or reverse appealed decisions. in all cases, the appeal Commission’s decisions were final and enforceable.

85. The representative of Saudi arabia confirmed that from the date of accession Saudi arabia’s laws would provide for the right to appeal administrative rulings on matters subject to WTo provisions to an independent tribunal in conformity with WTo obligations, including but not limited to those set out in article X of the gaTT 1994, article 23 of the agreement on Subsidies and Countervailing Measures, article 11 of the agreement on implementation of article Vii of the gaTT 1994, article 62 of the agreement on Trade-related aspects of intellectual Property rights and article Vi of gaTS. The Working Party took note of this commitment.

86. in response to questions from members of the Working Party, the representative of Saudi arabia indicated the Ministry of Commerce and industry would continue to oversee and coordinate within the Saudi government matters relating to the WTo, including implementation and interpretation issues.

87. in response to questions from members of the Working Party, the representative of Saudi arabia confirmed that only the central government had authority over matters covered by the WTo agreements and that the central government was superior in authority to sub-central governments. The authority of sub-central governments in Saudi arabia, he noted, was quite limited in comparison to the situation in many countries. For example, even as regards issues typically classified as local issues, e.g., local construction projects and water and sewage treatment, to the degree that sub-central governments had any role whatsoever, the role was limited by and exercised within tight constraints set by the central government. if a problem arose regarding non-uniform application or failure to apply WTo provisions, interested parties could provide information to the Ministry of Commerce and industry.

88. The representative of Saudi arabia confirmed that the provisions of the WTo agreement, including Saudi arabia’s Protocol, would be applied uniformly throughout Saudi arabia’s customs territory and other territories under Saudi arabia’s control, including in regions engaging in border trade or frontier traffic, special economic zones, and other areas where special regimes for tariffs, taxes and regulations

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were established. He added that when apprised by a WTo Member of a situation where WTo provisions were not properly applied, e.g., were applied in a non-uniform manner, central authorities would act to correct the situation and enforce the WTo provisions without requiring formal legal proceedings. The Working Party took note of these commitments.

iV. PoliCieS aFFeCTing Trade in goodS

- Trading rights

89. The representative of Saudi arabia noted that members of the Working Party had, in connection with trading rights (the right to import and export), requested an explanation of: (i) the requirements for approval; (ii) the grounds for disapproval; and (iii) whether a licence was granted automatically upon satisfaction of (i). The representative of Saudi arabia stated firstly, by way of clarification, that Saudi businesses and foreign companies with branches or offices in Saudi arabia must apply for commercial registration under the law on Commercial registration described above. This was a general requirement which applied to all businesses except for the smallest (businesses with capitalization of Sar 100,000 or less) irrespective of whether they were engaged in import or export trade. Commercial registration was largely a routine procedure that involved the completion of an application form, the payment of a fee and the submission of documentation to the Ministry of Commerce and industry. He further noted that the requirements described below applied both to foreign and Saudi businesses and confirmed that, except with respect to agricultural machinery listed in annex e, any legal entity or natural person had the right to engage in importation or exportation without commercial registration – although if a legal entity or natural person wished to engage in importation or exportation as a trading activity (i.e., to then distribute and/or sell the goods), that legal entity or natural person was required to be commercially registered.

90. at a later stage, the representative of Saudi arabia again confirmed that there were no substantive requirements to register with the Ministry of Commerce and industry in order to import goods other than agricultural machinery, although there was a requirement to obtain commercial registration for the carrying on of business in the Kingdom. The representative stated that he understood an “importer of record” to be a person who wishes to import goods into Saudi arabia, but had no presence or commercial registration in the Kingdom and did not wish to sell or distribute the goods in the Kingdom. Such persons, he stated, were not subject to the minimum investment requirements referred to in paragraph 56 of the Working Party report; they did not need to invest in the Kingdom to act as the importer of record, nor did they need to join the Chamber of Commerce or obtain commercial registration. He confirmed that, from the date of accession, foreign firms and individuals with no commercial presence in Saudi arabia, which were importers of record, would be able to register to engage solely in importation, without limitation on equity or requirement to invest in Saudi arabia and could obtain any necessary import licenses. He further confirmed

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that Saudi arabia would, as necessary, review and amend its laws, including the law on import licensing Procedures, and would implement such laws and regulations in full conformity with these obligations. For other foreign businesses, to obtain a commercial registration for the carrying on of business in Saudi arabia, they had to first obtain a foreign investment licence from the Saudi arabian general investment authority (Sagia). Upon receiving a foreign investment licence from Sagia, foreign businesses would apply to obtain a commercial registration from the Ministry of Commerce and industry. The rules and procedures for obtaining commercial registration were set forth in the law on Commercial registration, issued pursuant to royal decree no. M/1 of 21.2.1416H (19 July 1995), and the law on Commercial names, issued pursuant to royal decree no. M/15 of 12.8.1420H (20 november 1999), and the rules and regulations promulgated thereunder. in respect of commercial registration, separate forms were to be filled in depending on the form of entity to be given commercial registration. The procedure in commercial registration further provided payment of a registration fee (for a registration valid for five years) of Sar 1,000 in case of establishments, Sar 4,000 in case of partnerships, Sar 6,000 in case of limited liability companies and Sar 8,000 in case of joint-stock companies. in the case of limited liability companies, draft articles of association were required to be submitted to the Ministry of Commerce and industry for review. once such forms had been duly prepared, they were checked and authenticated by a notary public. Having been signed, authenticated and legalized, these documents were then published in the official gazette (Umm Al-Qura). in the case of limited liability companies, after printing and formal signing of the articles of association before a notary public, such articles were submitted to the Ministry of Commerce and industry and commercial registration was issued.

91. The representative of Saudi arabia also noted that “commercial registration” was a separate procedure and different from registration as a “commercial agent” (as discussed in paragraphs 95-98, below). He further noted that registration as a commercial agent was not necessary to obtain the right to import or export for goods other than agricultural machinery. any company, whether Saudi or foreign, which was commercially registered in the field of import trade or was an importer of record could import goods without the need to get any further permission or authorization, except that the company or importer of record would need to obtain an import licence for products listed in annex e and observe the restrictions or prohibitions on import of products listed in annexes F and g to the report. no requirements applied to the activity of importing (acting solely as the importer of record), but a firm that wished to be legally eligible to import goods and then engage in business activity in the Kingdom (i.e., distribution and/or sale of the imported goods) should formally incorporate the activity of importing within its scope (“object”) of business clause of its articles of association.

92. The representative of Saudi arabia confirmed that the Ministry of Commerce

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and industry had no discretion to deny commercial registration to a legitimate business, provided that the application form had been correctly completed and was accompanied by the correct fee and supporting documentation. a legitimate business was one whose contemplated activities did not contravene Saudi laws or regulations (e.g., those prohibiting the production and distribution of pork products).

93. The representative of Saudi arabia confirmed that the commercial registration set out the scope of business activities of the registered entity. a registered entity that wished to carry out activities not covered by its commercial registration could amend its articles of association to include the new activities (except those in the negative list under the Foreign investment law) and apply to the Ministry of Commerce and industry for its commercial registration to be amended so as to permit those new activities. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the procedure for amendment was very simple. once the articles of association had been amended to include new activities, then an application for amendment of commercial registration could be submitted; a fee of Sar 100 was charged for amendment.

94. in response to a question from a member of the Working Party, the representative stated that Saudi arabian law permitted the following types of business entities, all of which were subject to the law on Commercial registration: sole proprietorships (the most common form of business entity), general partnerships, limited partnerships, joint ventures, joint-stock companies, partnerships limited by shares, limited liability companies and professional companies. The representative stated that the law permitted every practical form of business entity and was designed to cover all possible forms of business organization under law.

95. The representative of Saudi arabia informed the Working Party that commercial registration was a distinct procedure from registration as a “commercial agent”. in Saudi arabia “commercial agency” described a business activity in which a natural or legal person acted as the agent or distributor of a producer, typically a foreign producer. The law governing the registration of commercial agents was set out in the Commercial agencies law, issued pursuant to royal decree no. M/11 of 20.2.1382H (22 July 1962), and its implementing regulations, Ministerial resolution no. 1897 of 24.5.1401H (29 March 1981).

96. in addition to having Saudi nationality, the requirements for approval as a commercial agent under the above measures were: (i) a commercial registration certificate giving commercial agency as one of the applicant’s business activities; (ii) a certificate from the Chamber of Commerce confirming that the applicant had paid his Chamber of Commerce subscriptions; and (iii) the submission of an application form and supporting documentation to the Ministry of Commerce and industry, including a copy and a certified arabic translation of the commercial agency or distribution contract which complied with the conditions set out in the law. The Saudi representative confirmed that the Ministry of Commerce and industry had no

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discretion to deny registration of an entity as a commercial agent provided that the above requirements were satisfied and a registration fee was paid.

97. in essence, the representative of Saudi arabia reported, the distinction between commercial registration and registration as a commercial agent was that commercial registration was an essential requirement to the conduct of any significant business activity in Saudi arabia, whereas “Commercial agency” was one type of business activity; it was a term used to describe the type of business activity described in paragraph 95, above.

98. The representative of Saudi arabia noted that the Commercial agencies law did not require a foreign manufacturer/supplier to appoint an agent or distributor in Saudi arabia. (However, pursuant to Council of Ministers decision no. 84 of 1.4.1421H (3 July 2000) importers of the types of agricultural machinery listed in annex e should be authorized distributors or agents.) any company, whether Saudi or foreign, which was commercially registered to trade, or simply the importer of record and not engaged in selling or distributing goods within the Kingdom could import goods without the need to get any further permission or authorization, except that a company or importer of record would need to obtain an import licence for goods set forth in annex e (list of Products Subject to non-automatic import licensing requirements). as noted in paragraphs 89-90, above, importers of record would not be required to obtain commercial registration, invest in Saudi arabia or be subject to minimum capitalization requirements.

99. in response to a question, the representative of Saudi arabia stated that, except for certain agricultural machinery, foreign companies holding commercial registration in Saudi arabia could directly import goods, without going through a commercial agent. He further stated that foreign companies could import and export goods directly if the activity of importation and exportation was mentioned in their commercial registration; as in paragraph 93, above, commercial registration could be amended to include importation and exportation.

100. in response to a further question, the representative confirmed that no special or unique “activity license” requirements existed for foreign firms and individuals (including importers of record) and domestic persons or firms engaging in importing or exporting goods, in contrast to the distributing of goods. He confirmed that foreign firms that had a commercial registration in Saudi arabia were not restricted in their ability to import or export most goods except as listed in annexes e (list of Products Subject to non-automatic import licensing requirements), F (list of Banned imports), g (Seed Specifications), i (list of Banned exports) and J (list of exports Subject to authorization/licensing) to the report and as described in their scope of business (“object clause”) or their registration, and that they could easily change their registration to allow for trade. He further confirmed that the criteria for registration were published in the official gazette and generally applicable to all. He stated that, upon accession, the minimum capitalization and commercial registration

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requirements would not be necessary either to become an importer of record or to re-export goods from Saudi arabia (e.g., a non-Saudi outside of the Kingdom and with no presence or investment in the Kingdom would be allowed to import and then re-export goods from Saudi arabia).

101. in response to specific questions, the representative of Saudi arabia recognized the distinction drawn in the WTo between the right to import and export under the gaTT and the right, under the gaTS, to provide services such as distribution and transportation, with respect to imported goods. Saudi arabia would, in implementing its obligations under gaTT 1994, ensure that the relevant laws, regulations and requirements would permit foreign firms, not resident in Saudi arabia and wishing to be importers of record, to engage in importation and re-exportation without limitation on equity or requirement to invest in Saudi arabia. Commercial distribution in Saudi arabia of imports as well as domestically produced goods would, upon accession, be governed by Saudi arabia’s commitments on distribution services as inscribed in its Schedule on Specific Commitments in Services. Moreover, Saudi arabia maintained the right to require importers that were not registered to engage in commercial distribution to provide information in their customs document regarding the further disposition of the goods once they entered Saudi arabia.

102. The representative of Saudi arabia said that Saudi arabia’s requirements on the right to trade would not contradict articles iii, Viii and Xi of gaTT 1994. The representative of Saudi arabia confirmed that there would be no restrictions on the right of foreign and domestic individuals and enterprises to import and export most goods to and from Saudi arabia, except as provided in WTo agreement, and for goods listed at annexes e (list of Products Subject to non-automatic import licensing requirements), F (list of Banned imports), g (Seed Specifications), i (list of Banned exports) and J (list of exports Subject to authorization/licensing) to the report. Saudi arabia emphasized that foreign enterprises and individuals had to comply with all WTo-consistent requirements related to importing and exporting, such as those concerning import licensing, TBT and SPS. Moreover, foreign enterprises and individuals which were only importers of record would not have the right to distribute goods within Saudi arabia, as providing distribution services would be done in accordance with Saudi arabia’s Schedule on Specific Commitments in Services. The representative of Saudi arabia confirmed that individuals and firms were not restricted in their registered scope of business and the criteria for registration of companies in Saudi arabia were generally applicable and published in the official gazette. at a later stage he confirmed that, if a foreign business entity (whether commercially registered or not) could not distribute goods on its own behalf, it could engage a Saudi firm or individual as an agent to do so. He further clarified that hiring a Saudi as an employee and paying him a salary to perform this function was not permitted. The representative of Saudi arabia clarified that upon accession foreign firms could distribute goods in Saudi arabia in accordance with the commitments of Saudi arabia, as inscribed in its Schedule on Specific Commitments in Services.

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103. The representative of Saudi arabia confirmed that, without prejudice to the limitations on distribution in its schedule on market access for services, from the date of accession Saudi arabia would ensure that its laws and regulations relating to the right to trade in goods and all fees, charges or taxes levied on such rights would be in full conformity with its WTo obligations, including articles Viii:1(a), Xi:1 and iii:2 and 4 of the gaTT 1994 and its commitments in its Schedule on Specific Commitments in Services. in particular, he confirmed that from the date of accession foreign firms and individuals with no commercial presence in Saudi arabia, which were importers of record, would be able to register to engage solely in importation without limitation on equity or requirement to invest in Saudi arabia and could obtain any necessary import licenses. He further confirmed that, to fulfil this commitment, Saudi arabia would, as necessary, review and amend its laws, including the law on import licensing Procedures and would implement such laws and regulations in full conformity with these obligations. The Working Party took note of this commitment.

a. iMPorT regUlaTionS - import regime

104. in response to a specific question, the representative of Saudi arabia confirmed that the application of secondary and tertiary boycotts had been terminated in practice and in law by the Saudi Council of Ministers decision no. 5 of 13 June 1995. The Working Party took note of this commitment.

- Customs Tariff

105. The representative of Saudi arabia informed members of the Working Party that, according to article 20 of the Basic law of governance, the authority for setting customs tariffs and for any changes thereto, and for levying any surcharges, rests with the Council of Ministers. imposition, amendment or abrogation of customs tariffs requires issuance of a decree by the Council of Ministers that is endorsed by a royal decree.

106. The representative stated that Saudi arabia used HS 2002 for classification of goods for customs purposes. There were 7,177 tariff lines at the 8-digit level. The first six digits corresponded to the HS while the last two digits were specific to Saudi arabia.

107. The representative of Saudi arabia said that customs tariffs were applied on CiF basis and had been declining. When Saudi arabia applied for accession in 1993, about 75 per cent of its tariff lines were subject to tariffs of 12 per cent, while about 6 per cent of its tariff lines carried duties of 20 per cent or 50 per cent. Since 1 January 2003, Saudi arabia had applied the gCC common external tariff within the framework of the gCC Customs Union, pursuant to royal decree no. 104 of 20.4.1423H (december 2002). The representative reported that, later, Saudi arabia had implemented royal decree no. 40 of 12.2.1424H (3 February 2004), pursuant to gCC rules allowing members to maintain tariff rates for some sensitive items outside

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of the common external gCC tariff structure. More than 85 per cent of the tariff lines carried duties of 0 or 5 per cent. of the remaining (roughly) 14 per cent of the lines, 7 per cent carried duties of 12 per cent, 6 per cent carried duties of 20 per cent and 20 tariff lines (i.e., tobacco and tobacco-related products) carried duties of 100 per cent. in response to a question from a member of the Working Party, the representative noted that, for a transition period of three years, from the date of issuance of the royal decree, these items would not be aligned in the gCC external tariff; they would be aligned after this period, per the agreement reached by the gCC member states. imports of the remaining 70 lines (i.e., alcohol and pork) were completely out of the gCC regime; they were banned for religious reasons.

108. Following the completion of bilateral negotiations with WTo Members, Saudi arabia’s Schedule of Concessions and Commitments on goods will be reproduced in Part i of the annex to the Protocol of accession of Saudi arabia.

- Tariff rate Quotas and Tariff exemptions

109. in response to questions raised by members of the Working Party, the representative of Saudi arabia stated that Saudi arabia did not apply tariff rate quotas and had no intention to do so in the future, except as might be permitted under article XiX of the gaTT 1994 and the WTo agreement on Safeguards.

110. The representative of Saudi arabia further stated that Section Viii, articles 98 to 105 of the Common Customs law of the gCC States, adopted 27-29 november 1999 (implemented from 2002), provided for the following tariff exemptions:

i. imports by diplomatic missions and by diplomats.ii. imports of arms, ammunition, military equipment and other

materials by military forces and by internal security forces.iii. imports by philanthropic societies.iv. goods exported or re-exported from Saudi arabia and subsequently

returned to Saudi arabia (returned goods).v. Personal effects and household items imported as passenger’s

baggage.

111. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the exemption of customs duties that was among the incentives for investment set out in the 1979 investment law (discussed in paragraph 53 of this report) was not conditioned on local content or exportation and was generally available.

112. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the tariffs were not suspended for imports by the monarchy or by the government for its own use. He further stated that tariffs for imports for religious purposes, per se, were not suspended. However, where a religious entity was registered as a charity with the government and imported goods

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for the purpose of providing services, on a non-profit basis, for “human, social, educational, scientific or religious fields or any other charitable purpose” that was not for profit, the tariff would be suspended, pursuant to articles 22-25 of the rules of implementation of the gCC Common Customs law. in response to a question from a member of the Working Party, the representative stated that the gCC Common Customs law contained no provision for temporary suspension of customs duties for reasons such as national emergency.

113. The representative of Saudi arabia stated that Saudi arabia would administer any tariff rate quota or tariff exemptions in conformity with the requirements of the WTo agreement, in particular articles i, ii, Viii and Xiii of the gaTT 1994 and the agreement on import licensing Procedures. The Working Party took note of this commitment.

- other duties and Charges

114. The representative of Saudi arabia stated that in the Kingdom’s view Saudi arabia was applying “other duties and charges” within the meaning of article ii:1(b) of the gaTT 1994 on 22 tariff lines in HS nos. 2401, 2402 and 2403, which had been shown in Saudi arabia’s revised offer of June 1999. The representative of Saudi arabia confirmed that other duties and charges on these 22 tariff lines would be bound at the rates shown in its June 1999 offer.

115. He further confirmed that Saudi arabia would not list other duties and charges in its Schedule of Concessions and Commitments on goods under article ii:1(b) of the gaTT 1994 on all other tariff lines, except the 22 tariff lines of HS Chapter 24 which would be bound at the rates set forth in the Schedule, and would bind such other duties and charges at zero. The Working Party took note of this commitment.

- Fees and Charges Connected with importation (for Services rendered)

116. The representative of Saudi arabia stated that Saudi arabia imposed very few fees or charges for port clearance, customs processing, customs inspection or import or export licenses. He said that there was a small fee of Sar 20, which corresponded to the costs of the customs declaration form and use of Customs’ computers to complete the declaration form. He added that, if goods were left in the Customs sheds and were not cleared after a delay of 13 days from the date of unloading, storage charges were levied at the rate of Sar 20 per ton per day. However, no charges were levied if the delay was not caused by the importer, e.g., the delay in clearing the goods was due to one of the following reasons:

i. the Customs department was responsible for the delay; ii. a natural disaster; oriii. an official holiday.

He said that the fees imposed for loading, unloading and handling of import and export cargoes at Saudi arabia’s ports of entry had two parts: one part mandated by

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the government (see annex a-3) and the rest determined by private-sector operators. These fees were not collected by the government but by the companies operating the port facilities.

117. in response to questions from members of the Working Party, the representative noted that, in accordance with article Viii:3 of the gaTT 1994, Saudi arabia did not impose substantial penalties for minor Customs breaches.

118. one member of the Working Party asked for additional information on the fees and charges for the provision of port services. in response, the representative of Saudi arabia reported that the provision of port services was regulated by the Saudi Port authority, a government agency overseeing private companies operating and providing services in each of the Kingdom’s ports. The fixed rate structure of such fees applicable to dry cargoes and livestock was set by the Saudi Port authority under the authority of the Council of Ministers and applied to all ports other than oil terminals (see annex a-3 for a comprehensive list of such charges); these charges were supplemented by additional charges applied by the private companies operating the port services and facilities, and depended upon the weight and volume of goods handled, including the packaging of the goods being imported and the number and size of the containers involved. He emphasized that the rates were not based on the value of the imports, and in his view reflected the approximate cost of the services rendered. Fees for services rendered at Saudi arabia’s oil ports and terminals have no mandated component and are fully established by the private operators of those facilities on behalf of the government.

119. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that royal decree no. 7/B/16941 of 6.11.1417H (15 March 1997) had passed responsibility for all operations and maintenance of berths and equipment owned by the Ports authority to the private sector, to be managed on commercial basis, based on the following principles:

- The ports and their facilities would remain under government ownership but would be privately managed on a commercial basis; and

- The private sector was given incentives to invest in the field of heavy equipment necessary to operate the ports effectively.

Under this new program, investment opportunities in Saudi ports other than privately operated oil ports and terminals were put out for public bidding during the year 1997, according to the following rules:

- The government and the private sector operators would share the terminal revenues as described above;

- The private operator would collect charges on the basis of fixed fees calculated by the government in accordance with the port

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tariff, based on the cost of the services provided and in order to pay for port infrastructure. additional charges were applied to cover the variable costs of the private company operating the port;

- Projects were awarded based on bidding and given to the party who offered the highest percentage for the government’s share;

- all Saudi companies which had, or which had partners that had, experience in the field were allowed to bid;

- To widen the private sector’s participation and provide competition, the operator was not allowed to participate in more than one contract at the same port;

- The operator was required to invest in new equipment, which becomes port property at the end of the contract; and

- The operator would market the port services to attract maritime trade.

Today, he said, non-oil ports and terminals were managed and operated by the private sector and all oil ports and terminals continued to be solely owned by the government but operated and maintained by private companies. The responsibilities of managing and operating the non-oil ports and terminals were passed to the private sector on a facility-by-facility basis, subject to the oversight of the Ports authority. The non-oil Saudi ports were subdivided into a number of independent facilities (container, general cargo, reefer cargo, bulk cargo, etc.) with every terminal having its own area, equipment, warehouses, workshops and open yards. The unified Saudi Port Tariff, dated 31 december 1998 and developed by the Saudi Seaports authority, set forth all relevant charges applicable to non-oil ports and terminals and was available at www.ports.gov.sa/tariffs.htm. it was binding on all private port operators and port users, other than private operators and users of oil port and terminal facilities. The operators were required to collect the charges stipulated in the unified Port Tariff, based on the cost of services provided to port users.

120. a member of the Working Party asked Saudi arabia to explain requirements that applied to imports of non-unitized cargo such as rice, in particular the port levy fee. in response, the representative of Saudi arabia stated that this levy was based on the unified Port Tariff and was applied to compensate for the labour and equipment costs involved in unloading cargo. The member further asked whether such inspection was necessary given more modern methods of inspection, and asked Saudi arabia to review these requirements. The representative of Saudi arabia stated that Saudi arabia would introduce five x-ray machines, three of which were under construction in Jeddah Port and the rest under construction in King abdulaziz Port in damman. in addition, Customs would review its inspection system in the context of its ongoing process of modernization.

121. Members asked about fees imposed by Saudi arabia for notarization or consularization of documents. in response, the representative of Saudi arabia stated

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that the only such fees currently imposed were for the authentication of certificates of origin and of invoices by Saudi consulates and the US-Saudi arabian Business Council. This was a general requirement imposed pursuant to Council of Ministers decision no. 5 of 3.1.1406H (18 September 1985), which had been provided to the Working Party. The Chambers of Commerce were not involved in the notarization or consularization of documents. The Business Council was authorized to charge a fee of US$ 15 per document to authenticate invoices and certificates of origin. The authentication was performed by Business Council officials located in the Saudi Consulates. after being authenticated, the documents could then be provided to Consular officials for consularization. The fee collected by the Ministry of Foreign affairs for consularization was nominal, at US$ 8 per document, regardless of the number of pages contained in the document. Fees collected by the Consulates were deposited in general government revenues; fees collected by the Business Council were used by the Council to promote US-Saudi trade. The practice of requiring authentication and consularization had been necessary, he said, to combat commercial fraud and to ensure that products prohibited for health reasons were not exported to Saudi arabia. Members noted that the requirement posed difficulties for exporters not operating from areas served by consular offices or the Business Council and duplicated similar reviews conducted by Customs officials in Saudi arabia at the time of importation. They pointed out that revenues from the fees were not related to the cost of the service, and requested that Saudi arabia eliminate the practice.

122. The representative of Saudi arabia confirmed that the requirement for notarization, authentication or consularization of trade documents, including certificates of origin and invoices, and the associated fees applied to all exports to Saudi arabia would be terminated no later than 31 december 2007, as authorized by Council of Ministers decision no. 5-B-57611 of 28.11.1424H (20 January 2004). He confirmed that this commitment included fees charged by Consular offices of the Kingdom of Saudi arabia and by the Business Council. The Working Party took note of this commitment.

123. The representative of Saudi arabia confirmed that any fees or charges imposed on or in connection with importation and exportation, would be applied in accordance with article Viii of the gaTT 1994. He further confirmed that the review of the inspection system described in paragraph 120, above, would be completed within one year of the date of Saudi arabia’s accession to the WTo. The Working Party took note of these commitments.

- import licensing Systems

124. in addition to information contained in the Memorandum on the Foreign Trade regime, the representative of Saudi arabia had provided a detailed description of the import licensing procedures prevailing in Saudi arabia in document WT/aCC/SaU/30, together with the justification for the measures in document WT/aCC/

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SaU/29/add.3, as well as documents WT/aCC/SaU/49, 53 and 56. The representative of Saudi arabia then provided an action Plan for the implementation of the import licensing agreement in document WT/aCC/SaU/40, Council of Ministers decision no. 84 of 1.4.1421H (3 July 2000), and later noted that document WT/aCC/SaU/30 would be updated and submitted to the Working Party by the time accession. The import licensing law, issued pursuant to Council of Ministers decision no. 88 of 6.4.1423H (16 June 2002), incorporated into Saudi law the provisions of the WTo agreement on import licensing Procedures. He further confirmed that some of the measures described in documentation submitted to the Working Party had been eliminated in order to conform with the requirements of the WTo agreement, and that all measures remaining in place were described fully in annexes e (list of Products Subject to non-automatic import licensing requirements) and F (list of Banned imports) to this report. He also noted that additional information could be obtained from the concerned department or division of the respective Ministry or from the information Centre of the Ministry. The information could also be obtained from the Chamber of Commerce and industry. He also confirmed that any person with a commercial registration (i.e., registration to do business), whether an individual or an entity, or an importer of record would be able to apply for an import licence, except for agricultural machinery, as provided for in annex e.

125. The representative of Saudi arabia confirmed that, in addition to the Ministry of agriculture and the Ministry of Commerce and industry, the Ministry of Health, Ministry of information and Culture, Ministry of interior, and Ministry of Petroleum and Mineral resources, the Ministry of education (department of Museums and archaeology), the Communications and information Technology Commission (CiTC), the national Commission for Wild life Conservation and development (nCWCd) and the Chivalry Club all had responsibilities concerning the approval of import licenses. He also confirmed that there were no substantive requirements to register with the Ministry of Commerce and industry in order to import, although there was a requirement to obtain commercial registration for the carrying on of business, whether manufacturing, retailing, trading or professional. any company, whether Saudi or foreign, which was commercially registered in the field of import trade or was an importer of record could import goods without the need to get any further permission or authorization, except for items which required an import licence. in response to a question from a member of the Working Party, the representative of Saudi arabia reported that wheat imports no longer required permits or import licenses from the grain Silos and Flour Mills organization (gSFMo) (see also paragraph 44.xii, above). any provisions or references to such permits or licenses were null and void and would be deleted from all laws, regulations or other measures as of the date of accession. He further stated that domestic grain benefited from price support, as notified to the Working Party and contained in Saudi arabia’s Schedule of Concessions and Commitments on goods. a gSFMo permit was not required to import grain and there was no approval process for imported grain. grain imports

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were not restricted in any way and prices were determined according to supply and demand. The representative added, in response to another question, that Saudi arabia no longer required licensing for “milk for industrial use.”

126. Members of the Working Party asked Saudi arabia to provide a list of products subject to automatic and non-automatic import licensing requirements. The representative of Saudi arabia stated that Saudi arabia did not subject any imports to automatic licensing at this time; a list of imports subject to non-automatic licensing requirements was attached at annex e. in addition, he confirmed that Saudi arabia had circulated to the Working Party its response to the questionnaire “information on import licensing Procedures” (WT/aCC/SaU/60). in response to a question from a member of the Working Party, the representative of Saudi arabia stated that: (i) automatic licensing was provided for in Council of Ministers decision no. 88; and (ii) non-automatic licenses were not used for statistical purposes. He further stated that Saudi arabia currently uses non-automatic licensing for all products which require an import licence, but in the future may use automatic licensing as authorized by the Council of Ministers decision no. 88. if Saudi arabia does institute automatic licensing for products in the future, those requirements will be applied in a manner that is consistent with all provisions of the WTo agreement on import licensing.

127. a member of the Working Party raised questions and concerns regarding annex e relating to import licenses and asked whether Saudi arabia was reviewing its licensing requirements to test whether non-automatic licenses were actually required and necessary on all products within the HS line listed or whether licenses were only needed for specific products within the category. The member further observed that several products listed in annexes e and F were covered by Saudi arabia’s iTa commitments and it was concerned that the market access achieved through elimination of tariffs might be undercut by non-automatic licenses and bans on some of these technology products. in response to these comments, the representative of Saudi arabia stated that the Kingdom had carefully reviewed the annexes and the licensing requirements and that the licenses were required and necessary for all products listed in annex e.

128. in response to a further question from a Member, the representative of Saudi arabia confirmed that, for transmission apparatus classified in heading 85.25 and listed in annex e, only equipment whose operation requires a frequency assignment from CiTC or equipment using frequencies not in accordance with the Saudi national accordance with the Saudi national Frequency Plan, are subject to non-automatic import licensing. other transmission apparatus, such as personal digital assistants, whose operation requires a frequency assignment to a service provider, are not subject to licence. The Working Party took note of this commitment.

129. Members of the Working Party noted, in particular, that article 3.5(f) of the agreement on import licensing provided that ordinarily an import licence must be granted within 30 days of receipt of a complete application. These members

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noted that for some categories of goods, import licenses took longer than 30 days, in particular, radio communication apparatus (one to two months) and network equipment (six to twelve months). These members earlier had noted that the importation of such products was also subject to approval by the Frequency department of the department of Post, Telegraph and Telephone. in response to these comments, the representative of Saudi arabia stated that the Frequency department of the CiTC ordinarily completed its review in one week. if a product met the frequency and necessary technical specifications, the CiTC would ordinarily decide whether to grant an import licence within 30 days. in response to a question, the representative of Saudi arabia stated that the new Saudi legislation on import licensing procedures clearly provided that import licenses must be issued within 30 days of application; the 30-day limit applied to telecommunications equipment, as well. The representative of Saudi arabia confirmed that Council of Ministers decision no. 84 of 1.4.1421H (3 July 2000) and Council of Ministers decision no. 88 of 6.4.1423H (16 June 2002) applied to telecommunication equipment.

130. in response to further questions from a member of the Working Party regarding import licensing for telecommunication equipment, the representative of Saudi arabia furnished the following information:

i. in accordance with article 39 of the Telecommunication act, Council of Ministers decision 88, and article 3 of the rules of Procedures of Pleading before the Board of grievances, the applicant has the right to challenge the rejection of his/her application. First, he/she must appeal to the Minister of Telecommunication and information Technology within 15 days of the applicant’s notification of the rejection of his/her application. The Minister has 30 days to reply. Second, if the Minister rejects the appeal, the applicant has 30 days to challenge such a decision before the Board of grievances. The Board acts in its capacity as an independent administrative court. in response to a question, the representative of Saudi arabia clarified that in case of rejection of an application for an import licence, reasons for rejection must be provided to the applicant.

ii. The international Telecommunication Union (iTU) standards were generic and covered a wide range of specifications. Saudi Standards were in line with iTU Standards, and covered local requirements.

iii. The application for using radio telecommunications equipment would be processed within one month of submission. after approval of the application, a one-year grace period was provided within which the equipment and assigned frequencies are to be brought into use. The applicant was to notify the CiTC upon use of the equipment and frequencies and then the relevant licence would be issued. The one-year period for bringing the equipment and frequencies into use expired if the applicant failed to notify the

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CiTC of bringing the equipment and frequencies into use within a year or, alternatively, request an extension from CiTC. licenses for equipment and frequencies were renewable annually.

in response to a comment from a member of the Working Party, the representative confirmed that the CiTC is the appropriate authority for licensing for “radio and telecommunication” equipment. He stated that document WT/aCC/SaU/30 would be updated to reflect this change and submitted to the Working Party.

131. a member of the Working Party inquired as to the meaning of terms “wireless sets”, frequency spectrum” and “security reasons” as used in Saudi arabia’s guidelines to import licensing Procedures. The representative of Saudi arabia replied that the meanings of these terms were as per their iTU-r definitions.

132. With respect to Satellite internet receivers, HS 85291000, the representative to Satellite internet receivers, HS 85291000, the representativereceivers, HS 85291000, the representative, HS 85291000, the representative of Saudi arabia noted that these products were currently listed in annex F as banned imports. He confirmed that Saudi arabia would permit imports of these products, subject to a non-automatic licence, within three years of the date of Saudi arabia’s accession to the WTo. in his government’s view, non-automatic licensing was necessary to protect public morals. He further stated that internet service providers transmitting to such satellite internet receivers would be required to use a Saudi internet filtering facility. The Working Party took note of this commitment.

133. Members of the Working Party also asked Saudi arabia to clarify the grounds for, and particulars of, its import licensing regime for the Chivalry Club. The representative from Saudi arabia clarified that the regime was necessary to preserve a policy of great importance to the Kingdom. The regime allowed the Saudi authorities to closely monitor the importation of non-arabian horses to ensure the preservation of the blood lines of the arabian horse stock in Saudi arabia. He explained that only by closely monitoring imports of live horses could this be ensured. in response to further questions, he noted that the importation of non-arabian horses was not banned; the Chivalry Club would grant an import licence for the importation of non-arabian horses, after clearance by the department of animal and Plant Quarantine at the Ministry of agriculture, within 30 days of receipt of a complete application. in this connection, some members of the Working Party requested additional information on the time limits for grant of other import licenses. The representative reported that the applicable time limit was 30 days. He further reported that imports of horses, whether arabian or non-arabian, were not banned, but required a non-automatic import licence.

134. in response to requests for information concerning the fees payable for obtaining an import licence, the representative of Saudi arabia stated that there were no fees payable for the obtaining of an import license; Saudi ministries, including the Ministries of agriculture, of Health and of Commerce and industry, did not charge fees for import licensing procedures, including the application process. Companies

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or persons wishing to import merchandise for display at a trade fair were granted non-automatic import licenses that permitted the importation of all necessary samples, subject to the condition that the samples not be offered for direct sale. in response to a remark by a member of the Working Party, the representative of Saudi arabia stated that import licensing for trade fairs had been listed in annex e.

135. Some members of the Working Party requested information on the precise laws and regulations governing the time limits for issuing an import licence. in response, the representative of Saudi arabia stated that Council of Ministers decision no. 88 of 6.4.1423H (16 June 2002) provided that the time limit for issuance of licenses was thirty days. in the event of an unsuccessful application for an import licence, the person requesting the licence could appeal the refusal to the Board of grievances.

136. a member of the Working Party asked about the timing of appeals of decisions by particular ministries to reject an application. The Saudi representative confirmed that the entire procedure for appeal (including re-appeal) to the Ministry of Health generally would take thirty working days to complete. He further stated that the process of appeal at the Ministry of Commerce and industry depended upon the completion of the licensing requirements by the importer, i.e., if the importer were to complete the requirements, the licence would be issued upon completion. in the case of chemicals, he reported, the issuance process would take one day; for distillation equipment, the process would require from two to three days. With regard to appeals to the Ministry of agriculture, he stated that the process for the procedure of appeal, when the documents are correct and complete, requires only one day in most instances.

137. in response to further requests for information, the representative of Saudi arabia noted that decisions to not grant an import licence could first be appealed to the Minister of the concerned Ministry or to the head of the agency concerned. any subsequent appeal would be to the Board of grievances. if the Minister or the head of the agency did not decide the appeal within 90 days, the applicant had the right to submit an appeal to the Board of grievances. The Board of grievances and the applicant would receive reasons, in writing, from the concerned Ministry or agency, and the applicant could appeal on that basis. The representative referred the members to paragraphs 82-84, above, regarding the composition and workings of the Board of grievances.

138. Some members of the Working Party asked whether petroleum and natural asphalt were subject to import licensing and requested that Saudi arabia provide the justification pursuant to the relevant provisions of the WTo agreement for the maintenance of import licensing on those products. in response, the representative of Saudi arabia stated that no import licensing requirements currently existed for petroleum products, including asphalt.

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139. in response to questions from some members of the Working Party, the representative of Saudi arabia stated that high-quality photocopiers did not require an import licence from the Public Security department of Forgery at the Ministry of interior. However, anyone wishing to purchase and use such a copier was required to sign an undertaking with the Ministry of the interior. This was because such photocopiers could produce extremely high-quality reproductions of documents, making it hard to differentiate between the original and the photocopies of paper currency and official documents, certificates, passports, maps and stamps. in response to a later question from a member of the Working Party, the representative of Saudi arabia stated that, as a matter of national security, the Saudi authorities monitored not only the importer, but also the purchaser and ultimate user of high-quality copiers to preclude, e.g., forging of identification papers and counterfeiting.

140. He also noted that burglar alarms required a non-automatic import licence to prevent misuse by criminals or terrorists. For this reason, import licenses were only issued to government enterprises, public enterprises and firms or individuals with a contract with the government to supply such security devices from inside the Kingdom or abroad. Some members of the Working Party requested additional information on the justification for the import licensing requirements for security reasons. The representative of Saudi arabia stated that those measures were necessary in order to prevent import and the misuse of the items by persons who could pose a security risk. The Ministry of the interior was the agency that determined whether the importer posed a security risk or not. He stated, in response to a further question of a member of the Working Party, that the non-automatic licensing requirement applied not to fire alarms, but only to burglar (anti-theft) alarms. He further stated that private entities were allowed to obtain licenses for importation of burglar (anti-theft) alarms.

141. The representative of Saudi arabia stated that the list of items subject to import licensing was under review, and in this context he noted that the requirement for import licensing of fire-fighting equipment had recently been lifted. Fire-fighting equipment could now be imported without a licence, following a customs examination to determine compliance with Saudi mandatory standards (technical regulations) or international technical regulations. in response to a question from a member of the Working Party, he noted that fire extinguishers no longer were subject to licensing requirements, although SaSo had issued applicable mandatory standards (technical regulations). When SaSo prepared the mandatory standards (technical regulations), it circulated them for comments to all concerned bodies, including foreign embassies in Saudi arabia. The standards were applied to both locally manufactured and imported fire extinguishers.

142. The representative of Saudi arabia later stated that the review of items subject to import licensing had been completed and was reflected in annex e. He assured the members of the Working Party that the list would continue to be reviewed at least once a year and the findings and decisions of each review would be published in the official gazette Umm al-Qura and notified to the Council on Trade in goods. The Working Party took note of this commitment.

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143. Some members of the Working Party requested information on the system for licensing the importation of agricultural machinery. The representative of Saudi arabia stated that the import licenses for agricultural equipment were non-automatic and had two purposes. First, they were necessary to administer a system of subsidies paid to importers of such equipment. Second, the import licence was required even if the importer did not intend to apply for a subsidy payment in order to ensure that the equipment was suitable for the Kingdom’s environment. The representative confirmed that the licence requirement would not be applied as a disguised restriction to trade. in response to a question and an observation by a member of the Working Party, the representative of Saudi arabia stated that an importer of agricultural machinery must be an authorized distributor or agent.

144. one member of the Working Party inquired as to the procedures for importing medical products, including pharmaceuticals. in response, the representative of Saudi arabia stated that no import licence is required for approved pharmaceutical and medical products, but that, as specified in annex e (list of Products Subject to non-automatic import licensing requirements), certain medical products were subject to non-automatic import licensing. in response to a further question, he confirmed that imports of medicine for human use under numbers 30.03 and 30.04 were not subject to import licensing (as long as they had been approved for sale in Saudi arabia), but that imports of medicines for veterinary use under those numbers were subject to import licensing requirements, for the purposes of guaranteeing animal health and safety. He further reported that pharmaceutical or medical products not previously approved were subject to an approval process administered by the Ministry of Health designed to evaluate the product and ensure that the manufacturer follows good Manufacturing Practices (gMP). The representative reported that this process may take up to 18 months. one of the members of the Working Party inquired as to whether Saudi arabia required pharmaceuticals to be registered in at least three eU countries before allowing for importation or marketing in Saudi arabia. The representative of Saudi arabia confirmed that there was no such condition for importation of medicines for human use. The process for companies wishing to market their pharmaceuticals in Saudi arabia was as follows:

i. submit a completed registration form for the company;ii. the Technical Committee would examine the form and attachments

and, upon preliminary approval, would establish a inspection group for the company and the product;

iii. the inspection group would visit the company and its factory to ensure that the company applied good Manufacturing Practice;

iv. the final decision of the Technical Committee would be made based on the report of the inspection group; and

v. after approval, the company would be allowed to obtain registration of its product(s).

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in response to a question, he confirmed that the base price for a pharmaceutical was established as the last stage in the registration process.

145. a member of the Working Party noted that Saudi arabia required agreement on a base price of a pharmaceutical as the last step before a product would be registered. in the member’s view, safety and efficacy of a pharmaceutical and pricing presented two separate issues, and registration should not be conditioned on agreeing on a base price. The pricing element of the registration process could be considered an unjustified restriction on imports.

146. a member of the Working Party stated that in its view the requirement for factory inspections was a technical regulation. in that member’s view, some form of certification that does not require on-site inspection should be possible in this regard, and the transparency and due process requirements of the WTo agreements on TBT and import licensing should apply. That member also requested additional information on application of the registration process to both importers and domestic manufacturers -- in particular, whether domestically produced products must meet fewer requirements or if the registration process took less time and whether the government applied any prohibitions or limitations on importation of pharmaceuticals if domestically produced products were on the market.

147. The representative of Saudi arabia stated that inspection of plants to ensure use of good Manufacturing Practice (gMP) was an essential part of the registration process to ensure safety and quality of pharmaceutical products. Factory inspections were carried out by many countries that had well-established drug regulatory authorities. Currently, a process for certification without inspection did not exist. He confirmed that the same registration process applied to both importers and domestic manufactures and that the same requirements and time frames applied. once a medicine for human use was registered, no further prohibitions or limitations applied, and it could be imported without the need for any further licensing. He added that the fee for pharmaceutical company registration was Sar 1,000 and the fee for product registration was Sar 200. (information about the procedure for company registration was provided in paragraphs 89-93.)

148. a member of the Working Party observed that commercial importers of chemicals required a licence from the Ministry of Commerce and industry whereas importation of chemicals for factories required a non-automatic import licence from the Ministry of industry and electricity. The member observed that the same chemicals were imported for both commercial and factory purposes and that the treatment for the two should not be different. The representative of Saudi arabia explained that the procedures had been streamlined and that now the Ministry of Commerce and industry was responsible for licenses for import of chemicals for company and factory use. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that document WT/aCC/SaU/30 would be updated and made public prior to accession.

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149. a member of the Working Party asked Saudi arabia to explain its reasons for requiring non-automatic import licenses for certain “distillation equipment”. in response, the representative of Saudi arabia stated that, in the past, imported distillation equipment had been used to produce alcoholic beverages. He explained that, as the production of alcoholic beverages was prohibited under Saudi law (Shari’a), the Kingdom of Saudi arabia had decided to regulate imports of distillation equipment to address the problem. in reply to a question from a member of the Working Party, the representative of Saudi arabia reported that there was no ban on the importation of distillation equipment and that importation required an import licence from the Ministry of Commerce and industry (and not from the Ministry of industry and electricity).

150. a member of the Working Party inquired as to procedures regarding pesticides. The representative of Saudi arabia replied that non-automatic import licenses for pesticides are valid for six months (or for the remainder of the registration period) because this assists the Ministry of agriculture in tracking the quantities of imports of potentially harmful substances, and for statistical tracking purposes. also, he reported, the system helps ensure that importers’ registration documents are valid during the period. He further stated that, if an application were rejected for any reason, the applicant could appeal the decision to the Ministry, which would issue a licence as soon as the applicant had satisfactorily completed the necessary documentation.

151. a member of the Working Party asked for details regarding the licensing procedures for veterinary drugs, vaccines, feeds and domestic animals. in response, the representative of Saudi arabia reported that, if the documents were correct and complete, the process for appeal and issuance of the licence by the Ministry of agriculture would take one day. He further explained that the use of the term “feed additives” indicated that the provision in question applied only to feed additives and did not apply to feeds, and that a licence was required to import other domestic animal-related products. in response to a further question from a member of the Working Party regarding import licensing for other domestic animal-related products, the representative of Saudi arabia stated that annex e (list of Products Subject to non-automatic import licensing requirements) contained the requested information on all products subject to import licensing.

152. a member of the Working Party asked Saudi arabia to clarify its regime as it applies to seeds and fertilizers. in response, the representative of Saudi arabia noted that the process of the Ministry of agriculture’s examination and approval of an application for import licence, or of an appeal (re-appeal), would take only one day where the documentation was complete. He reported that organizations permitted to provide a health certificate for seeds and fertilizers included the governmental authorities in the country of origin, as well as official laboratories in the country of origin that had been approved by the Ministry of agriculture. also, he reported, such certificates were issued by the Saudi Ministry of agriculture and easily obtained

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where the products were free of pests and diseases. regarding the specifications used by the Saudi arabian Standards organization (SaSo) to determine whether to approve an application for import licence for seeds, the representative confirmed that the list of requirements had been submitted to the Working Party at annex g (Seed Specifications) to the Working Party report. The time limits for import licenses were based on the need to ensure that the Ministry of agriculture could ensure the validity of importers’ registration documents and to allow Saudi authorities to track import levels of seeds and fertilizers for statistical purposes. one member of the Working Party questioned whether Saudi arabia imposed additional import requirements on seeds, through a non-automatic licensing process. The representative of Saudi arabia stated that the role of the Ministry of agriculture was explained in annex g, “Conditions and requirements”, and that the procedure was simple and short and did not, in his view, constitute a disguised restriction on international trade. a member of the Working Party raised the following questions and concerns regarding some entries in annex g; the representative of Saudi arabia responded to each point as follows:

i. With regard to the provisions for markings on containers of treated seeds (Seed Specifications, point 5), the representative of Saudi arabia responded that the markings should be in english and arabic and should specify that the seeds were treated with poisonous chemicals and are not fit for human or animal consumption. The “skull and cross bones” danger sign should be printed on the seeds containers (bags, cans or tins).

ii. With regard to “Conditions and requirements” (point 3c), the representative of Saudi arabia responded that, if a pesticide were used, it was only necessary to indicate the name and registration number of the product used, or alternatively, the ingredient, on the label or an additional label. The representative of Saudi arabia agreed that only the name and registration number of the product would be used.

iii. With regard to the requirement that certificates should confirm that the seeds have not been subject to radiation (“Conditions and requirements”, point 3d), the representative of Saudi arabia stated that these certificates had been requested only during the crisis of the Chernobyl nuclear plant. These certificates were not requested any more.

153. in response to further questions from a member of the Working Party regarding seed import restrictions, the representative of Saudi arabia clarified that annex g set forth in detail the role of the Ministry of agriculture, that all imported seeds were subject to import licensing and that Saudi arabia would not apply the Seed Specifications as an unjustified barrier to trade. The Working Party took note of this commitment.

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154. in response to questions from some members of the Working Party, the representative of Saudi arabia stated that Council of Ministers decision no. 84 of 1.4.1421H (3 July 2000) and Council of Ministers decision no. 88 of 6.4.1423H (16 June 2002) were the measures implementing the WTo agreement on import licensing Procedures. The import licensing law issued pursuant to Council of Ministers decision no. 88 incorporated into Saudi law the provisions of the WTo agreement on import licensing Procedures. The salient features of the new law were:

i. Persons, firms and institutions eligible to apply for import licenses are: (a) Saudi, foreign or joint venture companies registered under Saudi laws; (b) natural persons registered in the Commercial register; (c) foreign enterprises registered to engage solely in importation of goods into Saudi arabia; and (d) Saudi nationals and non-Saudis holding residence permits, without commercial registration, provided they apply to import goods for their personal use.

ii. imports by categories (a) and (b) will be limited to goods related to the scope of business inscribed in their commercial registration.

iii. applications for automatic import licensing may be submitted on any working day prior to the customs clearance of goods. licenses will be issued within a maximum of 10 days from the date of application.

iv. applications for non-automatic import licenses may be submitted within 21 days prior to the closing date of applications. licenses will be issued within a period of 30 days from the date of application.

v. applications would not be rejected for minor variations in value or minor documentation errors.

vi. licence applicants have to approach only one administrative body. if necessary, that body would coordinate with other administrative bodies.

vii. non-automatic licensing is required for imports subject to quantitative or other restrictions (Saudi arabia applies no quotas).

viii. article 9 of the law contains detailed provisions on allocation of quotas in line with the provisions of article 3 of the agreement on import licensing Procedures (Saudi arabia applies no quotas).

ix. The law requires publication in the official gazette of the amount of quotas and any changes thereto at least 30 days prior to the date of application (Saudi arabia applies no quotas).

x. in case of refusal of applications, the reasons for refusal will be provided upon request of the applicant.

xi. right of appeal to the Head of the administrative body is provided for, within a period of 15 days from the date of refusal. a further right of appeal to the Board of grievances against the decision of the Head of the administrative body is provided for, within 30 days from the date of the decision.

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155. The representative of Saudi arabia confirmed that Saudi arabia would, from the date of accession, eliminate and not introduce, re-introduce or apply non-tariff measures such as licensing, permits, prior authorization requirements, licensing requirements and other restrictions having equivalent effect that cannot be justified under the provisions of the WTo agreement. any further amendments to the import licensing regime after accession would be fully in accordance with all relevant provisions of the WTo, including the agreement on import licensing Procedures. He further confirmed that any discretionary authority permitting officials of the Kingdom of Saudi arabia to suspend imports and exports or licensing requirements that could suspend, ban or otherwise restrict the quantity of trade would be applied from the date of accession in conformity with the provisions of the WTo, including articles Xi, Xii, Xiii, XiX, XX and XXi of the gaTT 1994, and the agreements on agriculture, application of Sanitary and Phytosanitary Measures, import licensing Procedures, Safeguards and Technical Barriers to Trade. The Working Party took note of these commitments.

- Quantitative import restrictions, including Prohibitions and Quotas

156. in response to questions from members of the Working Party, the representative of Saudi arabia supplied details regarding quantitative restrictions maintained in Saudi arabia. in addition to information contained in the Memorandum on the Foreign Trade regime, the representative of Saudi arabia provided a current list of restricted (banned and controlled) items in Saudi arabia, together with the justification, in annex F (list of Banned imports). He also noted that additional information could be obtained from the concerned department or division of the respective Ministry or from the information Centre of the Ministry of Commerce and industry. The information could also be obtained from the Chamber of Commerce.

157. Certain members of the Working Party requested further details on quantitative import restrictions, including those on certain imports of the following products: long-life pasteurized milk in packing exceeding 1 litre (HS no. 0401.00.00); dates; rice; poultry, beef and lamb; offal; therapeutic medicines used in animal feed; lentils; and certain tyres. The representative of Saudi arabia noted that Saudi arabia had listed all of the products to which it applied quantitative import restrictions, as well as the relevant numbers and bases of the restrictions, at annex F (list of Banned imports). also, he said, Saudi arabia had taken a series of actions to comply with WTo provisions. He provided the following responses to specific questions from the members of the Working Party:

i. long-life Pasteurized Milk - Saudi arabia had removed the import ban and replaced it with a tariff.

ii. dates - Saudi arabia had removed the import ban and replaced it with a tariff.

iii. rice from the United States - Saudi arabia did not ban imports of rice from the United States.

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iv. Poultry, Beef and lamb from the United States - Saudi arabia did not ban imports of poultry, beef or lamb from the United States.

v. offal - The import of offal was permitted from all countries, or regions within countries, except those with livestock with infectious diseases, pursuant to the guidelines on the import of Meat and Meat Products (Ministry of Commerce and industry decision no. 123 of 16.1.1422H (9 april 2001), as amended by Ministry of Commerce and industry decision no. 1308 of 27.5.1424H (27 July 2003)). The latter decision permitted imports of offal from countries with livestock free of infectious diseases and provided safeguards for such imports. These measures were imposed to protect the health and safety of persons living in the Kingdom.

vi. Therapeutic Medicines Used in animal Feed - There were two types of restrictions, which Saudi arabia confirmed it would apply in the least trade-restrictive manner: (a) a ban on certain antibiotics due to their side effects on human health according to recommendations of the WHo and the Copenhagen Forum (September 1998), which applied to virginiamyacin, zinc bacitracin, spiramycin and tylosin phosphate, and enrofloxacin and its use in poultry; and (b) a quantitative restriction designed to preclude importation of huge quantities of therapeutic drugs for use as feed additives, which created the risk that the drug no longer would be efficacious for its primary purpose as an antibiotic.

vii. lentils from australia - The ban on lentils from australia had been lifted after the agreement between Saudi arabia and australia had been signed. The ban, and the problem that occasioned it, had been the subject of successful bilateral discussions between Saudi arabia and australia. Saudi arabia and australia had agreed that the ban would be lifted and that australia would certify future shipments.

viii. Tyres - The Ministry of Commerce and industry had banned imports of certain tyres following a series of fatal accidents in the United States caused by design and/or manufacturing issues. The action had been taken due to public safety concerns and in light of the fact that, given the climate of Saudi arabia, similar accidents would be even more likely to occur there than in the United States. The Ministry requested the investigation results from the concerned U.S. authorities and, in the meantime, took the prudential action of banning imports of those tyres, pending review of the results. The ban was limited to those tyre models, produced at specific facilities, which were most similar to the tyres involved in the accidents. The ban, therefore, applied only to certain tyre models and sizes, produced at certain facilities. The representative of Saudi arabia noted that specific information was available on request.

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ix. Used and rethreaded Tyres - Saudi arabia had banned imports of used and rethreaded tyres to protect public safety. given the climate of Saudi arabia, used and rethreaded tyres are particularly subject to failure and the safety of imports of these products could not be assured.

x. Mobile phones fitted with digital cameras – Saudi arabia had banned this item to preclude individuals from invading privacy by surreptitiously photographing, and downloading onto the internet, pictures of persons or property without consent of the person or the property owner. The ban had been eliminated after a review.

158. The representative of Saudi arabia confirmed that Saudi arabia would, from the date of accession, eliminate and not introduce, re-introduce or apply quantitative restrictions on imports or other non-tariff measures, such as quotas, bans, permits, prior authorization requirements, licensing requirements and other restrictions having equivalent effect that could not be justified under the provisions of the WTo agreement. He also confirmed that all import bans currently in place were listed in annex F, and that the list of banned imports would be reviewed on an ongoing basis but at least once a year to remove items where permitting importation would not compromise the legitimate objectives of the Kingdom. Changes to Saudi law after accession would be fully in accordance with all relevant provisions of the WTo. He further confirmed that any discretionary authority permitting officials of the Kingdom of Saudi arabia to suspend imports and exports or otherwise restrict the quantity of trade would be applied from the date of accession in conformity with the provisions of the WTo, including articles Xi, Xii, Xiii, XiX, XX and XXi of the gaTT 1994, and the agreements on agriculture, application of Sanitary and Phytosanitary Measures, import licensing Procedures, Safeguards and Technical Barriers to Trade. The Working Party took note of these commitments.

- Customs Valuation

159. Some members of the Working Party stated that the system of valuation described in the Memorandum on the Foreign Trade regime, in annex 4 to document WT/aCC/SaU/4 and in document WT/aCC/SaU/18 did not appear to fully comply with certain requirements of the agreement on implementation of article Vii of the gaTT 1994 (Customs Valuation agreement). Some members requested that a number of areas of the customs valuation regime receive further elaboration so that they were in conformity with the Customs Valuation agreement, its interpretative notes, and relevant decisions and declarations. in particular, members noted that, in addition to problems related to the right of appeal (article 11 of the agreement) and to transparency (article 12 of the agreement), Saudi arabia’s valuation system lacked predictability and relied on the “nearest equivalent value” as an alternative to transaction value. This could give customs officials excessively wide discretion in their determination of customs value of the imported goods. Members also sought

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confirmation that Saudi arabia would adopt decisions 3.1 and 4.1 of the Customs Valuation Committee. The representative of Saudi arabia stated that the valuation regime referred to by Working Party members pertained to previous Customs rules and regulations that had been abrogated and superseded by the gCC Common Customs law, which Saudi arabia had ratified by royal decree no. M/41 of 3.11.1423H (5 January 2003).

160. Concerning article 11 of the Customs Valuation agreement and the right of appeal to a judicial authority, the representative of Saudi arabia stated that appeal rights for a relevant person before an independent judicial body (i.e., the Board of grievances) was guaranteed by royal decree no. 190 of 16.11.1409H (19 June 1989). This applied to the Customs department. The requirements of article 12 concerning publication of laws, regulations and decisions were satisfied by article 71 of the Basic law of governance, which required that such information be published in the official gazette, Umm Al-Qura. The representative of Saudi arabia noted that article 1.i.3 of the rules of implementation of the Customs Valuation law implemented article 11 of the Customs Valuation agreement. He confirmed that decisions 3.1 and 4.1 of the Customs Valuation Committee would be implemented through Ministerial decision not later than the date of accession. in response to request by a member of the Working Party that Saudi arabia should implement paragraph 2 of decision 4.1 on the Valuation of Carrier Media Bearing Software for data Processing equipment, the representative of Saudi arabia agreed to that and confirmed that necessary provision had been made in the Ministerial decision referred to in paragraph 162, below.

161. The representative of Saudi arabia described the legal basis of the Saudi regime. He stated that the action Plan on implementation of the Customs Valuation agreement circulated in document WT/aCC/SaU/38/rev.1 had been completed, that Customs officials and brokers had been trained and necessary laws and regulations on customs valuation had been promulgated. The representative submitted to the Working Party the Common Customs law of the gCC States and the rules of implementation, which contained Saudi arabia’s new system of customs valuation. He further reported that the Common Customs law of the gCC was ratified by royal decree no. M/41. articles 26 and 27 of the law and article 1 of the rules of implementation dealt with customs valuation. He further reported that Saudi arabia had applied the new Common Customs law and the rules of implementation with effect from 1 January 2003, and that they were, in the view of Saudi arabia, consistent with the provisions of the Customs Valuation agreement. The representative of Saudi arabia emphasized that article 1.i.3 of the rules of implementation of the Customs Valuation law implemented article 11 of the Customs Valuation agreement.

162. The members of the Working Party thanked Saudi arabia for confirming that the provisions of the gCC Common Customs law and its rules of implementation were the legal authority for the operation of Saudi arabia’s customs valuation regime. They noted that, although the gCC law and the rules addressed many of

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the provisions of the Customs Valuation agreement, they were missing some crucial components of a fully WTo-consistent regime in this area. They identified what they viewed as a number of deficiencies in the implementation of articles 1, 2, 6-8 and 11-15 of the Customs Valuation agreement.

163. in response to the questions and concerns of Working Party members regarding the consistency of the gCC Common Customs law and rules of interpretation with WTo provisions, the representative of Saudi arabia stated that the deficiencies with reference to articles 1, 2, 6-8 and 11-15 of the Customs Valuation agreement pointed out in the previous paragraph had been taken care of in Ministerial decision no. 1207 of 9.5.1425H (27 June 2004), a copy of which had been submitted to the Working Party. He added that the arabic text of the Common Customs law and the rules of implementation adopted the terminology of the Customs Valuation agreement, and in any areas where the english translation was not clear, the gCC would be notified and requested to issue a new english translation that clarifies this. Concerning an importer’s ability to have goods released upon deposit of a sufficient guarantee, the representative of Saudi arabia confirmed that an importer had such right upon submission of a sufficient guarantee, which could be in the form of a surety, bank or cash deposit, bank guarantee, or mortgaged property of equivalent value. (in response to a subsequent question, the representative of Saudi arabia explained that, on the form accompanying the submission of the guarantee, the importer was asked to write down his account number. in the event that it was determined that no additional assessment was appropriate, the amount of the guarantee would be deposited into the importer’s account, if the guarantee was in the form of a bank or cash deposit.) Concerning the point raised on article 11 of the Customs Valuation agreement “that it did not appear that provision had been made either in the gCC law or the rules of implementation for the right of appeal, without penalty to a judicial authority or for written notice of the decision on appeal”, the representative of Saudi arabia noted that this issue has been clarified in Ministerial decision no. 1207 of 9.5.1425H (27 June 2004), which provided that the importer or any person liable for payment of the customs duties could object to and appeal the assessment of the customs value, without penalty, to an independent judicial body (Board of grievances). article 31 of the Procedural rules before the Board of grievances explicitly provides for written notice of decisions to the litigants. decision no. 1207, as well as article 61 of the gCC Common Customs law, provided that the importer should be informed in writing of the decision taken by the Committee concerning his complaint. as regarded the point raised on article 12, regarding publication of the laws, regulations and judicial decisions, the representative of Saudi arabia stated that it had been already clarified in paragraph 159, above, that the requirements of article 12 had been satisfied by article 71 of the Basic law of governance, which required that such information be published in the official gazette Umm Al-Qura. Moreover, decree no. 162 issued by the Council of Ministers on 17.6.1423H (28 august 2002) provided that the Ministry of Justice and Board of grievances should compile and publish administrative rulings and the final

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rulings issued by the courts and the decisions issued by competent committees. The representative of Saudi arabia confirmed that this would include the publication of administrative rulings of general application giving effect to the Customs Valuation agreement.

164. The representative of Saudi arabia confirmed that the Kingdom of Saudi arabia would implement the provisions of the WTo agreement on implementation of article Vii of gaTT 1994 (concerning customs valuation) in full from the date of accession to the WTo, without recourse to any transitions. He also confirmed that Saudi arabia would implement paragraph 2 of decision 4.1 on the Valuation of Carrier Media Bearing Software for data Processing equipment. The gCC Common Customs law and implementing regulations, which came into effect on January 1, 2003, substantially implemented the provisions of the Customs Valuation agreement. deficiencies in the law and regulations identified by members had been remedied in Ministerial decision no. 1207 of 9.5.1425H (27 June 2004). He further confirmed that the Ministerial decision would remain in effect until the gCC rules of implementation were officially amended by the gCC. The Working Party took note of these commitments.

- rules of origin

165. The representative of Saudi arabia stated that the Kingdom did not currently have rules of origin for non-preferential trade, but future rules would be implemented in accordance with the WTo agreement on rules of origin. in response to requests for information, the representative of Saudi arabia stated that certificates of origin issued by the competent authority of the exporting country (the concerned ministry or the chamber of commerce) were necessary for importation of goods from preferential sources. other requirements in the case of member countries of the greater arab Free Trade area included minimum value added of 40 per cent (see the last sentence of paragraph 166, below). From 1996, all imports of expensive textile products had been required to have the origin of the goods printed or stamped thereon with indelible print. a textile product was deemed to be “expensive” depending on an analysis of factors such as the quality, the brand name, texture, design and the price relative to other fabrics. This requirement was introduced to protect consumers against misleading or deceptive practices. in response to a request from a member of the Working Party to review this requirement, the representative of Saudi arabia stated that his government had found that it was necessary to protect consumers, as misleading marks of origin had been applied on paper stickers, with the result that consumers received a misleading impression about the goods.

166. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the gCC did not yet have its own rules of origin. rather, he stated, the gCC made use of the rules of international economic agreements in force, i.e., the WTo agreement on rules of origin and work thereunder. in response to further questions from a member of the Working Party,

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the representative of Saudi arabia stated that rules of origin were currently being prepared within the framework of the gulf Cooperation Council. These rules would be finalized in consultation with the WTo Secretariat and WTo Members and would be submitted for circulation to members of the Working Party upon completion. These gCC provisions on rules of origin would serve as Saudi arabia’s rules of origin for non-preferential trade, as well as for preferential trade among gCC members. The representative further stated that, pending finalization of rules of origin of the greater arab Free Trade area, interim rules were being applied which provided that origin was conferred on wholly produced or manufactured goods in an arab country and on goods in which domestic value added was not less than 40 per cent.

167. The representative of Saudi arabia stated that, from the date of accession, Saudi arabia’s laws and regulations for preferential and non-preferential rules of origin would comply fully with the WTo agreement on rules of origin. The representative of Saudi arabia confirmed that Saudi arabia’s rules of origin would be established in law and notified to the WTo Secretariat and the Committee on rules of origin by the time of accession. The requirements of article 2(h) and annex ii, Paragraph 3(d) of the agreement would be fully implemented prior to accession. He also stated that, from the date of accession, the Customs authorities would provide for an assessment of the origin of the import upon the request of an exporter, importer or any person with a justifiable cause. any request for such an assessment would be accepted even before trade in the goods concerned began. any such assessment would be binding for three years. The Working Party took note of these commitments.

- other Border Measures

168. Members of the Working Party asked Saudi arabia to describe the new customs procedures, following the establishment of the gCC Customs Union, particularly as they related to goods first imported through other gCC member States. one member of the Working Party observed that in some cases Saudi arabia had turned back imports destined for its market that first entered through and paid duties in other gCC member States. The representative of Saudi arabia stated that all customs procedures (i.e., lodgement of the customs declaration, inspection of the goods, assessment and collection of customs duties) were conducted in the first gCC member State where the goods entered from outside the gCC. goods destined for another gCC member State, after completion of customs formalities in the first gCC State, were allowed to leave after affixing customs seals and were accompanied by a copy of the customs import declaration showing the value of the goods and payment of duty. There was no further assessment and collection of duty in the country of final destination, with the exception of “sensitive” goods for which the remainder of the tariff rate of the country of origin (e.g., tariff rate of Saudi arabia minus 5 per cent) would be collected at entry. The representative said that in the absence of specifics and details it was difficult to say if and why the imports were turned back. it might be that the seals were not intact or the consignment was not accompanied by the customs

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declaration or, for example, that the import of the goods was banned in Saudi arabia but not in the gCC State of first importation (e.g., alcoholic beverages).

169. Members of the Working Party asked Saudi arabia to describe how duties collected were apportioned to various gCC member States. The representative of Saudi arabia explained that for the first three years following the establishment of the gCC Customs Union, the duties would be apportioned according to the final destination of the goods. The arrangement would be reviewed after the transitional period of three years. The Working Party took note of this commitment.

- application of internal Taxes to imports

170. a member of the Working Party asked whether Saudi arabia would abide by the non-discrimination provisions of articles i and iii of gaTT 1994 in relation to internal taxation from the date of accession. in response, the representative of Saudi arabia stated that Saudi arabia did not impose a value added tax (VaT), an excise tax or any other internal taxes or charges on either domestically produced or imported products.

171. The representative of Saudi arabia confirmed that, in case any internal taxes or charges were introduced, Saudi arabia would apply these taxes in compliance with articles i and iii of the gaTT 1994. The Working Party took note of this commitment.


172. Some members of the Working Party stated that the international Conformity Certification Program (iCCP) mentioned below operated as a PSi scheme. They noted that although most of the requirements of the agreement on Preshipment inspection appeared to have been complied with, some elements of the iCCP continued to raise concerns.

173. in response to comments of various members of the Working Party regarding the role of the iCCP and preshipment inspection, the representative of Saudi arabia reported that the Ministry of Commerce and industry, in cooperation with SaSo, had implemented the international Conformity Certification Program (iCCP) as a combined conformity assessment, preshipment inspection and certification scheme on the basis of which consignments were allowed entry into the Kingdom and cleared more quickly through Customs upon arrival. He further said that the iCCP had been phased out pursuant to Council of Ministers decision no. 213 of 3.8.1424H (30 September 2003) as of 28 august 2004.

174. The representative of Saudi arabia stated that, from the date of accession to the WTo, Saudi arabia would ensure that the requirements of the agreement on Preshipment inspection were met in full. He further confirmed that Saudi arabia would ensure that the operations of any preshipment inspection companies retained by Saudi arabia met the requirements of the WTo agreements, including the

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agreements on Technical Barriers to Trade, Sanitary and Phytosanitary Measures, import licensing Procedures, Customs Valuation, rules of origin, implementation of article Vi (anti-dumping), Subsidies and Countervailing Measures, Safeguards and agriculture. The establishment of charges and fees would be consistent with article Viii of the gaTT 1994, and Saudi arabia would ensure that the due process and transparency requirements of the WTo agreements, in particular article X of the gaTT 1994, would be satisfied. The Working Party took note of these commitments.

- anti-dumping, Countervailing duty and Safeguard regimes

175. Some members of the Working Party raised concerns regarding the law for the Protection and encouragement of national industry. The representative of Saudi arabia stated that the law would be reviewed to ensure consistency with WTo requirements by the date of accession at the latest.

176. Members also noted that Saudi arabia did not currently have any trade remedies legislation permitting the imposition either of anti-dumping or countervailing duties or of safeguard measures. Those members requested that Saudi arabia undertake to not impose such measures until appropriate WTo-consistent legislation had been enacted. The representative of Saudi arabia confirmed that this was the case and informed the Working Party that a trade remedies law, which included provisions on anti-dumping, Countervailing and Safeguard Measures, had already been passed by the Shoura Council and had been submitted to the Council of Ministers. after the enactment of the law through a royal decree, the implementing regulations would be issued. in response to questions from members of the Working Party regarding to what imports the law would be applied, the representative of Saudi arabia stated that the law was not adopted to target specific imports and would provide remedies only in situations foreseen by the WTo agreements on anti-dumping, Countervailing Measures and Safeguards. Copies of the law and the implementing regulations would be made available as soon as possible after their issuance.

177. one member sought clarification as to how the gCC trade remedy laws would work in practice in antidumping, countervailing duty and safeguard investigations, such as whether injury determinations would be made in all cases with respect to a gulf industry as a whole, as opposed to determinations made in some cases with respect to a domestic industry limited to the Kingdom of Saudi arabia. The member also asked whether trade remedy measures under these laws would always cover imports into the gulf countries as a whole, as opposed to measures in some cases being limited to covering imports into the Kingdom of Saudi arabia. in response, the representative of Saudi arabia stated that, as of 1 January 2004, the gCC had passed an anti-dumping and countervailing duty law and that the gCC was in the process of developing implementing regulations. The representative confirmed that copies of the law and the regulations would be submitted to the WTo as soon as the regulations were issued.

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178. The representative of Saudi arabia said that Saudi arabia would not apply any anti-dumping, countervailing or safeguard measures to imports from WTo Members until it had notified and implemented appropriate laws in conformity with the provisions of the WTo agreements on the implementation of article Vi, on Subsidies and Countervailing Measures and on Safeguards. He confirmed that Saudi arabia would ensure that such legislation would be in full conformity with the relevant WTo provisions, including articles Vi and XiX of the gaTT 1994 and the agreement on the implementation of article Vi, the agreement on Subsidies and Countervailing Measures and the agreement on Safeguards. after such legislation was implemented, Saudi arabia would only apply any antidumping duties, countervailing duties and safeguard measures in full conformity with the relevant WTo provisions. The Working Party took note of these commitments.

B. eXPorT regUlaTionS - export restrictions

179. Some members of the Working Party enquired whether the Kingdom of Saudi arabia maintained any export controls. in response, the representative of Saudi arabia stated that Saudi arabia maintained no export bans, except on some items such as date seedlings, breeding horses and subsidized wheat and wheat flour. He informed the Working Party that the legal basis of the bans was the authority of the Council of Ministers and that the bases for the individual bans were as set out in annex i (list of Banned exports), i.e., gaTT 1994 article XX(a), (b), (d), (f) and (j). Some members of the Working Party asked whether Saudi arabia intended to remove those bans prior to its accession to the WTo. in response, the representative of Saudi arabia stated that there was no ban on the export of wheat and wheat flour; an export licence would be approved unless the wheat and wheat flour had been subsidized and the subsidy had not been repaid (i.e., if the subsidy had been returned to the government, the product could be exported). He further added that Saudi arabia banned the export of date seedlings and breeding horses because the local breeds and varieties of these two items were pure and rare. The representative indicated that a list of banned exports was attached to the Working Party report at annex i; a list of exports subject to authorization/licensing was attached at annex J. in reply to questions from a member of the Working Party, the representative stated that any trader or manufacturer could apply for an export licence, for which no fees were charged. He further said that there were no activity licensing requirements and that the application for the licence had to be submitted to the concerned ministry, i.e., the Ministries of Commerce and industry, agriculture, Health, interior or Petroleum and Mineral resources. He reported that the licenses were either automatic or non-automatic as indicated in annex J and that the time period for obtaining the licence depended upon the nature of the exported product. at a later stage, the representative of Saudi arabia added that annexes i and J identified all products subject to export bans or export licensing, some of which were discussed below in response to questions from members of the Working Party. in response to a question from a member of the Working Party, the representative

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of Saudi arabia stated that export traders needing licenses were required to have commercial registration. He added that information on export licensing procedures was available on the website of the Ministry of Commerce and industry. He further added that the list of products subject to export licensing was presently not published but that, prior to accession, it would be published in the official gazette. He added that updates on export restrictions will also be published. The Working Party took note of these commitments.

180. a member of the Working Party commented that food imported into Saudi arabia could not be re-exported without approval, and receiving approval involved a time-consuming process. The member requested that all prior approval requirements for the re-exportation of imported food be abolished by the date of accession.

181. in response to a question from a member of the Working Party regarding the export ban on scrap metal, the representative of Saudi arabia confirmed that, prior to accession, this measure would be lifted. The Working Party took note of this commitment.

182. The representative of Saudi arabia confirmed that from the date of accession Saudi arabia would ensure that its laws, regulations and requirements relating to the right to export and all fees, charges or taxes levied on such rights would be in full conformity with its WTo obligations, including articles Viii:1(a), Xi:1 and iii:2 and 4 of the gaTT 1994 and that it would also implement such laws and regulations in full conformity with these obligations. The Working Party took note of these commitments.

183. The representative of Saudi arabia also confirmed that any export control requirements remaining in place on the date of accession would be fully consistent with WTo provisions, including those contained in articles Xi, XVii, XX and XXi of the gaTT 1994. in this regard, the requirement of approval to re-export food would be abolished as from the date of accession and re-export of subsidized food items would be subject to repayment of the amount of subsidy. The Working Party took note of this commitment.

- export duties

184. Some members of the Working Party requested information on export duties applied by Saudi arabia. Those members noted that the export duties applied by Saudi arabia appeared to be imposed only for revenue purposes and would have trade-distorting effects. in response, the representative of Saudi arabia stated that article Xi of the gaTT 1994 expressly permitted the imposition of export duties, and did not restrict the right to impose such duties. export duties applied only to un-tanned hides and skins, falling under HS nos. 4101, 4102 and 4103. The rate of export duty was Sar 2000/ton (roughly 20 per cent). The representative of Saudi arabia confirmed that Saudi arabia would not impose export duties on iron and steel

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scrap. The Working Party took note of this commitment.

- export Subsidies

185. Members of the Working Party asked for information regarding export incentives and subsidies. in response, the representative of Saudi arabia stated that Saudi arabia neither maintained nor had any intention to provide any prohibited export incentives or subsidies.

186. The representative of Saudi arabia confirmed that Saudi arabia did not maintain subsidies including export subsidies that met the definition of a prohibited subsidy, within the meaning of article 3 of the agreement on Subsidies and Countervailing Measures and that it would not introduce such prohibited subsidies in the future. The Working Party took note of this commitment.

C. inTernal PoliCieS aFFeCTing Trade in goodS - industrial Policy, including Subsidies

187. in response to requests for information concerning interest-free loans provided by the Saudi industrial development Fund (SidF), the representative of Saudi arabia stated that wholly-owned foreign companies, like Saudi-owned companies, were also eligible for a loan of up to 50 per cent of the project cost. The representative of Saudi arabia stated that, under the loan programme conducted by SidF, loans were not contingent upon export performance, nor were they contingent upon the use of domestic over imported goods. The decision to provide a loan was made on the basis of the facts appropriate to that particular case within the parameters of the SidF law. article 2 of the law provided that the Fund could provide medium- or long-term loans to: (1) new industrial enterprises established in Saudi arabia; and (2) existing private industrial enterprises for the extension of their activities or the replacement of their equipment and introduction of modern methods thereto. article 4 of the law stated that the Fund should carry out a full evaluation of the economic benefits of the enterprise required to be financed, taking into consideration the soundness of its management in order to ascertain the benefit of the industrial enterprise from economic, financial and technical aspects. in addition, the Fund was required to examine whether the financing required for the whole of the enterprise had been reasonably obtained and whether the volume of the Fund’s aid represented a reasonable percentage of the total financing needs of the enterprise; the Fund was required to obtain sufficient financial guarantees for the financing given by the Fund.

188. in response to questions from members of the Working Party, the representative of Saudi arabia stated that no WTo-inconsistent support or subsidies had been approved or sanctioned for projects involving the creation of production capacity for refined petroleum and petrochemical products.

189. The representative of Saudi arabia confirmed that any subsidy programmes would be administered in conformity with the agreement on Subsidies and

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Countervailing Measures and that all necessary information on programmes would be notified to the Committee on Subsidies and Countervailing Measures in accordance with article 25 of the agreement upon entry into force of Saudi arabia’s Protocol of accession. The Working Party took note of this commitment.

- Technical Barriers to Trade

190. The representative of Saudi arabia provided the Working Party with information on Saudi voluntary standards, Saudi mandatory standards (technical regulations) and Saudi arabia’s international Conformity Certification Programme (iCCP) in documents WT/aCC/SaU/15, 16, 21, 26, 29, 34, 36 and 37 (revised Comprehensive Procedures and guidelines concerning the iCCP); 41 (action Plan for the implementation of the TBT agreement); 45 (iCCP); 48 (Communication on the SaSo Technical directive); and 52 (Communication on the iCCP). The representative of Saudi arabia stated that, under Saudi law, “mandatory standard” was the same as the WTo term “technical regulation”.

- description of Saudi regime

191. The representative of Saudi arabia further informed members of the Working Party that Saudi arabia had established and was implementing the TBT regime. This had been done by issuing and implementing the SaSo Technical directive (having the force of law) on 18 July 2000, and amended on 19 July 2005. The major features of the system were:

i. all SaSo standards, mandatory standards (technical regulations) and conformity assessment procedures were intended to be fully compatible with the TBT agreement.

ii. SaSo had established a single contact point for information (enquiry Point) pursuant to Part Four of the Technical directive. it also would provide relevant documents upon request.

iii. The Ministry of Commerce and industry was the authority responsible for making notifications to the WTo.

iv. item 2 of Part Four of the Technical directive required a non-discriminatory and cost-based fee structure.

v. items 4/5/1 of Part Two of the Technical directive required publication of notices of proposed technical regulations, standards and conformity assessment procedures in the journal issued by SaSo.

vi. items 3/3/1 and 4/5/4 of Part Two of the Technical directive provided for a 60-day comment period and non-discriminatory consideration of comments in the preparation of final regulations.

vii. item 4/8 of Part Two of the Technical directive provided for a reasonable period of time between the final publication and entry into force of a technical regulation.

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viii. item 2/1 of Part Two of the Technical directive stated that SaSo would follow the Code of good Practice for the preparation, adoption and application of standards.

ix. item 2/3 of Part Two of the Technical directive and item 2 of Part Three of the Technical directive provided for national treatment and non-discrimination with respect to products in the context of development and application of technical regulations and conformity assessment procedures.

x. item 2/4 of Part Two of the Technical directive stated “Saudi voluntary and mandatory standards shall not create unnecessary barriers to international trade except what violates the islamic legislation (e.g., requirements for halal meat and labelling requirements for ‘alcohol free’ malt beverages), national security requirements, prevention of deceptive practices, and the protection of human health or safety, animal or plant life or health or the protection of environment”.

xi. item 4/9 of Part Two of the Technical directive provided for on-going review of technical regulations to ensure they are appropriate to achieve the desired legitimate objectives.

xii. items 3/1 and 4/1 of Part Two of the Technical directive required SaSo to consider relevant international standards as a basis for preparing Saudi technical regulations and standards unless these international standards or their parts are ineffective or an inappropriate means for achieving the intended, legitimate objectives. This, for example, could be due to their inconsistency with islamic law or due to climate, geographical factors or basic technical problems.

xiii. according to items 3/2 and 4/4 of Part Two of the Technical directive, technical regulations and standards should be prepared on the basis of product performance requirements rather than in terms of design or descriptive characteristics.

xiv. item 4/3 of Part Two of the Technical directive required SaSo to consider equivalent technical regulations of other Members unless they were ineffective or inappropriate for achieving the intended legitimate objectives.

xv. item 2 of Part Three of the Technical directive required SaSo to accept the results of conformity assessment procedures conducted by bodies in exporting Member countries provided that relevant Saudi arabian national deviations were taken into account.

192. in response to questions from some members of the Working Party, the representative of Saudi arabia stated that SaSo is the sole standardization body in Saudi arabia. its Board of directors consisted of representatives from all concerned

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Ministries, government agencies and the private sector. There was coordination between SaSo and other Saudi authorities on issuing any regulations that might affect trade between Saudi arabia and other countries. He said that technical committees made recommendations to SaSo on whether a standard should be voluntary or a mandatory (i.e., a technical regulation, in WTo terms). (a list of the technical committees was attached to the Working Party report at annex K.) in response to a question by a member of the Working Party, he reported that the criteria for adopting a standard as mandatory (as a technical regulation) would be based on the fulfilment of legitimate objectives as provided in the TBT agreement, such as protection of health, safety, national security, islamic law, the environment and prevention of deceptive practices. in reply to a question whether guidelines and/or criteria would be developed to assist in determining whether an existing mandatory standard (technical regulation) should remain mandatory when it was reviewed, the representative of Saudi arabia stated that the criteria for adopting mandatory standards (technical regulations) would also apply to a review of existing mandatory standards (technical regulations). He noted that the development of Saudi voluntary standards and mandatory standards (technical regulations) would proceed in accordance with SaSo’s general outline of the Measures for drafting Saudi Standards. all parties concerned with the subject matter of the draft mandatory standards (technical regulations) were normally represented on the relevant “technical committees” as active members; they included pertinent governmental, academic, industry and trade sectors. For this reason, only one draft circulation period was necessary to provide adequate opportunity for comments by other interested parties. in case of development of draft mandatory standards (technical regulations) by the SaSo technical staff, the first draft circulation period provided the opportunity for comments raised by all concerned parties to be taken into consideration in the preparation of the second draft. He also provided the Working Party with a copy of the procedures for the development of SaSo mandatory standards (technical regulations) in annex iV to document WT/aCC/SaU/29.

193. in response to additional questions from a member of the Working Party, the representative of Saudi arabia reported that SaSo had reviewed the Technical directive and the changes discussed below had been made as of 19 July 2005. The reference in the Technical directive to “iSo Code of good Practice” had been changed to “TBT Code of good Practice” and statements such as “whenever possible” or “as much as possible” had been removed from the Technical directive. also, Part iii of the Technical directive had been changed to reflect the Ministerial decision withdrawing the iCCP by deleting iCCP from Part iii of the Technical directive. The representative further stated that, to make all of the procedures more transparent, they had been placed on the Ministry of Commerce and industry website (www.commerce.gov.sa), and they were available from the Chambers of Commerce.

194. Members of the Working Party asked Saudi arabia to confirm that the Saudi Conformity assessment Program (SCaP) would comply with WTo rules and

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that any fees charged for assessing the conformity of the products originating in the territories of other Members were equitable in relation to any fees chargeable for assessing the conformity of like products of national origin or originating in any other country, as foreseen in the TBT agreement. at a later stage, the representative of Saudi arabia stated that SaSo had discontinued SCaP in light of the phase out of the iCCP and that SCaP had been removed from the third part of the Technical directive. in response to a question from members of the Working Party, the representative of Saudi arabia noted that a list of “items Subject to Mandatory Certification” had been attached to the Working Party report at annex H. The representative later assured the members that the list was up to date and complete, and would be reviewed and revised by the iCCP replacement Committee.

195. in response to questions from members of the Working Party, he noted that Saudi arabia was a member of the international Standardization organization (iSo), the international electrotechnical Commission (ieC), the international organization for legal Metrology (oiMl) and the Codex alimentarius Commission (CaC). all Saudi voluntary standards and mandatory standards (technical regulations) were notified to all other members of those international organizations. He further reported that, as noted in Saudi arabia’s Technical directive, Saudi arabia would comply with all relevant provisions of the TBT agreement, including the Code of good Practice, as from the date of accession. Certain Saudi mandatory standards (technical regulations) had a corresponding iSo or ieC equivalent which was indicated in the published list of SaSo mandatory standards (technical regulations); a high percentage of Saudi voluntary standards and mandatory standards (technical regulations) used international standards and other widely accepted national standards as references. He provided members of the Working Party with a list of SaSo voluntary standards and mandatory standards (technical regulations) that had been based upon CodeX standards, together with a complete list of the 2,338 Saudi voluntary standards and mandatory standards (technical regulations), including a cross-reference to the international standards adopted in their entirety as SaSo voluntary standards and mandatory standards (technical regulations) (in document WT/aCC/SaU/59/add.5, which replaced WT/aCC/SaU/34 and WT/aCC/SaU/15). The percentage changes constantly as Saudi arabia adopts pre-existing international standards. Some members of the Working Party requested a list of the standards deemed to be equivalent to Saudi mandatory standards (technical regulations). in response, the representative of Saudi arabia stated that SaSo had published the list of mandatory standards (technical regulations), and in this connection referred to the information in document WT/aCC/SaU/59/add.5.

196. The representative of Saudi arabia stated that the iCCP had been eliminated pursuant to Council of Ministers decision no. 213 of 3.8.1424H (30 September 2003) and no longer operated as from 28 august 2004 when the period specified in then-current contracts had expired. an iCCP replacement Committee had been

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formed consisting of members representing the Ministries of Commerce and industry, Finance and economy and Planning. The Committee, which is chaired by the Ministry of Commerce and industry, was charged with establishing the following replacement mechanism:

i. Using private laboratories as an alternative mechanism for certifying the conformity of imported goods to established standards, after the private laboratories have been approved for examination purposes.

ii. during a transitional period, the conformity certificate should be issued by an entity authorized by the competent official agency in the country of origin. Such conformity certificates should accompany all consignments of imported goods certifying their conformity to the established mandatory standard (technical regulation). The certificate should confirm that these goods were subjected to regular laboratory examination under supervision of the competent control agency in the country of origin. The entity should be fully responsible for the contents of this certificate. The producing company should assume full responsibility for all damages happening as a result of using such goods. random samples may be taken from the imported consignments on their arrival in the Kingdom’s ports in order to ascertain the veracity of the certificate.

The new “Conformity Certificate for the goods exported to the Kingdom of Saudi arabia” applied to all products, including domestic products, except those subject to the Kingdom’s sanitary and phytosanitary regulations. Certification was not required when documentation had been provided for purposes of assuring conformity to islamic religious requirements (rulings of islamic Shari’a). There were no fees for this certificate. detailed guidance on how to comply with the new requirements was available on the website of the Ministry of Commerce, which was the oversight authority.

197. Some members of the Working Party requested additional information on the purpose and operational details of the new Conformity Certificate mechanism. The representative of Saudi arabia stated that the purpose of the new Certificate was to provide Saudi authorities with a basis for conducting post-market surveillance to ensure product conformity to specified requirements and would be done through random sampling or risk-based compliance checks during the transitional period. The new mechanism allowed the entity submitting the Conformity Certificate (i.e., a conformity assessment body, an accredited body, an independent third party or a manufacturer) to declare compliance with the appropriate technical regulation or standard. Such entity was responsible for the information contained in the Certificate. The mechanism recognized technical regulations or standards that were in conformity with an approved SaSo technical regulation. in the absence of a relevant, approved

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SaSo technical regulation, information should be provided to identify whether the product meets a technical regulation of another government authority, SaSo standard or relevant international standard, or other standard. information should also be provided to identify who did the testing. The Conformity Certificate would not be needed once Saudi arabia had established sufficient in-country capabilities for testing imported and domestic products through random sampling or risk-based compliance checks. The representative of Saudi arabia further clarified that there was no geographic or nationality limitation for conformity assessment or accreditation bodies. The Working Party took note of these commitments.

198. Some members of the Working Party requested Saudi arabia to confirm that access to the SaSo Quality Mark would be on a non-discriminatory basis and without distinction to the origin of the product. in response, the representative of Saudi arabia stated that access to Saudi Quality Mark, a voluntary program, would be on a non-discriminatory basis, without distinction as to the origin of the products. in response to an additional question, he confirmed that domestic and foreign suppliers could apply to obtain the Quality Mark for imported products. Use of the Quality Mark would be granted in a non-discriminatory fashion to those domestic and foreign suppliers that met the requirements of the program. The Certificate of Conformity was voluntary and applicable to specified consignments of certain products when the organization submitted application for obtaining a conformity certificate according to standards pertaining to such product; this certificate of conformity might be applied to domestic, exported and imported products. This would help in the implementation of such standards and facilitate the commercial exchange. This certificate was granted for consignments conforming to standards when the conditions mentioned in paragraph 5 of the Third Part of the Technical directive were fulfilled. The “Quality Mark” was applicable for factories, while the Certificate of Conformity were for consignments. The representative of Saudi arabia confirmed that any fees charged in connection with the “quality mark” and “certificate of conformity” would be based on the cost of the services rendered.

199. a member of the Working Party requested Saudi arabia to explain its rice labelling requirement that information be printed on at least 50 per cent of the surface of the rice package. in response, the representative of Saudi arabia stated that this requirement no longer existed, as the Kingdom had withdrawn it.

200. a member of the Working Party inquired as to the rationale for the application of different emission standards to new and used heavy vehicles. The representative of Saudi arabia replied that new heavy vehicles were subject to more demanding standards because they could meet them; he reported that the Kingdom was unaware of any instance of non-compliance and that the standard was not, in practice, a bar to imports. a lower standard had been set for used heavy vehicles, he reported, because otherwise used heavy vehicles would not be able to be operated absent significant and extremely costly modifications. Concerning a further question regarding the

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application of different emission standards, the representative stated that there were no Saudi standards for heavy-duty gasoline engines and three Saudi standards for heavy-duty diesel engines, as follows:

i. SaSo 672/1991 “Motor Vehicles – allowable limits of Pollutants emitted to the atmosphere from Heavy duty diesel engine Vehicles”;

ii. SaSo 673/1991 “Motor Vehicles – Methods of Testing for Pollutants emitted from Heavy duty diesel engine Vehicles – Part 1: determination of exhaust gaseous Pollutants”; and

iii. SaSo 674/1991 “Motor Vehicles – Methods of Testing for Pollutants emitted from Heavy duty diesel engine Vehicles – Part 2: determination of Smoke density”.

The standards had been implemented since 14 november 1992. SaSo had not received any comments or complaints regarding them from any vehicle manufacturer.

201. in response to inquiries by members of the Working Party relating to shelf-life of food products, the representative of Saudi arabia confirmed that Saudi arabia had re-examined its shelf-life requirements. a technical committee from different government Ministries (Ministry of Commerce and industry, Ministry of Health, Ministry of agriculture, Ministry of Municipalities, Universities and SaSo) had reviewed Saudi standards on the shelf-life of food products (SaSo 457/2000 and SaSo 702/1993) according to the requirements of the SPS and TBT agreements, Codex alimentarius Commission, international scientific papers and research and field scientific studies carried out in the Kingdom of Saudi arabia or abroad. The revised Saudi standard, which incorporated the deletion of the statement of not allowing any food product which had overpassed more than half of its shelf-life, including perishable food. The revised standard also incorporated that shelf-life for food products would be voluntary except for select perishable food (i.e., fresh or chilled meat and poultry, fresh milk and fresh milk-based products, margarine, fresh fruit juice and fresh table eggs) and baby foods. With the exception of these products, Saudi arabia would accept manufacturer-determined use-by dates for products. The revised standard had been circulated for comments for a period of 90 days and would be implemented from the date of approval of SaSo Board of directors. The Working Party took note of this commitment.

202. The representative of Saudi arabia stated that to allow members and appropriate stakeholders to better understand how Saudi arabia will implement the revised standards, Saudi arabia will provide written technical guidance as soon as possible but no later than 90 days before the revised shelf life requirements are implemented. This guidance will be attached as an annex to the revised standards and will include the following language:

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i. These revised standards will be effective as of their approval by the SaSo Board of directors, not later than the end of 2005. Until this date, SaSo Standards 457/2000 and 702/1993 (shelf-life for food products) will be implemented. Products that are not in compliance with the current or revised standards can be returned to the originating country if requested and will not be destroyed or held at port indefinitely.

ii. The expiration date as defined in Section 4.1 represents that last viable date for the product to be consumed. Products that remain on the shelf beyond the expiration date may be pulled or destroyed. For products that have voluntary shelf-life, the exact date of expiration is determined solely by the manufacturer

iii. Where not elsewhere defined, suitable containers under Types of Packaging under Section 4.4.1. Mandatory expiration Periods of Food Products shall be defined as any appropriate container as long as the packaging has not been compromised (e.g., free from significant tears, damage, etc.).

iv. Products that do not fall under Section 4.4.1. Mandatory expiration Periods of Food Products shall be considered to fall under Section 4.4.2. Voluntary expiration Periods of Food Products, unless these products are perishable, as specified in paragraph 201. Types of packaging for products under Section 4.4.2. shall be defined as any appropriate container as long as the packaging has not been compromised (e.g., free from significant tears, damage, etc.).

v. all requests for more information about the revised standards should be submitted to the Food department at SaSo; Telephone no. 966-1-4520-166. The Ministry of Commerce and industry is responsible for monitoring and administering the application of the revised standards and will also be responsible for resolving any discrepancies or disputes involving the application of standards.

- Transparency

203. Some members of the Working Party requested that the government of Saudi arabia publish draft technical regulations in a single official journal or other publication that was available to the general public, and other interested parties. The representative of Saudi arabia stated that draft technical regulations would be available on SaSo website: [email protected]. He confirmed that Saudi arabia would notify the Secretariat when the new website (including an english version) was complete and that this would be by the end of 2005. He confirmed that all Saudi draft technical regulations were still announced in all Saudi newspapers and circulated to all foreign embassies in Saudi arabia. The Working Party took note of these commitments.

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- implementation of TBT agreement obligations

204. in response to the above explanations and clarifications provided by the representative of Saudi arabia, members of the Working Party requested that Saudi arabia provide a description of the steps being taken to ensure full implementation of the agreement on Technical Barriers to Trade. in response, the representative of Saudi arabia provided the Working Party with the Technical directive, which implemented TBT agreement. in response to a comment of a member of the Working Party, the representative referred to the statement at item x of paragraph 191, above. The SaSo Technical directive of July 2000, amended 19 July 2005, incorporated the substance of the TBT agreement. in response to a question from a member of the Working Party, the representative of Saudi arabia reported that the Saudi arabian Standards organization (SaSo) (P.o. Box 3437, riyadh 11471, Saudi arabia; tel: 966-1-452-0000; fax: 966-1-452-0086; www.saso.org.sa) was the operational enquiry point for issues relating to the TBT agreement.

205. The representative of Saudi arabia committed that Saudi arabia would comply with all obligations under the WTo agreement on Technical Barriers to Trade from the date of accession without recourse to any transition period. The Working Party took note of this commitment.

- Sanitary and Phytosanitary Measures

206. The representative of Saudi arabia stated that one of the legal bases for SPS requirements in Saudi arabia was royal decree no. M/10 of 3.3.1392H (16 april 1972), which established SaSo, the competent standardization body in Saudi arabia. He noted that SPS measures were enforced through Council of Ministers decision no. 85 of 1.4.1412H (4 July 2000) and Ministerial decision no. 943 of 2.5.1424H (1 July 2003). in response to further questions from members of the Working Party, the representative of Saudi arabia stated that the SaSo Technical directive implemented Saudi arabia’s obligations under the TBT agreement, while the Saudi Unified SPS Procedures implemented Saudi arabia’s obligations under the SPS agreement.

207. The representative of Saudi arabia stated that Saudi standards covered sanitary and phytosanitary measures by means of at least one of the following:

i. Measures following the standards and guidelines and recommendations of the Codex alimentarius Commission, the World organization for animal Health (oie), and the international Plant Protection Convention.

ii. Measures not covered by the standards and guidelines and recommendations of these organizations would be based on the provisions of the SPS agreement.

The Working Party took note of these commitments.

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208. Some members of the Working Party requested that Saudi arabia identify all areas of inconsistency and provide a timetable for bringing the Saudi arabian regime into conformity with the requirements of the SPS agreement. in response, the representative of Saudi arabia stated that an internal review had already been commenced into Saudi arabia’s SPS regime guided by the comments of the WTo Working Party in this respect. at a later stage, the representative of Saudi arabia provided members of the Working Party with a comprehensive action Plan for the implementation of the SPS agreement in document WT/aCC/SaU/42. Still later, he informed the Working Party that the action Plan had been fully implemented by issuance of Council of Ministers decision no. 85 of July 2000 and Ministerial decision no. 943 of 2.5.1424H (1 July 2003) on SPS law titled “Sanitary and Phytosanitary Unified Procedures”. in reply to questions from some Working Party members, the representative of Saudi arabia stated that the new SPS law also incorporated revisions of the “agricultural Quarantine regulations” and the “Statutory instruments of Veterinary Quarantine”, ensuring conformity with the requirements of the SPS agreement. He reported that the main provisions of the new Saudi law include the following:

i. Saudi arabia shall apply SPS measures consistently with the provisions of the WTo agreement on SPS Measures (article 2.1 of Saudi arabia’s SPS law).

ii. SPS measures shall be limited to the extent necessary to protect human, animal or plant life or health (art. 2.2 of Saudi arabia’s SPS law).

iii. SPS measures shall be based on scientific rules and principles and shall not be maintained without sufficient scientific evidence (art. 2.2 of Saudi arabia’s SPS law).

iv. There will be no unjustified discrimination between WTo Members and Saudi arabia where identical or similar conditions prevail (art. 2.3 of Saudi arabia’s SPS law).

v. SPS measures shall not be applied in a way that constitutes a disguised restriction on international trade (art. 2 of Saudi arabia’s SPS law).

vi. SPS measures taken by Saudi arabia shall be based on international standards, guidelines or recommendations, except where there is a scientific justification for a measure resulting in a higher level of protection (arts. 3.1 and 3.3 of Saudi arabia’s SPS law).

vii. Saudi arabia shall accept the SPS measures deemed appropriate by other WTo Members as equivalent where those measures achieve the protection level of Saudi arabia (art. 4.1 of Saudi arabia’s SPS law).

viii. article 5 of Saudi arabia’s SPS law follows the provisions of article 5 of the WTo SPS agreement.

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ix. article 6 of Saudi arabia’s SPS law follows the provisions of article 6 of the SPS agreement.

x. articles 7 and 8 of Saudi arabia’s SPS law follow the provisions of articles 7 and 8 of the SPS agreement.

a member of the Working Party was of the view that, in some instances, not all provisions of the SPS agreement had been taken over in Saudi arabia’s national legislation and key words had been changed or omitted. That left the legislation open to interpretation and might lead to legal uncertainty. The representative of Saudi arabia stated that the problem would be taken care of in a Ministerial Circular amending the Unified SPS Procedures. Members welcomed Saudi arabia’s statement that it would reconcile inconsistencies between its domestic legislation and regulations and procedures implementing the WTo SPS agreement, so that all of Saudi arabia’s laws, regulations, procedures and other requirements for importation were consistent with the provisions of the WTo SPS agreement. The Working Party took note of this commitment.

209. in addition, the representative of Saudi arabia stated that the veterinary quarantine bylaw issued pursuant to Council of Ministers decision no. 109 of 30.4.1424H (30 June 2003) covered sanitary and veterinary requirements and measures pertaining to animals and animal products conforming to the ruling of the international zoosanitary Code specifying the regulations recommended for international trade with regard to animals and animal products issued by the World organization for animal Health (oie). He noted also that the agricultural quarantine bylaw issued by Council of Ministers resolution no. 207 of 26.1.1396H (28 January 1976) set out requirements and phytosanitary measures conforming to the rules issued from iPPC initially based on Fao publications. The representative of Saudi arabia added that the Unified Plant Quarantine law (UPQl) for the gulf Cooperation Council (gCC) had been promulgated in 2003 and new unified quarantine pests lists had been issued. Since then, regular meetings had been held under the auspices of the gCC Secretariat general to establish procedures and policies for a strong agricultural quarantine system in the gCC region.

210. The representative of Saudi arabia stated that, pursuant to Council of Ministers decision no. 85, a Standing Committee on SPS Measures had been created. The Standing Committee was reviewing all existing SPS measures to ensure consistency with the requirements of the SPS agreement. Whenever, as a result of this review, a measure was determined to be inconsistent, the Standing Committee would issue a recommendation to the relevant agency, such as the Ministry of agriculture for livestock and fresh fruits, vegetables and grains, and the Ministry of Commerce and industry for processed foods and other foodstuffs. When the agency concerned determined that the measure was inconsistent with the SPS agreement, the agency would conform the measure to the requirements of the SPS agreement. also, when a WTo Member identified a specific measure, the Standing Committee

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would review that particular measure forthwith. The Working Party took note of these commitments.

211. in response to requests for further information regarding the role of the gCC and Saudi arabia’s quarantine system, the representative of Saudi arabia stated that the Council of Ministers had issued decision no. 109 of 30.4.1424H (30 June 2003). Through decision no. 109, Saudi arabia had adopted the veterinary quarantine system applicable to gCC countries. (He reported that a revised plant quarantine system was still under consideration.) The representative noted that the Customs Union of the gCC countries had adopted a system of one port of entry for all goods imported to gCC countries. according to the system, any item that was allowed to enter any gCC port was allowed to enter all gCC countries and customs procedures such as inspection, laboratory analysis and customs fees were handled in the first port of entry. Thus, the quarantine system in all gCC countries was unified. However, a transition period of three years from 1 January 2003 was provided for the gCC quarantine system’s fuller implementation. He assured the members that this transitional period did not and would not affect Saudi arabia’s commitments regarding operation of its quarantine system.

212. a member of the Working Party asked how Saudi arabia would ensure that measures applied by Saudi arabia would meet the requirements of article 5 of the SPS agreement (i.e., that the measures applied in each member were not more restrictive than necessary to deal with the risks faced by that particular member). The representative of Saudi arabia explained that, because there was free movement of goods between gCC countries due to the establishment of the customs union, it was not feasible to restrict imports in one gCC country and to allow imports in other gCC countries. Some members of the Working Party indicated that this could result in Saudi arabia applying a ban on imports even though those imports did not pose a disease risk in Saudi arabia, simply as a result of another gCC country imposing such a ban. Those members were of the view that this may be inconsistent with the requirements of article 5 of the SPS agreement. in response, the representative of Saudi arabia assured the members that Saudi arabia was aware of this concern and that any bans would be applied only in a manner consistent with article 5 of the SPS agreement as of the date of accession. He stated that, accordingly, existing arrangements would be reviewed in consultation with gCC countries and appropriately amended by the date of accession to ensure that an SPS measure could not be applied at any Saudi port to any product intended for final sale in Saudi arabia unless the SPS measure was based on relevant international standards, guidelines and recommendations or, in any other case, based on science consistent with the relevant provisions of the SPS agreement. The Working Party took note of these commitments.

213. The representative of Saudi arabia further reported that Saudi arabia earlier had issued sanitary and quarantine measures administered by the Ministry of agriculture, as well as the Ministry of Health and the Ministry of Municipalities.

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When no approved international standards applied to these products, the Kingdom of Saudi arabia would implement SPS measures based on science consistent with the relevant provisions of the SPS agreement.

214. Saudi arabia was a permanent and active member in the international organizations on plant and animal regulations, including Fao, the Codex alimentarius Commission (CaC), the World organization for animal Health (oie) and the international Plant Protection Convention (iPPC). Saudi arabia’s SPS measures did not arbitrarily or unjustifiably discriminate between different countries where identical or similar conditions prevail. Such measures also did not discriminate between the territory of Saudi arabia and other countries where identical or similar conditions prevailed. Saudi arabia’s SPS measures were not applied in a manner which constituted a disguised restriction on international trade.

215. in response to requests for information on the transparency of Saudi arabia’s SPS measures, the representative of Saudi arabia stated that Saudi arabia’s SPS measures were published in advance of their application. The Kingdom of Saudi arabia had an established system for informing governments and other standards organizations of changes. Saudi arabia’s SPS measures and requirements were notified to the embassies in the Kingdom and to Saudi Chambers of Commerce. in response to a comment by a member of the Working Party, the representative noted that, as with TBT standards, Saudi food draft standards will be available on SaSo website: [email protected], in order to increase transparency and provide notification of future changes to SPS import requirements. (all Saudi SPS measures would continue to be disseminated as described above.) in addition, he noted that full sets of guidelines detailing all requirements were freely available to any interested parties. Furthermore, information regarding Saudi arabia’s SPS regime, including its SPS measures, would be disseminated on the internet through a website accessible through the homepage operated by the Ministry of Commerce and industry. The website would be fully operational by the date of accession and offer a comprehensive service to users. The representative confirmed that Saudi arabia would provide notification of future changes to import requirements relating to SPS matters. The Working Party took note of these commitments.

216. Members of the Working Party asked Saudi arabia to identify any additional steps taken to implement obligations in the SPS agreement regarding transparency. The representative of Saudi arabia stated that SPS obligations had been implemented by recent decisions by the Council of Ministers. in particular, he noted that Council of Ministers decision no. 85 of 1.4.1421H (4 July 2000) included a number of provisions implementing obligations of the SPS agreement. First, decision no. 85 required the Ministry of Commerce and industry to notify the WTo and all WTo Members of all actions relating to SPS issues and to respond to any inquiries regarding the same. Second, under the decision, a Technical Standing Committee was established to monitor Saudi SPS measures and ensure that they are implemented in accordance

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with Saudi arabia’s WTo obligations. The Technical Standing Committee comprised representatives from the Ministry of Commerce and industry, the Ministry of agriculture, the Ministry of Health, SaSo and the Customs department. Third, decision no. 85 required the Ministry of Commerce and industry to prepare a list of all Saudi SPS measures; this list is attached as annex l (list of SPS Measures Maintained by the Kingdom of Saudi arabia). in response to a question by a member of the Working Party, the representative assured the member and confirmed that Saudi arabia would strictly follow the provisions of Council of Ministers decision no. 85 and would notify the WTo and all WTo Members of all proposed SPS measures and actions relating to SPS issues and respond to any inquiries regarding the same. The Working Party took note of these commitments.

217. Some members of the Working Party stated that the information on Saudi arabia’s SPS measures gave a good overview of the regime. They sought confirmation that measures were based on risk assessments carried out in accordance with article 5 of the SPS agreement. in response, the representative of Saudi arabia confirmed that Saudi arabia’s SPS measures conformed to all standards, guidelines or recommendations issued by the international bodies specifically designated by the SPS agreement, i.e., the Codex alimentarius Commission, the World organization for animal Health (oie) and the international Plant Protection Conventions, and so, in accordance with article 3.2 of the SPS agreement, such SPS measures were presumptively consistent with the SPS agreement. (Saudi arabia was a member of all three organizations.) For remaining SPS measures not covered by the above three organizations (such as microbiological risks and shelf life of food products), Saudi arabia relied on scientific studies, guidelines and recommendations issued either by specialized internationally accepted research institutes, universities or scientific references or, in limited cases, by itself. in cases where Saudi arabia decided that measures which provide a level of protection higher than that provided for in guidelines and recommendations issued by internationally recognized bodies are necessary to meet its appropriate level of protection, application of such measures would be based on scientific principles; only to the extent necessary to protect human, animal or plant life or health; and taking full account of the objectives of minimizing negative trade effects. He confirmed that Saudi arabia’s SPS measures were based on risk assessment in accordance with article 5 of the SPS agreement.

218. Some members of the Working Party identified certain possible areas of inconsistency with the requirements of the SPS agreement, such as the requirement in article 6 of Council of Ministers resolution no. 207 of 26.1.1396H (28 January 1976), “agricultural Quarantine regulations”, that products be free of all weed seeds, regardless of whether such weed seeds were quarantine significant, in accordance with relevant international guidelines. Some members also noted that article 3 of Council of Ministers decision no. 109 of 30.4.1424H (30 June 2003), “The Statutory instrument of the Veterinary Quarantine”, stated that “no animal may be admitted... from any country that was infected with any epidemic disease....” These

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members were of the view that this requirement was inconsistent with article 6 of the SPS agreement and national treatment provisions. in response, the representative of Saudi arabia stated that, upon accession, the Kingdom of Saudi arabia would revise resolution no. 207 and decision no. 109 to ensure compliance with the relevant WTo obligations. in response for further information concerning the importation of seeds, he noted that there was no fee charged for the inspection of seeds. The seeds were first subject to a visual examination to check for impurities and to ensure that the phytosanitary information in the import documents was correct. Thereafter, samples of the seeds were sent to laboratories to check for aflatoxins. The Working Party took note of this commitment.

219. one member of the Working Party stated that Saudi arabia, presumably due to animal health concerns related to BSe, had banned imports of bovine semen from that country. The representative of Saudi arabia confirmed that the ban on import of bovine semen had been lifted.

220. Similarly, in response to a comment from a member of the Working Party, the representative of Saudi arabia stated that, in the view of the Kingdom, it had not been established that West nile Virus could not be transmitted to humans. Thus, Saudi arabia had banned certain imports in accordance with information provided by oie and as a prudential measure, in conformity with article 5.7 of the SPS agreement. one member of the Working Party stated that Saudi arabia’s ban on live birds (specifically, day-old chicks) due to concerns about West nile Virus was not consistent with international practices. The representative of Saudi arabia confirmed that the ban on imports of day-old chicks from the United States had already been removed.

221. a member of the Working Party raised the following points in relation to annex l (list of SPS Measures Maintained by the Kingdom of Saudi arabia):

i. With regard to BSe - Saudi arabia only banned live bovines from Washington State in the United States, i.e., a regional approach was applied. The member said there was no justification for this approach and asked the representative of Saudi arabia to justify it in the context of article 5 of the SPS agreement. The representative of Saudi arabia stated that a regional approach was consistent with the provisions of paragraph 1 of article 6 of the SPS agreement. The member also stated that, according to annex l, meat from the same region (Washington State) was not banned, and this was equally not understandable. The reverse policy was applied by Saudi arabia in the case of Sweden (which had no cases of BSe), where Saudi arabia allowed imports of bovines but not of meat. The representative of Saudi arabia stated that since many cases of BSe kept appearing in various member countries of the european Union, the ban on meat had been applied to the eU as a whole.

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ii. also with regard to BSe – the member said that Saudi arabia should remove its restrictions on imports of embryos, as it had done for bovine semen. according to the member, in the current oie Code no import restrictions applied with respect to in-vivo collected embryos, following the recommendations of the embryo Transfer Society. The representative of Saudi arabia stated that Saudi arabia had no restrictions on imports of embryos.

iii. With regard to Foot and Mouth disease (FMd) – the member noted that imports from all european Countries were banned because of FMd. The member said that the eU was free of FMd, and so asked why all european countries were included in this ban. The representative of Saudi arabia stated that, in pursuance of resolution no. XX of the international Committee of the oie, adopted during the 72nd general session (23-28 May 2004), Saudi arabia had decided to remove the ban on imports of live bovine, ovine and caprine animals, due to Foot and Mouth disease, from all european countries.

iv. With regard to Milk and Milk Products – Saudi arabia imposed an import ban on fresh milk and milk products from Belgium. The member said that, according to the oie Code, these products should be traded without restrictions and the ban should be lifted. The representative of Saudi arabia stated that Saudi arabia and Belgium had agreed that the ban, which had been imposed due to dioxin contamination on imports of dairy products from that country, would be lifted, except for short-shelf-life products (fresh milk and liquid milk in any form, yogurt, sour milk, lebnah and cheese). Following a later review, Saudi arabia had lifted the ban entirely.

v. With regard to Poultry Meat and its Products and eggs – Saudi arabia banned imports from germany although, according to the member, the nitrofin contamination crisis that led to the ban dated back to 2002 and had been over for a long time. Further, the authorities had taken the appropriate measures, and so the ban should be lifted. The representative of Saudi arabia stated that the Saudi authorities and the german embassy in riyadh had drafted minutes of an agreement to lift the ban. The german authorities had studied the draft minutes and responded with some comments. The Saudi authorities had replied to these comments in august 2003. Since then, nothing had been heard from the german authorities.

vi. With regard to olive oil – the member said that import restrictions on olive oil from Spain had been introduced following alleged contamination of olive oil with traces of benzopyrene in July 2001. Subsequent follow up and analysis had been made and the analysed samples all showed negative results. The Spanish authorities had

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supplied relevant information on this issue, and so Saudi arabia should lift the ban. The representative of Saudi arabia stated that Saudi arabia had lifted the import ban on all grades of olive oil, including pomace olive oil, from all countries, including Spain.

222. Some members of the Working Party stated that certain other laws, such as the “approval of importing alfalfa and Vegetable Seeds from non-arab Countries” and “approval of importing Flower and Forage Crop Seeds from non-arab Countries” appeared to only apply to “non-arab” countries, which suggested problems in relation to the consistency of these regulations with the principle of most-favoured-nation treatment. Some members of the Working Party stated that the position appeared inconsistent with the SPS agreement’s requirement that, in applying SPS measures, WTo Members recognize “regional conditions” affecting human, animal and plant health risks. in response, the representative of Saudi arabia stated that the Kingdom of Saudi arabia would revise these laws to ensure compliance with relevant WTo obligations. The Working Party took note of these commitments.

223. one member of the Working Party asked as to the identity of the operational enquiry point for the SPS agreement. The representative of Saudi arabia reported that the Ministry of Commerce and industry would serve this function (Post office Box 11162, riyadh, Kingdom of Saudi arabia; telephone number 966-1-4027-574; www.commerce.gov.sa). He confirmed that the enquiry point would be fully operational by the date of accession. The Working Party took note of these commitments.

224. The representative of Saudi arabia stated that Saudi arabia’s sanitary and phytosanitary standards system would be in compliance with WTo provisions under the agreement on the application of Sanitary and Phytosanitary Measures as of the date of accession to the WTo, and that Saudi arabia would apply all measures under the agreement on the application of Sanitary and Phytosanitary Measures in a manner that is not more trade restrictive than required, from the date of accession without recourse to any transition period. The Working Party took note of these commitments.

- Trade-related investment Measures

225. Some members of the Working Party congratulated Saudi arabia on its generally very liberal investment regime and asked whether there were any measures in place in Saudi arabia that were inconsistent with the requirements of the agreement on Trade-related investment Measures (TriMs). in response, the representative of Saudi arabia stated that there were no measures in place in Saudi arabia that were inconsistent with the requirements of the agreement on TriMs. He noted that, in particular, there were no measures in place in Saudi arabia that were of the kind described in the “illustrative list” in the annex to the agreement on TriMs. Some members of the Working Party enquired whether Saudi arabia imposed any transfer requirements in relation to technical or management know-how upon foreign

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investors. in response, the representative stated that Saudi arabia did not maintain any requirements on such transfers.

226. The representative of Saudi arabia stated that Saudi arabia would not maintain any measures inconsistent with the TriMs agreement and would apply the TriMs agreement from the date of accession without recourse to any transition period. He confirmed that, in the event that any WTo inconsistencies existed, Saudi arabia would act to ensure that Saudi law conformed to the TriMs agreement. The Working Party took note of this commitment.

- Free zones

227. in response to questions from members of the Working Party, the representative of Saudi arabia stated that, although there were no free zones or free economic zones established or operating in Saudi arabia, articles 77-88 of the gCC Unified Customs law permitted the establishment of such zones. in response to a further question, the representative of Saudi arabia stated that currently there was no separate Saudi legislation on free zones. He reiterated that currently Saudi arabia had no free zones or economic zones.

228. The representative of Saudi arabia stated that, if free zones or special economic zones were established, Saudi arabia would administer them in compliance with WTo provisions, including those addressing subsidies, TriMs and TriPS, and that goods produced in these zones under tax and tariff provisions that exempt imports and imported inputs from tariff and certain taxes and charges would be subject to normal customs formalities when entering the rest of Saudi arabia, including the application of tariffs and any taxes and charges. The Working Party took note of these commitments.

- government Procurement

229. Some members of the Working Party requested that Saudi arabia undertake to accede to the agreement on government Procurement upon accession to the WTo. The representative of Saudi arabia replied that the agreement on government Procurement was a plurilateral agreement, adherence to which was not a precondition for accession to the WTo.

230. Members observed that government procurement accounted for a major part of Saudi arabia’s imports, and that Saudi participation in the agreement on government Procurement was an important issue. The benefits of joining the gPa included lower procurement costs and greater transparency. in particular, the transparency provisions of the agreement could be useful to Saudi arabia in ensuring the least-cost/best-quality outcome for procurement in covered agencies. in response to a request by a member of the Working Party to submit Saudi arabia’s procurement law and regulations, the representative of Saudi arabia stated that these are being revised and would be submitted after the revision had been effected.

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231. The representative of Saudi arabia confirmed that, upon accession to the WTo, Saudi arabia would initiate negotiations for membership in the agreement on government Procurement by tabling an entity offer. He also confirmed that, if the results of the negotiations were satisfactory to the interests of Saudi arabia and the other parties to the agreement, Saudi arabia would complete negotiations for membership in the agreement within a year of accession. The Working Party took note of these commitments.

- Trade in Transit

232. The representative of Saudi arabia informed the Working Party that goods in transit through Saudi arabia received duty free treatment under articles 69-73 of the Common Customs law of the gCC member states, which was applicable in Saudi arabia. The Kingdom’s policy regarding goods in transit was to allow them to be transported through Saudi arabia without any discrimination as to the kind of goods or their origin or destination. He said that goods transiting Saudi arabia bound for other countries were subject to the following conditions:

i. Banned goods were prohibited to transit Saudi arabia, according to the gCC Common Customs law.

ii. The types and marks of the goods should be specified in the accompanying manifest.

iii. The goods should be transported in modular containers having only one access and duly equipped with a lock to allow effective placement of Customs seals; the Customs seal should not be broken.

iv. Transit of the consignment across Saudi arabia must be covered by the guarantee of a customs broker at the port of entry.

v. The consignment must exit within the period specified by the port of entry.

233. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that the guarantee of the customs broker is necessary to ensure that the goods actually leave Saudi arabia; there is no fee for the guarantee. also, he reported that, in Saudi arabia, transit does not require escort.

234. one member of the Working Party asked for a clarification of Saudi arabia’s treatment of meat in sealed containers, where the meat had first entered another gCC country. The representative of Saudi arabia noted that Saudi arabia understood the importance of this issue. at a later stage, he noted that Ministerial decree no. 5618 of 15.11.1424H (8 January 2004) had been issued. That decree allowed such imported shipments to transit third countries, including third countries with infectious diseases, e.g., FMd, provided that shipments were in refrigerated containers that were appropriately sealed and documented. in response to a comment by a member of the Working Party, the representative of Saudi arabia stated that a copy of Ministerial

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decree no. 5618 had been submitted to the Working Party.

235. in response to a question from a member of the Working Party, the representative from Saudi arabia confirmed that Saudi arabia’s law and practice governing trade in transit would be applied in full conformity with the provisions of the WTo agreements, in particular article V of gaTT 1994. The Working Party took note of this commitment.

- agricultural Policy

236. The representative of Saudi arabia provided information on its agriculture sector, including tables on domestic support and export subsidies, contained in the Schedule of Concessions and Commitments on goods annexed to Saudi arabia’s draft Protocol of accession to the WTo and in WT/aCC/SPeC/SaU/1/rev.10.

237. Some members of the Working Party requested that Saudi arabia provide detailed information on the role of the Saudi arabian agricultural Bank (SaaB), in particular in the area of its mandate with regard to providing agricultural loans and subsidies. in response, the representative of Saudi arabia stated that SaaB was founded by royal decree no. 58 of 3.12.1382H (28 april 1963). it was a government financial institution specializing in providing funding to the agricultural sector in order to assist in the development of agriculture and improve agricultural productivity through the deployment of state of the art scientific and technical methods. The Bank granted loans through 13 branches, with 57 offices throughout the Kingdom, in order to facilitate provision of services to farmers in their regions. The Bank granted farmers, agricultural projects, fishermen, bee keepers and farm cooperatives two types of agricultural loans free of interest. However, there were unseen costs borne by agricultural investors in order to acquire a loan from SaaB. These costs were reflected in the number and amount of loans shown in the table below. The time needed to process the application and approve the loan was long due to bureaucratic formalities. Therefore, the opportunity costs for agricultural loans were very low.

Year no. Total amounts (Thousand Sar)

1992 4374 775,150

1993 4429 930,561

1994 3822 670,556

1995 2642 412,589

1996 3065 431,708

1997 3942 626,956

1998 5607 897,310

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Year no. Total amounts (Thousand Sar)

1999 6628 903,010

2000 6147 1,112,221

2001 8037 1,444,925

Source: Saudi arabian agricultural Bank, annual report no. 38, 1421H/1422H (2001).

238. He confirmed that the total “agricultural subsidies” package had been notified under non-product-specific support on supporting Table dS:9 of the domestic support tables. He added that the Bank had also been responsible for the disbursement of a package of agricultural subsidies incurred by the government towards reduction of agricultural expenditures in order to increase the average return on agricultural production. These subsidies included government grants to assist farmers in purchasing engines, irrigation pumps, agricultural machinery, poultry equipment and dairy production equipment; in addition, transport costs from the country of origin of high-breed cows imported to the Kingdom were also paid. The following table shows total agricultural subsidies disbursed through the bank during the period 1992-2001:

Year Total subsidies (Thousands Sar) (US$ 1 = Sar 3.75)

1992 677,902

1993 248,624

1994 355,434

1995 0 (no subsidies)

1996 296,937

1997 229,376

1998 225,492

1999 197,358

2000 228,960

2001 249,880

Source: Saudi arabian agricultural Bank, annual report, no: 38, 1421H/1422H (2001).

239. in response to further questions, the representative of Saudi arabia stated that in pursuance of the current development Plan, Saudi arabia would distribute land in areas where suitable quantities of water resources were available. investment would be encouraged in large agricultural projects that depend on renewable water resources, using modern irrigation systems that consume low quantities of water. domestic production of vegetables and fruits grown in greenhouses would be encouraged, as would the fishing industry using advanced technology. as planned, wheat production was gradually reduced from more than 4 million tons before 1994 to 2.8 million tons in 1994, 2 million tons in 1998 and 1.8 million tons in 2001. The

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production of barley was also reduced from 2 million tons in 1994-1995 to 1 million tons in 1998, and to less than 200,000 tons in 2001. domestically produced barley had been purchased by the gSFMo, and then sold to livestock producers at the fixed price of Sar 400/ton (US$ 107/ton). The representative of Saudi arabia stated that gSFMo had stopped receiving domestic barley according to royal decree no. 4/B/49434 of 8.12.1423H (10 February 2003). The farmers were advised to convert to other products that consume less water.

240. Some members of the Working Party asked whether there was any support to the dairy sector. in response, the representative of Saudi arabia stated that there was no specific support for the dairy sector, except for transportation cost of imported cows under special conditions. He added that the specific support for the dairy sector was included in the agricultural subsidies listed in paragraph 238, above, as well as in supporting Tables dS:7 and dS:9.

241. in response to questions concerning the provision of irrigation water for crop production, the representative of Saudi arabia stated that irrigation water for crop production was provided by private farmers, and not by the government. He noted that there were no subsidies associated with the running of irrigation equipment.

242. Some members of the Working Party requested that the representative of Saudi arabia clarify the role of the gSFMo in the export and subsidization of wheat. in response, the representative of Saudi arabia stated that since 1995 the gSFMo had not exported wheat or barley. export controls were maintained for subsidized wheat and barley through export licenses. in response to further questions, he added that the exportation of date palm seedlings, barley, corn, maize and soy beans was conditional upon the repayment of subsidies intended for the support of domestic production.

243. Saudi arabia’s commitments on agricultural tariffs, domestic support and export subsidies for agricultural products are contained in the Schedule of Concessions and Commitments on goods (document WT/aCC/SPeC/SaU/7/add.1) annexed to Saudi arabia’s draft Protocol of accession to the WTo and in WT/aCC/SPeC/SaU/1/rev.10.

- Trade in Civil aircraft

244. Some members of the Working Party asked that Saudi arabia enter a commitment to accede to the agreement on Trade in Civil aircraft from the date of entry into force of its Protocol of accession. in response, the representative of Saudi arabia stated that Saudi arabia had no present intention to accede to the agreement on Trade in Civil aircraft. He further stated that, upon accession, Saudi arabia would apply a zero rate of tariff on imports of goods related to the agreement on Trade in Civil aircraft.

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V. Trade-relaTed inTelleCTUal ProPerTY regiMe

a. general

245. The representative of Saudi arabia confirmed that the policy objective in the area of intellectual property was to provide effective and adequate protection to all categories of intellectual property in conformity with the provisions of the agreement on Trade-related aspects of intellectual Property rights (TriPS agreement). The representative of Saudi arabia stated that, as stipulated in Paragraph 1 of article 1 of the TriPS agreement, Saudi arabia would implement the provisions of the agreement within its own legal system and practice. in addition to the Memorandum on the Foreign Trade regime, the representative of Saudi arabia provided the Working Party with a Supplementary Memorandum on TriPS (WT/aCC/SaU/5). The representative of Saudi arabia provided the Working Party with the texts of the Trademarks law, the law on Patents, layout designs of integrated Circuits, Plant Varieties and industrial design (new law on Patents) and the Copyrights law (l/7645/add.1).

246. Some members of the Working Party congratulated Saudi arabia on its generally high level of protection of intellectual property rights. They noted that Saudi arabia had taken significant steps towards making its trade regime fully consistent with the TriPS agreement, but that some problems remained. Some members asked that Saudi arabia take immediate steps to address problems in its intellectual property regime, and asked also that Saudi arabia commit itself to full implementation of the TriPS agreement without a transitional period. in particular, some members of the Working Party expressed concerns in relation to the protection of copyrights; the duration of patent protection; protection of plant varieties; length of time before compulsory licensing and working requirements were applied; protection for sound recordings and audiovisual works; protection for broadcasts and satellite transmission; explicit protection for computer software programs; implementation of articles 1-21 of the Berne Convention; and the protection of well-known marks. in response, the representative of Saudi arabia reaffirmed Saudi arabia’s commitment to meeting the obligations of the TriPS agreement and provided additional relevant information as set forth below.

- agencies responsible for Policy Formulation and implementation

247. in response to questions from members of the Working Party, the representative of Saudi arabia confirmed that different Saudi agencies were responsible for different aspects of intellectual property formulation and implementation, depending on the precise nature of the issue involved. For example, the Ministry of Commerce and industry was responsible for implementing the Trademarks law and for formulating and implementing the Competition law. He further stated that the King abdulaziz City for Science and Technology (KaCST) was responsible for implementing the new law on Patents. He added that the Ministry of Culture and information was responsible for implementing the Copyrights law.

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- Membership in international intellectual Property agreements

248. in response to questions from the members of the Working Party, The representative of Saudi arabia confirmed that Saudi arabia was a member of a number of intellectual property conventions, including:

i. The Convention establishing the World intellectual Property organization (WiPo).

ii. The Berne Convention for the Protection of literary and artistic Works.

iii. The Paris Convention for the Protection of industrial Property.iv. The Universal Copyright Convention.v. The arab regional Copyright and related rights agreement.vi. The gCC Patent law.

- application of MFn and national Treatment to Foreign nationals

249. in response to a question from members of the Working Party, the representative of Saudi arabia stated that the Kingdom provided MFn and national Treatment in accordance with the provisions of articles 3 and 4 of the TriPS agreement.

- Fees and Taxes

250. in response to a question from members of the Working Party, the representative of Saudi arabia gave the following information on fees and charges:

i. Copyrights:

no fees or charges.

ii. new law on Patents:

Fees Patent industrial designs

layout designs of integrated Circuits

new Plants Varieties

registration application 800 300 1000 1000

Change or transfer of ownership 400 150 1000 1000

amendment or addition to the application 200 100 500 200

obtaining a copy of the application or certificate 100 100 100 100

registration of licence contracts 800 300 1000 1000

grant of compulsory license 8000 3000 5000 5000

grant and publication 1000 350 1000 1000

annual fees

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Fees Patent industrial designs

layout designs of integrated Circuits

new Plants Varieties

First year 500 300 1000 1000

Second year 1000 300 1500 1000

Third year 1500 600 2000 1500

Fourth year 2000 600 2500 1500

Fifth year 2500 900 3000 2000

Sixth year 3000 900 3500 2000

Seventh year 3500 1200 4000 2500

eighth year 4000 1200 4500 2500

ninth year 4500 1500 5000 3000

Tenth year 5000 1500 5500 3000

eleventh year 5500 3500

Twelfth year 6000 3500

Thirteenth year 6500 4000

Fourteenth year 7000 4000

Fifteenth year 7500 4500

Sixteenth year 8000 4500

Seventeenth year 8500 5000

eighteenth year 9000 5000

nineteenth year 9500 5500

Twentieth year 10000 5500

Twenty-first year to twenty-fifth year (for protection of trees) 7000

- Fees are for establishments. - Fees for individuals are half the above fees.

iii. Trademarks, including Service Marks:

a. application Fee: Sar 1,000b. registration Fee: Sar 3,000c. renewal of registration: Sar 3,000d. Changes or Modifications to registration: Sar 1,000

e. late Fee for delayed renewal (within 6 months): Sar 1,000

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B. SUBSTanTiVe STandardS oF ProTeCTion, inClUding ProCedUreS For THe aCQUiSiTion and MainTenanCe oF inTelleCTUal ProPerTY rigHTS

- Copyrights

251. The representative of Saudi arabia informed Working Party members that Saudi arabia had enacted a new Copyrights law (royal decree no. M/41 of 2.7.1424H (30 august 2003)), which Saudi arabia believed was in full conformity with the provisions of the TriPS agreement. The main features of the new law were: (i) more explicit protection for computer software and data bases; (ii) more specific protection to audio-visual works and sound recordings, including protection for 50 years after first public display or publication; (iii) legal use of foreign works such as translations and copying had been clarified according to the TriPS agreement; (iv) duration of protection of all artistic and literary works had been provided according to the requirements of the Berne Convention. in the area of enforcement, the new law provided in detail for all types of infringements and piracies and strengthened penalties (including provisions for: (i) imprisonment of up to six months (which can be doubled for repeat offenders); (ii) a maximum fine of Sar 250,000 (which can be doubled for repeat offenders); and (iii) compensation for damages and defamation due to the conduct of the violator) to meet the requirements of the TriPS agreement. in response to a question from a member of the Working Party, the representative of Saudi arabia reported that the implementing regulations had been issued by the Minister of Culture and information under Ministerial decision no. 1688/1 of 10.4.1425H (29 May 2004). The representative of Saudi arabia confirmed that the copyright law and regulations currently in force in Saudi arabia provided the following: (i) protection for news reports, excluding only news facts; (ii) a reproduction right to the full extent required by Berne article 9 (which includes digital reproduction); (iii) protection for pre-existing foreign works if they have not yet fallen into the public domain in the country of origin through the expiry of term of protection; (iv) a point of attachment for foreign sound recordings; (v) a definition of “works” that includes sound recordings; (vi) broadcasting and rebroadcasting rights that comply fully with Berne article 11bis; and (vii) parallel commercial export and import protection, as exportation and importation of copies not authorized for distribution in Saudi arabia is deemed to be infringement.

- Patents

252. Concerning patents, the representative of Saudi arabia noted that in general, patentable subject matter in Saudi arabia was consistent with the requirements of Section 5 of the TriPS agreement. Processes (methods of manufacturing) were patentable, and were protected from infringing use. Plant varieties currently were patentable and protected by the new Patents law. The representative of Saudi arabia stated that the protection of plant varieties had been provided in accordance with the

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provisions of article 27(3)(b) of the TriPS agreement. Patent holders in Saudi arabia had been accorded the rights mentioned in article 28 of TriPS. a patent holder was no longer required to make full industrial use of the patent in Saudi arabia within two years. although the old Patent law conferred a term of protection of 15 years with the possibility of a five-year extension, the representative of Saudi arabia stated that, according to article 19 of the new Patents law, the term of protection would be 20 years.

253. as to compulsory licensing, the representative of Saudi arabia stated that the amendment of the Patent law would conform national law and practice to the requirements of article 31 of the TriPS agreement. The review of the Patent law had revealed that, in comparison with article 27(3) of the TriPS agreement, the exclusion of patentability contained in paragraphs (a) and (b) of article 8 was in accordance with article 27 (1) of the TriPS agreement, which limits the patentable inventions to those which were related to products or processes; paragraph (c) of article (8) was in full compliance with subparagraph (b) of article 27(3) of the TriPS agreement, except that paragraph (c) did not exclude “micro-organisms” from “plants and animals” and did not include “non-biological processes” as processes excluded from “biological processes for the production of plants and animals”; paragraph (d) of the Patent law was in full compliance with sub-paragraph (a) of article 27(3) of the TriPS agreement. in response to a question of a member of the Working Party, the representative later added that the new law on Patents had modified paragraph (c) of article 8 of the old Patent law. accordingly, the following were not patentable under the new law on Patents: “Plants, animals and essentially biological processes for the production of plants and animals, excluding micro-organisms, non-biological processes and micro-biological processes.” The representative of Saudi arabia informed Working Party members that the new law on Patents had been issued under royal decree no. M/27 of 29.5.1425H (17 July 2004). The implementing regulations of the new Patents law had been issued by Ministerial decision no. 118828/M/10 of 14.11.1425H (26 december 2004). a copy of the english translation of the new law had been submitted to the WTo Secretariat for circulation to members of the Working Party. He said that, in the view of Saudi arabia, the new law on Patents was in full conformity with the provisions of the TriPS agreement and included provisions not only on Patents, but also on industrial designs, Plant Varieties and layout designs of integrated Circuits.

254. in response to a comment from a member of the Working Party regarding the timing of patent approvals, the representative of Saudi arabia stated that the Kingdom had taken a number of steps to accelerate and improve administrative procedures regarding the issuance of patents. Specifically, he reported, new patent examiners had been hired, increasing the staff from 15 to 80 examiners. in addition, training programs had been strengthened with regard to patent examinations and english

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language skills, both abroad and on the job in Saudi arabia. He further reported that the examination procedure had been modified to use patent search and examination reports and patents issued by the patent offices of other countries. This measure had been taken to avoid duplicative work and shorten the period from the date the patent application was filed to the date the patent was issued. Saudi arabia also was cooperating with the Patent office of the government of germany to take advantage of its experience and further streamline the Saudi system. in reply to questions from some members of the Working Party, the representative of Saudi arabia stated that the modified examination procedures were not part of the Patents law. like the practice of many other countries, procedures were not included in the law but were included within the regular practice of the Patent office. He further stated that the modified procedures were already in effect and the backlog was expected to be cleared no later than the end of 2006. in response to a further question from a member of the Working Party about patents for pharmaceuticals, the representative of Saudi arabia stated that, if a patent application related to a pharmaceutical were pending with KaCST, the Ministry of Health would not register a generic form of pharmaceutical unless there was no possibility that the patent would be granted.

- Trademarks

255. in response to requests for information concerning the protection of trademarks in Saudi arabia, the representative of Saudi arabia gave a description of various provisions of the existing Trademarks law and their relationship to the respective provisions of the TriPS agreement. in response to questions from Working Party members, he stated that geographical names could not be registered as trademarks under Saudi arabia’s Trademarks law if their use caused a misunderstanding as to the source of products or services, or their origin. Some members of the Working Party noted that the period of protection for a trademark when the requirement of use was not fulfilled was five years, two years more than the period required by article 19 of the agreement on TriPS. These members noted also that the initial and renewable period of protection for trademarks where the requirement of use was fulfilled was ten years, three years more than the period required by article 18 of the agreement on TriPS. later, the representative of Saudi arabia stated that a new WTo-consistent Trademarks law, issued pursuant to royal decree M/21 of 29.5.1423H (7 august 2002), would bring Saudi arabia’s trademarks regime into compliance with the provisions of the TriPS agreement. in response to a question, the representative confirmed that the new Trademarks law superseded all earlier laws on trademarks. The implementing regulations for the new Trademarks law were issued on october 4, 2002, by Ministerial order no. 1723. The main features of the new Trademarks law and implementing regulations are:

i. increase and impose harsher punishments, with the maximum of Sar 1,000,000;

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ii. The right of the injured party to compensation in proportion to the damages suffered by the injured party due to infringement;

iii. The right of the injured party to obtain from the Board of grievances an attachment order;

iv. The right of the party against whom an attachment order has been issued to compensation for the damages caused to him by a male fide party seeking the attachment order;

v. determination of all disputes arising as a result of trademark infringements is within the jurisdiction of the Board of grievances;

vi. it is within the jurisdiction of the investigation and Prosecution Panel to initiate punitive actions before the Board of grievances;

vii. The right to file an appeal before the Board of grievances against the decision of the Ministry of Commerce and industry denying registration of a trademark;

viii. The right of third parties to file a complaint before the Board of grievances against the registration of a trademark; and

ix. Protection of well-known trademarks, even if not registered.

- geographical indications

256. Members of the Working Party asked for details regarding Saudi arabia’s treatment of geographical indications. in response, the representative of Saudi arabia stated that the new Trademarks law also contained provisions regarding protection of geographical indications. With regard to alcoholic beverages, the representative noted that the production, sale, consumption and import of alcoholic beverages were prohibited in Shari’a and, thus, geographical indications of origin of wines and spirits were not protected.

- industrial designs

257. in response to requests for information concerning the protection available for industrial designs, the representative of Saudi arabia responded that industrial designs are protected by the industrial designs provisions in the new law on Patents, to be implemented by The King abdulaziz City for Science and Technology (KaCST). in response to a question from a member of the Working Party, the representative confirmed that, under the new Patents law, the conditions for obtaining design protection were that the design must be new, have specific features and not be contrary to Shari’a (public order). He further confirmed that the term of protection was ten years from the date of filing.

- layout designs of integrated Circuits

258. in response to requests for information concerning the protection available for layout designs, the representative of Saudi arabia noted that protection of layout designs of integrated circuits was covered by the new law on Patents.

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- Plant Variety Protection

259. in response to questions from members of the Working Party concerning the system of protection for plant varieties, the representative of Saudi arabia stated that the new law on Patents provided the necessary protection. He added that the system of protection in the new law on Patents was adopted from the UPoV Model law on the Protection of new Varieties of Plants. according to the new law on Patents, he confirmed, varieties would be entitled to protection if they were new, distinct, uniform, stable and subject to denomination.

- Undisclosed information

260. Some members of the Working Party requested information on the protection available for undisclosed information. The representative of Saudi arabia stated that, although undisclosed information was currently protected by the Companies law, labour law and Banks Control law, work was underway to prepare an Unfair Competition law that would deal comprehensively with this issue. That law would be implemented by the Ministry of Commerce and industry. He added that anti-competitive practices would be covered by the law as well.

261. The representative of Saudi arabia confirmed that the Council of Ministers had approved issuance of the regulations for the Protection of Confidential Commercial information, Council of Ministers decision no. 50 of 25.2.1426H (4 april 2005). The Minister of Commerce and industry issued these regulations by Ministerial decision no. 3218 of 25.3.1426H (4 May 2005), as amended by Ministerial decision no. 431 of 1.5.1426H (8 June 2005). These regulations provided for protection of undisclosed test and other data submitted to obtain approval of a pharmaceutical or agricultural chemical against unfair commercial use for a minimum period of five years from the date of obtaining the approval including the establishment of the base price. no person other than the person who submitted such data could, without the explicit consent of the person who submitted the data, rely on such data in support of an application for product approval. any subsequent application for marketing approval would not be granted a market authorization unless the applicant submitted its own data, meeting the same requirements applied to the initial applicant, or had the permission of the person initially submitting the data to rely on such data. Saudi arabia would protect such data against disclosure, except where necessary to protect the public, or unless steps were taken to ensure that the data were protected against unfair commercial use. any person harmed as a result of violations of the provisions of these regulations may file a lawsuit to claim compensation for damages sustained.

C. enForCeMenT

262. Some members of the Working Party noted the steps being taken by Saudi arabia to eliminate some problems in the area of enforcement, in particular the piracy of intellectual property. The members noted that it was clear that much of the necessary legislation was in place, but that Saudi arabia was experiencing difficulty

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in fully implementing and enforcing the new laws. These members of the Working Party urged Saudi arabia to work towards full conformity with the agreement on TriPS from the date of Saudi arabia’s accession to the WTo.

263. in response to a further comment by a member of the Working Party, the representative of Saudi arabia clarified that Saudi Customs was not directly responsible for enforcing Saudi laws regarding copyrights. rather, he said, this was enforced by the Ministry of Culture and information, which maintained an office in each customs entry point solely for the purpose of enforcing the Copyrights law. at each point of entry, Customs would bring to the Ministry office a sample of any shipment subject to possible copyright infringement. article 22 of the Copyrights law established a three-step procedure: Step 1, provisional seizure; Step 2, confiscation; Step 3, destruction and imposition of penalties, if the goods were found to violate the Copyrights law by the Violation review Committee of the Ministry of Culture and information; if the goods were deemed to be in full compliance, the shipment would be released and allowed into the Kingdom.

264. in response to a request from a member of the Working Party, the representative of Saudi arabia presented the information on enforcement set forth below under the following five headings.

- general obligations

265. regarding general obligations, the representative of Saudi arabia stated that Saudi intellectual property laws include provisions for the enforcement of the rights they provide in compliance with the provisions of the TriPS agreement. The Copyrights law, the Trademarks law and the new law on Patents each contained enforcement provisions. He further stated that the law of the Board of grievances (the administrative judiciary of Saudi arabia), the rules and Procedures of the Board of grievances and the Border Measures regulations related to iPr also contained provisions regarding enforcement. The laws, he said, contained provisions guaranteeing fairness and equity, while still providing for robust enforcement. The laws also provided for further appeal to the Board of grievances to contest the decisions of the administrative bodies. Under these laws, he reported, administrative and judicial decisions were required to be in writing and well-reasoned. all administrative and judicial procedures, including the Board of grievances procedures, were free of cost.

266. in response to questions, comments and observations by a member of the Working Party on enforcement of intellectual property rights, the representative of Saudi arabia provided the following information:

i. The expressions ex parte search orders or prejudgement attachment orders are not used as such in the new legislation. However, there is a provision on protective seizures/provisional protective measures in article 27 of the implementing regulations of Copyrights law.

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The procedures for that are described in detail in article 27. The right holder has to apply to the Violations review Committee through the general department of Copyright in riyadh or its branches. The Committee may ask the complainant to provide information listed in paragraph (3) of article 27.

ii. iPr laws of the Kingdom of Saudi arabia have been prepared in conformity with the provisions of the TriPS agreement, including its article 61. The fines and imprisonment are imposed keeping in view the circumstances of each case and the gravity of offence in each case and keeping in view that these have a deterrent effect. if a right holder is not satisfied with the level of fine or imprisonment, he has the right to file an appeal to the Board of grievances to enhance the fine and/or imprisonment.

iii. The right holder, who has suffered damages because of an infringement of his iP right, would be awarded damages by the Violation review Committee, which would determine the compensation after weighing the evidence and documentation submitted by him and the estimated amount of compensation claimed by him (article 24 of the implementing regulations of the Copyrights law). in arriving at its decision, the Committee would keep in view that the damage award is adequate to compensate for the injury the right holder has suffered as provided in article 22 (Four) of Saudi arabia’s Copyrights law. if the right holder is not satisfied with the decision, he has the right to submit an appeal to the Board of grievances for enhancement of compensation.

- Civil and administrative Procedures

267. in addition to the material presented in the preceding paragraph, the representative of Saudi arabia confirmed that, with regard to civil and administrative procedures, the laws mentioned above, as well as associated implementing regulations, implemented the requirements of Section 2 of Part iii the TriPS agreement. For example, he said, article 22(iv) of the Copyrights law and articles 48 and 51 of the Trademarks law complied with TriPS agreement provisions regarding damages and compensation (article 45 of the TriPS agreement).

- Provisional Measures

268. regarding provisional measures, the representative of Saudi arabia informed the Working Party that a right holder could obtain an order for precautionary and preventive measures under particular intellectual property laws. articles 49-51 of the Trademarks law permitted a trademark owner to seek precautionary measures from the Board of grievances based on a petition and official certificate of trademark registration. articles 22 and 24 of the Copyrights law and articles 27 and 28 of the implementing regulations of the Copyrights law provided for provisional

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measures to stop printing the infringing work, seize copies, extracts and printed matter as a precaution or to apply such other precautionary seizure that the Committee responsible for determining violations of the Copyrights law deemed necessary to protect copyrights. article 34 of the law on Patents, layout designs of integrated Circuits, Plant Varieties and industrial designs authorized the Committee responsible for adjudicating disputes and appeals to take such prompt measures as the Committee deemed necessary to avoid the damages arising from infringement. article 55 of the implementing regulations of this law provided that the Committee may, upon submission of a statement of the case, order that precautionary and preventive measures be taken against the defendant. in such cases, the plaintiff was required to submit an assurance set by the Committee to safeguard the defendant’s right in the case of an invalid complaint. Precautionary measures were also provided for copyrights and trademarks in articles 5 and 6 of the regulations on Border Measures.

- Special requirements related to Border Measures

269. in response to comments concerning the enforcement of border measures, the representative of Saudi arabia stated that article 22.7 of the Copyrights law and article 49 of the Trademarks law authorized judicial or administrative bodies to issue a provisional seizure decision. Moreover, Customs authorities, in coordination with the Ministry of Commerce and industry and the Ministry of Culture and information, seized consignments infringing intellectual property rights, according to the applicable laws in Saudi arabia. in connection with the enforcement of border measures, Saudi Customs was in the process of establishing an internal iPr Unit, which would create a database for Customs’ use to assist with enforcement against forged and counterfeit goods.

270. The representative of Saudi arabia reported that the issue of special requirements related to border measures had been covered by the Border Measures regulations, which had been issued pursuant to Ministerial decision no. 1277 of 15.5.1425H (3 July 2004) and by Copyrights law and the Trademarks law. in his view, these provisions fully complied with Section 4 of Part iii of the TriPS agreement.

- Criminal Procedures

271. With regard to criminal procedures, the representative of Saudi arabia stated that they were addressed by article 22 of the Copyrights law and articles 43-45 of the Trademarks law.

272. The representative of Saudi arabia stated that Saudi arabia would apply fully all the provisions of the agreement on Trade-related aspects of intellectual Property rights from the date of accession to the WTo, without recourse to any transition period. The Working Party took note of this commitment.

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Vi. PoliCieS aFFeCTing Trade in SerViCeS

273. in addition to the Memorandum on the Foreign Trade regime, the representative of Saudi arabia provided the Working Party with information on the services regime in Saudi arabia in a Supplementary Memorandum on the Foreign Trade regime (WT/aCC/SaU/5), as well as in supplementary background notes and information in documents WT/aCC/SaU/23 and 24.

274. Some members of the Working Party congratulated Saudi arabia on its very liberal services regime. They noted, in particular, the high number of foreign workers and service providers already supplying services within Saudi arabia.

275. Some members of the Working Party requested clarification of the roles of various government agencies in the approval of new investments of foreign capital in the services sector. in response, the representative of Saudi arabia stated that all foreign investment was to be approved by the newly created Saudi arabian general investment authority (Sagia) as a one-stop shop, except those activities listed in the negative list or where the power to licence was assigned to an agency other than Sagia, as set forth in paragraph 278, below.

276. Some members of the Working Party requested information on the regulation of the banking sector and, in particular, requested information on the conditions under which a foreign bank could obtain a licence to establish a branch within Saudi arabia. in response, the representative of Saudi arabia stated that direct branching was permitted under article 3 of the Banking Control law. He reported that banking firms’ activities were regulated by the Banking Control law. Under article 2 of the Banking Control law, a natural or legal person was required to have a licence to engage in a banking business. Under article 3 of the law, the licensing requirements for a Saudi national bank or a joint venture bank included that it must be a public Saudi joint-stock company. Upon the recommendation of the Saudi arabian Monetary agency, the Minister of Finance and the Council of Ministers would evaluate each recommendation to grant a licence for a branch of foreign bank, a Saudi national bank and a joint venture bank. The licensing criteria were prudential in nature and dealt with issues such as capital adequacy, liquidity, profitability and corporate governance. The criteria were applied on a non-discriminatory basis. However, there were a few differences between the licensing criteria for a joint venture bank or a branch of a foreign bank. For example, a branch did not need a local Board of directors nor did it need two external auditors. The licensing procedures would be applied in a non-discriminatory basis for domestic and foreign investors. in response to a question, the representative of Saudi arabia stated that the Banking Control law did not provide for the opening of representative offices in the Kingdom by foreign banks. in response to questions from a member of the Working Party relating to the regulatory regime for foreign bank branches, the representative of Saudi arabia said that it was still being developed, but would be in line with commonly accepted international practice. For example, in determining capital adequacy, the parent bank’s capital would be

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relied on. The specific capital requirement for a foreign bank branch would differ depending on its business plans in the Kingdom, which could include the full scope of business allowed to a Saudi bank. all liquidity or other requirements would be applied to a foreign bank branch, Saudi national bank or a joint venture bank in a non-discriminatory basis, taking into account different requirements for the different legal forms of business. The Working Party took note of these commitments.

277. Some members of the Working Party raised questions about how foreign equity limitations were established and applied. in response, the representative of Saudi arabia explained that the Council of Ministers had the authority to establish, eliminate or waive foreign equity limitations, at its discretion. The Council of Ministers could, for example, waive foreign equity limitations on a case-by-case basis. in response to a further question regarding the effect of foreign equity limitations on taking certain corporate decisions, the representative of Saudi arabia stated that, where the percentage of foreign equity holdings in a public joint-stock company is subject to limits set forth in Saudi arabia’s Schedule on Specific Commitments in Services, provisions of Saudi arabia’s Company law or the by-laws of a public joint-stock company requiring a supermajority for taking a decision shall not, in practice, impair the ability of foreign shareholders to exercise operational control of the company when acting pursuant to those rules, including making decisions on changes in the company’s capital, extension of the term of the company, its dissolution, or merger with another company.

278. He further added that Saudi arabia provided for a wide range of judicial, arbitral and administrative procedures with respect to trade in services. administrative decisions affecting trade in services could be appealed to the Board of grievances under the Council of Ministers resolution no. 190 of 16.11.1409H (19 June 1989) Concerning rules and Procedures of the Board of grievances and the Board of grievances law. Commercial disputes were generally covered by the Board of grievances and some other standing and ad hoc committees. Some members of the Working Party asked the representative of Saudi arabia to provide information on the review of decisions concerning the licensing of service providers in Saudi arabia. in response, the representative of Saudi arabia stated that a number of Ministries and agencies were involved in approval of the right to provide a service in Saudi arabia, e.g., the Ministry of Commerce and industry for engineers, legal practitioners, accountants and insurers; the Ministry of defence and aviation for civil aviation, tourism and travel agents; the general organization for Technical education and occupational Training for technical institutes and national occupational centres; the Ministry of Health for medical practitioners, pharmacists and hospitals; the Ministry of Transportation for maritime transport; SaMa for banks and cooperative insurance companies; and the CiTC for telecommunication services. in all cases, the Ministries and agencies involved had internal standing committees of senior officials to review initial administrative decisions pertaining to licensing. decisions of standing committees could be appealed to the responsible Minister or agency head.

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administrative decisions involving potential civil suits against the government could be brought before the Board of grievances.

279. He further added, in response to requests for information on the nature and extent of incentives, tax exemptions and subsidies available to service providers in Saudi arabia, on a national treatment basis, the representative of Saudi arabia stated that no tax exemptions were provided, pursuant to the Foreign investment law of april 2000. in response to a question from a member of the Working Party, the representative of Saudi arabia stated that no incentives or tax exemptions were available to service providers in Saudi arabia.

280. in response to requests for information concerning restrictions on the provision of professional services, the representative of Saudi arabia stated that all professional services were treated in the same manner. a licence was required to provide professional services. To be eligible for a licence, the company was required to be reputable and well recognized in the field of its profession, to have been registered and successfully practising in the field for at least ten years and to be prepared to participate in the training and the building of Saudi nationals’ experience and the introduction of relevant technology. in addition, the foreign company should employ or have at least one representative in Saudi arabia. That representative should stay in Saudi arabia for a period not less than nine months per year; have at least a university degree in the field of the company specialization; and have not less than ten years’ successful experience. in response to requests for further information concerning the conditions required to be fulfilled to be eligible for grant of a licence, the representative of Saudi arabia stated that the relevant licensing authority in Saudi arabia could request information establishing the reputation and experience of the service provider. a foreign company would be considered as reputable, well recognized and practising in the field successfully if, e.g., it was registered under the companies law of its home country, was certified as financially viable by its bankers, produced copies of audited balance sheets for the last two years, provided information establishing that the company had completed assignments for former clients on a satisfactory basis or, if available from a Chamber of Commerce and industry in the company’s home country, the foreign company produced a Chamber-certified list of previous contracts/assignments outside Saudi arabia. Concerning participation in training and the introduction of technology, the applicant company should give an undertaking that it would train Saudi nationals and would introduce the new technologies and know-how that it employed in its home country. He also added that existing foreign companies already licensed to operate in Saudi arabia had a period of one year to fulfil those conditions. if they did not do that, the licence may be cancelled. new companies had to fulfil the conditions from the beginning of their business activities.

281. Some members of the Working Party asked whether Saudi arabia planned to liberalise the limitations placed on the participation of foreigners in security underwriting, commodity brokerage services and currency exchange operations, as

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well as the limitations placed on the participation of foreigners in land transportation and professional services. in response, the representative of Saudi arabia stated that, although there were limitations on the participation of both foreign and domestic individuals in providing security underwriting, commodity brokerage services and currency exchange operations, there were no such limitations on domestic and foreign banks, except the requirements to be licensed. There were no plans to liberalise those conditions. in response to a question, the representative of Saudi arabia stated that participation of foreign suppliers was not allowed in land transportation services.

282. Some members of the Working Party asked whether there were any instances of less than national treatment for foreign service providers. The representative of Saudi arabia stated that only Saudi arabian nationals were allowed to participate in commercial agencies, customs clearance agencies, real estate agencies and civilian security. Postal services and radio and television transmission services were reserved to the State. He further added that, under article 8 of the Unified economic agreement of the gulf Cooperation Council, national treatment was provided for gulf Cooperation Council nationals in, among other things, freedom of movement, work and residence, right of ownership and freedom of exercising economic activity, including service activities and free movement of capital. Saudi arabia, together with the other gulf Cooperation Council members, was in the process of implementing this agreement. in addition, some bilateral agreements signed by Saudi arabia conferred preferred or reciprocal supplier status on companies from signatory countries with regard to certain services. agreements with egypt and Jordan conferred reciprocal supplier status for cross-border truck and public transportation vehicles; agreements with egypt and Tunisia granted preference to national shipping and transport modes in bilateral trade; agreements with lebanon, Syria and Turkey provided for reciprocal treatment with regard to transportation and transport vehicles; and an agreement with Morocco included reciprocal airline privileges.

283. in response to requests for information concerning the rules governing temporary residence in Saudi arabia by foreigners, the representative of Saudi arabia stated that the law of residency was enforced by the Ministry of interior. in addition, the Ministry of labour approved applications for the presence of foreigners who worked or were licensed to work in the private sector. Some members of the Working Party requested information on the system followed for employment of foreign employees and investors. The representative of Saudi arabia stated that, once a foreign employee was offered a contract, a visa would be granted. Business visitors would, however, require a letter of invitation or a copy of the relationship or agreement with a Saudi party.

284. in response to questions concerning the limitations placed upon the total number of natural persons employed in particular sectors, the representative of Saudi arabia stated that, as a matter of principle, work was considered a Saudi citizen’s right. Consequently, a foreigner would not be employed when doing so

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would displace a Saudi worker. The labour and Workers regulations required that any enterprise, Saudi or foreign owned, would ensure that the percentage of the Saudi workers engaged by the employer should not be less than 75 per cent of the total workforce. However, the regulations also permitted the Minister of labour to reduce the required percentage in circumstances where qualified Saudi workers were not available. Foreign workers, including those falling under Saudi arabia’s Mode 4 commitments, were required to obtain work permits from the Ministry of labour. The representative of Saudi arabia clarified that this paragraph would not in any way reduce the commitments made by Saudi arabia in Mode 4. all service providers’ activities, regardless of ownership, were obliged to reserve certain positions for Saudis, including personnel officers, recruitment officers, receptionists, cashiers, civilian security guards and transaction follow-up clerks to government departments.

285. Some members of the Working Party requested clarification of the qualification requirements and procedures for approval of natural persons serving as foreign service providers. in response, the representative of Saudi arabia stated that different categories of services required different types of approval. For example, for medical services, the service provider should have a medical degree from a recognized institution, i.e., a college or university. For educational services, the service provider should have adequate academic qualifications in the relevant disciplines from a recognized institution, i.e., a college or university. a provider of accounting and auditing services should be a certified accountant from an institute certified by the host government. The representative of Saudi arabia stated these requirements referred to natural persons. in addition, all foreign companies should possess the necessary technical expertise, financial capabilities and occupational proficiency.

286. in response to questions concerning restrictions placed on government procurement of business inputs (i.e., business entities providing business services) from foreign service providers, the representative of Saudi arabia stated that all non-Saudi contractors must assign not less than 30 per cent of the work included in their contract to wholly-owned Saudi companies. all contractors were obliged to purchase the tools and equipment that they procure for performance of their contracts from Saudi agents for these tools and equipment in Saudi arabia. Contractors were required to obtain the following services from local Saudi establishments: transportation services for goods and services within Saudi arabia (if the contractor did not perform this service by itself directly with equipment owned by the business and with personnel directly employed by the business); banking services; services for the leasing and purchase of land and buildings; and catering services and supply of foodstuffs. The representative of Saudi arabia stated that these requirements applied only to government procurement, and not private procurement, of services.

287. Some members of the Working Party asked whether permission for a foreign-owned service provider to own real property was automatic once the licence to engage in business activities as a foreign establishment in Saudi arabia was obtained. in

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response, the representative of Saudi arabia stated that foreign establishments authorized to carry on their activities in the Kingdom under the Foreign investment law may own real estate only for a specific use related to the licensed project, in accordance with the rules on foreign ownership of real estate. The concerned Minister’s approval of a request to own real estate was a prerequisite before its review by a Ministerial Committee headed by the Minister of interior.

288. in response to a question from a member of the Working Party regarding telecommunications frequency usage and availability, the representative of Saudi arabia confirmed that this information would be made available in the national Frequency Plan, which would be prepared pursuant to the reference Paper attached to the telecommunications portion of the Kingdom’s Schedule on Specific Commitments in Services. The representative added that the national Frequency Plan was in the development stage; it would be published as soon as it was finalized.

289. in response to questions from members of the Working Party, the representative of Saudi arabia provided the following information regarding the Kingdom’s insurance regime:

1986: Traditional insurance is prohibited under islamic Shari’a. an acceptable alternative insurance concept called “Cooperative insurance” emerged in the Saudi insurance Market. The national Company for Co-operative insurance (nCCi) was established as a pilot company by royal decree no. M/5 of 17.5.1405H (18 January 1986). no official statistics were available, but, in the past, a certain number of insurance companies had been operating in Saudi arabia through a Saudi agent pursuant to Ministerial orders issued by the Ministry of Commerce and under the auspices of a Saudi commercial agent.

1999: The law of Cooperative Health insurance was issued by royal decree no. M/10 of 1.5.1420H (12 august 1999). it was concerned primarily with the consumption side of this service. The Council of Cooperative Health insurance headed by the Minister of Health was responsible for the enforcement of this law.

2001: The Compulsory auto insurance act was issued by Council of Ministers decision no. 222 of 12.8.1422H (29 october 2001). Third party liability insurance coverage became mandatory for all motor vehicles operating in the Kingdom. The Traffic department under the Ministry of interior was responsible for the enforcement of the Compulsory auto insurance act. This act was also concerned with consumption of that service.

2003: The Cooperative insurance Companies Control law was issued by royal decree no. M/32 of 2.6.1424H (31 July 2003), to protect the insured’s rights by monitoring the financial health of the company and supervising the company’s activities and those engaged in insurance professions, to

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encourage fair and effective competition, to enhance the stability of the insurance market and to enhance the insurance sector in the Kingdom. This law addressed explicitly the issue of the supply of the service.

The relevant government entities dealing with insurers were as follows:

i. The Saudi arabian Monetary agency (SaMa): responsible for the regulatory oversight and supervision of the insurance industry and qualifications of insurance companies.

ii. The Ministry of Commerce and industry: responsible for the legal requirements of the Companies law.

iii. The Council of Cooperative Health insurance, headed by the Ministry of Health: responsible for the enforcement of the law of Cooperative Health insurance as it relates primarily to the consumption of the service.

iv. The Traffic department, headed by the Ministry of interior: responsible for the enforcement of the Compulsory auto insurance act as it relates to the consumption of the service.

290. The representative of Saudi arabia stated that Cooperative insurance in the Kingdom was undertaken through licensed public joint-stock insurance companies operating in a cooperative manner, as provided within the articles of the Cooperative insurance Companies Control law, promulgated by royal decree no. M/32 of 2.6.1424H (31 July 2003) in accordance with the principles of islamic Shari’a. Cooperative insurance operated with the purpose of maintaining an efficient, fair, safe and stable insurance market for the benefit and protection of policyholders and shareholders. Cooperative insurance aimed to strengthen values like cooperation and social solidarity (takaful) among the insured by indemnifying those among them who sustain losses insured against as well as by sharing equitably the amount of such losses among themselves. The representative of Saudi arabia further stated that cooperative insurance companies offered both policyholders and shareholders the opportunity to benefit from their contributions and investments through the distribution of the surplus of insurance operations between the shareholders and policyholders in the ratio of 90/10 (90 per cent for the shareholders and 10 per cent for the policyholders). To facilitate a clear accounting for the distribution of the surplus, the insurance and re-insurance operations accounts were kept separate from the shareholders’ investment accounts. insurance operations accounts were maintained separately from the contributions paid to the company by policyholders and were reserved for payments of claims and expenses of the company’s operation. Policyholders were entitled to a percentage of the surplus from the income generated from the operations and the return on investment from the policyholders’ contributions at the end of the year in the form of reduction of premium or by monetary distribution. The accounting methods for the distribution of surplus were transparent, as set forth in the law’s implementing regulations.

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291. The implementing regulations of this law were issued by the Finance Minister, pursuant to Ministerial decision no. 1/596 of 1.3.1425H (20 april 2004) and specified the insurance activities covered in this law. The implementing regulations: (i) provided transparency by making public all rules and regulations affecting the insurance and reinsurance industry; (ii) promoted competition in the market place; and (iii) provided consumer and private-sector protection. in response to a question from a member of the Working Party, the representative of Saudi arabia acknowledged that these regulations would need further refinement in light of Saudi arabia’s accession commitments.

292. a member of the Working Party requested a clear and detailed definition member of the Working Party requested a clear and detailed definition of “cooperative joint-stock insurance company,” including an explanation of itsinsurance company,” including an explanation of its company,” including an explanation of its ownership, any requirements to float shares on the public stock exchange, and an explanation of how “surplus” is calculated and distributed between shareholders and policy holders. in response, the representative of Saudi arabia provided the following clarifications. in establishing a new locally incorporated public joint-stock cooperative insurance company, a foreign insurance company must go through the following steps:

i. obtain a licence from SaMa, in accordance with articles 4 through 11 of the Cooperative insurance Companies Control law and its implementing regulations;

ii. obtain approval from Sagia;iii. apply, with a minimum of five founders, to the Ministry of

Commerce and industry, in accordance with the Companies law;iv. obtain approval of the Council of Ministers, enacted through a

royal decree; andv. receive SaMa authorization for conducting business. authorization for conducting business.

The capital requirement and capitalization is required upon receipt of the application in the form of a bank guarantee, and paid-up capital is required upon the issuance of the royal decree. article 6 of the Cooperative insurance Companies Control law implementing regulations requires that new applications be processed within 90 days. after approval of its application by the Ministry of Commerce and industry, theindustry, the company shall float the required percentage of shares (currently set at a minimum of 30 per cent under the Capital Market authority’s implementing regulations) on the Saudi stock market in an initial public offering (iPo) in accordance with the Capital Market law and its implementing regulations. The Capital Market authority (CMa) implementing regulations require that every issue be underwritten, and that CMa review the prospectus within 45 days of receiving all information and documentation required.

293. Subject to the provisions of the Cooperative Health insurance law, promulgated by royal decree M/10 of 1.5.1420H (13 august 1999), the Cooperative5.1420H (13 august 1999), the Cooperative

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insurance Companies Control law granted the Saudi arabian Monetary agency (SaMa), through a clear, transparent and consistent regulatory and supervisory process, the powers to:

i. review applications for licenses and issue recommendations for licensing, after which the application is referred to the Ministry of Commerce and industry for approval under the Companies law.

ii. authorize suspension and withdrawal of regulatory permission.iii. approve board members of locally incorporated public joint-

stock cooperative insurance and reinsurance companies, and their external auditors.

iv. Monitor solvency of insurance and reinsurance companies through the establishment of general rules to ensure credit worthiness, capital adequacy, soundness of assets and technical provisions and ability to meet obligations to policyholders.

v. inspect records directly or through auditors and request regulatory information.

vi. approve mergers and acquisitions of insurance and reinsurance companies.

vii. regulate and approve rules of investment in insurance and reinsurance operations.

viii. establish minimum deposit limits and the amount of funds to be deposited in local banks to exercise each insurance activity.

ix. approve policy forms.x. establish investment policy for insurance and reinsurance

companies.xi. intervene following violations of the rules, including requiring

liquidations.xii. establish the pre-conditions for granting licenses to provide

insurance-related services, in particular: insurance brokers, insurance consultants, inspectors and loss adjusters, experts in settling insurance claims and actuaries.

294. The representative of Saudi arabia stated that, according to article 3(2) of the Cooperative insurance Companies Control law, the main object of the insurance and reinsurance companies was to engage in insurance and reinsurance activities, not to undertake any other activities unless they were complementary or necessary.complementary or necessary. insurance and reinsurance companies could not directly own brokerage companies or establishments. reinsurance companies could not own reinsurance brokerage companies or establishments. However, insurance companies could, subject to obtaining SaMa’s approval, own companies or establishments engaged in reinsurance brokerage activities.

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295. The representative of Saudi arabia stated that, according to article 3(3) of the Cooperative insurance Companies Control law, the paid-up capital of the Control law, the paid-up capital of the locally incorporated public joint-stock cooperative insurance company “shall” not be less than Sar 100,000,000 and the paid-up capital of a reinsurance company or an insurance company engaged in underwriting reinsurance activities for non-affiliated companies “shall” not be less than Sar 200,000,000. The minimum capital “shall” not be altered without SaMa’s approval and in accordance with the provisions of the Companies law relating to the locally incorporated cooperative insurance and reinsurance public joint-stock companies.

296. Some members of the Working Party requested clarification and modification of a number of requirements in the current Saudi regulatory regime that have an impact on foreign insurance service providers. For example, members noted that capitalization requirements appeared to be excessive, given that foreign insurance companies are required to operate on a cooperative basis; and there is a separate 20 per cent statutory reserve requirement that effectively doubles this capitalization requirement. Furthermore, current Saudi regulations require a 10-15 per cent statutory bank deposit, the interest on which does not accrue to the company, but is instead retained by the regulator (SaMa). restrictions on the investment of assets currently require that 50 per cent of investment must be in Saudi riyal vehicles. in addition, regulations permitted the imposition of unnecessary reinsurance requirements. The representative of Saudi arabia confirmed that the necessary regulatory reforms, including those for implementation of royal decree no. 3120/MB permitting branching, would be completed before May 2006, and would implement the commitments for all subsectors set out in Saudi arabia’s Schedule on Specific Commitments in Services. He further explained that such regulatory reforms would be developed with the goal of promoting investment and the creation of meaningful commercial opportunities in the Saudi cooperative insurance market. Such reforms would be consistent with internationally recognized insurance industry standards and principles, including the standards of the international association of insurance Supervisors (iaiS), the financial services transparency code of the iMF and the oeCd’s “detailed Principles for the regulation and Supervision of insurance Markets in emerging economies.” The Working Party took note of these commitments.

297. a member of the Working Party asked if foreign legal or natural persons were allowed to invest directly in the Saudi stock market. The representative of Saudi arabia explained that foreign legal or natural persons were not allowed to invest directly in the Saudi stock market, except through mutual funds. He further explained that the transfer of significant shareholding (five per cent or more) in a bank or cooperative insurance company was only permitted with the approval of SaMa.

298. in response to a question from a member of the Working Party concerning the ability of foreign insurance service suppliers to open and operate branches in Saudi arabia, the representative of Saudi arabia confirmed that foreign insurance

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companies were permitted to open and operate branches in Saudi arabia pursuant to royal decree no. 3120/MB of 4.3.1426H (13 april 2005). He further explained that existing foreign insurance service suppliers operating in Saudi arabia as of 13 april 2005, were permitted a three-year transition period, beginning 13 april 2005, to comply with the Cooperative law on insurance and to establish as either a locally incorporated public joint-stock cooperative insurance company or as a direct branch (as a cooperative insurance provider). as set out in paragraph 296, above, the representative of Saudi arabia confirmed that the necessary regulatory reforms for implementation, set out in royal decree no. 3120/MB permitting branching, would be completed before May 2006, and would be consistent with internationally recognized insurance industry standards and developed with the goal of promoting investment and the creation of meaningful commercial opportunities in the Saudi cooperative insurance market. Such reforms would be in line with the internationally recognized standards of the international association of insurance Supervisors (iaiS) and the financial services transparency code of the iMF. He confirmed that, subject to prudential considerations that would be reflected in future implementing regulations and in conformity with internationally recognised insurance industry standards, branches of foreign insurance companies operating in Saudi arabia were not subject to economic needs tests or numerical limitations, that such branches were permitted to operate on the global capital of the parent company, taking account of prudential considerations against insufficient local capital investment, and that deposit requirements would be set in accordance with local liability and consistent with international norms. He explained that the regulations implementing royal decree no. 3120/MB had not yet been published, but confirmed that, subject to the conditions stated in the previous sentence, multiple licenses would be permitted for branches, and that it would not be necessary to apply for and receive separate licenses for non-life and protection and savings insurance. The Working Party took note of these commitments.

299. a member of the Working Party asked for clarification concerning licensing of operations and new insurance products in general and in particular during the three-year transition period provided for in royal decree no. 3120/MB. The member was particularly concerned regarding the following issues:

i. whether foreign insurance services suppliers, including those operating during the three-year transition period, would be permitted a full scope of operations and would not be required to apply for separate licenses to supply non-life and protection and savings insurance services;

ii. whether foreign insurance suppliers would not be required to supply protection and savings insurance services through, or in conjunction with, a bank;

iii. whether foreign insurance suppliers, including those operating in Saudi arabia during the three-year transition period provided in

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royal decree no. 3120/MB, were permitted to offer new insurance products and service new clients; and

iv. whether applications for such new products would be reviewed and responded to within three months of receipt of the completed documentation and whether applications for products already approved for other financial institutions would be reviewed and responded to within 15 days of receipt of completed documentation.

in response, the representative of Saudi arabia stated that foreign insurance service suppliers operating in Saudi arabia during the three-year transition period would be able to offer new products and service new clients, as set forth in the Saudi Schedule on Specific Commitments in Services. He confirmed that it was the ongoing intent of the Kingdom of Saudi arabia to further expedite and streamline the general approval procedures for new and existing products. He further confirmed that the necessary regulatory reforms, including those for implementation of royal decree no. 3120/MB permitting branching, would be completed before May 2006, and would be consistent with internationally recognized insurance industry standards and developed with the goal of promoting investment and the creation of meaningful commercial opportunities in the Saudi cooperative insurance market. Such reforms would be in line with the internationally recognized standards of the international association of insurance Supervisors (iaiS) and the financial services transparency code of the iMF. all rate formulae, policy clauses, insurance application forms and other relevant materials required by SaMa and other relevant government agencies such as the Cooperative Health insurance Council and the Traffic department, and amendments to such items, may be filed with SaMa for recordation prior to their use and may be used thereafter unless SaMa disapproves within 45 days after receipt in the case of products that have already been approved for other financial institutions or within 120 days after receipt in the case of new products. The Working Party took note of these commitments.

300. Following the completion of bilateral negotiations with WTo Members, the Schedule on Specific Commitments in Services of Saudi arabia would be reproduced in Part ii of the annex to the Protocol of Saudi arabia.

Vii. TranSParenCY

301. Some members of the Working Party requested information on Saudi arabia’s implementation of the transparency requirements prescribed in article X of the gaTT, article iii of the gaTS and other WTo agreements. They asked whether a legal obligation existed in Saudi arabia to publish in an official journal all laws, regulations, judicial decisions and administrative orders or rulings of general application or other measures having similar effect relating to trade or economic policy “in such a manner as to enable governments and traders to become acquainted with them”; to what extent publication occurred prior to entry into force; and whether any such measures could

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enter into force without being published in Umm Al-Qura, the official Journal.

302. in response, the representative of Saudi arabia stated that article 71 of the Basic law required that all laws be published in Umm Al-Qura, the official Journal, before they entered into effect, and that laws become effective on the date of publication unless a later date was specified. He added that the Umm Al-Qura also is the official journal for publication of regulations, implementing regulations, decrees, decisions, Ministerial orders, international agreements and concessions, which also could not come into effect prior to publication there. Pursuant to decree no. 162 issued by the Council of Ministers on 17.6.1423H (28 august 2002), these rules extended to administrative orders. He further added that article 47 of the Board of grievances law required the publication of judicial decisions. There were no other requirements for publication or notification currently in effect. He also confirmed that his government has set up a single operational enquiry point -- the Ministry of Commerce and industry (Post office Box 11162, riyadh, Kingdom of Saudi arabia; telephone number 966-1-402-7574; www.commerce.gov.sa) -- in conformity with the requirements of article iii of the general agreement on Trade in Services and the WTo agreements on TBT and SPS.

303. a member stated that timely review of legislation published in Umm Al-Qura was difficult, as copies were not immediately available to the general public and many private-sector entities were unable to obtain copies of laws and regulations with sufficient time to become acquainted with their provisions prior to the date of implementation. This member suggested that Saudi arabia consider posting the Umm Al-Qura on the internet to improve access by the public to laws, regulations, judicial decisions and administrative rulings of general application, and welcomed any other practical steps taken by Saudi arabia to ensure prompt and accessible publication of legislation and regulations in the official Journal.

304. a member raised the issue of publishing notice of proposed measures and providing an opportunity for members and interested persons to provide comments and views on such measures prior to their adoption and implementation. Providing such an opportunity was required under some WTo agreements and provided useful information that could facilitate the acceptance and operation of measures. This member noted the Saudi government’s practice of circulating information on proposed and adopted measures through Chambers of Commerce in the Kingdom and requested information on Saudi arabia’s plans to provide opportunities for members and interested persons and associations to obtain information and provide comments on proposed measures.

305. The representative of Saudi arabia confirmed that from the date of accession his government would fully implement article X of the gaTT 1994, article iii of the gaTS and the other WTo transparency requirements, including those requiring notification, prior comment and publication. as such, all laws, regulations, decrees, judicial decisions and administrative rulings of general application pertaining to or

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affecting customs issues, trade in goods, services, intellectual property and the control of foreign exchange would be published promptly in the Umm Al-Qura in a manner that fulfils the WTo requirements and no such law, regulation or other normative act or measure would become effective or be enforced prior to such publication. He further confirmed that the government also had decided to expand the transparency provided with regard to legislation and measures having similar effect in the areas of trade and investment. in this regard, Saudi arabia would, from the date of accession, establish or designate an official website (and possibly a supplemental official journal or an expanded Umm Al-Qura), updated on a regular basis and readily available to WTo Members, individuals, associations and enterprises, dedicated to the publication of all regulations, decisions, orders, administrative rulings of general application, and other measures pertaining to or affecting trade in goods, services and TriPS prior to enactment. The publication of such regulations and other measures would include, as appropriate, the names of the authorities (including contact points) responsible for implementing a particular measure and the effective date of the measure. also, it would list the products and services affected by the particular measure, identified by appropriate tariff line and classification. The representative of Saudi arabia confirmed that, with respect to proposed measures, Saudi arabia would provide a reasonable period, i.e., no less than 60 days, for members, individuals, associations and enterprises to provide comments to the appropriate authorities before such measures were adopted, except for those regulations and other measures involving national emergency or security, or for which the publication would impede law enforcement. He added that Saudi arabia intended to post the contents of current and past editions of the official Journal on this website as well, and to keep them current. The Working Party took note of these commitments.

Viii. noTiFiCaTionS

306. The representative of Saudi arabia said that, upon entry into force of the Protocol of accession, Saudi arabia would submit all initial notifications required by any agreement constituting part of the WTo agreements. any regulations subsequently enacted by Saudi arabia which gave effect to the laws enacted to implement any agreement constituting part of the WTo agreements would also conform to the requirements of that agreement. The Working Party took note of these commitments.

iX. Trade agreeMenTS

307. in response to questions from members of the Working Party, the representative of Saudi arabia submitted the text of the Unified economic agreement (Uea) signed on 11 november 1981 under the gulf Cooperation Council (gCC). He said that, in his view, the Uea met all the requirements of article XXiV of gaTT agreement 1994, including paragraphs 5(b) and 8(b). The free-trade area had eliminated duties and other restrictive regulations of commerce on all trade between the members of the

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gCC in the products originating in the member states, and work was proceeding to further harmonize trade and commercial policies. He also submitted the programme for the implementation of the agreement Facilitating and developing Trade exchange among arab States to create a Free Trade area and the agreement Facilitating and developing Trade exchanges among arab States. Saudi arabia would notify these agreements upon becoming a WTo Member.

308. in response to further questions, the representative of Saudi arabia stated that the gCC Customs Union had been established and was operative since the beginning of January 2003. Saudi arabia and other gCC member states were applying the gCC common external tariff. The rates of common external tariff for more than 85 per cent of the tariff lines were 5 per cent or 0 per cent. He said that future plans included the application of common external tariff to all items and steps towards a common market and a common currency.

309. in response to additional questions from a member of the Working Party, the representative of Saudi arabia stated that the 1981 list was the basic document that was the foundation of the gCC. Further to this list, the first gCC FTa was established; later, the gCC Summit took a decision on further economic integration and established a Customs Union (which came into force 1 January 2003). The representative added that customs tariffs had been removed on all trade among gCC countries and that there were no exceptions. as for treatment of imports into one member of the customs union when they are shipped to another, the representative of Saudi arabia referred to paragraphs 168-169, above. He also stated that there were no rules of origin for the gCC Customs Union. as for other restrictions, the representative reported that particular goods imported into one member of the Customs Union could not be shipped to another member if their importation into the other member was banned (e.g., the import ban on alcohol and pork in Saudi arabia).

310. in response to a question on the liberalization of services within the gCC, the representative of Saudi arabia stated that the gCC had liberalized trade in services for roughly 100 sub-sectors of services, including professional services, most business services, telecommunication services, banking and other financial services (other than insurance services), distribution services, education services, environmental services, health and related social services and tourism services. The gCC members had agreed to progressively liberalize other services sectors and sub-sectors.

311. in response to another question from a member of the Working Party, the representative of Saudi arabia stated that the gCC Supreme Council, which met annually and comprised Heads of State/Heads of governments, was the ultimate decision-making body in the gCC. The Ministerial Council, comprising Foreign Ministers, was responsible for overall implementation and implementation of decisions of the Supreme Council. a Committee consisting of the Ministers of Finance and economy of the gCC member states was responsible for follow-up on the implementation of the economic agreement signed by gCC member States

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leaders in december 2001, including the requirements of establishing a customs union. affiliated with this Committee were a number of specialized committees, such as the Committee comprising Customs directors and deputy Ministers of Finance and the Customs Union Committee. With respect to implementation, decisions of the Supreme Council would be made by executive decisions by member states at a level no less than the Council of Ministers. Follow-up on implementation was affected by decisions made by the concerned ministers within the framework of the Council.

312. The representative of Saudi arabia stated that the greater arab Free Trade area (gaFTa) included the following sixteen member states of the arab league: Bahrain, egypt, iraq, Jordan, Kuwait, lebanon, libya, Morocco, oman, Qatar, Saudi arabia, Sudan, Syria, Tunisia, United arab emirates and Yemen. He added that, as of 1 January 2005, customs duties on national goods exchanged among the member states to the agreement had been removed. Moreover, exemptions from customs duties accorded within the framework of the gaFTa were limited to products of the member states of the area only. a copy of the text of the gaFTa, in english, was submitted to the WTo Secretariat for distribution to members of the Working Party. in response to a question from a member of the Working Party regarding rules of origin, the representative of Saudi arabia stated that the arab league was still preparing rules of origin. These would be sent to the WTo once completed.

313. The representative of Saudi arabia noted that Saudi arabia and other gCC member states had discussed with the european Communities the possibility of establishing a free trade area.

314. The representative of Saudi arabia stated that his government would observe the provisions of the WTo, including article XXiV of the gaTT 1994 and article V of the gaTS, in its trade agreements, and would ensure that the provisions of these WTo agreements for notification, consultation and other requirements concerning free trade areas and customs unions of which Saudi arabia was a member were met from the date of accession. He confirmed that Saudi arabia would, upon accession, submit notifications and copies of the gCC Customs Union and the arab league Free Trade area for review by the Committee on regional Trade agreements (CrTa). The Working Party took note of these commitments.

ConClUSionS

315. The Working Party took note of the explanations and statements of Saudi arabia concerning its foreign trade regime, as reflected in this report. The Working Party took note of the commitments made by the Kingdom of Saudi arabia in relation to certain specific matters which are reproduced in paragraphs 33, 35, 36, 37, 52, 69, 85, 88, 103, 104, 113, 115, 122, 123, 128, 132, 142, 153, 155, 158, 164, 167, 169, 171, 174, 178, 179, 181, 182, 183, 184, 186, 189, 197, 201, 203, 205, 207, 208, 210, 212, 215, 216, 218, 222, 223, 224, 226, 228, 231, 235, 272, 276,

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296, 298, 299, 305, 306 and 314 of this report. The Working Party took note that these commitments had been incorporated in paragraph 2 of the draft Protocol of accession of Saudi arabia to the WTo.

316. Having carried out the examination of the foreign trade regime of Saudi arabia and in the light of the explanations, commitments and concessions made by the representative of Saudi arabia, the Working Party reached the conclusion that Saudi arabia be invited to accede to the Marrakech agreement establishing the WTo under the provisions of article Xii. For this purpose, the Working Party has prepared the draft decision and Protocol of accession reproduced in the appendix1 to this report, and takes note of Saudi arabia’s Schedule of Concessions and Commitments on goods WT/aCC/SaU/61/add.1 and its Schedule of Specific Commitments on Services WT/aCC/SaU/61/add.2 that are annexed to the Protocol. it is proposed that these texts be adopted by the general Council when it adopts the report. When the decision is adopted, the Protocol of accession would be open for acceptance by Saudi arabia which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of Saudi arabia to the Marrakech agreement establishing the WTo.

1 not reproduced.

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annex a: list of goods and Services Subject to Price and Profit Controlsannex B: Comparison of the Provisions of the old 1979 and the new 2000 Foreign investment lawsannex C: negative listannex d: Summary of the Provisions of the Capital Market lawannex e: list of Products Subject to non-automatic import licensing requirementsannex F: list of Banned importsannex g: Seed Specificationsannex H: list of items Subject to Mandatory Certificationannex i: list of Banned exportsannex J: list of exports Subject to authorization/licensingannex K: list of Technical Committeesannex l: list of SPS Measures Maintained by the Kingdom of Saudi arabia

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anneX a

list of goods and Services Subject to Price and Profit Controls annex a-1: goods Subject to Price regulation

no. item Current regulated PriceHS

Classification 1. Wheat Flour Sar 20/21 per 40 kg 11010010

2. Fuel oil 6–12 Halalas/litre 27101140

3. gasoline 90 Halalas/litre 27101121

4. diesel 37 Halalas/litre 27101130-3

5. Kerosene 43.5 Halalas/litre 27101129

6. liquefied Petroleum gas (lPg) (Cooking gas) 72 Halalas/litre 271110

7. natural gas liquids

-Propane

-Butane

-natural gasoline

Pursuant to Council of Ministers

resolution no. 260*27111200

27111300

27101114

8. asphalt 300 Sar/Metric Ton 2714

9. natural gas (ethane and Methane)

281 Halalas/MMBTU 271111

10. Crude oil (Used as Fuel) 10 Halalas/litre 2709

11. Pharmaceuticals 10, 15 or 20 per cent profit margin, as set out in annex a-2, depending on the export price (CiF) to Saudi arabia

Chapter 30

(1 Sar = 100 Halalas)

* See the discussion of ngl pricing in the Working Party report, in particular, paragraphs 29–32.

annex a-2: list of goods Subject to Profit regulation

no. item Current Profit Controls legal Basis

HS Code

1. Pharmaceuticals export to Sa (CiF)*

Wholesale Margin

retail Margin

royal decree no. M/31 of 1.6.1425H (July 19, 2004)

Ch. 30

less than 50 Sar

15% 20%

Sar 50-200

10% 15%

More than Sar 200

10% 10%

* The export price is established at the time of registration, as explained in paragraph 35 of the Working Party report.

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annex a-3

government Price regulation in Services Sectors

no. Services Current regulated Price1. energy Transportation Services,

including Pipeline Transportation Services

Tariffs are established based on the cost of services provided and are administered in a non-discriminatory manner. The single pipeline tariff currently in place is Sar 539 Per 1,000 barrels.

2. Port-general Cargo Sar 35 Per Ton or Part Thereof

3. Port-Vehicles and equipment Sar 35 Per Ton or Part Thereof

4. Port-Bagged Cargo and Foodstuff Sar 20 Per Ton or Part Thereof

5. Port-Bagged Cement Sar 10 Per Ton or Part Thereof

6. Port-Bulk Cargo (including bulk handled at the cement silos, grains, oils or similar; excluding crude oil, gas and liquefied petroleum products)

Sar 6 Per Ton or Part Thereof

7. Port-exported Bulk Cement and Clinker

Sar 3 Per Ton or Part Thereof

8. Port-Container 20 Feet long or less Sar 270 Per Unit

9. Port-Container over 20 Feet long Sar 415 Per Unit

10. Port-Sheep/goat Sar 2 Per Head

11. Port-other livestock Sar 5 Per Head

12. (a) electricity Consumption for Houses & Commercial Purposes from 1 – 4000 Kilowatt Per Hour on a Monthly Basis

(b) electricity Consumption for Houses & Commercial Purposes from 4001 – 6000 Kilowatt Per Hour on a Monthly Basis

(c) electricity Consumption for Houses & Commercial Purposes from 6001 and more Kilowatt Per Hour on a Monthly Basis

5 Halalas Per 1 Kilowatt



13. Water Consumption or Sewer Services 15 Halalas Per 1 Cubic Meter

- The Council of Ministers is the responsible legal authority.

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annex BComparison of the Provisions of the old 1979 and the

new 2000 Foreign investment laws

The old Foreign Capital investment law was enacted in 1979. The new Foreign investment law was enacted pursuant to royal decree no. M/1 of 5.1.1421H (9 april 2000) to replace the 1979 law. Under the old law, the licensing authority for foreign investment was the Foreign investment Secretariat of the Ministry of industry and electricity. Under the new law, the licensing authority was the Saudi arabian general investment authority (Sagia). The primary other differences between the old and the new laws were as follows:

authorities Providing Services to and regulating investors

old law: Several Ministries and government agencies.

new law: Saudi arabian general investment authority (Sagia) investor Service Centres (one-Stop-Shop). (Sagia comprises representatives from nine investment-related ministries.)

investment Fields open to Foreign investors

old law: The old law required that the project be a development project approved under the national development Plan and that the project be accompanied by foreign technical skills and expertise to facilitate technology transfer and be approved as viable by the Foreign investment Bureau.

new law: all fields are open for investment, except those on the negative list.

Period for Taking a decision on an investment application

old law: not specified.

new law: Maximum 30 days.

Possibility of obtaining More Than one license

old law: restricted, had to be in the same activity.

new law: The foreign investor may obtain more than one licence in diverse activities.

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Type of Foreign investment

old law: The old law favoured joint ventures over 100 per cent foreign-owned projects.

new law: 100 per cent foreign-owned projects are allowed by the new law, in addition to joint ventures.

incentives

old law: Foreign capital enjoyed the incentives offered to national capital only in manufacturing industries. The Saudi share in ownership had to be 25 per cent or greater.

new law: The foreign investment project enjoys all of the incentives and privileges offered to local projects.

investment guarantees

old law: none were specified. no expropriation cases since 1957.

new law: The foreign investor has the right to transfer his share derived from selling his equity or profits out of the Kingdom, as well as any amounts required for the settlement of contractual obligations pertaining to the project. investments related to the foreign investor shall not be confiscated without a court order. They may not be subject to expropriation except for the public interest and in exchange for an equitable compensation according to regulations.

real estate ownership

old law: Foreign ownership of real-estate by foreign investors was prohibited.

new law: The foreign facility licensed under the Foreign investment act is entitled to any real-estate for practicing the licensed activity and for the housing of staff. also, the real-estate regulation allows foreign investment in real-estate worth Sar 30 million or more.

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Penalties for Violations

old law: The Kingdom could cancel the licence or deny incentives after the investor received warning from the Ministry of industry and electricity to correct the violation within a certain period. investors could appeal to the Board of grievances within 30 days.

new law: a petition against any penalty may be brought by the investor before the Board of grievances. Possible penalties include:

- Withholding incentives offered to the foreign investor.

- imposing a fine not exceeding Sar 500,000.

- Cancelling the licence, in case of a continuing violation after a written notification to rectify the violation within a certain period specified by Sagia.

Tax exemption

old law: industrial and agricultural projects were offered a ten-year tax holiday and other projects a five-year holiday, provided that the local share formed 25 per cent of the project capital. The tax on profits was up to 45 per cent.

new law: Taxes on profits were reduced to 20 per cent and losses may be transferred to coming years.

Sponsorship

old law: Foreign investors had to be sponsored by a Saudi citizen.

new law: The requirement of the old law was removed. The foreign investor and his non-Saudi staff shall be sponsored by the licensed investment project.

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anneX C

negative list

i. industrial Sectors

a. oil exploration, drilling and production, except the services related to the mining sector listed at 5115 and 883 in international industrial Classification Codes.

b. Manufacturing of military equipment, devices and uniforms.

c. Manufacturing of civilian explosives.

ii. Services Sectors

a. Catering to military sectors.b. Security and detective services.c. real estate investment in Makkah and Madina.d. Tourist orientation and guidance services related to Hajj and

Umrah.e. recruitment and employment services, including local recruitment

offices.f. real estate brokerage.g. Printing and publishing, except the following activities:

- Pre-printing services (CPC 88442)- Printing presses (CPC 88442)- drawing and calligraphy (CPC 87501)- Photography (CPC 875)- radio and television broadcasting studios (CPC 96114)- Foreign media offices and correspondents (CPC 962)- Promotion and advertising (CPC 871)- Public relations (CPC 86506)- Publication (CPC 88442)- Press services (CPC 88442)- Production, selling and renting of computer software (CPC 88)- Media consultancies and studies (CPC 853)

- Typing and copying

h. distribution services, wholesale and retail trade, including medical retail services and private pharmacies, and commercial agencies, except franchise rights listed at CPC 8929, with foreign ownership not exceeding 49 per cent, and the granting of one franchise to each area.

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i. audio-visual and media services.j. Telecommunications services, except the following activities:

- Mobile telephone services- Telex services (CPC 7523)- Telegraph services (CPC 7522)- electronic data interchange (CPC 7523)- enhanced/Value-added facsimile services, including

storing, forwarding and retrieving (CPC 7523)- VSaT services (CPC 75291)- Fax services (CPC 7529 and 7521)- gMPCS services (CPC 75299)- internet Service Provider services (CPC 75299)- electronic mail (CPC 7523)- Provision of online information and database retrieval

(CPC 7523) - information provision and online retrieval and/or

processing, including transaction processing (CPC 843)k. land and air transport.l. Satellite transmission services.m. Services provided by midwives, nurses, physiotherapists and

paramedics (CPC 93191).n. Fisheries.o. Blood banks, poison centres and quarantines.

anneX d

Summary of Provisions of the Capital Market law

Chapter 1 sets out the definitions of the terms used in the law. The Capital Market authority (CMa) has rule-making authority to further define what will or will not be deemed a security. This assures necessary flexibility and certainty. The CMa is formally created in Chapter 2, which also sets forth the CMa’s extensive rule-making powers, organizational structure and duty to report annually to the President of the Council of Ministers. Chapter 3 creates the Saudi arabian Securities exchange as a joint-stock company and empowers it to adopt by-laws for the purpose of establishing and enforcing high professional and ethical standards for brokers. The CMa is also required to establish and maintain a Securities Violation Tribunal with jurisdiction over all disputes.

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Chapter 4 requires the exchange to establish the Securities deposit Centre, which will be the exclusive organization for clearing, settling and registering ownership of securities traded on the exchange. Chapter 4 provides that the records of the centre are conclusive evidence of ownership for securities traded on the exchange and authorizes the exchange to adopt rules necessary to assure efficient and reliable clearance, settlement and registration. Under Chapter 5, brokers must be licensed. licensing requirements are established and administered by the exchange, but the actual issuing of licenses is by the CMa, based on a recommendation by the exchange. Chapter 6 provides that, commencing in 2005, the CMa has the authority to adopt rules regulating enumerated aspects of the activities of investment funds, collective trusts, investment managers and investment advisers.

The disclosure procedures for public offers of securities and the on-going disclosure requirements for the issues of publicly traded securities are set forth in Chapter 7. no sales through a public offer of a security can occur until a prospectus is published and the CMa has approved the prospectus. Such approval is granted upon the CMa being satisfied that the prospectus fulfils the disclosure requirements as set forth in the CMa’s regulations. Chapter 8 authorizes the CMa to issue rules defining what constitutes manipulation, as well as insider trading and tipping of inside information.

advance notice of a possible takeover is the subject of Chapter 9; anyone who increases his ownership of a class of equity security listed on the exchange so that he will own 10 per cent or more of a company must file certain information about himself and such other information as the CMa’s regulations require. These provisions are similar to early-warning disclosures in other countries. Chapter 9 authorizes the CMa to adopt a range of substantive protections for the shareholders of the firm that is the target of a takeover. Chapter 10 is the final chapter of the Capital Market law. it sets forth the CMa and private investor action that can be brought for violations of

any provision, rule or regulation of the Capital Market law.

anneX e

list of Products Subject to non-automatic import licensing requirements

S. no. HS Code description WTo Justification authority1. 01 01 10 10 arabian breed,

pure-bred horsesgaTT art. Xi:2(b) eC

2. 01 01 10 20 arabian breed, pure-bred horses

gaTT art. Xi:2(b) eC

3. 01 01 90 10 arabian breed, pure-bred horses

gaTT art. Xi:2(b) eC

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S. no. HS Code description WTo Justification authority4. 01 01 90 20 arabian breed,

pure-bred horsesgaTT art. Xi:2(b) eC

5. 06 02 20 10 date palm, and seedlings thereof

gaTT art. XX(b) Moa

6. 23 09 90 50 Preparations for the animal forage

gaTT art. XX(b) Moa

7. Chapters 28 and 29

Chemicals gaTT art. XXi PSd for the chemicals used in explosives. MoCi, MoH or MePa for the chemicals falling within their competence and supervision other than those stated above.

8. ex 30.03 Medicines, for veterinary use

gaTT art. XX(b) Moa

9. ex 30.04 Medicines, for veterinary use

gaTT art. XX(b) Moa

10. 25 01 00 30 Sodium chloride gaTT art. XXi aed 11. 27.12, except

27 12 10 00

Paraffine, Vaseline gaTT art. XXi aed

12. 31 02 30 00 explosives, fireworks, gunpowder, propellent powders, prepared explosives, detonating fuses, percussion or detonating caps, igniters, electric detonators, safety fuses, sulphate turpentine oils; polymethyl methacrylate; cellulose nitrates; aluminium powders and flakes; magnesium powder and flakes

gaTT art. XXi aed

13. 31 02 50 00 aed

14. 36 01 00 00 aed

15. 36 02 00 00 aed

16. 36 03 00 10 aed

17. 36 03 00 90 aed

18. 25 01 00 30 aed

19. 35 03 00 10 aed

20. 38 05 10 00 aed

21. 39 06 10 00 aed

22. 39 12 20 00 aed

23. 76 03 20 00 aed

24. 81 04 30 00 aed

25. 31.02 Chemical fertilizers gaTT art. XXi Moa

26. 31.03 Chemical fertilizers gaTT art. XXi Moa

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S. no. HS Code description WTo Justification authority27. 31.04 Chemical fertilizers gaTT art. XXi Moa

28. 31.05, except

31 02 30 00 and

31 02 50 00

Chemical fertilizers gaTT art. XXi Moa

29. 36 04 10 00 lighting fireworks for occasions

gaTT art. XXi aed

30. 36 04 90 00 aed

31. 38 08 30 00 Herbicides, anti-sprouting products, plant-growth regulators

gaTT art. XX(b) Moa

32. ex 58 07 10 00 Military uniforms, military badges, etc.

gaTT art. XXi Competent Military agency

33. ex 58 07 90 00 Competent Military agency

34. ex 61 01 Competent Military agency

35. ex 61 03 Military uniforms, military badges, etc.




38. 65 05 90 94 Peak caps gaTT art. XXi Competent Military agency

39. 65 06 10 30 Helmets, for military use


40. ex 73 26 90 99 other items of iron and steel, for military use


41. ex 90 05 10 00 night vision binoculars


42. 83 01 40 20 Security equipment such as security surveillance

gaTT art. XXi PSd

43. 85 25 40 00 Security cameras, CTV systems, anti-theft alarm systems

gaTT art. XXi PSd

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S. no. HS Code description WTo Justification authority44. 85 43 89 20 Metal detectors

not for use in civil aircraft

gaTT art. XXi PSd

45. 85 31 10 00 Magnetic card or thumb impression operated

gaTT art. XXi PSd

46. 90 22 19 90 access/exit doors and equipment, metal

gaTT art. XXi PSd

47. 90 22 19 10 detecting doors and equipment, baggage screening equipment

gaTT art. XXi PSd

48. 84 19 40 00 distillation equipment

gaTT art. XX(a) MoCi

49. 84 59 61 00 Key cutting, copying and repairing machines and instruments of any type

gaTT art. XX(d) PSd

50. 84 59 69 00 Key cutting, copying and repairing machines and instruments of any type

gaTT art. XX(d) PSd

51. 84 72 30 00 Postage franking machines

gaTT art. XX(d) gdP

52. 85 25 20 11 Transmission apparatus for military purposes

gaTT art. XXi CiTC, for wireless sets imported by companies and individuals. The concerned Minister is whoever is acting for him for the wireless sets imported by the government sector.

53. 85 25 20 19 Transmission apparatus whose operation requires a frequency assignment from CiTC

gaTT art. XXi CiTC

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S. no. HS Code description WTo Justification authority54. 85 25 20 30 Transmission

apparatus whose operation requires a frequency assignment from CiTC

gaTT art. XXi (Same as above)







58. 85 25 20 90 Video boosters whose operation requires a frequency assignment from CiTC


59. 85.26 in addition to any other relevant heading

Transmission apparatus whose operation requires a frequency assignment from CiTC


60. 85 42 10 00 Mobile telephone chips and prepaid mobile phone cards

gaTT art. XX(d) (Same as above)

61. ex 87.03 armoured vehicles gaTT art. XXi Moi

62. 89 02 00 00 Fishing vessels gaTT art. XXi BS

63. Chapter 93 arms and ammunitions

gaTT art. XXi aed

64. different headings

Wild animals and products thereof, according to CiTeS

gaTT art. XX(b) nCWCd


Cultural and archaeological property

gaTT art. XX(f) gdaM

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S. no. HS Code description WTo Justification authority66. different

headingsProducts containing currency pictures, models or wrappers in shape of currency or otherwise

gaTT art. XX(d) SaMa


items imported for display in trade fairs

gaTT art. XX(d) MoCi

68. 84 24 81 10

84 24 81 20

84 24 81 30

84 24 81 90

irrigation equipment gaTT art. XX(d) Moa

69. 82.01 agricultural Tractors gaTT art. XX(d) Moa

70. 84 13 19

84 13 19 90

84 13 80

84 38 11 00

84 38 20 00

Water Pumps gaTT art. XX(d) Moa

71. 84 32 10 00

84 32 21 00

84 32 29 00

Plowing Machinery gaTT art. XX(d) Moa

72. 84 32 30 00

84 32 40 00

84 32 80 00

Seeders gaTT art. XX(d) Moa

73. 84 33 11 00

84 33 20 00

84 33 30 00

84 33 40 00

84 33 51 00

84 33 52 00

84 33 59 00

84 33 60 00

Harvesting Machinery

gaTT art. XX(d) Moa

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abbreviations Used in annex e

aed = arms & explosives department, Public Security department, Ministry of interiorBS = Border Security, Ministry of interiorCiTC = Communication & information Technology CommissioneC = equestrian ClubgdaM = general directorate of archaeology & Museums gdP = general directorate of PostsMePa = Meteorological environmental Protection agencyMoa = Ministry of agricultureMoCi = Ministry of Commerce & industryMoH = Ministry of HealthMoi = Ministry of interiornCWCd = national Commission for Wildlife Conservation & developmentPSd = Public Security department, Ministry of interior

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anneX F

list of Banned imports

S. no. HS Code description WTo Justification

1. 01.03 live swine, meat, fat, hair, blood, guts, limbs and all other products of swine

gaTT art. XX(a)

2. 02 09 00 10

3. 02 06 30 00

4. 02 06 41 00

5. 02 06 49 00

6. 02.03

7. 05 02 10 00

8. 02 10 11 00

9. 02 10 12 00

10. 02 10 19 00

11. 15 01 00 30

12. 16 02 41 00

13. 16 02 42 00

14. 16 02 49 00

15. 41 03 30 00

16. 15 03 00 11

17. 15 03 00 21

18. 15 03 00 91

19. 16 01 00 31

20. 16 01 00 21

21. 16 01 00 11, in addition to other relevant headings

22. 41 03 31 00

23. 41 06 31 00

24. 41 06 32 00

25. 41 13 20 00

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26. 01 06 19 40 dogs, other than hunting dogs, guard dogs or guide dogs for the blind, accompanied with a certificate from a competent authority in the country of exportation duly qualified by the Saudi arabian embassy stated therein that the dog to be admitted is a hunting dog, guard dog or guide dog for the blind, in addition to submitting to the veterinary quarantine

gaTT art. XX(a)

27. 02 08 20 00 Frog meat gaTT art. XX(a)

28. 09 08 10 00 narcotics of all types, forms and descriptions

gaTT art. XX(b)

29. 09 08 20 00

30. 12 07 91 00

31. 12 07 99 10

32. 12 07 99 20

33. 12 11 30 00

34. 12 11 40 00

35. 12 11 90 20

36. 12 11 90 60

37. 13 02 11 00

38. 13 02 19 10

39. 29 39 91 10, in addition to other relevant headings

40. 31.01 animal or vegetable raw natural organic fertilizer

gaTT art. XX(b)

41. 12 11 90 90 goro nut gaTT art. XXi

42. 12 11 90 90 Betel gaTT art. XX(b)

43.

44.

45.

46.

22.03

22.04

22.05

22.06

alcoholic beverages and intoxicants of all kinds, including those containing alcohol

in any intoxicating proportion

gaTT art. XX(a)

47. 22 07 20 90

48. 22.08, except 22 08 90 11 and 22 08 90 19

49. 24 03 99 20 Tobacco snuff – Tobacco “sawika” gaTT art. XX(b)

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50. 25 24 00 00 asbestos and products thereof gaTT art. XX(b)

51. ex 29.31 Sarin toxic gas gaTT art. XX(b)

52. 30 06 80 00 industrial waste and hazardous refuse

gaTT art. XX(b)

53. 36 04 10 00 Fireworks of the kind used by children such as snaps, rockets, sulfuric jitters and night stars, etc., falling within this scope

gaTT art. XX(b)

54. 40.12, except

40 12 90 00

Used and rethreaded tyres gaTT art. XX(b)

55. 49 01 99 10 The Holy Quran gaTT art. XX(a)

56. 49 07 00 11 Saudi arabian stamps gaTT art. XX(d)

57. 49 09 00 20 greeting cards with electric circuit gaTT art. XXi

58. 49 11 10 90 Coupons of Hadi (sacrificial animals)

gaTT art. XX(d)

59. 49 11 10 90 Blank invoices of foreign companies abroad

gaTT art. XX(d)

60. 85 12 30 00 Security car radar detection equipments

gaTT art. XXi

61. 85 28 12 99 Satellite internet receiver gaTT art. XXi

62. 85 29 10 00 Satellite internet receiver gaTT art. XXi

63. 85 31 80 90 apparatus releasing sounds of police car sirens or of some animals

gaTT art. XXi

64.

65.

66.

67.

68.

69.

ex 87.01

ex 87.02

ex 87.03

ex 87.04

ex 87.05

ex 87.09

damaged vehicles, and right-hand drive vehicles

gaTT art. XX(b)

70. ex 87.11 Two, three and four wheeler children’s motor cycles or vehicles

gaTT art. XX(b)

71. 90 13 10 00 Binoculars in which electric circuit is used and it directly projects red light on the target

gaTT art. XXi

72.

73.

74.

93 02 00 00

93 04 00 90

93 07 00 90

revolvers and pistols in the shape of mobile phones, lighters, pagers, pens or other pistols

gaTT art. XXi

75. 95 03 80 00 remote control airplanes and parts thereof

gaTT art. XXi

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76. 95 03 90 00 noise-making pistols and guns, and toy pistols similar in shape to real pistols

gaTT art. XXi

77. 97 05 00 00 Mummified animals gaTT art. XX(a)

78. different Headings

all foodstuff containing animal blood in their manufacturing

gaTT art. XX(a)


drink having description of zamzam

gaTT art. XX(a)


all types of machines, equipment and tools for gambling or games of chance

gaTT art. XX(a)


Kuwait and iraq war leftover equipment and machinery

gaTT art. XXi


Publicity material for cigarettes of any kind

gaTT art. XX(b)


Products polluted by radiation or nuclear dust (e.g., watches of trademark Trophy)

gaTT art. XX(b)

anneX g

Seed Specifications

1. Seed must be true to type, from the first generation certified and producedgeneration certified and produced certified and produced directly from registered seed and the product of the preceding growing season.

2. each consignment must include a certificate indicating the following:

- date and place of production (name of country, state or province and city)- Purity percentage- germination percentage- Vitality of the seeds- inert matter percentage- Weed seeds (including number of seeds and varieties in a sample of 2 kg)- Barley seeds (include number of seeds in a sample of 2 kg wheat seeds)- Moisture percentage

The certificate must be from a national lab or an authorized government lab (including a state lab if the seeds are imported from the US).

For seeds imported from Canada or europe, the iSTa (international Seed Testing association), orange Certificate must be presented.

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3. The seeds must be treated with either:

- fungicide Triadimenol (commercially known as Baytan) (15 - 30 per cent); or- a mixture of Triadimenol 7.5 per cent and imazalil 3 per cent at the rate recommended by the US ePa; or - fungicide Brochlora 10 per cent and Carbendazim 40 per cent (commer cially known as Prelude) at the rate of 2 kg/ton of seed; or- fungicide Carboxin 17 per cent and Thiram 17 per cent (commercially known as Vitavax 200) at the rate of 2.5 kg/ton of seed.

4. all growing seeds must be red in colour and homogeneously treated in order to differentiate them from consumption seeds.

5. Markings on the containers of treated seeds must be clear in the english and arabic languages and must specify that the seed was treated with poisonous chemicals and is not fit for human or animal consumption. The skull and cross-bones danger sign must be printed on the seed containers (bags, cans, etc.)

Conditions and requirements

1. The release of any consignment or shipment depends on the result of theThe release of any consignment or shipment depends on the result of the analysis of a random sample taken by the technician of Moa at the arrival port. The Moa technician will determine the fitness of the seeds. the fitness of the seeds.

2. each consignee must submit the following documents:

a) Complete name and address of the importerb) name and address of the seed exporterc) name of the seed variety(ies)d) Quantity imported (net weight)e) Price CiF arrival port

3. The consignee also must submit the following certificates:

a) Field inspection certificate from the authorities in the country of origin indicating that the fields were inspected and determined to be fit for seed production.

b) Certificate of origin issued by the government authorities in the exporter’s country.

c) in case of chemical treatment of seeds, if a pesticide has been used, it is only necessary to indicate the name and registration number.

4. The importer may not use or sell the seeds unless it receives a letter from Moa’s director of research including the results of the analysis performed pursuant to paragraph 1, above.

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5. a seed consignment must be inspected before shipment to confirm that it fulfils the specifications and conditions for importation. This can be done by sending a representative from the importing company or through an independent lab.

6. a letter of credit must be opened at a bank in Saudi arabia.

7. The last date for the arrival of a seed shipment to Saudi ports is within the time frame of the importing licence.

8. no seed consignment shall be released without a letter issued by the director of Plant Quarantine stating that the above conditions have been satisfied.

Conditions for rejection of a Shipment

1. any shipment imported without prior permission from Moa, or not fulfilling the specifications and conditions set out in the previous section, will be rejected. The importer of the seeds will be fully responsible for all necessary actions, including the re-export of the seeds to his country.

2. any consignment will be rejected if the percentage of the following is less than recommended:

a) Purity percentage less than 98 per centb) germination percentage less than 92 per centc) inert matter percentage not more than 1 per centd) Moisture percentage not more than 12 per cente) Barley seeds percentage (in shipments of wheat seed) – not more than five kernels of barley in a 2 kg sample.

3. any shipment that contains weed seeds that are especially difficult to control, such as avenaspp – lollium, phalaris spp, or parasitic herbs such as cuscuta spp obanche spp, striga spp, or bromus spp, shall be rejected.

4. any shipment in which the total weed seeds (other than those mentioned above) is more than five seeds per kg of wheat or barley will be rejected.

5. any shipment will be rejected unless the lab test shows it is free from the following diseases:

a) ergot attack of wheat and barley caused by fungus claviceps puprpurea.

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b) Karnal bunt attack of wheat and caused by fungus neovossia indica.

c) Southern blight attack of wheat caused by sclerotium rolfsii.d) loose smut attack of wheat caused by ustilago tritici, and of barley

caused by ustilage nuda.e) Semi-loose smut attack of barley caused by ustilago nigra.f) Flag smut attack of wheat caused by urocystis agropyri.g) Cover smut attack of wheat caused by tilletia spp and in barley

caused by ustilago hordia.h) eptoria leaf and glume blotch attack of wheat and barley caused by

septoria spp.i) Helminthosporium spot blotch attack of wheat and barley caused

by helminthosporium satirium.j) Barley scald attack of barley caused by rhynihosporium secalis.k) net blotch attack of wheat caused by helminthosporium teres.l) Barley stripe attack of barley caused by helmunthosporium

granineum.m) Scab or head blight attack of wheat and barley caused by Fusarium

spp.n) Take all attack of wheat and barley caused by gacumannomyces

graninis vartriaci.o) Snow mold attack of wheat caused by fusarium nivale.p) Black point attack of wheat caused by alternaria, helminthosporium

and fusarium spp.

Bacterial diseases

a) Bacterial leafstreak or black chaff attack of wheat and barley caused by bacteria xanthomonas translucens.

b) Bacterials leaf blight attack of wheat and barley caused by bacteria pseudomonas syrinag.

c) Bacterial spike blight attack of wheat and barley caused by bacteria corynebacteriaum tritici.

d) Bacterial basal glume rot attack of wheat and barley caused by pseudomonas atrofaciens.

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Viral diseases

a) Barley stripe mosaic virus.

nematodes diseases

a) ear cockle caused by anguina tritici.

6. in addition, a shipment can be rejected if there is evidence of attack by any other seed transmission diseases where the number of attack seeds is at least 5 seeds/kg.

7. a shipment or consignment can be rejected if there is evidence of attack by any kind of insects at any stage.

anneX H

list of items Subject to Mandatory Certification

item Harmonised System Commodity Codes

group i – Toys

Toys, incl. video games and other electronic toys

8712.00 / 9501 / 9502 / 9503 / 9504.10 / 9504.90 / 9505 / From 9506.99 /

Playground, amusement and fairground equipment

9508 / From 3407

group ii - electrical and electronics

air conditioning systems up to 60,000 btu (5 tons)

8415.10.20 / 8415.81.20 / 8415.82.20 / 8415.83.20

Combined function audio and/or video systems (non professional)

8518.30 / 8518.50 / 8520.30 /Combinations of ii-03, ii-04, ii-41, ii-43

non professional stand-alone audio products (except radio receivers)

8518.21 / 8518.22 / 8518.29 / 8518.40 / 8519.21 / 8519.29 / 8519.31 / 8519.39 / 8519.92 / 8519.93 / 8519.99 / 8520.20 / 8520.90

Video playing and recording systems (non professional)

8521.10 / 8521.90 / 8525.40 /

generator sets up to 12 kw 8502.11 / 8502.20

Motors up to 12kw 8501.10 / 8501.31 / 8501.32 / 8501.40 / 8501.51 / 8501

Fax and telex machines 8517.21 / 8517.22

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Household cooking appliances 8516.60 / 8516.72

Clothes washing machines up to 10 kg and household dish-washing machines

8450.11 / 8450.12 / 8450.19 / 8422.1

Clothes drying machines up to 10 kg 8451.21

electric irons, ironers and clothes steamers

8451.30 / 8516.40 / 8516.32

domestic electromechanical kitchen appliances incl. food processors, meat choppers and grinders

8509.40 / 8509.80

Personal care/grooming appliances (shavers, hair clippers, hair-removal devices and massagers)

8510.10 / 8510.20 / 8510.30 / 9019.10

lift and elevator systems 8428.10 / 8431.31

Household microwave ovens 8516.50

electric ovens up to 10 kw 8516.60

Copy machines and accessories 9009.11 / 9009.12 / 9009.30 / 9009.21 / 9009.22 / 9009.90

Personal computers (desktops/portables), storage units, peripherals and other input/output devices

8471.41 / 8471.49 / 8471.50 / 8471.60 / 8471.70 / 8473.30

Power transformers and distribution transformers up to 1000 kva

8504.21 / 8504.22 / 8504.31 / 8504.32 / 8504.33 / 8504.34

Household refrigerators and freezers up to 40 cu ft incl. Household refrigerating display cabinets

8418.10 / 8418.21 / 8418.22 / 8418.29 / 8418.30 / 8418.40 / 8418.50

Telephone sets, incl.mobile, cordless telephones, and modems

8517.11 / 8517.19 / 8517.50 / 8525.20

electric wires and cables up to 1000v 8544.51 / 8544.59

non-industrial vacuum cleaners, water suction appliances and shampooers

8509.10 / 8509.80

Household electric fires and heaters 8516.29 / 8516.21

drinking water coolers and fountains 8418.69.10

evaporative air coolers (desert coolers and humidifiers) up to 1.5 kw

8415.10.10 / 8415.82.10 / 8415.82.90 / 8415.83.10 / 8415.83.90

domestic electric fans 8414.51 / 8414.60

Compressors for cooling units up to 60,000 btu

8414.30

Tea and coffee brewing appliances, and appliances for heating liquids

8516.71

incandescent, fluorescent and discharge luminaires, fixtures and lampholders

9405.10 / 9405.20 / 8536.61

Manually operated household switches, circuit breakers and fuses up to 40a

8536.10 / 8536.20 / 8536.50

168 WTo BiSd 2005



incandescent, fluorescent and discharge lamps

8539.21 / 8539.22 / 8539.29 / 8539.31 / 8539.32

Ballasts for discharge type lamps (including tubular fluorescent lamps)

8504.10

Starters for discharge type lamps (including tubular fluorescent lamps)

8532.10

general use mains plugs, socket outlets and mains configuration adapters

8536.69

luminaires for road and street lighting 9405.40Batteries, including rechargeable and automotive

8506.10 / 8506.30 / 8506.40 / 8506.50/ 8506.60 / 8506.80 / 8507.10 / 8507.30 / 8507.40

immersed swimming pool luminaries 9405.40Hair care equipment (hand-held hair dryers, hair curlers, waving apparatus and curling tong heaters)

8516.31, 8516.32

Water pumps up to 12 kw 8413.70

TV sets (colour/black and white) 8528.12 / 8528.13

general use mains voltage converters, power supplies and battery chargers

8504.40

Stand alone radio receivers 8527.12 / 8527.13 / 8527.19 / 8527.21 / 8527.29

Storage and instant type water heaters up to 200 litres

8516.10

Watt hour meters 9028.30

Household sewing machines 8452.10

group iii – automotive

Passenger automobiles, trucks, buses and multi-purpose vehicles (new)

8701 / 8702 / 8703 / 8704 / 8705

Passenger automobiles, trucks, buses and multi-purpose vehicles (used)

8701 / 8702 / 8703 / 8704 / 8705

automotive glass (windshield, side and rear glass)

7007.21

Vehicle spare parts (new), including radiators and hoses, brakes and parts, lights, filters, silencers and exhaust pipes, clutches and parts, child restraints, spark plugs, wiper blades and motors, safety belts, fuel tanks, mirrors, bumpers, door locks and hinges, tyre tubes, and v-belts, gauges, rims and steering rods.

40.09 / 4010.22 / 4013.10, 4013.90 / 70.09 / 8301.20 / 8302.30 / 8421.23 / 8421.31 / 8501.10 / 8511.10 / 8512.20 / 8512.40 / 8539.10 / 8708.10 / 8708.70 / 8708.21 / 8708.29 / 8708.91/ 8708.92 / 8708.93 / 8708.94 / 8708.99 / 9026.20 / 9026.80 / 9401.20

new tyres for passenger automobiles, trucks, buses and multi-purpose vehicles

4011.10 / 4011.20

169WTo BiSd 2005

accession


group iV – Chemical

engine, transmission, hydraulic, turbine, and transformer oils, brake fluid and anti-freeze/ coolant

2710.00.52 / 2710.00.53 / 2710.00.54 / 2710.00.55 / 2710.00.94 /2710.00.95 / 2710.00.96 / 38.19 / 38.20

Paints all 3208 / all 3209

Perfumes and cosmetics 3302.90 / all 3303 / all 3304 / all 3305 / all 3306 / 3307.10 / 3307.20 / 3307.30 / 3307.49.10 / 3307.90.10 / 3401.1

domestic-use pesticides and insecticides 3808

group V – others

aluminium and aluminium alloy products for architectural application

7604 / 7606 / 7608 / 7609 / 7610 / 7616

Steel and iron alloy pipes 7304 / 7305 / 7306 / 7307

gold and silver jewellery (including gemstones)

7113.11 / 7113.19 / 7113.20 / 7114.11 / 7114.19 / 7114.20 / 7116.10 / 7116.21

Head dress for men - cotton shemagh and ghutras

6505.90.10 / 6505.90.30

Fire extinguishers up to 24kg 8424.10

Cement 2523.21 / 2523.29.10 / 2523.29.20

Safety matches 3605.00

low pressure regulators and pressure cookers

8481.10 / 7323.93 / 7323.99

Toilet paper and facial tissues, paper towels and serviettes

4818.10 / 4818.20 / 4818.30

Cigarettes only 2402.20

Household and camping gas appliances, including heaters, cookers, barbecues and lamps

7321.11 / 7321.81 / 9405.50

anneX i

list of Banned exports

S. no. HS Code description WTo Justification1. ex 01 01 10 10 arabian breed, pure-bred horses,

femalesgaTT art. XX(b)

2. ex 01 01 10 20 arabian breed, pure-bred horses, females

gaTT art. XX(b)

3. ex 01 01 90 10 race horses, females gaTT art. XX(b)

4. ex 01 01 90 20 Ponies, females gaTT art. XX(b)

170 WTo BiSd 2005


S. no. HS Code description WTo Justification5. ex 01 02 Bovine animals, females gaTT art. XX(b)

6. ex 01 04 Sheep and goats, females gaTT art. XX(b)

7. ex 01 06 19 11 Camels, females gaTT art. XX(b)

8. 0602 2010 date palm seedlings of following types: Khalas, nabut Saif, Munifi, Safri, Magfizi, Barhi, Sukkari, Shalabi, Safari, Barni, ajwa, ambara, Hulwa and rothana

gaTT art. XX(b)

9. 12 14 green fodder and hay gaTT art. XX(b)

10. ex 22 01 90 10 zamzam water gaTT art. XX(a)

11. 44 01 10 00 Wood gaTT art. XX(j)

12. 72 04 Scrap iron gaTT art. XX(d)

13. 97 06 antiques and archaeological and historical items

gaTT art. XX(f)

anneX J

list of exports Subject to authorization/licensing

S. no. HS Code description WTo Justification authority

1. 01 01 10 10 Horses, pure-bred

gaTT art. Xi: 2(b)

equestrian Club


gaTT art. Xi: 2(b)

equestrian Club


gaTT art. Xi: 2(b)

equestrian Club


gaTT art. Xi: 2(b)

equestrian Club

5. 10 01 Wheat gaTT art. XX (d) gen Silo & Mills org

6. 10 03 00 00 Barley gaTT art. XX (d) Ministry of Finance

7. 10 05 90 10 golden corn gaTT art. XX (d) Ministry of Finance

8. 10 05 90 20 White corn gaTT art. XX (d) Ministry of Finance

9. 11 01 00 10 Wheat flour gaTT art. XX (d) Ministry of Finance

10. 12 01 Soya beans gaTT art. XX (d) Ministry of Finance

171WTo BiSd 2005

accession


11. 19 01 10 10 Milk-based infant food

gaTT art. XX (d) Ministry of Finance

12. 19 01 10 20 Milk-based infant food

gaTT art. XX (d) Ministry of Finance

13. 25 05 Sand gaTT art. XX (i) Ministry of Petroleum & Mineral resources

14. 25 06 21 10 Sand mixed aggregates

gaTT art. XX (i) Ministry of Petroleum & Mineral resources

15. 25 06 21 20 Sand mixed aggregates

gaTT art. XX (i) Ministry of Petroleum & Mineral resources

16. 25 15 11 00 Marble gaTT art. XX (i) Ministry of Petroleum & Mineral resources

17. 25 17 Stone mixtures gaTT art. XX (i) Ministry of Petroleum & Mineral resources

18. 25 22 limestone gaTT art. XX (i) Ministry of Petroleum & Mineral resources

19. 27 09 Crude oil automatic licensing

Ministry of Petroleum & Mineral resources

20. 27 10, except naptha

Fuels automatic licensing


21. 27 11 gases, including liquefied gases

automatic licensing


22. 27 14 asphalt automatic licensing


23. 28 44 radioactive materials

gaTT art. XX (b) Ministry of interior

24. 28 45 radioactive materials


25. 90 22 19 10 radioactive materials


26. 90 22 19 90 radioactive materials


27.

28.

29.

29 03 19 10

29 03 45

29 03 49

ozone

depleting

materials

gaTT art. XX (b) Meteorological

& environmental

Protection agency30. 30 03 Medicines gaTT art. XX (b) Ministry of Health

31. 30 04 Medicines gaTT art. XX (b) Ministry of Health

32. 73 11 00 30 Filled gas cylinders

gaTT art. XXi Ministry of Petroleum & Mineral resources

172 WTo BiSd 2005



33.

34.

35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

84 07 90 00

84 08 80 00

84 11

84 12 80 00

84 13 50 00

84 13 60 00

84 13 70 00

84 13 81 00

84 32

84 33

87 01 10 00

87 01 30 00

87 01 90 00

agricultural machinery

gaTT art. XX (d) Saudi agricultural Bank

46. 85 48 10 00 Scraps of batteries, etc.

gaTT art. XX (b) Meteorological & environmental Protection agency


Wild fauna and flora, and products thereof

gaTT art. XX (g) nat. org of Wild life

note: Procedures for issuing automatic export licenses for specific products will be issued consistent with Saudi arabia’s WTo obligations.

anneX K

list of Technical Committees

1. agriculture and Food Products general Committeea. Food Safetyb. Meat and Fishc. dairy and dairy Productsd. Cereals and legumes Productse. Confectionaryf. Fruits, Vegetables, Condiments and Spices and their Products

2. Construction and Building Materials general Committeea. Tilesb. Sanitary Ware

173WTo BiSd 2005

accession

c. Cement and Concreted. doors and Windowse. Pipesf. glass g. Construction Sectors

3. electrical and electronic Products general Committeea. Household appliances and their accessoriesb. Cables and their accessoriesc. electronics and Communications Setsd. luminaires and their accessoriese. electrical Systems and accessoriesf. Power generation, Transmission and distribution g. Medical appliances and Supplies

4. Mechanical and Metal Products general Committeea. Motor Vehiclesb. Pressure Vessels and Steam Boilersc. air Conditioning and refrigerationd. Metal and Wooden Kitchense. office and School Furnituref. Water Pump and irrigation Systemsg. Steel Cans Used for Canning h. amusement Park devices

5. Chemical and Petroleum Products general Committeea. Petroleum Productsb. detergents and Hygienic and Cosmetic Productsc. Plasticsd. Chemicalse. Paints and Varnishes

6. Textile Products general Committeea. Textile Products

7. Measurement and Calibration general Committeea. Physical Measurementsb. Mechanical Measurementsc. electrical and electronic Measurements

174 WTo BiSd 2005

an

ne

X l

lis

t of

SPS

Mea

sure

s M

aint

aine

d by

the

Kin

gdom

of

Saud

i ara

bia

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0101

0102

0104

10

0104

20

liv

e e

quin

e a

nim

als

liv

e B

ovin

e a

nim

als

liv

e S

heep

liv

e g

oats

Ban

ned

beca

use

of S

crew

W

orm

art

icle

5 o

f S

PS

a

gree

men

tPa

nam

a

0102

liv

e B

ovin

e a

nim

als

Ban

ned

beca

use

of B

Se

(B

ovin

e S

pong

ifor

m

enc

epha

lopa

thy)

art

icle

5 o

f S

PS

a

gree

men

tS

pain

, Por

tuga

l, it

aly,

ger

man

y, F

ranc

e,

gre

ece,

aus

tria

, Bel

gium

, Sw

itze

rlan

d,

Hol

land

, den

mar

k, F

inla

nd, S

love

nia,

l

uxem

bour

g, i

rela

nd, C

zech

rep

ubli

c,

Slo

vak

rep

ubli

c, P

olan

d, C

anad

a (a

lber

ta P

rovi

nce)

, Uni

ted

Kin

gdom

, U

Sa

(W

ashi

ngto

n S

tate

)01

02l

ive

Bov

ine

ani

mal

sB

anne

d be

caus

e of

FM

d

(Foo

t and

Mou

th d

isea

se)

art

icle

5 o

f S

PS

a

gree

men

tU

rugu

ay, S

yria

0102

0104

10

0104

20

liv

e B

ovin

e a

nim

als

liv

e S

heep

liv

e g

oats

Ban

ned

beca

use

of F

Md

(F

oot a

nd M

outh

dis

ease

)

art

icle

5 o

f S

PS

a

gree

men

ta

ll a

fric

an C

ount

ries

oth

er th

an

Sou

th a

fric

a, S

outh

afr

ica

(nor

ther

n P

rovi

nce

and

Mpu

mal

anga

, nor

ther

n C

ape,

nor

th W

est a

nd K

waz

ulu-

nat

al),

C

hina

, ind

ia, M

alay

sia,

Yem

en, i

ran,

ir

aq, C

hine

se T

aipe

i, Pa

kist

an, T

urke

y,

leb

anon

175WTo BiSd 2005

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0201

liv

e B

ovin

e a

nim

als

Ban

ned

beca

use

of r

ende

r Pe

sta

rtic

le 5

of

SP

S

agr

eem

ent

all

afr

ican

Cou

ntri

es (

exce

pt S

outh

a

fric

a), P

akis

tan,

ira

n, a

fgha

nist

an,

Mon

goli

a02

01

0202

0206

0200

0206

2100

0206

6200

0206

2900

1502

0010

1602

5010

1602

5090

1602

9010

1602

9021

1602

9029

1602

9030

1603

0010

all

type

s of

Bov

ine

Mea

t and

its

Pro

duct

sB

anne

d be

caus

e of

BS

e

(Bov

ine

Spo

ngif

orm

e

ncep

halo

path

y)

art

icle

5 o

f S

PS

a

gree

men

ta

ll e

U c

ount

ries

, Sw

itze

rlan

d, J

apan

, C

anad

a

020

1

0202

0206

0200

0

0206

2100

0206

6200

all

type

s of

Bov

ine

Mea

t and

its

Pro

duct

sB

anne

d be

caus

e of

ren

der

Pest

art

icle

5 o

f S

PS

a

gree

men

ta

ll a

fric

an C

ount

ries

(ex

cept

Sou

th

afr

ica)

, Pak

ista

n, i

ran,

afg

hani

stan

, M

ongo

lia

176 WTo BiSd 2005

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0206

2900

1502

0010

1602

5010

1602

5090

1602

9010

1602

9021

1602

9029

1602

9030

1603

0010

all

type

s of

Bov

ine

Mea

t and

its

Pro

duct

sB

anne

d be

caus

e of

ren

der

Pest

art

icle

5 o

f S

PS

a

gree

men

ta

ll a

fric

an C

ount

ries

(ex

cept

Sou

th

afr

ica)

, Pak

ista

n, i

ran,

afg

hani

stan

, M

ongo

lia

0201

0202

0206

0200

0

0206

2100

0206

6200

0206

2900

1502

0010

1602

5010

1602

5090

1602

9010

1602

9021

1602

9029

1602

9030

1603

0010

all

type

s of

Bov

ine

Mea

t and

its

P

rodu

cts

Ban

ned

beca

use

of F

Md

(F

oot a

nd M

outh

dis

ease

)a

rtic

le 5

of

SP

S

agr

eem

ent

all

afr

ican

Cou

ntri

es (

exce

pt S

outh

a

fric

a), a

ll e

urop

ean

Cou

ntri

es, C

hina

, M

alay

sia,

Yem

en, i

ran,

ira

q, J

orda

n,

Chi

nese

Tai

pei,

Paki

stan

, leb

anon

177WTo BiSd 2005

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0204

0206

8010

0206

8090

0206

9011

0206

9012

0206

9019

0206

9090

all

type

s of

She

ep a

nd g

oat

Mea

t and

The

ir P

rodu

cts

Ban

ned

beca

use

of F

Md

(F

oot a

nd M

outh

dis

ease

)a

rtic

le 5

of

SP

S

agr

eem

ent

all

afr

ican

Cou

ntri

es (

exce

pt

Sou

th a

fric

a, S

udan

, eth

iopi

a ),

a

ll e

urop

ean

Cou

ntri

es, C

hina

, M

alay

sia,

Yem

en, i

ran,

ira

q,

Jord

an, C

hine

se T

aipe

i, l

eban

on

0207

0407

Poul

try

Mea

t and

its

Pro

duct

sB

anne

d be

caus

e of

avi

an

infl

uenz

aa

rtic

le 5

of

SP

S

agr

eem

ent

US

a, C

anad

a, J

apan

, Kor

ea,

Vie

tnam

, Chi

na, T

hail

and,

Hon

g K

ong

Chi

na, l

aos,

Cam

bodi

a,

Paki

stan

, ind

ones

ia, M

alay

sia

0105

liv

e B

irds

Ban

ned

beca

use

of W

est n

ile

Feve

ra

rtic

le 5

of

SP

S

agr

eem

ent

US

a (

the

ban

has

been

lift

ed

on p

oult

ry, o

ne-d

ay c

hick

s an

d ha

tchi

ng e

ggs)

0101

0105

0106

3100

0106

3200

0106

3910

0106

3920

liv

e e

quin

e a

nim

als

liv

e B

irds

Ban

ned

beca

use

of W

est n

ile

Feve

r

Ban

ned

beca

use

of W

est n

ile

Feve

r

art

icle

5 o

f S

PS

a

gree

men

t

art

icle

5 o

f S

PS

a

gree

men

t

om

an, M

oroc

co, U

Sa

(n

ew

Yor

k on

ly; o

nly

Hor

ses)

om

an, M

oroc

co

178 WTo BiSd 2005

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0105

0106

3100

0106

3200

0106

3910

0106

3920

0407

0011

liv

e B

irds

Hat

chin

g e

ggs

Ban

ned

beca

use

of a

vian

in

flue

nza

art

icle

5 o

f S

PS

a

gree

men

tU

Sa

, Can

ada,

Jap

an, K

orea

, V

ietn

am, C

hina

, Tha

ilan

d, H

ong

Kon

g C

hina

, lao

s, C

ambo

dia,

C

hine

se T

aipe

i, Pa

kist

an,

indo

nesi

a, M

alay

sia

0105

0106

3100

0106

3200

0106

3910

0407

0011

liv

e B

irds

Hat

chin

g e

ggs

Ban

ned

beca

use

of i

lTa

rtic

le 5

of

SP

S

agr

eem

ent

egy

pt, S

yria

, leb

anon

0207

0407

0408

Poul

try

Mea

t and

its

Pro

duct

s

egg

s

Ban

ned

due

to

Con

tam

inat

ion

wit

h n

itro

fin

(Car

cino

geni

c H

erbi

cide

)

art

icle

5 o

f S

PS

a

gree

men

tg

erm

any

0302

0303

0304

0306

0307

Fish

(Fr

esh,

Chi

lled

, Fro

zen)

Cho

lera

- r

elat

eda

rtic

le 5

of

SP

S

agr

eem

ent

infe

cted

are

as (

defi

ned

by W

Ho

C

ircu

lati

on r

epor

t)

179WTo BiSd 2005

H.S

. no.

des

crip

tion

of

prod

uct

nat

ure

of S

PS

Mea

sure

Just

ifica

tion

W

To

Mem

bers

and

non

-Mem

ber

Cou

ntry

(ies

)

0402

9110

0402

9120

0402

9410

0403

1000

0403

9020

0404

Fres

h M

ilk

and

Mil

k P

rodu

cts

(Sho

rt S

helf

lif

e)C

hole

ra -

rel

ated

art

icle

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181WTo BiSd 2005

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Decision of the General Council on 11 November 2005


The general Council,

Having regard to paragraph 2 of article Xii and paragraph 1 of article iX of the Marrakesh agreement establishing the World Trade organization (the “WTo agreement”), and the decision-Making Procedures under articles iX and Xii of the WTo agreement agreed by the general Council (WT/l/93).

Conducting the functions of the Ministerial Conference in the interval between meetings pursuant to paragraph 2 of article iV of the WTo agreement,

Taking note of the application of the Kingdom of Saudi arabia for accession to the WTo agreement dated 21 december 1995,

Noting the results of the negotiations directed toward the establishment of the terms of accession of the Kingdom of Saudi arabia to the WTo agreement and having prepared a Protocol on the accession of the Kingdom of Saudi arabia,

Decides as follows:

1. The Kingdom of Saudi arabia may accede to the WTo agreement on the terms and conditions set out in the Protocol annexed to this decision1.

1 See under section “legal instruments”.

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aCCeSSion oF Tonga

Report of the Working Party Adopted by the Ministerial Conference on 15 December 2005

(WT/ACC/TON/17, WT/MIN(05)/4)

i. inTrodUCTion

1. The government of the Kingdom of Tonga applied for accession to the World Trade organization in June 1995. at its meeting on 15 november 1995, the general Council established a Working Party to examine the application of the government of Tonga to accede to the World Trade organization under article Xii of the Marrakesh agreement establishing the WTo. The terms of reference and the membership of the Working Party are reproduced in document WT/aCC/Ton/2/rev.8.

2. The Working Party met on 26 april 2001, 18 november 2005 and 1 december 2005 under the Chairmanship of Mr. S. Harbinson.

doCUMenTaTion ProVided

3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade regime of Tonga (document WT/aCC/Ton/3), the questions submitted by Members on the foreign trade regime of Tonga, together with the replies thereto, and other information provided by the authorities of Tonga (WT/aCC/Ton/4; WT/aCC/Ton/5; WT/aCC/Ton/9 and revision 1; WT/aCC/Ton/11; WT/aCC/Ton/12; WT/aCC/Ton/13, WT/aCC/Ton/14; WT/aCC/Ton/15; and WT/aCC/Ton/16), including the legislative texts and other documentation listed in annex i.

inTrodUCTorY STaTeMenTS

4. The representative of Tonga said that the Kingdom of Tonga was a small island nation with limited human and financial resources. Tonga had a total population of 102,000 and a gross domestic Product equivalent to US$ 163 million. its ecosystem was fragile and highly vulnerable to natural disasters and adverse external changes. rising sea levels represented a direct threat to his country. Tonga’s economy relied heavily on imported goods and a few external financial sources. The trade balance deficit was largely financed by remittances from Tongans living abroad. The main industry, the fishing industry, had witnessed significant improvements over the past decade, but its performance was undermined by weather disturbances and high transportation costs. These factors made it difficult for the country to attract foreign investment.

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5. in Tonga, accession to the WTo was seen as a powerful instrument to enhance trade security, create new trade and investment opportunities, and strengthen multilateral cooperation. it was considered important to foster competitiveness and development and help Tonga better integrate into the world trading system. His government had put in place a national mechanism to coordinate accession to the WTo, and had taken a number of measures to bring Tonga’s trade regime in line with WTo requirements. Tonga had established a national Codex alimentarius Committee. Tonga had also become Member of the World intellectual Property organization (WiPo) in July 2001, and new legislation had been drafted to ensure compliance with WTo TriPS regulations.

6. Members of the WTo welcomed the application from the Kingdom of Tonga to join the organization. Members were impressed by the efforts undertaken by Tonga so far, but noted that further work would be required, particularly in the area of legislation, for Tonga to be in compliance with WTo requirements. WTo Membership was seen by some Members as a powerful tool for Tonga to achieve its development objectives and reduce the business costs for local enterprises. Members looked forward to a rapid and smooth accession process, resulting in terms that would strike an appropriate balance between the rules and requirements of the WTo and Tonga’s level of development.

7. The Working Party reviewed the economic policies and foreign trade regime of Tonga and the possible terms of a draft Protocol of accession to the WTo. The views expressed by members of the Working Party on the various aspects of Tonga’s foreign trade regime, and on the terms and conditions of Tonga’s accession to the WTo are summarized below in paragraphs 8 to 187.

ii. eConoMiC PoliCieS

- Monetary and fiscal policy

8. The representative of Tonga said that the central bank, the national reserve Bank of Tonga, was responsible for the formulation and implementation of Tonga’s monetary policy in coordination with the Ministry of Finance. The main objectives of Tonga’s monetary policy were to ensure a sufficient level of foreign exchange reserves to meet import requirements, maintain a stable exchange rate for the national currency - the Pa’anga (ToP), and to slow the increase in bank lending to the private sector. instruments used to this end in recent times included adjustments of interest rates and increases in mandatory reserve requirements for the commercial banks.

9. Fiscal policy aimed primarily at balancing the budget (an objective which had been achieved in recent years); increasing the efficiency of government services; promoting private sector development through the application of stricter economic,

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financial, and environmental criteria for borrowing, together with improved debt recording and reporting systems; improving public debt management; and strengthening the monitoring and management of public enterprises. Taxes levied in Tonga in 2004 included the individual income tax, the corporate income tax, a sales tax (5 per cent), a fuel sales tax, and a port and services tax (20 per cent). a fiscal deficit had been registered in 2003-2004. The deficit had been financed by foreign concession loans, domestic bond reserves, and governmental cash reserves.

10. He added that a tax reform programme had been developed with a view to enhancing the effectiveness and transparency of the tax administration and fostering the development of a fair business environment. Under the new taxation system, emphasis had been moved from trade to internal taxes. The new system was based on a small number of broad-based taxes. The new taxation regime was being introduced gradually. The reform involved the introduction of a broad-based consumption tax, the Consumption Tax; the simplification of the individual income tax; the establishment of single corporate income tax to ensure greater fairness; and the introduction of a single customs duty rate and excise duties on imports and domestically-produced alcohol and tobacco products (see paragraph 73 below). The Consumption Tax (15 per cent) had been introduced on 1 april 2005 in replacement of the sales tax, port and service tax, and fuel sales tax, which had been abolished. The draft income Tax Bill modifying the individual and corporate income taxes was expected to be submitted to Parliament in 2005 and to enter into force by 1 december 2005. Under the new system, it was estimated that taxes on international trade and transactions would make up 57.9 per cent of government revenue, domestic taxes on goods and services 22.7 per cent, income and profit taxes 18.1 per cent, and property and other taxes 1 per cent.

- Foreign exchange and payments

11. The representative of Tonga said that the value of the currency of Tonga - the Pa’anga - was determined on the basis of a weighted basket of currencies comprising the U.S. dollar, the new zealand dollar, the australian dollar, and the Japanese Yen. The exchange rate of the Pa’anga against the U.S. dollar, which was the intervention currency, was determined daily by the national reserve Bank of Tonga (nrBT), while the rates for the other currencies, for transactions of the reserve Bank, were determined based on the cross rates provided by the Bank of england. The nrBT was allowed to vary the value of the Pa’anga relative to the basket, at its own discretion, by 5 per cent per month. in May 2005, one Pa’anga bought approximately US$ 0.52.

12. Tonga was a member of the iMF. all current payments were free and any capital introduced into the country was free to be repatriated provided that documentary evidence was provided to the nrBT for verification. The nrBT sometimes put guidelines in place to be followed by foreign exchange dealers prior to allowing these

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remittances. This was necessary to assist the nrBT with management of foreign reserves, the calculation of balance of payments and enhancing Tonga’s anti-money laundering and anti-terrorist financing regime. The nrBT was entitled to impose repatriation requirements pursuant to the Foreign exchange Control act no. 9 of 1963, the Foreign exchange Control regulations of 1965, and the Foreign exchange Control regulations (amendment) act of 2000. Currently, prior approval was required from the nrBT for (i) all outward transfers of ToP 50,000 and above; (ii) all capital transfers; and (iii) all loans in excess of ToP 50,000 to any corporate body resident in Tonga controlled by non-residents. Tonga stressed that the nrBT’s requirements of prior approval for transfers of ToP 50,000 and above was only for information gathering purposes; all current payments were allowed to be made. Capital transfers included: transfers for purchase of property, migrant transfers and debt forgiveness; acquisition and disposal of non-financial assets such as patents; direct investment, including equity capital; portfolio investment, including equity, debt securities and financial derivatives; other investments, including trade credits, loans and deposits. Capital transfers were minimal in quantity and size. The nrBT had delegated to commercial banks approval authority for (i) outward transfers amounting to less than ToP 50,000 and (ii) outward transfers from foreign currency accounts. Commercial banks were required to notify the nrBT of outward transfers from foreign currency accounts no later than one day after the transfer had been effected. in reply to questions, the representative of Tonga said that Tonga had no plans to change these requirements, but was ready to conform to any relevant WTo provisions.

13. in answer to questions, the representative of Tonga said that the repatriation requirements described in the previous paragraph had been introduced in July 2000 following the decline in official foreign reserves under 3 months of import cover. Because of the high dependency of the Tongan economy on imports, a level of foreign reserves of 3 to 4 months of import cover was regarded as essential to protect the country from sudden external shocks. repatriation requirements were still in force and were being monitored by the nrBT. Tonga’s official international reserves fluctuated quite considerably: they had amounted to US$ 13 million as of the end of September 2002 and US$ 41.8 million at the end of august 2005. His government would be able to consider removing the repatriation requirement once it was clear that Tonga’s official foreign reserves could be maintained at a level of 3 to 4 months of import cover, currently considered to be approximately US$ 30 million to US$ 40 million, in the long-term. He emphasized that Tonga had accepted article Viii of the articles of agreement of the iMF, that the nrBT’s requirements of prior approval for transfers of ToP 50,000 and above was only for information gathering purposes and that all current payments were allowed to be made. in January 2003, the nrBT had authorized the writing of forward contracts for bona fide importers and exporters by commercial banks for an amount up to US$ 2 million.

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14. The representative of Tonga confirmed that, from the date of accession, his government would ensure that the authority in Tonga’s laws to apply measures for balance of payments purposes would be applied in a manner consistent with the requirements of the understanding on balance-of-payments provisions of the gaTT 1994, as well as article Xii of the gaTT 1994. The Working Party took note of these commitments.

- investment regime

15. The representative of Tonga said that his government encouraged foreign investment. The 1978 industrial development incentives act, Cap. 114 (the idi act) aimed at fostering the establishment of manufacturing, processing, and assembling industries; tourism projects, including accommodation, vessels, sport facilities and tourist sites; service-oriented repair activities; and agricultural and fishery enterprises. incentives were provided through a system of tax exemptions. Potential benefits included (i) income tax holidays including, for non-resident investors, on the withholding tax for up to five years; (ii) accelerated depreciation of assets; (iii) exemption from customs duties on imported capital goods for up to two years; (iv) duty drawback on imported raw materials and components; (v) a 50 per cent exemption from Port and Services Tax; and (vi) the right for non-resident companies and shareholders to repatriate profits and capital gains. any person, irrespective of nationality, wishing to benefit from these incentives had to apply for a development licence to the Minister of labour, Commerce and industry. Benefits granted depended on the nature of the project and were listed in the development licence.

16. applicants for development licenses were required to complete a form and provide information on the nature of the project, its cost and financing; employment requirements, including the employment of expatriate staff; potential markets for the products; details on the incentives sought; information on the experience and financial background of the applicant and all shareholders; and needs for electricity and water. in addition, applicants were requested to submit financial statements or bank references indicating their financial strength, and a business plan including information on proposed production, market prospects, financial matters, personal arrangements, office and land lease, and cash flow projections for the first three years of activity. in the case of tourism prime facility projects, a construction plan duly approved by the Ministry of Health and Ministry of Work was required. a ToP 200.00 (US$ 100) fee was charged for each application for a development licence.

17. applications were examined by a Standing advisory Committee established within the Ministry of labour, Commerce, and industry. The Committee included the Minister and Secretary of labour, Commerce and industry; the Secretary of Finance; the Managing director of the Tonga development Bank; the general Manager of the Bank of Tonga; the director of the Central Planning department; and ad hoc

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members as required. The Committee made recommendations to the Minister. applicants were informed in writing of the decision and, in case of approval, of the terms of the licence. The licence could be used to obtain a work permit – or Temporary residence Visa – from the immigration authorities. licence holders had to register their company with the registrar of Companies as provided for in the Companies act, Cap. 27. registration was subject to the approval of the Privy Council. although not specifically stated in the act, in case of rejection, the refusal to deliver a licence could be appealed to the Ministry of labour, Commerce, and industry. in 2003, 44 projects involving a total investment of over US$ 17 million had been approved, mainly in manufacturing and tourism. Between 1999 and 2003, a total of 250 licenses had been delivered (Table 1). He provided detailed information on the incentives granted under the idi act between 1999 and 2003 in annex 1 of document WT/aCC/Ton/11.

18. domestic and foreign investors were entitled to the same benefits and subject to the same procedures. However, in the case of foreign investment the Committee would study the extent to which the project provided substantial and continuing benefits to the people and economy of Tonga and include these considerations in the recommendation to the Minister. The Committee examined whether the project (i) involved the processing of local resources; (ii) substantially contributed to local added value; (iii) was labour intensive; (iv) had export potential; (v) contributed to import substitution; (vi) had a reasonable level of local participation; (vii) would have a multiplier effect leading to the creation of ancillary enterprises; (viii) was likely to complement other domestic manufactures; and (ix) satisfied any other criteria the Committee might consider relevant.

19. Several Members were seriously concerned about the discretionary powers exercised in investment approval decisions in Tonga and some of the criteria used in deciding whether to grant a licence for foreign investment. These Members observed that the benefits provided under the idi act would seem, in law or in fact, to be contingent upon export performance, import substitution, or local content requirements. The concerns raised by Members are discussed below in further detail in the sections “industrial policy, including subsidies” and “Trade-related investment Measures (TriMs)”.

20. The representative of Tonga replied that the criteria causing concern to Members had never been applied in practice. He could therefore confirm that no benefits under the idi act had been or would be made contingent upon export performance, import substitution, or local content requirements. He noted that the provisions of the idi act exempting investment licence holders from the port and services tax had ceased to have effect when the Consumption Tax had been introduced on 1 april 2005. The idi act would be suspended on 1 July 2006. The act would be repealed following the introduction of the single customs duty rate (of 15 per cent) by no later than 1 January 2007. He confirmed that benefits granted to investors under the act would be eliminated upon revocation of the act.

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21. He noted that Parliament had passed a new law - the Foreign investment act 2002 - with a view to bringing Tonga’s legislation on registration of foreign investment into line with WTo provisions. The new law would become effective upon entry into force of the implementing regulations − the Foreign investment regulations 2002 − expected by december 2005. Under the Foreign investment act, any foreign investor carrying on any activity for the purpose of generating revenue in trade, commerce or industry, including any trade, profession or calling, was required to obtain and hold a valid foreign investment registration certificate. The Foreign investment act detailed the regulations for foreign investment into Tonga, the registration requirements for foreign investors and the duration of registration certificates; established reserved, restricted, and prohibited activities; detailed the terms for transfer of registration, cancellation of registration and the means for appeal if registration was refused; and set out transitional arrangements for foreign investors already operating in Tonga at the time of the legislation being implemented. no benefits or incentives were offered or provided under the Foreign investment act. reserved activities, i.e. activities that could only be carried out by Tongans, were listed in Schedule 1 of the Foreign investment regulations 2002 (see Table 2(a)). restricted activities were activities open to foreign investors under the conditions specified in Schedule 2 of the Foreign investment regulations 2002 (see Table 2(b)). restricted activities included commercial fishing and agricultural supply stores distributing seeds, fertilizer, and chemicals. as for prohibited activities, these were listed in Schedule 3 of the Foreign investment regulations 2002 (see Table 2(c)).

22. noting that education and health services were listed in Table 2(b), a Member asked Tonga to clarify the meaning of “restricted” activities. in response, the representative of Tonga said that the restricted list of activities set out in Schedule 2 of the regulations of the Foreign investment act 2002 prescribed the business activities that a foreign investment business could carry on if the corresponding conditions laid down in the Schedule were satisfied. Foreign investors providing education services, for example, were required to comply with the education act, and providers of medical and health services with the Medical Practitioners act. He confirmed that the Foreign investment act was consistent with the commitments made in Tonga’s Services Schedule. all service providers, both foreign and domestic, had to comply with domestic legislation. He confirmed that there was no distinction in the legislation between foreign and domestic providers. The purpose of the domestic legislation was to ensure that teachers and medical practitioners had appropriate professional qualifications.

23. in response to a Member who noted that prohibited activities included “export, import or production of any products prohibited under the laws of Tonga”, he referred to the “import prohibition” and “export prohibition” sections of the report. Unless an activity was designated as restricted, reserved, or prohibited, there

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was no foreign participation limitations, in law or in practice, for foreign investors wishing to invest into Tonga; foreign investment registration certificates were issued automatically except where a business activity was a prohibited activity, a restricted activity or a reserved activity that did not meet the conditions applicable to that activity. Certificates were valid from their date of issue until the termination of the business activity for which they had been issued. Certificates ceased to be valid if the business activity for which they had been issued had not commenced within one year of the date of issue (section 10 of the Foreign investment act). Certificates could be cancelled by the Secretary if the information that had been provided in the application was materially incorrect and misleading as to the ownership or nature of the activity, the activity carried out was a prohibited or restricted activity, or the foreign investor had failed to substantially comply with any foreign investment reporting requirements prescribed in the regulations (section 11 of the act). Foreign investors having been refused a foreign investment registration certificate could appeal to the Minister within 14 days from the date of notification of the refusal. The Minister should nominate and appoint an arbitrator to determine the appeal within seven days. arbitrator’s decisions had to be given within 28 days in writing and were final; they could not be appealed or reviewed by any Court (sections 13 of the act and the regulations). in reply to questions from Members, he confirmed that there was no minimum amount of investment for a foreign investor to be issued with a foreign investment registration certificate. He noted that there was no direct connection between the Foreign investment act and the idi act. The Foreign investment act provided for a registration mechanism for foreign investment while the idi act was a fiscal incentive package for investment.

24. The representative of Tonga confirmed that since enactment no benefits granted under the industrial development incentives act had been or would be made contingent, in law or in fact, on export performance, import substitution or local content requirements. Such criteria contained in the industrial development incentives act had never been applied in practice. He further confirmed that the idi act would be suspended on 1 July 2006 and subsequently repealed once customs duties would have been reduced to the single rate of 15 per cent. all the benefits provided for in the idi act would thereby be eliminated. He confirmed that the new Foreign investment act would provide no such benefits. The Working Party took note of these commitments.

25. The representative of Tonga stated that Tonga would be prepared to enter Protocol commitments to abide by the relevant WTo provisions, including article 3 of the agreement on Subsidies and Countervailing Measures and the agreement on Trade-related investment Measures, and to ensure that its laws implement these commitments. For the texts of these commitments, see the sections below dealing with these subjects.

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- State ownership and privatization

26. The representative of Tonga said that a large number of services, infrastructure, and commercial activities had traditionally been government-funded. in 1998, his government retained a stake, either through equity or loans, in 26 enterprises, including public utilities.

27. His government aimed at rationalisation of public sector activities, including through privatization. a Cabinet Sub-Committee had been established to plan the restructuring of government commercial activities, and a Public enterprise Unit to develop a programme of privatization. Since 1998, his government had corporatized the Port authority and the Tonga Telecommunication Commission, i.e. established these government-owned entities as legally independent entities and made them subject to the requirements of the Companies act, and privatized the royal Beer Co. ltd. Postal services would be corporatized once the debts of Tonga Post have been paid off. The government Store, which used to supply the public and private sector with hardware and other products had ceased operations in 1999, except for the disposal of goods undergoing processing. a list of enterprises with State ownership as per 30 June 2002, including information on their activities and market position, and the percentage of government ownership, is provided in Table 3 and in paragraph 28 below. He expected the privatization programme to be completed over a period of five to ten years. The Tongan government would only maintain or make new investment in companies that provided significant social and economic services that the private sector could not reasonably provide and where monopoly was likely to prevail. He confirmed that Tonga maintained no restrictions on foreign participation in the privatisation programme, that no special privileges were granted to public enterprises, that no restrictions prevented private firms from entering sectors where they would compete with the very few government owned firms that were currently sole service providers, e.g. in the distribution of cooking gas (Home gas), and that the establishment of competing firms was welcome.

28. The representative of Tonga added that all State-owned enterprises and enterprises with State participation at this time were services providers, and that his government no longer owned shares in any manufacturing facility in Tonga. Tonga Corporation managed Tonga’s landholdings in american Samoa and Hawaii. Tonga investments ltd. was a holding company established in 1971 to manage businesses carried out by its subsidiaries - Frisco Hardware ltd., Homegas ltd. and Primary Produce export ltd. Frisco sold hardware and construction materials - mostly imported goods - in competition with private enterprises. Primary Produce limited was essentially a shell company established to collect debts, and would be wound up as soon as possible. Tonga Timber limited supplied coconut/timber milling and hardware. Sea Star Fishing Co. ltd. was one of a number of deep sea fishing operations in this market. The government of Tonga had been negotiating to sell

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its shares in this company. leiola duty Free operated Tonga’s duty free shops. The government had not granted a monopoly, but there were at present no competitors in the market. air Pacific limited was Fiji’s national airline, providing regional airline services in competition with other suppliers in the market. Hawaiian air was another regional airline. royal Tonga airlines was Tonga’s national airline and competed with air new zealand, Polynesian airlines and air Pacific (the other main airlines servicing similar routes). Pacific Forum line limited, a regional shipping company based in Fiji, provided regional freight and charter services, and Shipping Corporation of Polynesia ltd. provided domestic and international passenger and cargo charter services. Westpac Bank of Tonga competed with three other banks currently present in Tonga, and the Tonga development Bank provided development and business advisory banking services. international dateline Hotel was one of many such tourist hotels in Tonga’s market. While either fully or partially government-owned, with the exception of leiola duty Free, none of the enterprises listed above still in operation were granted any special rights or privileges nor a sanctioned monopoly in their line of business. generally, they competed with other suppliers in the market.

29. Tonga’s public utilities included the Tonga Water Board, established under the 1978 Water Board act, Cap. 92, and responsible for the supply of water in the main populated areas; and the Tonga Broadcasting Commission, established under the Broadcasting Commission act, Cap. 100, which operated public radio services. Private sector representatives participated in the Board of directors of these enterprises. Home gas, a subsidiary of Tonga investment limited, was the sole distributor of cooking gas in Tonga. electricity was now provided by a private enterprise and the government had corporatized its telecommunications provider, which now competed with another supplier in the market.

30. asked about the percentage of Tonga’s gdP generated by State-owned enterprises, the representative of Tonga said that Tonga’s gdP figures did not differentiate between State-owned and non-State-owned firms. Tonga did not have statistics on the output of State-owned firms. Tonga could contrast the value of imports by the quasi-government sector with the total value of imports: in 2004, the value of imports by the quasi-government sector had amounted to ToP 4.5 million, compared to a total value of imports of ToP 206.4 million. in March 2004, the value of assets of the Public enterprise division of the Ministry of Finance had amounted to ToP 186 million and net government investment, including loans, to ToP 107 million.

- Pricing policies

31. The representative of Tonga said that Tonga applied price controls on basic necessities to protect consumers, in particular low income families. Maximum prices were set for these goods to prevent wholesale and retail suppliers from taking advantage of local monopoly conditions resulting from the small size of the economy.

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Commodities currently subject to price control are listed in Table 4. none of these products, except for bread, were produced locally. He confirmed that the Home gas Company distributed one of the liquid petroleum products mentioned in Table 4. However, it did not produce liquid petroleum products and the price for its services was not regulated. it had been set up to ensure that Tonga’s very small market was supplied regularly. Prices for services were determined freely by market forces. as noted in the previous section, the establishment of competing firms was welcome.

32. The legal basis for Tonga’s price controls was the 1988 Price and Wage Control act, Cap. 113. Controls were enforced by the Competent authority Committee, established within the Ministry of labour, Commerce, and industry, and chaired by the Minister. other members of the Committee included the Minister of Finance, Secretary of labour, Commerce and industry, deputy Secretary of Commerce, and three representatives of the private sector. The Committee met on a monthly basis and was responsible for setting maximum prices, monitoring the prices of controlled goods and services, monitoring minimum wages, and carrying out controls, including on-site inspections at traders’ premises. The Committee could request traders to submit oral or written information on prices, wages and working hours and, in case of violation, to prohibit the sale of the incriminated goods until prices had been modified.

33. responding to specific questions, the representative of Tonga said that controls were carried out at the point of sale, and not at the border, as the primary purpose of the price controls was to protect the interests of consumers. He confirmed that Tonga’s price controls did not affect the valuation of goods for customs purposes. Tonga’s price control mechanisms were enforced as maximum mark-up percentages, i.e. a percentage over landed cost for the wholesale trade and a percentage over wholesale cost for retail trade in the goods concerned, except for standard size bread (454 grams) and petroleum products. in the latter cases, the Committee determined the sales prices for these goods. He provided detailed information on the mark-up calculations in annex a of document WT/aCC/Ton/5. Price controls had recently been eliminated on motor vehicles, motorcycles and motor vehicle spare parts. He added that his government had no plans to reduce the number of goods subject to price control, although some discussions had taken place on this matter. He confirmed that all products within the listed categories were subject to price control without exception. The price controls in principle applied equally to both domestically-produced and imported goods, although at the present time the only product under price control that was produced in Tonga was bread.

34. in response to concerns of Members who noted that, according to annex a of WT/aCC/Ton/5, local agricultural and fish products were not subject to price control while imported products were covered by controls, which would appear to be inconsistent with the provisions of article iii of the gaTT 1994, the representative of Tonga said that an order, which amended the Price and Wage Control act 1988

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and removed the reference to local agricultural and fish products not subject to price control from the Mark-Up Schedule, had been approved by the Competent authority on 2 May 2005. The order had come into force on 17 May 2005.

35. The representative of Tonga confirmed that from the date of accession Tonga would apply its price control measures in a WTo-consistent fashion, and take into account the interests of exporting WTo Members as provided for in article iii:9 of the gaTT 1994. in this regard, an order amending the Price and Wage Control act 1988 had been issued, which removed the exemption of local agricultural and fish products from price control from the Mark-Up Schedule. He further confirmed that any price controls applied to imports from the date of accession would also be applied to similar domestically-produced goods. Tonga would also publish the list of any goods and services subject to price controls in its official gazette. The Working Party took note of these commitments.

- Competition policy

36. The representative of Tonga said that Tonga had no specific legislation addressing competition issues, and had no plans to introduce such legislation. The Protection against Unfair Competition act 2002 did not establish a competition policy; it provided protection against deceptive industrial and commercial practices, including damaging another’s goodwill or reputation, creating confusion, misleading the public, and unfair competition in case of secret information.

37. in response to questions, the representative of Tonga noted that there was no WTo requirement for competition policy to be applied. Tonga understood the implications of restrictive business practices to which reference had been made, such as price fixing and anti-competitive mergers and business acquisitions. However, given the structure and size of Tonga’s domestic market, these practices had not created problems that would warrant the utilization of Tonga’s extremely limited resources.

iii. FraMeWorK For MaKing and enForCing PoliCieS

38. The representative of Tonga said that Tonga had become a sovereign and independent State within the British Commonwealth of independent States in 1970. Tonga was a constitutional monarchy headed by His Majesty the King Taufa’ahau Tupou iV, who had acceded to the throne in 1965. The current Constitution had been promulgated the same year. The King chaired the Privy Council - comprising the Prime Minister, Ministers of the Crown and the two governors of Ha’apai and Vava’u, all appointed by His Majesty – which advised and assisted His Majesty in his functions. The Cabinet, the second branch of the executive, was composed of the Ministers of the Crown and the governors. Cabinet Ministers held office until their retirement.

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39. legislative powers were exercised by the legislative assembly, made up of Privy Councillors and Cabinet Ministers, sitting as nobles; nine representatives of the nobles, elected by the nobles; and nine representatives of the people elected every three years by universal suffrage. The assembly was the only organ empowered to adopt laws (Clause 55 of the Constitution). Bills had to be passed three times by the majority of the assembly members before being presented to His Majesty for royal assent, and became law upon publication. The governors were responsible for the implementation of laws within their district.

40. Judicial power was exercised by the Magistrates’ Court, the Court of appeal, the Supreme Court and, for land-related matters, the land Court. Judges were appointed by His Majesty in Council. The Magistrates’ Court was the lowest court, dealing with criminal and civil cases for which the sanctions foreseen by the law would not exceed ToP 1,000 – or three years imprisonment in the case of criminal charges. The land Court was the supreme court in charge of land related cases, including hereditary estate taxes and town allotment mortgages. Tonga’s present judicial system did not provide for specialized administrative or commercial courts. The highest court was the Court of appeal.

41. administrative decisions could be reviewed, in first instance, by the Supreme Court in accordance with the Supreme Court act, Cap. 10. Supreme Court decisions could be appealed to the Court of appeal pursuant to the Court of appeal act, provided appeal had been permitted by the first instance judge, the appeal had been lodged within 42 days from the date of judgement, and the grounds for appeal had been clearly laid down. The Court of appeal was composed of three judges, including the Chief Justice. as the Court of appeal was the highest court in Tonga, only decisions of the Court of appeal pertaining to nobles titles and hereditary estates could be further appealed to the Privy Council.

42. according to Section 11 of the Commissioner for Public relations act 2001, foreign and domestic importers had the right to appeal any administrative action relating to matters subject to WTo provisions, e.g. customs classification and valuation, tariff application, licensing, TBT, SPS, and TriPS, to an independent body – the Commissioner for Public relations. The Commissioner was appointed by His Majesty in Council for five years, but was independent from the executive. He was neither under the responsibility of nor accountable to the executive. The Commissioner’s office was not appointed by the executive. The Commissioner could only formulate recommendations. Pursuant to Section 11, the Commissioner could, upon a complaint or on his own initiative, investigate any administrative decision or recommendation made, and any administrative act done or omitted by any department or organization to which the act applied; any officer, including the Minister and governor; and any employee or member of any such department or organization affecting any person in its personal capacity, and formulate recommendations to the relevant government

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bodies. recommendations made by the Commissioner could be appealed to the Supreme Court. no case had been appealed to date. When recommendations by the Commissioner were not followed by action within a reasonable period of time, the Commissioner could send a copy of the recommendations to the Prime Minister who should table it in the Privy Council. He considered this situation to be in full conformity with relevant WTo obligations, including article X:3(b) of the gaTT 1994.

43. The representative of Tonga confirmed that from the date of its accession, Tonga would establish or designate tribunals or procedures for the prompt review of all administrative actions relating to the implementation of laws, regulations, judicial decisions and administrative rulings of general application referred to in article X:i of the gaTT 1994 and article Vi of the gaTS. The tribunals or procedures would also include actions relating to the implementation of national treatment, conformity assessment, the regulation, control, supply or promotion of a service, including the grant or denial of a licence to provide a service and other matters. The tribunals or procedures responsible for such reviews would be impartial and independent of the agency entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter. The review procedure would include the opportunity for appeal, without penalty, by individuals and enterprises affected by any administrative action subject to review. if the initial right of appeal was to an administrative body, there should be the opportunity to choose to appeal the decision to a judicial body. notice of the decision on appeal should be given to the appellant and the reasons for such a decision provided in writing. The Working Party took note of these commitments.

44. Policies related to foreign trade were formulated and implemented by the Ministry of labour, Commerce and industry, in cooperation with the Ministries of Finance; Police; Health; agriculture and Food; and Fisheries. His government had established a Trade Coordination Committee chaired by the Minister of labour, Commerce and industry to coordinate the work of the various government entities. Border control fell under the competence of the Minister of Finance, who was also responsible for customs duties, and taxes and excises, as well as the issuance of import licenses for some products. import licenses for restricted products were issued by the Minister of Police and the Minister of Finance. The Minister of Foreign affairs was in charge of immigration, and granted entry and resident permits. The Minister of agriculture and Food, the Minister for Fisheries and the Minister for Health regulated matters of public health, quarantine and phytosanitary measures related to importation and exportation. The formulation and implementation of policies affecting trade in services involved the Tonga Visitors Bureau, Tonga Telecommunications Commission, Tonga electric Power Board, the Ministries of Finance, Civil aviation, education, Justice, and Ports and Marines. While trading regulations were set out in laws and regulations, residual discretionary powers could also be exercised by the competent

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Minister when required.

45. The private sector could influence the legislative process through consultations held with the Ministries through associations such as the Tonga Chamber of Commerce, the Small Business association, the Tonga Tourist association, the Society of accountants, the Tonga Business and Professional Women’s Federation inc, and the law Society. in the reform of trade legislation, the Ministry of labour, Commerce and industry consulted with the private sector via its government/Private Sector Consultative Committee.

46. The representative of Tonga acknowledged that implementing legislation would have to be adopted in a number of areas to ensure compliance with WTo regulations. He presented an overview of legislative action resulting from the WTo accession process in document WT/aCC/Ton/7. in light of progress in Tonga’s legislative agenda, Tonga submitted a revised legislative action plan (annex to document WT/aCC/Ton/15).

47. Concerning the procedures to be followed for the ratification of Tonga’s Protocol of accession, he said that the accession Package would be submitted to the Privy Council for ratification, i.e. approval, by the Minister for labour, Commerce and industries, who was responsible for overseeing the accession process to the WTo. ratification did not require approval by the legislative assembly. after approval by the Privy Council, WTo provisions would not supersede domestic legislation; they would have to be integrated into domestic legislation through amendments. in the event of a conflict between WTo provisions and domestic laws and regulations, the latter would apply.

48. The representative of Tonga confirmed that sub-central entities had no autonomous authority over measures covered by WTo provisions. He confirmed that the provisions of the WTo agreement, including Tonga’s Protocol, would be applied uniformly throughout its customs territory and other territories under Tonga’s control, any special economic zones, and other areas where special regimes for tariffs, taxes and regulations are established. He added that when apprised of a situation where WTo provisions were not being applied or were applied in a non-uniform manner, central authorities would act to enforce WTo provisions without requiring affected parties to petition through the courts. The Working Party took note of these commitments.

iV. PoliCieS aFFeCTing Trade in goodS

- Trading rights

49. The representative of Tonga said that the licenses act, Cap. 47, required any natural or legal person carrying out a business activity to take out a licence and pay an

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annual fee. The schedule covered a wide range of commercial activities, not necessarily linked to external trade. The decision to issue a licence was not discretionary or subject to specific criteria, but rather a simple “pay-and-serve” process.

50. He added that a new Business licence act would repeal the licenses act Cap. 47, and introduce a simple, transparent procedure for the issuance of business licenses. The new legislation aimed at bringing Tonga’s rules in this area into line with best international practice and the rules of the WTo, i.e. articles Viii:1(a), Xi:1 and iii:2 and 4 of the gaTT 1994. The new act required a licence to be issued automatically to any business or person planning to undertake business in Tonga (whether wholesale, retail, export, or import), provided the proposed activity was not prohibited; the applicant was 18 years of age or older; in case of partnerships, that all partners were at least 18 years of age; and - for foreign investors - possession of a valid foreign investment registration certificate. applications had to be submitted for each business activity listed in schedule 3 of the act. implementing regulations had been submitted to the Cabinet for approval, and were expected to be implemented by december 2005. Pursuant to the draft regulations, business licenses would be delivered automatically within seven days. in case of refusal, the applicant would have to be advised in writing of the grounds for refusing the application. licence fees would be based only on the cost of services rendered (verification and processing of applications) and would be levied once a year (see Table 5). any holder of a valid business licence could engage in the activity for which the licence had been granted for one year without restriction. He confirmed that under the new Foreign investment act, foreign firms seeking to be the importer of record would be required to have a foreign investment registration certificate prior to obtaining the business licence for importation from the one-stop shop of the Customs department. details on the Foreign investment act 2002 are contained in the “investment regime” section of this report (paragraphs 21 to 23).

51. in response to the concern of a Member regarding the current absence of regulations implementing the Business licence act, which might possibly include disguised restrictions on trade, the representative of Tonga maintained that the Business licence act provided for simple and transparent procedures, of a non-discriminatory nature and therefore applied equally to nationals and foreigners, for the issuance of business licenses. He stressed that the implementing regulations would not include hidden trade restrictions. a copy of the regulations had been forwarded to the Working Party. The Business licence act would come into effect upon implementation of regulations, i.e. by december 2005.

52. The representative of Tonga confirmed that from the date of accession, Tonga would ensure that its laws and regulations relating to the right to trade in goods and all fees, charges and taxes levied on such rights would be in full conformity with its WTo obligations, including articles Viii:1(a), Xi:1 and iii:2 and 4 of the gaTT

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1994 and that it would implement such laws and regulations in full conformity with these obligations. The Working Party took note of this commitment.

a. iMPorT regUlaTion

- Customs tariff

53. noting that Tonga initially applied the Standard international Trade Classification (SiTC), and that Tonga’s Parliament had rejected proposed changes to Tonga’s classification system, some Members urged Tonga to implement a customs classification system in line with the international standard (the Harmonized System). Trade taxes being an important component of government revenue, Tonga was also encouraged to take steps to diversify its revenue base.

54. The representative of Tonga replied that Tonga was now implementing the 4-digit level of the Harmonized System. The Customs database was being upgraded to be made consistent with the 6-digit level of the Harmonized System. The Personal Computer (PC) Trade database developed by Statistics nz, which was based on the 6-digit level of the Harmonized System, was being introduced. The database, which would be used to process customs data and collect trade statistics, was expected to be operational by december 2005. Tonga levied customs duties in accordance with the Customs and excise act, Cap. 67 (see section on Customs Valuation). it accorded tariff preferences to members of the Pacific island Countries Trade agreement (PiCTa). imports from other countries were subject to a single set of tariff rates. import duties were mostly in the 0-30 per cent range, but higher rates were applied on motor vehicles, vans and trucks (45 per cent); petroleum (35 per cent); and beer, spirits, tobacco and cigarettes (rates ranging from 150 to 330 per cent ad valorem or specific duty amounts, if higher). rates on tobacco had been increased recently for health reasons and now ranged between 187.5 per cent and 525 per cent (ad valorem or specific duty amount, whichever was higher). The weighted average level of customs duties had amounted to 18.5 per cent in 1995.

55. He added that a series of taxation reforms, including the introduction of a single customs rate, had been launched. The single customs rate would be introduced after the PC Trade has been put in place. a single rate of 15 per cent would be introduced no later than 1 January 2007. Tonga’s customs tariff would be adjusted accordingly by amending the Customs and excise act, Cap. 67. no exceptions to the single rate customs duty were foreseen, as exceptions would defy the logic of introducing such a system. The introduction of a single rate customs tariff would not only allow for more streamlined customs procedures and a more administratively feasible customs system, but should also improve duty collection and allow for far more accurate recording of imports into Tonga.

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- other duties and charges

56. The representative of Tonga said that, in addition to customs duties, Tonga levied a 20 per cent ad valorem Port and Services Tax in accordance with the Port and Services Tax act (Cap.71). The tax applied to all imported goods except those fully or partially exempt under the industrial development incentives act. among the items exempt from the Port and Services tax were essential goods such as educational, scientific and cultural books, documents and materials; fertilizer; insecticides, pesticides and fungicides for agricultural use; agricultural machinery, implements and tools; timber milling machinery; and stock feed and seeds.

57. Some Members stated that the Port and Services Tax did not appear to meet the requirement of article Viii of the gaTT 1994, and requested that it be eliminated in the context of Tonga’s accession to the WTo. Questions were also raised about the WTo-consistency of Tonga’s wharfage dues.

58. The representative of Tonga acknowledged that the Port and Services Tax should be considered an “other duty or charge” within the meaning of article ii of the gaTT 1994, and recalled that Tonga had offered to bind its other duties and Charges at zero during the negotiations on market access for goods. He noted that the Port and Services Tax had been eliminated on 1 april 2005 when the Consumption Tax had been introduced. as for the wharfage and berthage fees, and fees for the issuance of import licenses, these were fees for services rendered. These fees and charges are examined in the relevant section below.

59. The representative of Tonga confirmed that from the date of accession other duties and charges within the meaning of article ii:1(b) of the gaTT 1994 would be applied in accordance with WTo provisions and that Tonga would not introduce any new other duties and charges. He further confirmed that other duties and charges within the meaning of article ii:1(b) of the gaTT 1994 would be bound at zero in Tonga’s goods Schedule. The Working Party took note of these commitments.

- Tariff rate quotas, tariff exemptions

60. The representative of Tonga said that Tonga did not apply tariff rate quotas on any product, and had no intention to introduce such quotas.

61. Tariff exemptions were granted according to the Customs and excise act. The coverage of the exemptions required a legal basis and could not be extended administratively. goods subject to duty exemption were goods for the use of the reigning Sovereign, the government of Tonga, or accredited diplomatic representatives and technical assistance officials; personal effects and accompanied luggage of passengers (within specified limits); ground equipment, fuel and lubricants for air

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services; educational, scientific and cultural articles; charitable gifts; marine life-saving equipment; patterns, samples, advertising matter and documents; religious goods; and trophies, medals and photographs. a more detailed description of such goods (mostly not by HS number) was provided in document WT/aCC/Ton/4, pp. 22-25. The coverage of the import duty exemptions and exemptions from Port and Services Tax were not identical. The potential benefits provided for in the industrial development incentives (idi) act, described under the heading “investment regime” above, included exemption from customs duties on imported capital goods for up to two years as well as suspension of duty on imported raw materials and components. He noted, however, that the idi act would be suspended on 1 July 2006 and subsequently repealed following the introduction of the single rate customs duty of 15 per cent. The revocation of the act would eliminate all the benefits granted under the act.

62. The representative of Tonga confirmed that upon Tonga’s accession to the WTo, any tariff quotas and tariff exemptions would only be implemented in conformity with the relevant WTo provisions including article i of the gaTT 1994 and the TriMs agreement. The Working Party took note of this commitment.

- Fees and charges for services rendered

63. The representative of Tonga said that the fees charged by the Port authority pursuant to Standing order 1999 were set in relation to the cost of the services rendered by the authority. These fees included berthage, wharfage, mooring, slipway and boat lifter, and tug boat fees. The Port authority had been established by the Port authority act 1998 as part of a reform package to put the management of the port on an efficient commercial basis. The Port authority administered the port at Tongatapu, and nearly 99 per cent of Tonga’s trade in goods passed through this port. Fees charged by the Port authority were set after consultation with the Port User advisory Committee. The scale of fees was also submitted to the executive of the South Pacific Board of Ports, composed of members from the Pacific island Countries, australia and new zealand. Standing order 1999 set out the fees charged by the Port authority itself, as well as the fees that could be charged by stevedoring companies operating on the wharf.

64. Berthage fees applied to ships brought to the berth and wharf space. Berthage fees covered the operating costs and required return on investment for navigation aids, towage, pilotage, mooring lines and provision of the wharf. The fees depended on the capacity of each vessel and the time spent in the berth. The fees were calculated on the basis of the number of hours spent (cruise ships) or worked at the berth. Wharfage fees were collected when goods were discharged from or loaded into a vessel within the port. The fees corresponded to the costs of maintaining the wharf, insurance policy, and interests on loans for upgrading and construction of wharf facilities. Mooring fees were applied to local registered vessels and yachts and covered the costs of maintaining local wharves and other facilities. Slipway and boat lifter fees were

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charged for the use of the slipway and boat lifter, and tug boat fees for the renting of a tug boat and other port equipments. He provided detailed information on these fees in document WT/aCC/Ton/11, pages 10-13.

65. Some Members reminded Tonga that gaTT article Viii provided that all fees and charges be limited to the approximate cost of the services rendered, and not to constitute an additional fiscal tax on imports. as Tonga’s wharfage fees, based on length and/or internal space, did not appear directly related to the cost of any particular customs service, Tonga was urged to bring its fee structure into conformity with the requirements of gaTT article Viii.

66. in response, the representative of Tonga said that fees based on length and/or internal space were directly related to the wharf space occupied and to the amount of cargo unloaded and therefore to the cost of the service provided. He also noted that fees for the issuance of business licenses, dealt with in the section on trading rights, were fees for services rendered. The protocol commitment in paragraph 68 would therefore apply to them. He also provided detailed information on quarantine fees paid by exporters of agricultural products, which is reproduced in Table 6.

67. Under the new Business licence act 2002, the relevant provisions of which were dealt with in the section on Trading rights above (paragraph 50 and Table 5), the fee for the issuance of a business licence authorizing importers to engage in the business of importing would be limited to the approximate cost of the services rendered. Tonga confirmed that there was one fee structure for business licenses for all business activities (e.g. importing, exporting) and therefore the fee structure for a business licence to export was the same as the fee structure for a business licence to import.

68. The representative of Tonga confirmed that all fees and charges, including those listed in paragraphs 50, 63 and 67 of this report, would be operated in conformity with the relevant provisions of the WTo agreement, in particular articles Viii and X of gaTT 1994. From the date of accession, Tonga would not apply, introduce or reintroduce any fees and charges for services rendered that were applied to imports on an ad valorem basis. information regarding the application and level of such fees and charges, revenues collected and their use, would be provided to WTo Members on request. The Working Party took note of these commitments.

- application of internal taxes to imports

69. The representative of Tonga said that imported and domestically-produced beer (HS number 2203.0010) was subject to an excise tax of ToP 0.75 per litre or 20 per cent ad valorem, whichever was higher. Beer was, for the time being, the only product on which excise duty was levied.

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70. Value added tax (VaT) had not been introduced in Tonga, but a sales tax of 5 per cent was levied on most goods and services. exempt from sales tax were goods and services sold to the reigning Sovereign or to the government; goods sold among vendors or businesses for the purpose of further retailing, manufacturing or processing before being sold to the public; local agriculture, livestock and fisheries products sold at local markets and farm gates by individual sellers; goods sold by street vendors such as handicrafts, woodcarvings, clothing and peanuts; tickets for international travel sold to patients upon approval and certification by the Minister of Health; building materials used in residential construction (exemption certificate to be issued by the Minister), all of which were imported; and goods destined for exportation.

71. Some Members noted that Tonga’s sales tax exemption on local agriculture, livestock and fisheries products, and goods sold among vendors and businesses, involved elements that might discriminate against imports. Tonga was invited to provide further clarification on how these exemptions would not conflict with the provisions of article iii of the gaTT 1994.

72. The representative of Tonga replied that the sales tax exemption on local agriculture, livestock and fisheries products applied only to very small individual producers who sold their products locally. domestic products sold by large local firms were subject to sales tax. Small producers had been exempted due to difficulties in tax collection and the disproportionate costs involved in collecting relatively small amounts of sales tax. in this respect, Tonga’s practice did not differ from that of many Members of the WTo. as to goods sold among vendors and businesses, registration with the inland revenue department was required for vendors or businesses to qualify for a sales tax exemption. He did not consider this requirement an obstacle to trade as the only purpose of the registration procedure was to administer the collection of revenue. no further registration was required. He confirmed that apart from the above-mentioned exemptions, all other customers and firms were subject to the sales tax. The trade turnover threshold for firms, farms, and individuals exempted from sales tax amounted to approximately ToP 1,000,000. There were no data available on the percentage of firms exempted from the sales tax. He added that Tonga’s present sales tax regime had been terminated on 1 april 2005 as part of the taxation reform programme.

73. The taxation reform programme had been designed with the assistance of the Pacific Financial Technical assistance Centre (PFTaC). Under the new system, emphasis would be moved from trade taxes to broad-based taxes. Taxes levied in Tonga would include a simplified individual income tax; a single rate corporate income tax; a single rate customs duty; excise taxes on imports and domestically-produced alcohol and tobacco products; and a broad-based consumption tax (the Consumption Tax). The Consumption Tax had been introduced on 1 april 2005 in

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replacement of the sales tax, fuel sales tax, and ports and services tax. The rates of the Consumption Tax were 15 per cent and zero. The 15 per cent rate applied to most imports of goods and services supplied in Tonga. The main items to be zero-rated were exports, international transport services, and basic provision of electricity and water for domestic consumption. a complete list of zero-rated and exempt items was provided in Table 7. The Consumption Tax applied equally to imported and domestically-produced goods. excise tax rates on imported and domestically-produced alcohol and tobacco products would be identical and would take the form of specific duties, which would be collected at the import stage or at the border for imported products and at the point of sale (ex-factory) for domestic products. in response to a Member who enquired about the level of excise tax rates, he added that due to the uncertainty of the impact of the taxation reforms on government revenue, the government of Tonga had decided to take a cautious approach regarding the implementation of the taxation reforms. The Consumption Tax had been introduced before the other taxation reforms in order to allow the government to observe the revenue-generating performance of the Consumption Tax prior to the introduction of other reforms and avoid putting government revenue into a precarious situation. The government of Tonga would determine the rates of excise tax for alcohol and tobacco once it had full information about the level of revenue generated by the Consumption Tax. The excise taxes would be set to ensure that they did not discriminate against imports. The new system would be implemented by amendment to the Customs and excise act.

74. in reply to questions raised by Members, the representative of Tonga stated that, subject to a limited number of exceptions, the Consumption Tax would apply to all imports and sales by registered Consumption Tax payers. The social exemptions to the Consumption Tax included medical, dental and nursing services; domestic public transport services; and education services, and the administrative exemptions included financial services; some property transactions; and a personal baggage exemption for luggage accompanying passengers arriving by sea or air (limited to ToP 500 (US$ 250)). The planned registration threshold for the Consumption Tax was ToP 100,000 (US$ 50,000). However, businesses with an annual turnover below the threshold could register voluntarily if they so wished. Pursuant to Part iii of registration 6(6) of the Consumption Tax act, any person who had failed to register would be treated as registered from the beginning of the first Consumption Tax period after which it had been obliged to apply for registration or as notified in writing by the Chief Commissioner. He added that all firms exempted from the Consumption Tax were required to register under the Business licenses act to carry out business legally in Tonga.

75. The representative of Tonga confirmed that from the date of accession Tonga would apply its domestic taxes, including excise and consumption taxes, in full compliance with the relevant provisions of the WTo, including articles i and

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iii of the gaTT 1994, in a non-discriminatory manner to imports from all WTo Members and to domestically-produced goods. The Working Party took note of this commitment.

- Quantitative import restrictions, including prohibitions, quotas and licensing systems

76. The representative of Tonga said that Tonga prohibited imports of certain items, and importation of some goods was restricted and required a special licence. The items affected by these provisions are enumerated in Tables 8(a) and 8(b), respectively. He added that Tonga had not established specific import quotas for any product, and had no plans to introduce such quotas.

77. Some Members requested more information on the rationale behind the import prohibition on fireworks, Tonga’s definition of indecent articles and seditious matter, the justification for the current restrictions on imported motor vehicles, brandy, whisky and rum, eggs, and cabin and ships biscuits, and any plans to modify or remove these import restrictions.

78. The representative of Tonga replied that the importation of fireworks and indecent articles, including pornography, was regulated for safety reasons and to protect public morals. The Minister of Police could authorize importation of fireworks. Tonga did not manufacture its own fireworks. indecent articles and seditious matter were defined in accordance with the usual discretionary definition. Motor vehicles had been included on the “restricted list” solely to monitor imports for road safety reasons. Most of Tonga’s imports were second-hand vehicles which could represent a danger on the roads. Tonga had no domestic production of motor vehicles, motorcycles or motor scooters, or parts thereof, and licenses were issued freely by the Minister of Finance and, for left-hand vehicles, by the Minister of Finance and the Minister of Police unless a vehicle was found to be obviously unsafe. Vehicles imported for commercial purposes were considered unsafe if they were more than 10 years old. There was no restriction on the age of vehicles imported for private use. The safety of imported vehicles was evaluated by the customs officer at the wharf. importers were required to comply with safety requirements for the goods to be released. importation of eggs was monitored and restricted to protect local poultry farms. Tonga restricted imports of spirits for health reasons.

79. The representative of Tonga confirmed that Tonga would remove its licensing requirements for eggs, cabin and ships biscuits, brandy, whisky, and rum by 31 december 2006 as indicated in the legislative action plan annexed to document WT/aCC/Ton/15. The Working Party took note of this commitment.

80. The representative of Tonga added that any person or firm wishing to import

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goods into Tonga needed an import licence, covering each individual consignment. Mixed consignments required separate licenses. The licenses were issued by the licensing Unit at the Ministry of labour, Commerce and industries according to the licenses act, Cap. 47. except for the restrictions noted above, the licensing system was liberal, and procedures were simple and straightforward. incomplete applications, or failure to abide by established procedures, might lead to rejection of an application. However, applications could be re-submitted and refusals could be appealed to the Minister for labour, Commerce and industries, or referred to the court system.

81. licenses were not transferable among importers, but carried indefinite validity and no penalty applied to unused licenses. The system had been revised to eliminate discriminatory treatment of foreigners, and import licenses were now granted automatically to Tongans and non-Tongans alike. a Trading licence Screening Committee, which had been considering each application lodged by non-Tongans, had been abolished. although the licensing system facilitated the monitoring of imports and the collection of statistics, he acknowledged that its principal purpose was to generate revenue for his government. in 1999, import licenses had raised more than ToP 200,000 (about US$ 100,000).

82. Some Members reminded Tonga that article 1:2 of the agreement on import licensing Procedures stated that licensing procedures should be administered in conformity with gaTT provisions. article Viii of the gaTT 1994 provided for all non-tariff import fees and charges to be limited in amount to the approximate cost of the services rendered, and not to constitute a tax on imports or exports. Moreover, the agreement on import licensing Procedures required licensing systems to be operated in a transparent, predictable, fair and equitable manner, and it was noted that the private sector had expressed dissatisfaction with Tonga’s system of import (and export) licensing. Tonga was consequently urged to bring its licensing arrangements into conformity with the WTo.

83. The representative of Tonga replied that his government had reviewed the issues raised. Tonga needed to retain import licensing procedures for monitoring and statistical purposes. Taking into account the views of WTo Members, his government had amended Tonga’s licensing system. The licenses act, Cap. 47, and thereby the practice of licensing each consignment, would be repealed upon the entry into force of the Business licence act, i.e. upon adoption of its implementing regulations by december 2005. Under the new system, importers would have to obtain a business licence authorising them to engage in the business of importation. The new act required import business licenses to be issued automatically within 7 days and limited licence fees to the cost of the services rendered (i.e. verification and processing of applications) as required by article Viii of the gaTT 1994 (see Table 5). More detailed information on Tonga’s Business licence act is provided in the “Trading rights” section of this report, paragraphs 49 to 52.

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84. The representative of Tonga confirmed that, from the date of accession, Tonga would not introduce, re-introduce or apply quantitative restrictions on imports, or other non-tariff measures such as licensing, quotas, prohibitions, bans and other restrictions having equivalent effect that cannot be justified under the provisions of the WTo agreement. The legal authority of the government of Tonga to restrict or prohibit importation of goods into Tonga would be applied from the date of accession in conformity with the relevant requirements of the WTo, in particular articles Xi, Xii, Xiii, XV, XViii, XiX, XX, and XXi of the gaTT 1994, and the agreements on agriculture, the application of Sanitary and Phytosanitary Measures, import licensing Procedures, Safeguards, and Technical Barriers to Trade. The Working Party took note of these commitments.

- Customs valuation

85. The representative of Tonga said that Tonga was using the Brussels definition of Value (BdV) system for the purposes of customs valuation. The present system, set out in the Customs and excise act (in Part ii, sections 15 and 16), was not based on transaction value as experience had shown that invoices presented to customs in Tonga in some cases did not reflect the price actually paid or payable.

86. in order to assist Tonga in evaluating the key areas where additional legislation and institutions might be necessary, a Member reminded Tonga that transaction value as defined in article 1 of the agreement on the implementation of article Vii of the gaTT 1994 was the preferred method of appraisement, followed by the transaction value of identical merchandise, the transaction value of similar merchandise, the deductive value, computed value, and finally the fallback method. Tonga’s current legislation did not appear to provide for any of these methods of valuation. article 7 of the agreement prohibited appraisals based on (i) the selling price in the country of importation; (ii) a system providing for the acceptance for customs purposes of the higher of two alternative values; (iii) the price of goods on the domestic market of the country of exportation; (iv) the cost of production other than computed values having been determined for identical or similar goods; (v) the price of goods for export to a country other than the country of importation; (vi) minimum customs values; or (vii) arbitrary or fictitious values. Tonga’s legislation would also have to provide adequate protection for the treatment of confidential information in accordance with article 10 of the agreement; transparency provisions ensuring the publication of laws, regulations, judicial decisions and administrative rulings regarding the valuation of merchandise (article 12); provisions granting importers the right to a written explanation of how judicial and administrative valuation decisions had been determined (articles 11.3 and 16); and bonded entry of merchandise allowing importers to withdraw goods against sufficient surety or deposit to cover the ultimate payment of customs duties when the final determination of the customs value was being delayed (article 13).

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87. The representative of Tonga recognised that Tonga’s present valuation rules did not conform to WTo requirements. Tonga planned to introduce a new WTo-compatible system as soon as was practicable. The Customs and excise amendment act 2003, addressing the changes necessary to the valuation system, had been passed by Tonga’s Parliament in october 2003. The act had entered into force on 3 May 2004. However, the Customs and excise amendment act 2003 did not fully comply with the requirements of the Customs Valuation agreement. in particular, there was no authority for exclusion of genuine interest charges; important definitions, such as “goods of the same class or kind”, had been omitted; incorrect tests were applied (180 days instead of 90 days); and the language used departed from that of the agreement in a number of cases, leading to potential changes in meaning. Consequently, a new Customs and excise act 2005 incorporating all the requirements of the WTo Customs Valuation agreement was being drafted. He said the draft Customs and excise act 2005 had been substantially revised with the assistance of the iMF PFTaC and with some guidance from the australian Customs Service. The revised draft had been circulated for information to the Working Party under WT/aCC/Ton/15/add.1. He believed the new act conformed with relevant WTo agreements, including the agreement on implementation of article Vii of the gaTT 1994. The draft act was expected to be submitted to Parliament and adopted no later than 31 december 2006.

88. a Member noted that the revised draft act still fell short of conformity with the WTo agreement, i.e., it lacked provision for an importer to provide a sufficient guarantee in the form of surety or other deposit covering the ultimate payment of customs duties, as required by article 13. Subsection 6(1) of the revised draft act should include provision to ensure that the transaction value of similar goods were based on exports that occur “on or about the same time” as required by article 3 of the WTo agreement. in addition, no criteria were included in the text to justify the rejection of related party transactions using the transaction value method of valuation, as was required by article 1:2(a). The draft act did not contain provisions guaranteeing (a) protection of confidential information (article 10); (b) importers the right to a written explanation of how judicial and administrative valuation decisions had been determined (articles 11.3 and 16); or (c) the publication of laws, regulations, judicial decisions, and administrative rulings regarding the valuation of merchandise (article 12). This Member noted that these provisions either should be incorporated in the draft act or other relevant legislation, or Tonga should identify where they could be found in other existing legislation. in response, the representative of Tonga said that Tonga would consider the points raised by the Members and make adjustments to the draft Customs and excise act 2005 where required. He confirmed Tonga’s intention to ensure full conformity of the draft Customs and excise act 2005 with the WTo agreement on implementation of article Vii of the gaTT 1994. Tonga would address relevant concerns with the assistance that was currently being received from australia.

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89. The representative of Tonga indicated that the implementation of the WTo Customs Valuation agreement represented a major challenge for his government. it had originally believed that the major problem for Tonga, in complying with WTo requirements, would be to implement articles 1-6 of the WTo Customs Valuation agreement correctly (i.e., use of transaction value and the hierarchy of alternative methods of valuation). as Tonga had begun to move towards compliance with these requirements, it had realized that the provisions of the agreement were interrelated and that effective implementation of the requirements as a whole would take some time. The Customs department was not fully equipped with the appropriate facilities (databases, etc.) to implement the agreement and customs officials needed to be trained. To this end, Tonga requested a transition period to implement the agreement on the implementation of article Vii of the gaTT 1994. Tonga was prepared to take a commitment to ensure that any changes made in its laws, regulations and practice during the transition period would not result in a lesser degree of consistency with the provisions of the agreement on Customs Valuation than existed on the date of accession. in this regard, the government of Tonga requested that the Working Party grant it a transitional period of approximately two years from the date of its accession to allow it to obtain and utilize technical assistance to assist in the progressive implementation of the obligations of the agreement, which would be implemented in full starting from 1 January 2008, as detailed in Table 9. additionally, during the transition period, Tonga would continue its current practice of permitting an importer to withdraw its goods from Customs, pending the final determination of the customs value, when the importer provides sufficient guarantee in the form of a surety, a deposit or some other appropriate instrument for the payment of customs duties for which the goods may be liable. These provisions, implementing article 13 of the WTo agreement, were found in sections 76 and 77 of the Customs and excise act 1984.

90. during this period, Tonga would ensure that its regulations under current legislation in place and additional legislation implemented during the transition concerning customs valuation would be applied on a non-discriminatory basis to all imports. Further, Tonga would ensure that any changes made in its laws, regulations and practice during the transition period would not result in a lesser degree of consistency with the provisions of the agreement on Customs Valuation than existed on the date of accession. Tonga would progressively implement the Customs Valuation agreement as detailed in Table 9. Tonga would participate in the work of the Committee on Customs Valuation. He added that Tonga would seek out all available technical assistance to ensure that its capacity to fully implement the agreement upon expiration of the transition period is assured. The new legislation would be in full conformity with relevant WTo provisions. a copy of the text of the proposed amendments would be submitted for review by the Working Party, and it was expected that these amendments would be passed by Parliament in 2006. in response to requests from delegations for more specificity, he proposed that Tonga

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would proceed to conform its customs regime with the requirements of the agreement on the implementation of article Vii of the gaTT 1994 in accordance with the action plan reproduced in Table 9, setting out details of the steps that still remained to be taken in order to achieve this objective and a timetable for each step.

Table 9: action Plan for conformity with the agreement on the implementation of article Vii of the gaTT 1994

action deadlineWorking Party review of draft text of Bill Prior to accession

regulations for implementation of amended Customs and excise act provided to interested Members

no later than 31 July 2006

education program – Customs officials, related Tongan government staff, and Customs clients

Commence november 2005

Customs Specialist Valuation training Commence november 2005

development of administrative guidelines for Customs staff

no later than 31 december 2005

articles 1, 8, 2, 3 and 7 plus associated articles (i.e. articles 9, 10, 12, 13, 16 and 17) of the WTo agreement: implementation phase

no later than 31July 2006

article 11 of the WTo agreement: implementation (separate Parliamentary action)

no later than 31 July 2006

Parliamentary passage of Bill no later than 31 december 2006

Cabinet endorsement of amended Customs and excise act regulations


articles 5 and 6 of the WTo agreement; implementation phase


Further education program and refresher training for Customs and related Tongan government staff

on-going

Full implementation of the agreement on the implementation of the article Vii of the gaTT 1994.

no later than 1 January 2008

91. The representative of Tonga confirmed that legislation on the valuation of imports for customs and taxation purposes conforming to the requirements of the WTo agreement on the implementation of article Vii of the gaTT 1994 had been drafted and was expected to be submitted to the Parliament for enactment in 2006. Tonga would provide any interested Member a copy of the draft regulations for implementation of the amended Customs and excise act by 31 July 2006. Tonga would apply fully the agreement no later than 1 January 2008 according to the action plan in Table 9. during this period, the scope of implementation of other aspects of

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the agreement and other measures as described in paragraphs 89 and 90 would be applied by Tonga. The Working Party took note of this commitment.

- rules of origin

92. The representative of Tonga said that importers were required to provide a combined certificate and invoice for imported goods, including details regarding the country of origin. These details were required for statistical purposes only.

93. a Member stated that Tonga should implement the agreement on rules of origin - under which Tonga would have certain obligations including in regard to the transparency of laws, regulations and practices regarding rules of origin - from the date of accession. Tonga should abide by the transitional disciplines of article 2 of the agreement from the date of accession and Tonga’s laws should be amended to incorporate the requirements of article 2(h) and annex ii, paragraph 3(d), i.e. that for non-preferential and preferential rules of origin, respectively, the customs authority will provide upon the request of an exporter, importer or any person with a justifiable cause an assessment of the origin of the import and outline the terms under which it will be provided, and that any request for such an assessment would be accepted even before trade in the goods concerned began. Upon completion of the international work programme for the harmonization of rules of origin, article 3 of the agreement would also apply to Tonga.

94. a Member noted that Tonga had ratified the Pacific island Countries Trade agreement (PiCTa), which established regional rules of origin. a rules of origin Committee had been formed and would soon begin to implement the specific rules of origin contained in PiCTa, which complied with the WTo agreement on rules of origin. This Member consequently asked Tonga to confirm that its preferential and non-preferential rules of origin would comply with the WTo agreement on rules of origin upon accession.

95. in reply, the representative of Tonga confirmed that the PiCTa provisions were Tonga’s only preferential rules of origin and that Tonga had no non-preferential rules of origin. He added that Tonga would incorporate the provisions of the WTo agreement on rules of origin into the new Customs and excise Bill 2005 currently being drafted and share the relevant draft text with interested WTo Members as soon as possible. He expected Parliament to pass this legislation in 2006. The Working Party took note of this commitment.

96. The representative of Tonga confirmed that, from the date of accession, Tonga’s preferential and non-preferential rules of origin would comply fully with the WTo agreement on rules of origin, including the provisions of article 2(h) and annex ii, paragraph 3(d) of the agreement, i.e., that for preferential rules of origin,

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(e.g., pursuant to PiCTa), the customs authority would upon request from an exporter, importer or any person with a justifiable cause for an assessment of the preferential origin of the import make such a determination as soon as possible, but no later than 150 days after the request had been submitted provided that all necessary elements had been submitted. Tonga would apply the same provisions for non-preferential rules of origin when it establishes such rules. Tonga would also abide by the relevant WTo provisions on transparency and the provision of information about its rules of origin and their application. The Working Party took note of this commitment.


97. The representative of Tonga said that Tonga’s legislation had no provision for pre-shipment inspection.

98. The representative of Tonga confirmed that if in the future Tonga engaged the services of a preshipment inspection enterprise or preshipment inspection requirements were introduced, it would be on a temporary basis and in conformity with the requirements of the agreement on Preshipment inspection. Tonga would take full responsibility to ensure that such enterprises operating on its behalf complied with the provisions of WTo agreements, including the agreements on Customs Valuation, import licensing Procedures, and Technical Barriers to Trade. Provision would be made that decisions by such firms could be appealed by importers in the same way as administrative decisions taken by the government of Tonga. Tonga would also give due consideration to the recommendations of the Working Party on Preshipment inspection of 2 december 1997 and subsequent recommendations issued by that Working Party. The Working Party took note of these commitments.

- anti-dumping, countervailing duties, safeguard regimes

99. The representative of Tonga said that Tonga had no specific legislation providing for the imposition of anti-dumping, countervailing duty, or safeguard measures, and had no plans to introduce such legislation. in response to a Member’s comment, he confirmed that Tonga did not intend to use tariff flexibility to address unfair or excessive imports.

100. The representative of Tonga confirmed that Tonga would not apply any anti-dumping, countervailing or safeguard measures until it had implemented and notified appropriate laws in conformity with the provisions of the WTo agreements on these matters. Tonga would ensure the full conformity of any such legislation with the relevant WTo provisions, including article Vi and XiX of the gaTT 1994 and the agreement on the implementation of article Vi, the agreement on Subsidies and Countervailing Measures and the agreement on Safeguards. after such legislation was implemented and notified, Tonga would only apply any anti-dumping duties,

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countervailing duties and safeguard measures in full conformity with the relevant WTo provisions. The Working Party took note of these commitments.

B. eXPorT regUlaTion

- Customs tariffs, fees and charges for services rendered, application of internal taxes to exports

101. The representative of Tonga said that Tonga did not levy export duty on any item. Under the new Business licence act 2002, the relevant provisions of which are dealt with in the section on Trading rights (paragraph 50), the fee for the issuance of a business licence authorizing exporters to engage in the business of exporting would be limited to the approximate cost of the services rendered.

102. The representative of Tonga confirmed that from the date of accession, Tonga would apply all fees and charges for services rendered to exports in accordance with WTo agreements, in particular articles Viii:1(a), Xi:1 and iii:2 and 4 of the gaTT 1994. The Working Party took note of this commitment.

- export restrictions and export licensing

103. The representative of Tonga said that Tonga prohibited exportation of raw coral and specified Tongan cultural articles. Certain other items were restricted and needed special authorization to be exported. approval from the director of Health was required for exportation of medical biological and organic products; chemicals; drugs including narcotic and barbiturates; poisons; and second-hand clothing. The director of agriculture authorized exports of veterinary biological and organic products; animals, birds, fish and reptiles; insects and gastropods; plants and fungi; seeds; and trees and timber. no quantitative restrictions applied to exports from Tonga, but - as noted above - a general export licensing procedure, applied on a consignment basis, was being enforced for revenue purposes.

104. asked to explain the export restrictions on agricultural products, he added that exports of rare and indigenous species (plants and animals) were restricted for environmental reasons. Size and maturity, as well as requirements established in the country of importation, were determining factors in the exportation of some agricultural products. Tonga subjected medical, biological and organic products to quarantine to prevent the spread of diseases, and narcotics-related drugs and chemicals were restricted. He cited health reasons to justify Tonga’s export restriction on second-hand clothing. He confirmed that the application and approval procedures were identical for Tongans and non-Tongans.

105. The representative of Tonga said that under the new Business licence act

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exporters were required to obtain a business licence authorising them to engage in the business of exportation: the procedures and conditions for obtaining this licence were the same as for importation. For details see paragraphs 50 and 83 above.

106. The representative of Tonga stated that from the date of accession, Tonga’s applied laws and regulations regarding export restrictions would be in conformity with the relevant provisions of the WTo, including articles Xi, XVii, XX and XXi of the gaTT 1994. The Working Party took note of this commitment.

C. inTernal PoliCieS aFFeCTing Foreign Trade in goodS

- industrial policy, including subsidies

107. The representative of Tonga said that his government’s industrial development policies included encouraging private sector development, through the industrial development incentive (idi) act; improving efficiency through skills training; promoting export-oriented manufacturing; developing traditional and non-traditional agricultural products having potential for added value through processing, notably cassava, kava, vanilla and pumpkins; and establishing TongaTrade as a centralised agricultural and commodity export promotion wing of the Ministry of labour, Commerce and industries.

108. The representative of Tonga said that TongaTrade had been established as a “search engine” for local producers exploring new potential markets overseas. TongaTrade identified the markets through research and gap analysis, assisted and facilitated the development of exporters’ marketing skills, and facilitated the development and implementation of market management plans for groups of products.

109. The representative of Tonga added that Tonga benefited from a number of export market development programmes and schemes administered elsewhere. The Forum Secretariat’s export market development programme financed marketing missions to australia, new zealand and Japan for companies in Tonga with export potential. The programme was offered through the offices of the South Pacific Trade Commission in Sydney (australia), auckland (new zealand) and Tokyo (Japan). These offices also financed trade fairs and exhibitions to promote products from the Pacific islands. The Forum Secretariat supported private sector development in Pacific island Countries, and operated a marketing support fund directed towards export-oriented industries. in addition, the Commonwealth Secretariat had funded participation by Tongan companies in trade fairs and exhibitions and provided technical assistance to export-oriented industries in Tonga. The aCP-eU Centre for development of industry financed marketing studies and capital for joint ventures between european Communities’ and Tongan enterprises, especially those with an export orientation,

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and the european Commission, through the european development Fund, had funded market studies for export-oriented industries in Tonga and assisted in the production of promotion and marketing material.

110. export financing was available from the normal commercial banking system or through the Tonga development Bank (TdB). The TdB provided facilities including term loans - on purely commercial terms - for the production of commodities such as squash, vanilla and root crops; loans to cover costs such as freight, inputs (e.g. fertilizer and chemicals) and marketing; as well as loans to companies purchasing export commodities, such as vanilla. Together with the Ministry of agriculture and Forestry, the TdB administered an export diversification fund whereby the TdB provided loans to companies or registered societies for all matters pertaining to the export of produce. The fund had assisted in the development of squash exports in the early 1990s. all credits extended under this fund, in all ToP 1.05 million (US$ 525,000), had been fully repaid. in addition, a Venture Capital Fund had been established to provide equity capital support for the development of viable private sector projects. Capital had only been provided to successful companies wishing to expand their activities. The facility had been available to any type of business and not calculated in relation to exports, but priority had been given to projects promoting exports or import substitution, foreign exchange earnings, the creation of employment, training opportunities and the introduction of new skills. The maximum amount invested in a single project had been ToP 50,000 (about US$ 25,000). only three projects had been financed over a period of three years, and the Venture Capital Fund had now been terminated.

111. The Tonga reserve Bank had established an export guarantee scheme to guarantee loans from overseas sources. However, this scheme had never been used. The government of Tonga had, on an ad hoc basis, provided support to growers of squash pumpkin against losses caused by drought and other natural disasters. Support provided to squash pumpkins growers would be detailed in Tonga’s domestic Support Tables. He stressed these measures had never involved any export price or similar guarantee.

112. Tonga’s industrial development incentives act provided for import duty exemptions for holders of a development licence in respect of imported semi-finished products and/or raw materials, including packaging materials, used in the processing, manufacturing, or assembly of final products destined for re-exportation. importers holding a development licence were required to pay customs duties in their entirety upon importation of the goods. The duties were refunded at the time of exportation of the finished products upon presentation, to the Controller of Customs, of sufficient evidence. The system therefore corresponded to a duty drawback scheme. However, in practice, goods imported for re-exportation were exempted from customs duties at the initial port of clearance. He added that Tonga did not have a system to monitor

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the re-exportation of goods. He recalled the discussion that had taken place in the Working Party on Tonga’s investment regime and the commitment undertaken by Tonga to formally remove any of the criteria under the idi act that were inconsistent with relevant WTo provisions (paragraph 24). He confirmed that the idi act would be suspended on 1 July 2006 and subsequently repealed following the introduction of the single rate customs duty of 15 per cent. Benefits granted under the act would thereby be eliminated, and no duty exemptions would be granted after 1 July 2006.

113. Some Members stated that some of the benefits granted to holders of development licenses issued in accordance with the industrial development incentives act such as exemption from income tax for up to five years; exemption from withholding tax for the same period; accelerated depreciation of assets; customs duties exemptions on imported goods; and a 50 per cent exemption from the Port and Services Tax would - to the extent that these benefits were made contingent on export performance or import substitution in law or in fact - appear to violate the WTo agreement on Subsidies and Countervailing Measures. Tonga was thus urged to amend the industrial development incentives act.

114. The representative of Tonga recalled the discussion that had taken place in the Working Party on Tonga’s investment regime and in particular the commitment made by Tonga to repeal the industrial development incentives act (paragraph 24). He confirmed once again that the Foreign investment act did not provide benefits contingent on export performance, import substitution or local content requirements.

115. The representative of Tonga confirmed that from the date of accession his government would not maintain subsidies which met the definition of a prohibited subsidy, within the meaning of article 3 of the agreement on Subsidies and Countervailing Measures, and did not seek transitions to provide for the elimination of all such measures. He further stated that Tonga would not introduce such prohibited subsidies in the future, and would apply export promotion measures in conformity with WTo requirements. The representative of Tonga further confirmed that as from the date of accession Tonga’s laws would administer any subsidy programs provided by his government in conformity with the agreement on Subsidies and Countervailing Measures and that all necessary information on notifiable programs would be notified to the Committee on Subsidies and Countervailing Measures according to article 25 of the agreement upon entry into force of Tonga’s Protocol of accession. The Working Party took note of these commitments.

- Technical barriers to trade

116. Some Members stated that Tonga would need to implement fully the WTo agreement on Technical Barriers to Trade as of the date of WTo accession, and requested detailed information on Tonga’s infrastructure relating to the development

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and application of standards, technical regulations and conformity assessment procedures, including policies or procedures relating to the use of international standards and transparency. Tonga was reminded that the WTo TBT agreement did not require Tonga to implement standards in any area, but any standards and conformity assessment systems introduced in the future would need to be consistent with WTo requirements.

117. The representative of Tonga said that Tonga had no specific Standardization act or technical regulations in place. The Public Health act 1992, which empowered the Minister for Health to make regulations in relation to food standards, had so far not been used for this purpose. Thus, Tonga had not adopted any technical regulations, standards or conformity assessment procedures to date, and had no plans to do so. The Consumer Protection act 2000 did refer to the implementation of approved standards, including labelling requirements, to protect consumers, but no standards had been established. Foreign goods entering Tonga were accordingly not subject to any particular standards-related procedures or requirements. as to the establishment of a TBT enquiry Point, the WTo desk at the Ministry of labour, Commerce and industries would serve this function.

118. in response to questions raised, the representative of Tonga restated that Tonga had not adopted any technical regulations, standards or conformity assessment procedures to date, and currently had no plans to do so. Tonga had circulated a note providing information on the way in which it would implement the transparency provisions of the TBT agreement (document WT/aCC/Ton/14). Tonga had already nominated an enquiry point, being the WTo desk at the Ministry of labour, Commerce and industries. This was operational and could be contacted at: national TBT notification authority and enquiry Point, address:

Ministry of labour, Commerce and industries, P.o. Box 110, nuku’alofa, Tonga. Phone: +(676) 23688, Fax: +(676) 25410,

email: [email protected].

119. The representative of Tonga confirmed that if, in the future, technical regulations or standards and conformity assessment procedures were to be introduced, Tonga would neither adopt nor implement these regulations, standards or procedures until it had implemented and notified appropriate legislation in conformity with the agreement on Technical Barriers to Trade. Tonga would ensure the full conformity of any such legislation with the agreement on Technical Barriers to Trade. any standards, technical regulations, and conformity assessment procedures adopted would be developed and applied in conformity with the provisions of the agreement, including

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publication prior to implementation to allow interested parties the opportunity for review and comment as provided for in the agreement. Prior to accession, Tonga would prepare regulations specifying the publication to be used for the publication of any proposed measures, the procedure to be used for taking comments into account, etc. any such measures would be applied on a non-discriminatory basis, i.e. providing for national treatment and MFn treatment to all imports. regulations would be introduced to ensure that its national TBT notification authority and enquiry Point would be operational as from the date of its accession. Tonga would also provide relevant government officials with training to ensure that, from the date of accession, they were fully conversant with the requirements of the TBT agreement. The Working Party took note of these commitments.

- Sanitary and phytosanitary measures

120. The representative of Tonga said that the Quarantine and Quality Management division of the Ministry of agriculture and Food and the Ministry of Health were responsible for Tonga’s sanitary and phytosanitary measures relating to foreign trade in animals, plants and related products. The principal pieces of SPS-related legislation were the Plant Quarantine act (Cap. 127) 1988 together with the amendments to that act and its associated regulations 1995 and Fee regulations 1991 and 1992; the animal diseases act (Cap. 146) 1978 and the amendments to that act; and the Public Health act 1992 and the amendments to that act. The Quarantine act Cap. 77, gave the director of Health powers to impose quarantine restrictions for the protection of public health. He further noted that three new acts had been passed by the legislative assembly in 2002, namely the animal diseases (amendment) act 2002, the agricultural Commodities export act 2002, and the Pesticides act 2002 which had been notified to the WTo in document WT/aCC/Ton/12/add.3. Fao and South Pacific Commission consultants had assisted in the drafting of this legislation, which should be in conformity with international requirements. Tonga’s legislation did not refer specifically to scientific evidence, but Tonga’s regulations were, in fact, based on scientific principles. The representative of Tonga confirmed that Tonga had the capability of conducting its own risk assessments. import regulations required a code of conduct for imports and the release of imported goods, including initiation of pest risk analysis or pest risk assessment. The code of conduct basically entailed that all import requirements and restrictions were always aligned with international standards as documented in the Tonga Quarantine Manual 1998, and the import policies and procedures always recognized the technical basis of decision making in accordance with the SPS agreements, the oie guidelines, the iPPC international Standards for Phytosanitary Measures (iSPM), especially the iSPM no.1, no. 2 and no. 11, and other international guidelines. Tonga had no measures establishing tolerances for the use of additives or contaminants.

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121. asked to what extent Tonga’s standards aligned with relevant international standards, the representative of Tonga added that Tonga based its SPS measures on international standards to the extent possible. Tonga was a member of the Codex alimentarius Commission, the asia Pacific Plant Protection Commission (aPPPC) and the Pacific Plant Protection organization (PPPo), but not yet a contracting party to the international office of epizootics (oie) and the international Plant Protection Convention (iPPC). Tonga also received assistance from regional organizations, in particular the Secretariat of the PPPo and, on the animal side, the Secretariat of the Pacific Community. The Plant Quarantine act and its amendments were aligned with international standards such as those of the Fao (Food and agriculture organization) and the iPPC. The Pacific Plant Protection organisation operated actively to set standards fitting to Pacific requirements. Such standards were submitted to the member countries (Forum island Countries including new zealand and australia) for funding and implementation. in addition, the PPPo reviewed and drafted standards regulations of any member. The PPPo met every three years and was chaired by Tonga. Tonga used Fao and oie standards as a basis for its own standards relating to animals and animal products. regarding the principle of equivalence, Tonga recognized different measures achieving the same level of protection, and based its regulations in this respect on those of australia and new zealand.

122. importation was only prohibited when necessary to protect human, animal or plant life and health. a list of products prohibited in accordance with the Plant Quarantine act and in the animal diseases act is reproduced in Table 10. He stressed that importation of the items listed in Table 10 was not prohibited per se, but that the pest risk analysis system used by Tonga required those applying for import permits to provide technical and biological data to the Ministry of agriculture and Food indicating that the species were free of the regulated quarantine pest concern taking into account, as appropriate, the level of prevalence of the pest of concern in the area of origin of the shipment being considered for import or, if an effective treatment was available, import permits would be issued with additional quarantine requirements. Part iii of the Plant Quarantine regulations 1995 set out the main requirements for each prohibited item. if the regulations enabled the director to impose additional conditions or the inspector to require treatment of the item, the condition or treatment would be as set out in the Tonga Ministry of agriculture and Food’s Quarantine operations Manual. relevant abstracts from the manual would be made available to importers on request. in response to a Member who felt that it would be necessary to amend the relevant legislation to clarify the fact that “prohibited” products were actually only subject to “restriction”, i.e. import permits, the representative of Tonga replied that, in his view, there was no need to revise the legislation as several sections of the Plant Quarantine act 1998 and Plant Quarantine regulations 1995 provided an explanation of the term “prohibited”.

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123. Some Members requested more detailed information and specific legislative references to be able to evaluate Tonga’s SPS regime and its consistency with the WTo agreement on the application of Sanitary and Phytosanitary Measures. a Member noted that Tonga’s regime did not appear to be consistent with the SPS agreement on the issue of transparency. Tonga would need to have notification procedures in place so that its trading partners could be made aware of changes in Tonga’s quarantine measures, for example, quarantine arrangements against foot and mouth disease. Concerning quarantine measures against foot and mouth disease, the representative of Tonga clarified that Tonga had taken precautionary measures by not allowing importation of animals or animal products from foot and mouth disease infected countries and regions. Tonga screened high risk vessels coming from infected countries, and screened air passengers arriving from infected destinations.

124. The representative of Tonga confirmed that Tonga had the technical infrastructure in place required to implement the SPS agreement. He provided notes on the implementation and administration of the SPS agreement, circulated in document WT/aCC/Ton/9/rev.1. Tonga’s SPS enquiry Point and notification authority will be operated by one and the same body within the Ministry of agriculture and Food (MaF) called the national SPS notification authority and enquiry Point. The national SPS notification authority and enquiry Point was operational and was headed by the director, MaF. it could be contacted at:

Ministry of agriculture and Food national SPS notification authority and enquiry PointP.o. Box 14, nuku’alofa, Kingdom of TongaPhone: +(676) 23038/23402Fax: +(676) 23093/24271/24922

email: [email protected], [email protected]

The authority was staffed by one official and five working committee members comprising technical advisors drawn from relevant divisions of the MaF. The enquiry Point would provide answers to all reasonable questions from interested Members as well as undertake the role of providing relevant documents, in accordance with annex B of the SPS agreement. The notification authority will be responsible for notifying changes in Tonga’s sanitary or phytosanitary measures, in accordance with the notification procedures of annex B of the SPS agreement. The director was responsible for ensuring that Tonga’s transparency obligations under the agreement were met on an ongoing basis, including making notifications to the WTo and maintaining publications and procedures required by the agreement. The representative of Tonga noted that the staff of the national SPS notification authority and enquiry Point would be guided by the WTo Secretariat Handbook on «how to

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apply the transparency provisions of the SPS agreement of September 2002». He added that Tonga intended to provide additional training to responsible government officials to ensure that they were fully conversant with the requirements of the SPS agreement upon accession.

125. The representative of Tonga also stated that he believed that Tonga had the ability to apply the provisions of the SPS agreement and that Tonga’s existing legislation provided an adequate basis for the application of the agreement. Tonga would develop a specific plan for ongoing implementation of SPS obligations and seek technical assistance to ensure that it had the capacity to implement the SPS agreement correctly on an ongoing basis. The representative of Tonga indicated that Tonga was prepared to accept the obligations of the WTo agreement on Sanitary and Phytosanitary Measures from the date of accession without any transitional period.

126. The representative of Tonga confirmed that Tonga would observe the requirements of the agreement on Sanitary and Phytosanitary Measures from the date of accession. The representative of Tonga confirmed that his government had already established an enquiry point in the Ministry of agriculture, Forestry and Food. The director of that Ministry was responsible for ensuring that Tonga’s transparency obligations under the agreement on the application of Sanitary and Phytosanitary (SPS) Measures were met on an ongoing basis, including making notifications to the WTo, and maintaining the publications and procedures required by the agreement, including publication with sufficient time for public comment prior to enactment. Tonga would specify clearly the manner for publishing any proposed SPS measures (as defined in annex a of the SPS agreement). it would also specify the government body/bodies responsible for developing and applying such measures, and to which bodies importers and exporters could direct enquiries concerning import requirements and other relevant information. Tonga administered its existing requirements on imports for sanitary and phytosanitary purposes listed in Table 10 based on principles of pest risk analysis and the international standards of Codex alimentarius, iPPC, Fao and oie, and these existing requirements would be notified to the WTo Committee on Sanitary and Phytosanitary Measures upon accession. any SPS standards, technical regulations, and conformity assessment procedures adopted after accession would be developed and applied in conformity with the provisions of the agreement, including publication prior to implementation to allow interested parties the opportunity for review and comment as provided for in the agreement. Tonga would review its existing requirements in light of its obligations under the agreement. existing or new measures would be applied on a non-discriminatory basis, i.e. providing for national treatment and MFn treatment to all imports. The representative of Tonga also confirmed that Tonga would apply the agreement from the date of accession without recourse to any transition period. He also confirmed that Tonga would provide relevant government officials with training to ensure that, from the date of accession, they were fully conversant with the requirements of the

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SPS agreement. The Working Party took note of these commitments.

- Trade-related investment measures

127. The representative of Tonga said that, other than the measures set out in the industrial development incentives act (1978) in relation to the development licence programme, Tonga had no specific measures related to investment in trade-related businesses. These measures were, in his view, not inconsistent with the WTo agreement on Trade-related investment Measures, and Tonga therefore did not intend to notify any measures under the agreement.

128. Having reviewed the industrial development incentives act, some Members considered that the act referred to import substitution, export performance or local content criteria which would constitute trade-related investment measures. it was noted that, even though these provisions did not appear to be applied in practice, the possibility to deny or revoke an industry’s licence if export requirements were not met qualified as a TriM. Members sought a commitment that the industrial development incentives act would be amended, and that the revised act and associated practices and decision-making procedures would be consistent with the WTo, including the TriMs agreement.

129. The representative of Tonga recalled the discussion that had taken place in the Working Party on Tonga’s investment regime and in particular the commitment made by Tonga to repeal the industrial development incentives act (paragraph 24). He further clarified that the idi act would be suspended on 1 July 2006 and repealed by december 2006, thus eliminating the benefits which had concerned members of the Working Party. The Foreign investment act 2002 was aimed at regulating foreign investment. The act had been passed by Parliament and would enter into force upon implementation of the Foreign investment regulations by december 2005. The representative of Tonga stated that, in his view, the Foreign investment act 2002 was consistent with trade-related investment measures under the gaTT 1994.

130. The representative of Tonga said that Tonga would not maintain any measures inconsistent with the TriMs agreement, that Tonga’s laws would implement this commitment, and that Tonga would apply the TriMs agreement from the date of accession without recourse to any transition period. The Working Party took note of this commitment.

- State-trading entities

131. noting that the government of Tonga had had a stake in 26 enterprises in 1998, some Members requested Tonga to provide information on any state trading enterprises operating under exclusive or special privileges in relation to imports or

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exports. Specific questions were raised concerning the activities of Tonga investments ltd., Frisco, Primary Produce limited, royal Beer Co. ltd., leiloa duty Free Shops (Tonga) ltd., Sea Star Fishing Co. ltd., Tonga Timber ltd., and the government Supplies department.

132. The representative of Tonga replied that a description of the status and operations of enterprises wholly and partially owned by the government of Tonga could be found in paragraphs 27 to 29 of this report. none of the enterprises listed enjoyed a government monopoly in their activities. a privatization paper had been endorsed by the Cabinet, identifying leiola duty Free as a candidate for privatization in 2003/04. in his view, Tonga maintained no State-trading enterprises as defined by gaTT article XVii and the Understanding on the interpretation of article XVii of the gaTT 1994.

133. The representative of Tonga confirmed that Tonga would apply its laws and regulations governing the trading activities of any State-owned enterprises and State-owned or other enterprises with special or exclusive privileges and would act in full conformity with the provisions of the WTo agreement, in particular article XVii of the gaTT 1994 and the Understanding on that article and article Viii of the gaTS. Tonga would notify any enterprise falling within the scope of article XVii. The Working Party took note of these commitments.

- Free zones, special economic areas

134. The representative of Tonga said that Tonga had no designated free zones or free economic zones.

135. The representative of Tonga said that any free zones or special economic areas which Tonga established would be fully subject to the coverage of its commitments in its Protocol of accession to the WTo agreement and that Tonga would ensure enforcement of its WTo obligations in those zones or areas. in addition, goods produced in any such zones or areas under tax and tariff provisions that exempt imports and imported inputs from tariffs and certain taxes would be subject to normal customs formalities when entering the rest of Tonga, including the application of tariffs and taxes. The Working Party took note of these commitments.

- government procurement

136. The representative of Tonga said that no specific procedures applied to goods and services purchased within Tonga. He confirmed that local suppliers did not benefit from any preferential margin in government procurement. His government had appointed agents in australia and new zealand to handle procurement of goods and services to be obtained outside Tonga.

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137. Procurement of supplies was organized through public tender, open to all local and overseas suppliers. all bids were evaluated at the closing date of the Tender, and the lowest-price bidder would be awarded the contract or order. a specific form (“overseas requisition”) would be prepared for winning bids from overseas. The form was endorsed by Treasury and approved by the Prime Minister before being sent to the government agent in the country concerned. The overseas agent would place the order with the supplier, arrange transportation, verify specification expedites etc., pay the supplier and bill the government of Tonga.

138. asked whether Tonga intended to initiate negotiations for accession to the agreement on government Procurement, the representative of Tonga noted that this plurilateral agreement had not been drawn up with the situation of very small developing countries, such as Tonga, in mind. Few, if any, Tongan government contracts would be covered due to the value thresholds applied under the agreement. Moreover, large contracts were often implemented in the context of economic aid programmes, which would be covered by the procurement rules of the organizations concerned.

- agricultural policies

139. The representative of Tonga said that the policies of his government regarding trade in agricultural products did not differ significantly from those applicable to trade in general. The establishment of TongaTrade and the facilities offered by the Tonga development Bank were aimed at encouraging the development and diversification of agricultural and commodity exports. He stressed that Tonga had not introduced any price support or export subsidy measures. He confirmed that expenditures for infrastructural facilities required for the facilitation of export were limited to the provision or construction of capital works only, and did not constitute subsidies to inputs or operating costs. The fees paid by exporters for these types of facilities were commensurate to the costs of the services rendered.

140. The policies of his government were geared towards diversifying the agricultural sector through strengthening and developing infrastructural and support mechanisms such as the introduction of new crop varieties, market development, new quarantine and new methods of treatment for produce, and to provide continuous assistance to farmers.

141. The representative of Tonga provided information on domestic support and export subsidies in agriculture for the period 1996/97 to 1998/99 in document WT/aCC/SPeC/Ton/3 and revisions 1, 2 and 3. He noted that all support recorded during this period qualified as “green Box” measures exempt from the reduction commitment. His government provided a number of general service measures, mainly through the Ministry of agriculture and Forestry, in part financed by donor

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countries and agencies. The figures provided in the supporting tables reflected the government of Tonga’s financial contribution to these measures.

142. Tonga’s commitments on agricultural tariffs and on domestic support and export subsidies for agricultural products are contained in the Schedule of Concessions and Commitments on goods (document WT/aCC/Ton/17/add.1) annexed to Tonga’s Protocol of accession to the WTo.

- Trade in civil aircraft

143. a Member noted that Tonga exempted ground equipment and technical supplies required for use at airports in connection with air services from customs duty, and asked whether Tonga would consider binding its customs duties and other revenue charges on civil aircraft and parts at zero in its Schedule of Concessions and Commitments on goods.

144. The representative of Tonga confirmed that, prior to 1 april 2005, ground equipment and technical supplies for use at airports in connection with air services were exempt from customs duties, but not from the 20 per cent Port and Services Tax. Under the new taxation regime, aircraft and aircraft parts for both domestic and international airlines were subject to the Consumption Tax. However, in the case of international airlines, the tax was refunded upon departure of the aircraft from Tonga. as for the tariff rate to be applied to aircraft and aircraft parts, it was still to be finalized. He added that the tariff on aircraft and parts would not have a protective effect as Tonga had no domestic production of these goods.

V. Trade-relaTed inTelleCTUal ProPerTY regiMe

- general

145. The representative of Tonga provided information on the implementation of the WTo agreement on Trade-related aspects of intellectual Property rights (TriPS) in document WT/aCC/Ton/6.

- intellectual property authorities

146. authorities responsible for policy formulation and implementation included the intellectual Property and Company registration (iPCr) office, accountable for the implementation of intellectual property legislation; the Hon. Minister of labour, Commerce and industries, the Minister responsible for the industrial Property act 1994, the Copyright act 2002, the Protection of geographical indications act 2002, the Protection of layout-designs (Topographies) of integrated Circuits act 2002, and

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the Unfair Competition act 2002; and the Supreme Court, responsible for settling intellectual property disputes. all intellectual property regulations had to be approved by the Cabinet.

- intellectual property legislation

147. The representative of Tonga said Tonga would amend its intellectual property legislation to ensure consistency with WTo intellectual property rules and obligations. The main pieces of Tonga’s current intellectual property regime were the industrial Property act 1994, the Protection of geographical indications act 2002, the Protection of layout-designs (Topographies) of integrated Circuit act 2002, the Copyright act 2002, and the Protection of Unfair Competition act 2002. The industrial Property act had been implemented since 1 February 2000, the Copyright act had been enacted and was expected to be implemented by 1 July 2006, and regulations implementing the Protection of geographical indications act, the Protection of layout-designs (Topographies) of integrated Circuits act, and the Unfair Competition act had been endorsed by Cabinet and submitted to the law reform Committee.

148. Some Members were concerned that several TriPS requirements, in particular the most-favoured nation and national treatment provisions of the TriPS agreement, had not been included in Tonga’s legislation. The representative of Tonga acknowledged that Tonga’s current intellectual property regime did not conform fully to WTo requirements. Further work would be needed to bring its legislation into conformity with WTo rules and obligations. He accordingly requested that Tonga be granted a transitional period permitting Tonga to complete this process after its accession to the WTo. Technical assistance would be required to help introduce the necessary legislative changes.

- Participation in international intellectual property agreements

149. The representative of Tonga said that Tonga had become member of the World intellectual Property organisation on 14 June 2001, and had been a party to the Paris Convention for the Protection of industrial Property and the Berne Convention for the Protection of literary and artistic Works as of the same date. These two conventions were self-executing under Tonga’s legal regime. His government was considering membership in the Patent Cooperation Treaty, the Madrid Protocol and agreements, and the Hague agreement. His government and was seeking more information on the geneva Phonogram Convention, the WiPo Copyright Treaty, the WiPo Performance and Phonogram Treaty and the 1961 rome Convention.

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- SUBSTanTiVe STandardS oF ProTeCTion, inClUding ProCedUreS For THe aCQUiSiTion and MainTenanCe oF inTelleCTUal ProPerTY rigHTS

- Copyright and related rights

150. The representative of Tonga said that the Copyright act of 1985, revised in 1987 and 1988, had provided some protection to literary and dramatic works. However, the act was not entirely compliant with the TriPS agreement, and its entry into force had been delayed due to lack of implementing copyright regulations. The act required revision to provide protection for computer programmes as literary works under the Berne Convention 1971; databases by copyright; rental rights for owners of rights in films, sound recordings, phonograms and computer programmes; protection to broadcasting organizations to control the use of the broadcast signals for a minimum of 20 years; and to protect performers from unauthorized recording and broadcasting of live performances.

151. He added that Parliament had passed a new law - the Copyright act 2002 – to ensure conformity with the TriPS agreement. The act, which would be implemented by 1 July 2006, repealed the existing copyright legislation.

- Trademarks, including service marks

152. The representative of Tonga said that trademarks were protected in accordance with the industrial Property act 1994, Part V and Vi. Protection for well known trademarks or service marks was provided for in Part V, Section 26 (2) (e) of the act. He noted that some provisions of the TriPS agreement, notably articles 15.4 (nature of the goods and services), 17 (exceptions) and 20 (special requirements), had not been included in Tonga’s existing legislation, but would be covered in the new legislation and regulations that would be introduced to ensure full conformity with the requirements of the WTo TriPS agreement. amendments to the industrial Property act 1994 had been endorsed by the Cabinet and submitted to the law reform Committee.

- geographical indications, including appellations of origin

153. The representative of Tonga said that geographical indications were protected under the Protection of geographical indications act 2002. The act was, in his view, in full compliance with the requirements of the TriPS agreement. implementing regulations had been endorsed by the Cabinet and submitted to the law reform Committee.

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- industrial designs

154. The representative of Tonga said that industrial designs, including textile designs, were protected under the industrial Property act 1994 (Part iV) and the intellectual Property regulations 1998. amendments to the industrial Property act 1994 had been endorsed by the Cabinet and submitted to the law reform Committee.

- Patents

155. The representative of Tonga said that the scope of patentability, the rights conferred by a patent and the criteria under which non-voluntary licenses were granted, were laid down in the industrial Property act 1994 and in the industrial Property regulations 1998. The act had been in force since 1 February 2000. The relevant provisions of the act and regulations were, in his view, in compliance with the requirements of the TriPS agreement. Tonga was not yet a party to the Patent Cooperation Treaty, but was considering membership.

156. The intellectual Property and Company registration (iPCr) office acted as Tonga’s Patent office. Patent holders from third countries could apply for registration in accordance with the industrial Property act 1994. The law afforded patent protection for any invention, whether a product or process, in any field of technology if it was new, involved an inventive step, and was industrially applicable. applications for patents were to be made using Form 1, prescribed in the industrial Property act 1994, and submitted to the iPCr office. Tonga had an agreement with iP australia for it to conduct technical examinations of inventions and to provide search reports as to the patentability of inventions. Patent terms of up to 20 years from the filing date were available.

- Plant variety protection

157. The representative of Tonga said that plant varieties were currently not protected under any legislation in Tonga. However, a Plant Variety, Seed and Seedlings Bill was being drafted with the assistance of UPoV.

- layout designs of integrated circuits

158. The representative of Tonga said that protection of layout designs of integrated circuits was provided for in the Protection of layout-designs (Topographies) of integrated Circuit act 2002. regulations implementing the layout designs act had been endorsed by the Cabinet and submitted to the law reform Committee. The relevant provisions of the act and regulations were, in his view, in full compliance with the requirements of the TriPS agreement.

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- requirements of undisclosed information, including trade secrets and test data

159. The representative of Tonga said that Tonga protected undisclosed data against unfair commercial use in accordance with Section 9 of the Protection against Unfair Competition act 2002. Pursuant to this act, any act or practice, in the course of industrial or commercial activities, that resulted in the disclosure, acquisition, or use of secret information without the consent of the person lawfully in control of that information (the rightful holder) and in a manner contrary to honest commercial practices constituted an act of unfair competition. information was considered secret if (i) it was not generally known among or readily accessible to persons within the circles that normally dealt with that kind of information, (ii) had a commercial value because it was secret, and (iii) the rightful holder had taken reasonable steps to keep it secret. Secret tests or other data submitted to a competent authority for marketing approval of pharmaceutical or agricultural chemical products using new chemical substances were protected against disclosure, except where necessary to protect the public or where steps had been taken to ensure that the data were protected against unfair commercial use. The term of protection was determined by the court upon application, taking into account the nature of the tests or data and the efforts and expenditure involved, but should not be inferior to five years, except in exceptional circumstances. Prior to issuance of marketing approval of any pharmaceutical and agricultural chemicals products, the relevant Ministries in Tonga would determine the existence of a patent covering a product for which an application for marketing approval had been filed by a party other than the patentee, and must not approve such application for marketing approval until the date of the expiration of such patent.

- MeaSUreS To ConTrol aBUSe oF inTelleCTUal ProPerTY rigHTS

160. The representative of Tonga said that measures to control the abuse of intellectual property rights were included in the industrial Property act 1994 and the Protection of Unfair Competition act 2002. However, Tonga’s legislation would need to be amended to ensure that such measures were in line with TriPS requirements. amendments to the industrial Property act 1994 and an enforcement and Border Measures Bill had been endorsed by the Cabinet and submitted to the law reform Committee. He added that his government had launched a limited scale public awareness programme on intellectual property regulations and the iPCr office was organizing training for customs officials. Further training would include police forces.

161. Complaints concerning intellectual property matters could be lodged with the iPCr office. decisions of the iPCr could be appealed to a court.

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- enForCeMenT

162. The representative of Tonga indicated that Tonga would need technical assistance to complete the necessary legislative changes to implement the TriPS agreement and to ensure that the agreement’s provisions were being observed, including the introduction of provisions addressing civil judicial procedures and remedies, provisional measures, administrative procedures and remedies, special border measures, and criminal procedures, as well as to carry out additional steps to implement and enforce the TriPS agreement, e.g. the training of personnel and the development of infrastructure. in answer to questions raised, he stated that pirated goods were sold in Tonga although the majority of the public did not recognize them as such. His government was introducing programmes to raise the awareness of intellectual property rights.

163. The representative of Tonga said that Tonga had enacted new legislation in recent years that provided for WTo-consistent rules for the protection of intellectual property in several areas, including the Copyright act 2002, the Protection of geographical indications act 2002, and the Protection of layout designs (Topographies) of integrated Circuit act 2002. Section 6(1)(f) of the Copyright act 2002 prohibited the importation of copies of copyright works without the permission of the right holder. However, importation of such goods was allowed for personal use under Section 15 of the act. He acknowledged that further work would be needed in other areas to implement new legislation to bring Tonga’s intellectual property regime into conformity with the WTo agreement on TriPS. existing legislation and regulations, covering Patents, industrial Property, Trademarks and services marks would need amendment. amendments to the industrial Property act 1994, as well as draft regulations for the geographical indication act 2002 and the Protection of layout designs (Topographies) of integrated Circuits act 2002, had been endorsed by the Cabinet and submitted to the law reform Committee for verification before submission to the Parliament. all these texts would be circulated to the Working Party for review prior to the conclusion of the negotiations. The government of Tonga intended to enact these amendments and implement the relevant additional regulations by 31 december 2007.

164. in addition, an enforcement of intellectual Property rights including Border Measure Bill, known as the enforcement Bill, had been drafted. The draft provided measures to remedy or prevent the violation of intellectual property rights. it empowered the Minister to establish a cooperative body composed of officials from the Customs and Trade department, the Police, and intellectual Property to carry out enforcement of intellectual property rights. The enforcement Bill did not impose any criminal penalties for the infringement of intellectual property rights. it did not stipulate any specific civil penalties, but it established procedures and measures to be followed by the Court and the Customs department in the event of infringement or

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imminent infringement actions. Measures and remedies to be ordered by the Court included injunctions to prevent further infringement or imminent infringement, provisional measures to prevent likely irreparable harm of imminent infringement, damages, compensation, the obligation for the infringer to relay information to the right holder regarding the counterfeit or pirated goods, destruction of the pirated copyright goods and/or counterfeit trademark goods, and any other remedy provided for in Tongan law. Pursuant to the Section on “Border Measures by the Customs department” of the Bill, Customs had the authority to suspend clearance of counterfeit trademark goods and pirated copyright goods (i) upon order of the Court or (ii) upon the Customs department’s own initiative (as a temporary measure to enable the right holder to apply to the court to suspend customs clearance). The Bill had been endorsed by the Cabinet and submitted to the law reform Committee.

165. asked about criminal and civil penalties for infringement of intellectual property rights, the representative of Tonga said that infringement of owners’ rights was punishable by a fine of ToP 5,000 and/or five years imprisonment pursuant to Section 43(4) of the industrial Property act 1994. all complaints regarding intellectual property infringements should be lodged with the Supreme Court, except in the case of opposition to the registration of marks, which should be lodged with the iPCr office. responding to questions, he reminded the Working Party of the extreme smallness of Tonga’s economy, which limited the gains of right holders in upholding their rights, and thus their inclination to pursue violations of their rights in Tonga.

166. at present key Ministries lacked expertise about the obligations created under the TriPS agreement. Tonga recognized that cooperation with other Forum group countries in the area of intellectual property protection would be useful, and membership of the Patent Cooperation Treaty, the Madrid Protocol and the Hague agreement would facilitate compliance with the TriPS agreement. Tonga intended to accede to these treaties by 1 January 2007. Tonga was a party to both the Paris and Berne Conventions. Care had been taken to ensure that all intellectual property legislation was in line with the provisions of these Conventions. The provisions, particularly those relating to national treatment, priority and protected properties were fully enforced.

167. The representative of Tonga thanked the Working Party for its recognition that technical assistance would be required and the governments concerned for the technical assistance that they had already provided. For the reasons given above, the government of Tonga requested that the Working Party grant a transitional period to 30 June 2008 from the date of its accession, to obtain technical assistance and equip the government to fully implement the obligations of the TriPS agreement. He confirmed that, if such a transitional period were granted, articles 3, 4 and 5 of the agreement, providing for, inter alia, national treatment and MFn treatment under

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current legislation in place would apply, and Tonga would ensure that any changes made in its laws, regulations and practice in this period would not result in a lesser degree of consistency with the provisions of the TriPS agreement that existed on the date of accession. in addition, Tonga would not grant patents, trademarks, or copyright, or marketing approvals for pharmaceutical or agricultural chemicals inconsistent with the provisions of the TriPS agreement. He confirmed that during the transition period Tonga would implement the provisions of article 39.3 to protect against unfair commercial use of undisclosed test or other data submitted in support of applications for marketing approval of pharmaceutical or of agricultural chemical products which utilize new chemical entities, by providing that no person other than the person who submitted such data may, without the permission of the latter person, rely on such data in support of an application for product approval for a period of at least five years from the date on which Tonga granted marketing approval to the person that produced the data. Prior to the issuance of marketing approval of any pharmaceutical and agricultural chemical products, the relevant Ministries in Tonga would determine the existence of a patent covering a product for which an application for marketing approval had been filed by a party other than the patentee, and would not approve such application for marketing approval until the date of the expiration of such patent. Tonga also would implement the provisions of article 70.8 and 70.9 to provide “pipeline” protection and exclusive marketing rights during the transition period.

168. The representative of Tonga also stated that, should a transition be granted, existing rates of infringement would not in his view increase significantly over this transition period and that any infringement of intellectual property rights would be addressed immediately in cooperation and with assistance from affected right holders. He added that Tonga would seek out all available technical assistance to ensure that its capacity to enforce fully its TriPS-consistent legal regime upon expiration of the transition period is assured. in response to requests from delegations for more specificity, the representative of Tonga presented an action Plan setting out details of the steps that still remained to be taken in order to achieve this objective and a timetable for each step (Table 11).

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Table 11: action Plan for conformity with the TriPS agreement

action deadlinedrafting and circulation of amendments to existing legislations to address deficiencies vis-à-vis the WTo agreement on TriPS as identified in response to WT/aCC/9, specifically:

- industrial Property act 1994;

- Copyright act 2002.

Prior to accession

Copyright act 2002 has been enactedParliamentary passage of amendments to the industrial Property act 1994


amendments to industrial Property act 1994 have been endorsed by the Cabinet and submitted to the law reform Committee for verification

drafting of new legislations, covering:

- general and enforcement obligations under the TriPS agreement (enforcement Bill).

- Protection of undisclosed information and trade secrets.

Prior to accession

Protection against Unfair Competition act 2002 enacted (protection of undisclosed information and trade secrets is provided for by section 9)

Parliamentary passage of the enforcement Bill


drafting and passage of new legislation, covering:

- Plant variety protection


drafting and implementation of regulations for intellectual Property legislations, specifically:

- geographical indications act 2002;

- Protection of layout designs (Topographies) of integrated Circuits act 2002; and

- new legislations required, as detailed above.


regulations for the geographical indications act 2002 and the Protection of layout designs (Topographies) of integrated Circuits act 2002 have been endorsed by Cabinet and submitted to the law reform Committee

development of manuals and operating procedures

no later than 30 June 2007

appointment of staff no later than 30 June 2007

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action deadlineTraining of key iP personnel no later than 31 december 2007

Training for users (development of information brochure and training program)


Full implementation of the agreement on Trade-related aspects of intellectual Property rights


169. The representative of Tonga confirmed that Tonga would apply the agreement on Trade-related aspects of intellectual Property rights no later than 30 June 2008 according to the action Plan in Table 11 with the understanding that during this period protection for intellectual property rights listed in paragraphs 167 and 168 would be applied in Tonga. The Working Party took note of this commitment.

Vi. PoliCieS aFFeCTing Trade in SerViCeS

170. The representative of Tonga said that services accounted for more than 50 per cent of Tonga’s gdP. While the Ministry of labour, Commerce and industry – which would serve as Tonga’s services enquiry point - was responsible for formulating policies related to services sectors, there was no comprehensive policy and individual services sectors were regulated independently. overall, the regulatory structure was very simple. The licensing act, Cap. 47, which covered most services, required services providers to hold a licence obtained against payment of an annual fee (detailed information on the fee structure was provided in document WT/aCC/Ton/3, pages 29-31). Tonga’s legislation contained no specific provisions regulating monopolies, safeguard measures, international payments, or government procurement of services. a 25 per cent local participation requirement for access to foreign service suppliers in retail, construction, and tourism services needing no special equipment and skills, which had been implemented for economic development purposes, had been abolished.

171. He added that Tonga applied fully the most-favoured-nation principle to trade in most services sectors, including in the recognition of professional qualifications. He considered Tonga’s laws and regulations on certification for foreign qualification in compliance with the provisions of the general agreement on Trade in Services (gaTS). Tonga had no national qualification standards of its own, but accepted qualifications from any recognized foreign institution. in the case of medical practitioners, the director of Health applied the standards of australia, Canada, new zealand, the United Kingdom, and the United States, in accordance with the Medical registration act, Cap. 75. requests were dealt with case-by-case when recognition of foreign professional qualifications involved countries not explicitly mentioned in the relevant legislation.

234 WTo BiSd 2005


172. legal services were regulated by the 1989 law Practitioners act. The act required any legal practitioner to be included in the roll of law Practitioners held by the Supreme Court, to possess a practising certificate, and be a member of the Tonga law Society. Membership in the Tonga law Society required documented professional knowledge and experience in common law jurisdiction, minimum three character references, and an expressed intent to practice law in Tonga. However, the legal practitioner did not need to reside in Tonga. appearance before Tonga’s Supreme Court required a diploma in law from the University of South Pacific or at least a Bachelor’s degree in law from a recognized university. Foreign lawyers were subject to the same rules as domestic legal practitioners. The representative of Tonga confirmed that foreign legal firms and lawyers were allowed to provide consultations on legislation other than that of their home state.

173. Financial services were regulated by the 1991 Financial institutions act and regulations, the national reserve Bank act, the Tonga development Bank act, the Westpac Bank of Tonga act, the Foreign exchange Control act and regulations, and the Money laundering and Proceeds of Crime act. licenses were delivered by the Ministry of Finance based on inquiries by the national reserve Bank of Tonga, which supervised the activities of banks, and approval of the Privy Council. The annual licence fee amounted to ToP 3,000. Financial services licenses were not subject to numerical or geographical limitations. in 1998, three commercial banks were operating in Tonga in addition to the Tonga development Bank, providing banking services such as deposits, loans, and local and international money transfer. He confirmed that financial institutions were allowed to provide financial information and advisory services. Tonga allowed the establishment of new foreign commercial banks, merchant banks and other financial services companies both in the form of wholly-owned subsidiaries or direct branches. in addition, Tonga permitted the establishment, including through direct branches, of new foreign life and non-life insurance companies, insurance brokers and agencies, and insurance underwriting and management companies servicing the domestic market. Financial services could also be provided by authorized foreign exchange dealers.

174. Tonga’s telecommunications market had been opened up following the adoption of the Communications act 2000. The Tonga Communications Corporation (TCC), a government-owned entity, was an integrated provider of network infrastructure and communications services but competed with a second full service provider. Both companies provided domestic and international calling services, as well at internet services.

175. Under the 2000 Communication act, any person or company wishing to deliver domestic or international communication services, including television, radio, internet, and mobile phone services, could apply for a licence. licenses were delivered by the Privy Council under conditions set out by the Council, including (i) the

235WTo BiSd 2005

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approval by the Tonga Telecommunication Commission of the technical operating details of the service, (ii) sufficient funds to establish and maintain such a service, and (iii) payment of an annual licence fee (ToP 5,000 in 2000). in addition, with a view to monitoring developments in the telecommunication sector and ensuring fair competition, approval by the Cabinet was also required. a licence was granted for five years and could be renewed every two years thereafter. The transfer of a licence was subject to the approval of the Privy Council. licenses could be revoked in case of non-payment of the licence fee, and lapsed after 12 months of non-use. The licence holder was expected to exercise “self-censorship” in respect of cultural sensitivities. as a result of these reforms, the telecommunications market would be fully liberalized from 1 January 2008.

176. as to accountancy services, licenses were delivered by the Ministry of labour, Commerce and industry. approval from the Tonga Society of accountants was not needed, and no market access restrictions were imposed on foreign accountants and foreign accounting firms to practice in Tonga. education services had been opened to foreign providers, and several religious institutions had established secondary schools. other academic institutions, such as the University of the South Pacific extension Centre, provided degree-level courses.

177. Specific regulations applied to shipping and electricity-related services. Shipping licenses had to be endorsed by the Ministry of Marine and Ports, and the Tonga electric Power Boards verified qualifications and services to be provided before issuing licenses for electricity-related services. Foreign ship owners or shipping companies needed to establish an office in Tonga to be eligible to register ships under the Tongan Flag. The representative of Tonga confirmed that no specific requirements applied to practice engineering, computing and architectural services in Tonga, except possession of a licence delivered by the Ministry of labour, Commerce and industry. licenses were delivered upon presentation of a certificate from any recognized university, irrespective of the country, and a reference document from the former employer in the same business activity (optional).

178. Tonga’s commitments on services are contained in the Schedule of Specific Commitments in Services (document WT/aCC/Ton/17/add.2) annexed to Tonga’s Protocol of accession to the WTo.

Vii. TranSParenCY

- Publication of information on trade

179. The representative of Tonga said that all laws and regulations affecting trade were published in the Tongan government gazette. Copies of specific laws and regulations could be purchased from the government Printing department.

236 WTo BiSd 2005


information on laws and regulations relating to trade was also available, free of charge, from the Trade Policy Unit at the Ministry of labour, Commerce and industries. an investment promotion website, which would be the official website of the Ministry of labour, Commerce and industries, was in the process of being established by the industries division of the Ministry of labour, Commerce and industry. Tonga was receiving technical assistance on this matter from the Multilateral investment guarantee agency (Miga), a member of the World Bank group. Tonga intended the website to be dedicated to the publication of all regulations and other measures pertaining to or affecting trade in goods, services and TriPS, where possible prior to enactment. This website would be updated on a regular basis and would be readily available to WTo Members, individuals and enterprises. Tonga intended, where possible, to provide a reasonable period, e.g. no less than 30 days, for comment to the appropriate authorities of Tonga before the regulations and other measures pertaining to or affecting trade in goods, services and TriPS were implemented, except for those laws, regulations and other measures involving national emergency or security, or for which the publication would impede law enforcement. Tonga intended to implement this facility as soon as possible so that it could test how its plans work in practice.

180. The representative of Tonga confirmed that, from the date of Tonga’s accession, Tonga would fulfil the transparency requirements set out in article X of the gaTT 1994, article iii of the gaTS and other WTo agreements including those requiring prior comment and publication. Tonga confirmed that all regulations and other measures pertaining to or affecting trade in goods, services and TriPS, except for laws, regulations and other measures involving national emergency or security, or for which publication would impede law enforcement, would be published. He further confirmed that all laws, regulations, rulings, including administrative rulings of general application, decrees or other measures related to trade in goods would be published in the official gazette, and that no law, regulation, etc. relating to trade in goods, services and TriPS would become effective prior to such publication. The publication of such laws, regulations and other measures of general application would include the effective date of these measures and list, where appropriate and possible, the products and services affected by the particular measure, identified for customs purposes by appropriate tariff line and classification. The Working Party took note of these commitments.

- notifications

181. The representative of Tonga said that at the latest upon entry into force of the Protocol of accession, Tonga would submit all initial notifications required by any agreement constituting part of the WTo agreement. as new legislation implementing the provisions of WTo agreements was enacted, revised notifications would be provided. any regulations subsequently enacted by Tonga which gave effect to the laws enacted to implement any agreement constituting part of the WTo

237WTo BiSd 2005

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agreement would also conform to the requirements of that agreement. The Working Party took note of these commitments.

Viii. Trade agreeMenTS

182. The representative of Tonga said that Tonga was a member of the South Pacific Forum, a political grouping of independent and self-governing States in the South Pacific. The South Pacific Forum had been established in 1971 to develop a collective response to regional issues. Tonga was also a party to the South Pacific regional Trade and economic Co-operation agreement (SParTeCa), signed in July 1980. The SParTeCa agreement was a preferential non-reciprocal trade agreement whereby australia and new zealand extended duty free and unrestricted or concessional access for virtually all products originating in the Forum island members, i.e. Cook islands, the Federated States of Micronesia, Fiji, Kiribati, Marshall islands, nauru, niue, Papua new guinea, Solomon islands, Tonga, Tuvalu, Vanuatu and Western Samoa. The agreement included provisions for general economic, commercial and technical co-operation and safeguard provisions against product dumping. He confirmed that Tonga did not provide any duty-free or concessional access to products originating in australia and new zealand under this agreement.

183. He added that Tonga granted preferences to members of the Pacific island Countries Trade agreement (PiCTa), ratified by Tonga in 2001. The PiCTa provided for progressive phasing out of tariffs between Forum island countries by 2010, as part of the establishment of a Pacific regional free trade area in goods. The first tariff cut took place upon entry into force of the agreement in april 2003. Tonga also participated in the Pacific agreement on Closer economic relations (PaCer), which had entered into force on 3 october 2002. Members of the PaCer included Pacific Forum island Countries, australia, and new zealand. although the PaCer was not a free trade agreement, it set a timetable for regional free trade negotiations with australia and new zealand.

184. Tonga and Fiji had signed a bilateral trade agreement in 1995, aimed at facilitating the free flow of agricultural products. The agreement was non-reciprocal, having been formulated shortly after a bilateral quarantine protocol had been established for 20 agricultural items imported into Fiji from Tonga. a joint committee met bi-annually to discuss matters of mutual trade interest.

185. He added that Tonga had participated in the regional long-Term Sugar agreement, running from 1995-1998. Under this agreement, Fiji had supplied agreed quantities of sugar to Kiribati, Solomon islands, Tonga, Tuvalu and Western Samoa at pre-determined prices. The agreement had been administered by the Forum Secretariat, located in Suva (Fiji). Tonga’s entitlement had been allocated among private firms based on their requests without any form of price subsidy.

238 WTo BiSd 2005


186. Tonga had also signed and ratified the Cotonou agreement between the european Communities (eC) and 70 countries in africa, the Caribbean and the Pacific (aCP), whereby the eC extended non-reciprocal trade preferences to the aCP States. Preliminary negotiations with the eU on the establishment of an economic partnership agreement had commenced.

187. The representative of Tonga stated that his government would observe the provisions of the WTo, including article XXiV of the gaTT 1994 and article V of the gaTS in its trade agreements, and would ensure that the provisions of these WTo agreements for notification, consultation and other requirements concerning preferential trading systems, free trade areas and customs unions of which Tonga was a member were met from the date of accession. The Working Party took note of these commitments.

ConClUSionS

188. The Working Party took note of the explanations and statements of Tonga concerning its foreign trade regime, as reflected in this report. The Working Party took note of the commitments given by Tonga in relation to certain specific matters which are reproduced in paragraphs 14, 24, 35, 43, 48, 52, 59, 62, 68, 75, 79, 84, 91, 95, 96, 98, 100, 102, 106, 115, 119, 126, 130, 133, 135, 169, 180, 181, and 187 of this report. The Working Party took note that these commitments had been incorporated in paragraph 2 of the Protocol of accession of Tonga to the WTo.

189. Having carried out the examination of the foreign trade regime of Tonga and in the light of the explanations, commitments and concessions made by the representative of Tonga, the Working Party reached the conclusion that Tonga be invited to accede to the Marrakesh agreement establishing the WTo under the provisions of article Xii. For this purpose, the Working Party has prepared the draft decision and Protocol of accession reproduced in the appendix1 to this report, and takes note of Tonga’s Schedule of Concessions and Commitments on goods (document WT/aCC/Ton/17/add.1) and its Schedule of Specific Commitments on Services (document WT/aCC/Ton/17/add.2) that are annexed to the draft Protocol. it is proposed that these texts be adopted by the Ministerial Conference when it adopts the report. When the decision is adopted, the Protocol of accession would be open for acceptance by Tonga which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of Tonga to the Marrakesh agreement establishing the WTo.

1 not reproduced.

239WTo BiSd 2005

an

ne

X 1

Tabl

e 1:

num

ber

of i

nves

tmen

t Pro

ject

s H

avin

g B

een

gra

nted

a d

evel

opm

ent l

icen

ce f

or th

e Y

ears

199

9 to

200

3 (U

S$)

Se

CT

or

1999

2000

2001

2002

2003

To

Tal

no.

of

Pro

ject

Pro

ject

C

ost

no.

of

Pro

ject

Pro

ject

C

ost

no.

of

Pro

ject

Pro

ject

C

ost

no.

of

Pro

ject

Pro

ject

C

ost

no.

of

Pro

ject

Pro

ject

C

ost

1999

-200

3n

o.C

ost

Man

ufac

turi

ng16

1,10

6,86

0 20

26,0

55,0

01

2012

,085

,177

10

4,3

24,3

48

22 8

,173

,851

88

51,7

45,2

37

Tour

ism

Pri

me

Faci

lity

234,

647,

097

20 3

,468

,780

23

19,7

42,5

96

7 3

,504

,845

10

3,1

30,4

40

8334

,493

,758

eng

inee

ring

724

6,40

0 7

235

,600

5 6

56,4

50

463

7,45

0 23

1,77

5,90

0

Com

mer

cial

Fa

rmin

g8

7,97

8,48

5 6

250

,950

7

663,

800

4 3

16,5

00

543

6,99

9 30

9,64

6,73

4

Com

mer

cial

Fi

shin

g8

12,2

07,6

50

6 3

,958

,858

6

7,06

7,13

0 3

7,4

38,0

00

3 4

,913

,500

26

35,5

85,1

38

To

Tal

6226

,186

,492

59

33,9

69,1

89

5639

,558

,703

29

16,2

40,1

43

4417

,292

,240

25

013

3,24

6,76

7

240 WTo BiSd 2005


Table 2(a): reserved activities

(Schedule 1 of the Foreign investment regulations 2002)

1. Taxis

2. Passenger vehicles for hire

3. Used motor vehicle dealers

4. retailing activity which consist of the distribution of grocery products (food & household provisions)

for final consumption

5. Baking of white loaf bread

6. Tongan cultural activities, including:

(a) folktales, folk poetry, and folk riddles;

(b) folk songs and instrumental folk music;

(c) folk dances, and folk plays;

(d) production of folk arts in particular, drawings, paintings, carvings, sculptures, woodwork, jewellery, handicrafts, costumes, and indigenous textile.

7. raising of chicken for the production of eggs

8. Security business

9. export of green and mature coconuts

10. Wiring and installation of residential and commercial buildings with capital investment of less than ToP 500,000

11. Production / Farming of:

root crops (yams, sweet yam, taro, sweet potato, cassava);

(a) squash;

(b) paper mulberry [hiapo];

(c) pandanus [lou’akau]; and

(d) kava.

12. Fishing activities comprising:

(a) reef fishing

(b) inshore fishing within 12 nm (zone C) in water less than 1,000 meters

(c) Bottom fishing in water depth less than 500 m.

241WTo BiSd 2005

accession

Table 2(b): restricted activities


no. Business activity Condition

1. Commercial fishing comprising:

- Tuna fishing

- Bottom fishing in water deeper than 500m

- other deep water fishing

- aquaculture

Subject to their respective resource Management Plan

(administered by the Ministry of Fisheries)

2. agricultural supply store distributing seeds, fertilizers, chemicals.

Subject to the requirements of the Pesticide act 1993

3. education facility education act

4. Medical or Health activity Medical Practitioners act

Table 2(c): Prohibited activities


no. activities

1. Storage, disposal or transport of nuclear or toxic waste

2. Pornography

3. export, import or production of any products that are prohibited under the laws of Tonga

4. Prostitution

5. Processing or export of endangered species

6. Production of weapons of warfare

242 WTo BiSd 2005


Table 3: enterprises with government ownership in Mid-2002

organization activity/Market Position

approximate share of the domestic

market (%)

Percentage of government ownership

air Pacific limited

Fiji’s national airline; provides regional airline services; competes with the other market suppliers.

11 <5

Westpac Bank of Tonga

Commercial bank; competes with 3 other banks in Tonga.

32 4

export Produce Treatment Services ltd.

Manages the hot air treatment plant at the airport.

100 20

Hawaiian air Hawaii’s national airline. Ceased operations in

Tonga

<5

international dateline Hotel

Holds 49% of the shares of the company that owns Tonga’s biggest hotel; competes with other accommodation facilities in Tonga.

n/a 51

leiola duty Free operates Tonga’s duty free shops; has a monopoly position.

100 60

Pacific Forum line limited

regional shipping company based in Fiji; provides regional freight and charter services.

20 approx. 5

royal Tongan airlines

Tonga’s national airline; competes with air new zealand, Polynesian airlines and air Pacific (other main airlines that service similar routes).

38 99

Sea Star Fishing Co. ltd

deep sea fishing company; competes with many other firms; Tonga’s government is considering divesting itself from this company.

30 70

Shipping Corporation of Polynesia ltd

Provides domestic and international passenger and cargo charter services; many domestic competitors in this market.

20 100

Tonga development Bank

Provides development and business advisory banking services.

32 100

243WTo BiSd 2005

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organization activity/Market Position

approximate share of the domestic

market (%)

Percentage of government ownership

Tonga investment ltd

Holding/investment company set up in 1991 to manage the activities of its subsidiaries (Frisco, Home gas, and Primary Produce limited).

Frisco: Hardware and building materials supplier; mainly sells imported products; no exclusive or special rights or privileges; competes with other private firms.

Home gas: Sole distributor of cooking and heating gas in Tonga; no exclusive or special rights or privileges.

Primary Produce ltd.: no longer in operation; should be wound up.

20

100

n/a

99

Tonga Telecommuni-cations international ltd

Provides both local and international telecommunications services; competes with private enterprises; no special rights or privileges.

70 100

Tonga Timber limited

Coconut/timber milling and hardware supplier; competes with other suppliers; no exclusive or special rights or privileges.

20 99

Tonga Corporation

Manages Tonga’s landholdings in american, Samoa and Hawaii.

n/a 100

Table 4: Products Subject to Price Control

Tariff line item Commodity

11.02 Flour

1701.0000 Sugar

0405.0000 Butter

15.17 Margarine

0402.1000 Baby Milk

0902.0000 Tea

1006.0000 rice

244 WTo BiSd 2005


Tariff line item Commodity

0901.0000 Coffee

1801.0000 Cocoa

15.01 – 1516.0000 edible oils of all types

15.01 Cheese and dripping

2501.0000 Salt

19.01 infant Food Preparations

2710.0020 White Benzene

2710.0070 all lubricant oils

3808.1000 insecticides

3808.3000 Herbicides

3808.2000 Fungicides

3101.0000 – 3105.0000 all chemicals and fertilizer for agricultural use

27.10 liquid petroleum products

2710.0010 Motor Spirit

2710.0040 Kerosene

not available diesel

1905.1010 Bread of standard size

Table 5: Business licence Fees

(Schedule Two of the Business licence act 2002)

item activity Fee (ToP) due date

1. application for Business licence 75.00 Upon application

2. application for renewal of Business licence

65.00 Upon application

3. amendment of Business licence 30.00 Upon application

4. inspection of Business licence register 10.00 Prior to inspection

5. Copying of Business licence register 10.00 Upon application for copy

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Table 6: Quarantine Fees levied on exports of agricultural goods

activity Fee (ToP)

FUMigaTion

Small Chamber (1.1 m3) 10.00

all other fumigation chambers including sheet fumigation.

7.75 per m3 or part thereof (maximum of ToP 130.00 per container and/or chamber).

HeaT STeriliSaTion

Sterilisation of goods by heat in an oven 7.75 per 0.2m3 or part thereof (maximum of ToP 130.00 per container and /or chamber)

WaSTe diSPoSal

disposal/incineration of quarantineable material e.g. war ships

0.40 per hour or part thereof.

STeaM Cleaning

Per consignment 15.00 per hour or part thereof.

Cold STorage

Cool room/refrigerator 0.02 per kg per 24 hours or part thereof

Freezer 0.04 per kg for the first 24 hours and 0.02 per kg per 24 hours or part thereof, thereafter.

inSPeCTion and ClearanCe:

eXaMinaTion For iMPorT or eXPorT

documentation (Certificates and permits) 4.00

examination of a container system unit 2.00

examination of motor vehicle 4.00

examination of goods at airports for issuing of a Phytosanitary Certificate (Max. 15 mins)

2.00

examination of goods, other than at an airport for the issuing of a Phytosanitary Certificate (Max. 30 mins)

4.00

airCraFT ClearanCe

light aircraft 50.00

narrow-bodied aircraft (untreated) 80.00

narrow-bodied aircraft (treated) 50.00

Wide-bodied aircraft (untreated) 120.00

Wide-bodied aircraft (treated) 60.00

246 WTo BiSd 2005


activity Fee (ToP)

SHiP ClearanCe

Vessel of more than 25 metres in length 50.00

Vessel of 25 metres or less in length 20.00

PoST-enTrY QUaranTine

Bench space per month (per 0.5 m3 or part thereof)

7.75

Potting Material, chemicals and other related expenses

at cost

oVerTiMe

For aircraft and passenger clearance at airports;

Weekdays 4.00 per hour

Weekends & Public Holidays 5.00 per hour

other than aircraft and passenger clearance at airports

2.00 per hour

MiSCellaneoUS FeeS

Hire of forklift and driver 25.00 per hour

any other activity not specified in these regulations

4.00 per officer per half hour or part thereof including travelling time

Source: adapted from Tonga government’s gazette Supplement extraordinary, no.7 of 1997, “The Plant Quarantine Fees regulation 1997”.

Table 7: Consumption Tax exemptions and zero rates

Supplies exempt from the Consumption Tax

a) Medical prescriptions, dental nursing or health services;

b) educational services;c) Financial services;d) Public transport services;e) lease of land for residential purposes.

247WTo BiSd 2005

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Taxable supplies subject to a zero rate of Consumption Tax

a) an export of goods;b) an export of services supplied for use outside of

Tonga;c) a supply of international transport of goods or

passenger services from a place outside Tonga to another place or if the transport or part of the transport is across the territory of Tonga;

d) The supply of goods as part of the transfer or part or whole of a business as a going concern by a registered person to another registered person provided that the supplier and recipient have: (i) agreed in writing that part or whole of the business is supplied as a going concern; and (ii) notified the Chief Commissioner, in writing, of the details of the transfer, at the date of the transfer on which consumption tax has been credited as input tax.

e) Supplies of goods and services by a supplier in Tonga to His Majesty to King;

f) electricity supplied by a supplier for commercial use.

g) electricity supplied by any supplier for domestic purposes;

h) The first 20 cubic meters of water per month supplied by any supplier for domestic purposes;

i) insecticides, pesticides and fungicides for use in agriculture;

j) agricultural machinery and implements, including hand tools and timber milling machinery;

k) agricultural seeds and fertilizers;l) Stock feed;m) live poultry;n) live bovine animals;o) live swine;p) Packaging material for use in agriculture.

248 WTo BiSd 2005


imports exempt from the Consumption Tax

a) imports which are supplied in Tonga and are an exempt supply under 1;

b) imports not exceeding ToP 500 in value accompanying a person arriving in Tonga;

c) imports by diplomats according to law.d) insecticides, pesticides and fungicides for use in

agriculture;e) agricultural machinery and implements, including

hand tools and timber milling machinery;f) agricultural seeds and fertilizers;g) Stock feed;h) live poultry;i) live bovine animals;j) live swine;k) Packaging material for use in agriculture.

Table 8(a): goods Prohibited from importation into Tonga

1. Counterfeit coin, currency notes or stamps.

2. indecent articles (obscene books, paintings, drawings, cards, lithographic or other engravings, photographs, prints, films or other indecent products or articles except for private purposes) [Schedule ii, Part 1 (Section 35) ProHiBiTed and reSTriCTed iMPorTS]

3. goods bearing the royal arms of the Kingdom of Tonga, unless importers holds his Majesty’s authority.

4. goods bearing any trade name or trade mark being or claiming to be the name or trade mark registered under the registration of United Kingdom Trade Mark act.

5. Fireworks, unless given permission by Minister of Police.

6. all books and any written or printed matter, sounds and visual recordings of which import is prohibited by copyright law*.

7. all books and any written or printed matter and sound and visual recordings which advocate violence, lawlessness or disorder.

8. all toxic or hazardous wastes.

9. goods the importation of which is prohibited by any other law in force in the Kingdom.

10. goods the importation of which is restricted by any other law in force in the Kingdom except in accordance with such law.

* Cover both counterfeit goods and copyright piracy.

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Table 8(b): goods requiring a Special import licence

HS number description Permission required & Ministry involved

application Fee (ToP)

93.03 Firearms and ammunition licence issued by the Minister of Police

10.00

3602.000 explosives of all kinds including fuses and detonators

licence issued by the Minister of Police

nil

9304.0000 noxious, stupefying or tear gas in any form and all weapons and instruments or appliances for firing or using such gas containers or cartridges for such weapons or other instruments or appliances

Written permission of the Minister of Police

nil

2208.3010 Brandy and whisky Certified to the satisfaction of the Collector of Customs that it has been matured in wood for three years*

nil

2208.4010 rum Certified to the satisfaction of the Collector of Customs that it has been matured in wood for two years*

nil

87.04

87.11

Motor vehicles, motor cycles and motor scooters

licence issued by the Minister of Finance and the Minister of Police (for public safety purposes and records keeping)

nil

87.04 left hand drive motor vehicles licence issued by the Minister of Police (for public safety purposes and records keeping)

nil

04007.0010 eggs licence issued by the Minister of Finance*

nil

1905.9010 Cabin and ships biscuits licence issued by the Minister of Finance *

nil

goods the importation of which is restricted by any other law in force in the Kingdom except in accordance with such law.

* Tonga is prepared to remove its licensing requirements for eggs, cabin and ships biscuits, brandy and whisky, and rum by 31 december 2006 as indicated in the legislative action plan annexed to document WT/aCC/Ton/15.

250 WTo BiSd 2005


Table 10: import Prohibitions relating to animals, Plants and related Products

Plant

HS number name Plants, including living plants and products of plants, prohibited

08030000 Banana, abaca, other Musaceae Heliconia-ceae

Plants, corns and cut flowers

07082000071022000713320007133300

all Beans of the spe-cies Phaseolus

all except seed

0714100011081400

Cassava (Manihol esculenta grantz)

all except tissue cultures

0805081400002007910020083000

Citrus all except fruit and seeds. Fruit from areas where citrus canker (Xanthomonas)Campestris p.v. citri, (Hasee) dye) occurs. all of Murraya spp.

0801151323065000

all palms including coconut

all except seednuts and pollen from areas ap-proved by the Minister

- Cacao and host plants of Cacao swollen shoot

all except seed from asia Pacific region

09012101

Coffe (Coffea spp.) all propagating material except seed

10051102200011031300110423001108120019042302100023067000

Maize (zea mays l) all except seed

08029090 Peanut (arachis hypogaea l)

all except seed

0701071010000714110511081300

Potato (Solanum tuberosum l)

all except tubers, true seed and tissue cultures

10070000 Sorghum (Sorghum spp)

all except seed

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- rubber (Hevea spp) all

071490100714902007149030

Taro and edible aroids (alocasia spp, Colocasia spp, Xanthosoma spp nd Cyrtosperma spp)

all except propagating material, seed and tissue cultures

0702000020022009500021032000

Tomato (lycopersicon esculenum Miller)

all except fruit and seed

- orchidaceae all except tissue cultures and seedlings in Sterile flasks.

animal

Prohibition on importation or liberation of certain animals

(1) no person shall import or introduce into the Kingdom without prior approval of His Majesty’s Cabinet any animal or carcass of the species listed below:

(a) any snake of any species whatever (HS 01062000, 02085000, 02109300, 41032000)

(b) any venomous reptile, or any living stage of any venomous amphibian, venomous fish or venomous invertebrate (HS 01062000, 02085000, 02109300, 41032000);

(c) any monkey of any species;(d) any member of the squirrel species;(e) any red fox or silver fox (HS 43016000);(f) any musquash;(g) any hamster;(h) any mongoose;(i) any coypu;(j) any mink (HS 43011000);(k) any rabbit (HS 02081000);(l) any hare (HS 02081000);(m) any deer;(n) any opossum;(o) any other animal that is likely to become a nuisance or to

cause injury or damage.

(2) no person shall without prior approval of Cabinet import or introduce into the Kingdom the egg, semen or carcass of any animal specified in subsection (1) of this section.

Source: The Plant Quarantine act and the animal diseases act, Second Schedule, regulation 31.

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anneX 2

laws, regulations and other information Provided to the Working Party by Tonga

- income Tax Bill 2004- industrial development incentive act 1978 (Cap. 48) and amendments

1990, 1992;- act no. 11 of 4 october 1982 To amend the industrial development

incentives act 1978;- Foreign investment act 2001;- Foreign investment act 2002;- order to amend the Prices of goods and Wages Control act 1998;- act no. 3 of 8 September 1947 (as amended, 1950, 1956 and 1984) To

Make Provision For Controlling the Prices of goods and Services and Wage rates;

- Protection against Unfair Competition act, 2001;- Chapter 27 of the Companies act of 1988;- The registration of Business names Bill 1995 - arrangement of Sections

and registration of Business names act, 2001;- Business licence act of 2002;- Business licence regulations 2002 of 2005;- act no. 20 of 2 november 1993 To amend the licenses act;- licence (amendment) act 1995 (Cap. 47);- drafting guidelines for amendments to the licenses act Cap. 47;- application for licence to import goods;- act no. 29 of 16 october 1987 To amend the intoxicating liquor act; - draft Customs and excise act 2005, dated 21 october 2005;- a Bill for an act to amend the Customs and excise act (The Customs and

excise (amendment) act 2003);- The Customs and excise (amendment) act no. 25 of 10 november 1999

– Tonga Harmonized Customs Tariff and excise Schedule;- Customs and excise Bill 2004 of July 2004;- Customs and excise amendment act 2003 of 4 September 2003;- Customs and excise act 1998 (Cap. 67) and amendments;- Customs and excise act (1983) Part i: imports – Classification and Tariff;- act no. 3 of 24 June 1992 to amend the Customs duty and excise act

(Cap. 67);- act no. 6 of 6 July 1927 (as amended, 1950, 1963, 1964, 1974, 1997 and

1988) To impose Stamp duties;- Ports authority (overseas Vessels Tariff Fees) Standing order 1999;- act to repeal the Port and Services Tax act of 24 november 2003;- Port and Service Tax act 1988 (Cap. 71);

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- act no. 22 of 23 october 1990 To amend the Port and Service Tax act;- act no. 11 of 1 September 1981 To amend the Wharves act;- Wharves act 1992 (Cap. 138) and amendments 1997, 1998;- list of Products subject to Wharfage Tax (conferred by Sections 5 and 16 of

the Wharves act 1992 (Cap. 138);- Schedule of duty Free and Ports & Services Tax Free goods;- acts nos. 6 of 3 november 1964 and 3 of 1985 To impose a Tax Upon Fuel

imported into the Kingdom and Sold by the importer;- act no. 3 of 1 July 1986 To impose a Tax Upon retail Sales of all goods

and Services in the Kingdom of Tonga;- Consumption Tax regulations 2005;- information on implementation and administration of the Customs Valuation

agreement;- agricultural Commodities export act of 2001, Section 4 – The agricultural

Commodities export (general) regulations 2001;- draft Bill for an agricultural Commodities export act;- Public Health act 1992 and amendments;- animal diseases act of 1978, Section 13 – The animals (importation)

regulations 2001;- animal diseases act 1988 (Cap. 146);- draft Bill for an act to amend the animal diseases act 1978;- Pesticides act of 2001, Section 22 – The Pesticides regulations;- Pesticides – information and application forms for licenses, registration and

user permits;- draft Bill for a Pesticides act;- act no. 18 of 15 april 1928 (as amended, 1986 and 1988) relating to

Quarantine;- Plant Quarantine act (Cap. 127) 1988;- information on State Trading;- act no. 10 of 30 September 1987 to amend the Copyright act of 1985;- Copyright act 1988 (Cap. 121) and amendments;- draft law on Copyright and related rights;- Copyright act 2001;- Copyright act 2002; - industrial Property act 1994 (Cap. 19);- industrial Property regulation 1998;- act no. 19 of 9 november 1994 To Provide For the registration and

Protection of Patents, Utility Model Certificates, industrial designs and Trade Marks;

- draft regulations for geographical indications act 2002;- Protection of geographical indications act 2001;- draft regulations for layout-designs (Topographies) of integrated Circuits

act 2002;

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- Protection of layout designs (Topographies) of integrated Circuit act 2001;

- law on the enforcement of intellectual Property rights including Border Measures of 2004;

- act no. 21 of 18 october 1989 To Provide For law Practitioners; For Their Professional Conduct and discipline; For The establishment of the Tonga law Society and For Connected Purposes;

- act no. 16 of 15 august 1991 To require The registration Before Practice of Medical, dental, nursing, Midwifery and other Health Professions in Tonga;

- act no. 13 of 7 august 1984 To amend the Tonga Telecommunications act, 1983;

- act no. 15 of 21 September 1989 To regulate Broadcasting and Matters related Thereto;

- act no. 22 of 30 october 1991 To regulate the licensing and Supervision of Financial institutions in Tonga and For Purposes Connected Therewith;

- act no. 15 of 15 august 1991 To Provide For a Comprehensive Health Service For Tonga;

- act no. 29 of 2 november 1992 To deal with Public Health Services in Tonga;

- act no. 9 of 24 october 1949 (as amended, 1950, 1951, 1956, 1957, 1960, 1962, 1974, 1975, 1981, 1983 and 1988) To Provide For the establishment of the Tonga electric Power Board For the Production, Control and distribution of electric Power Throughout the Kingdom and For related Purposes;

- Water Board act (Section 28) Water Supply (amendment) regulations 1992 (Tonga government gazette Supplement extraordinary no. 5 of 5 June 1992;

- act no. 19 of 5 July 1977 (as amended, 1979, 1980 and 1990) To Control and regulate Tourism by the establishment of an advisory Board and by the introduction of a System of licensing of Tourist Facilities and Matters relative Thereto; and

- act no. 16 of 31 March 1970 To Make Better Provision For the Control of immigration.

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accession

Decision of the Ministerial Conference on 15 December 2005


The Ministerial Conference,

Having regard to paragraph 2 of article Xii and paragraph 1 of article iX of the Marrakesh agreement establishing the World Trade organization (the “WTo agreement”), and the decision-Making Procedures under articles iX and Xii of the Marrakesh agreement establishing the World Trade organization agreed by the general Council (WT/l/93);

Taking note of the application of the Kingdom of Tonga for accession to the Marrakesh agreement establishing the World Trade organization dated 30 June 1995;

Noting the results of the negotiations directed toward the establishment of the terms of accession of the Kingdom of Tonga to the WTo agreement and having prepared a draft Protocol on the accession of the Kingdom of Tonga;

Decides as follows:

The Kingdom of Tonga may accede to the WTo agreement on the terms and conditions set out in the draft Protocol annexed to this decision.1

1 See under section “legal instruments”

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APPELLATE BODY

WorKing ProCedUreS For aPPellaTe reVieW

(WT/AB/WP/51)

Definitions

1. in these Working Procedures for Appellate Review,

“appellant”

means any party to the dispute that has filed a notice of appeal pursuant to rule 20;

“appellate report”

means an appellate Body report as described in article 17 of the dSU;

“appellee”

means any party to the dispute that has filed a submission pursuant to rule 22 or paragraph 4 of rule 23;

“consensus”

a decision is deemed to be made by consensus if no Member formally objects to it;

“covered agreements”

has the same meaning as “covered agreements” in paragraph 1 of article 1 of the dSU;

“division”

means the three Members who are selected to serve on any one appeal in accordance with paragraph 1 of article 17 of the dSU and paragraph 2 of rule 6;

1 This document replaces the Working Procedures for Appellate Review circulated 1 May 2003. it is a consolidated, revised version, and reflects amendments to rules 1, 18(5), 20, 21, 23, 27 and annex i, as well as the addition of a new rule 23bis and a new annex iii, as discussed in WT/aB/WP/W/8 and WT/aB/WP/W/9. The Working Procedures for Appellate Review consolidated in this document will be applied to appeals initiated after 1 January 2005.

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“documents”

means the notice of appeal, any notice of other appeal and the submissions and other written statements presented by the participants or third participants;

“dSB”

means the dispute Settlement Body established under article 2 of the dSU;

“dSU”

means the Understanding on Rules and Procedures Governing the Settlement of Disputes which is annex 2 to the WTO Agreement;

“Member”

means a Member of the appellate Body who has been appointed by the dSB in accordance with article 17 of the dSU;

“other appellant”

means any party to the dispute that has filed a notice of other appeal pursuant to paragraph 1 of rule 23;

“participant”

means any party to the dispute that has filed a notice of appeal pursuant to rule 20, a notice of other appeal pursuant to rule 23 or a submission pursuant to rule 22 or paragraph 4 of rule 23;

“party to the dispute”

means any WTo Member who was a complaining or defending party in the panel dispute, but does not include a third party;

“proof of service”

means a letter or other written acknowledgement that a document has been delivered, as required, to the parties to the dispute, participants, third parties or third participants, as the case may be;

“rules”

means these Working Procedures for Appellate Review;

“Rules of Conduct”

means the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes as attached in annex ii to these rules;

258 WTo BiSd 2005


“SCM Agreement”

means the Agreement on Subsidies and Countervailing Measures which is in annex 1a to the WTO Agreement;

“Secretariat”

means the appellate Body Secretariat;

“service address”

means the address of the party to the dispute, participant, third party or third participant as generally used in WTo dispute settlement proceedings, unless the party to the dispute, participant, third party or third participant has clearly indicated another address;

“third participant”

means any third party that has filed a written submission pursuant to rule 24(1); or any third party that appears at the oral hearing, whether or not it makes an oral statement at that hearing;

“third party”

means any WTo Member who has notified the dSB of its substantial interest in the matter before the panel pursuant to paragraph 2 of article 10 of the dSU;

“WTo”

means the World Trade organization;

“WTO Agreement”

means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, Morocco on 15 april 1994;

“WTo Member”

means any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations that has accepted or acceded to the WTo in accordance with articles Xi, Xii or XiV of the WTO Agreement; and

“WTo Secretariat”

means the Secretariat of the World Trade organization.

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appellate Body

ParT i

MeMBerS

Duties and Responsibilities

2. (1) a Member shall abide by the terms and conditions of the dSU, these rules and any decisions of the dSB affecting the appellate Body.

(2) during his/her term, a Member shall not accept any employment nor pursue any professional activity that is inconsistent with his/her duties and responsibilities.

(3) a Member shall exercise his/her office without accepting or seeking instructions from any international, governmental, or non-governmental organization or any private source.

(4) a Member shall be available at all times and on short notice and, to this end, shall keep the Secretariat informed of his/her whereabouts at all times.

Decision-Making

3. (1) in accordance with paragraph 1 of article 17 of the dSU, decisions relating to an appeal shall be taken solely by the division assigned to that appeal. other decisions shall be taken by the appellate Body as a whole.

(2) The appellate Body and its divisions shall make every effort to take their decisions by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by a majority vote.

Collegiality

4. (1) To ensure consistency and coherence in decision-making, and to draw on the individual and collective expertise of the Members, the Members shall convene on a regular basis to discuss matters of policy, practice and procedure.

(2) The Members shall stay abreast of dispute settlement activities and other relevant activities of the WTo and, in particular, each Member shall receive all documents filed in an appeal.

260 WTo BiSd 2005


(3) in accordance with the objectives set out in paragraph 1, the division responsible for deciding each appeal shall exchange views with the other Members before the division finalizes the appellate report for circulation to the WTo Members. This paragraph is subject to paragraphs 2 and 3 of rule 11.

(4) nothing in these rules shall be interpreted as interfering with a division’s full authority and freedom to hear and decide an appeal assigned to it in accordance with paragraph 1 of article 17 of the dSU.

Chairman

5. (1) There shall be a Chairman of the appellate Body who shall be elected by the Members.

(2) The term of office of the Chairman of the appellate Body shall be one year. The appellate Body Members may decide to extend the term of office for an additional period of up to one year. However, in order to ensure rotation of the Chairmanship, no Member shall serve as Chairman for more than two consecutive terms.

(3) The Chairman shall be responsible for the overall direction of the appellate Body business, and in particular, his/her responsibilities shall include:

(a) the supervision of the internal functioning of the appellate Body; and

(b) any such other duties as the Members may agree to entrust to him/her.

(4) Where the office of the Chairman becomes vacant due to permanent incapacity as a result of illness or death or by resignation or expiration of his/her term, the Members shall elect a new Chairman who shall serve a full term in accordance with paragraph 2.

(5) in the event of a temporary absence or incapacity of the Chairman, the appellate Body shall authorize another Member to act as Chairman ad interim, and the Member so authorized shall temporarily exercise all the powers, duties and functions of the Chairman until the Chairman is capable of resuming his/her functions.

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Divisions

6. (1) in accordance with paragraph 1 of article 17 of the dSU, a division consisting of three Members shall be established to hear and decide an appeal.

(2) The Members constituting a division shall be selected on the basis of rotation, while taking into account the principles of random selection, unpredictability and opportunity for all Members to serve regardless of their national origin.

(3) a Member selected pursuant to paragraph 2 to serve on a division shall serve on that division, unless:

(i) he/she is excused from that division pursuant to rules 9 or 10;

(ii) he/she has notified the Chairman and the Presiding Member that he/she is prevented from serving on the division because of illness or other serious reasons pursuant to rule 12; or

(iii) he/she has notified his/her intentions to resign pursuant to rule 14.

Presiding Member of the Division

7. (1) each division shall have a Presiding Member, who shall be elected by the Members of that division.

(2) The responsibilities of the Presiding Member shall include:

(a) coordinating the overall conduct of the appeal proceeding;

(b) chairing all oral hearings and meetings related to that appeal; and

(c) coordinating the drafting of the appellate report.

(3) in the event that a Presiding Member becomes incapable of performing his/her duties, the other Members serving on that division and the Member selected as a replacement pursuant to rule 13 shall elect one of their number to act as the Presiding Member.

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Rules of Conduct

8. (1) on a provisional basis, the appellate Body adopts those provisions of the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes, attached in annex ii to these rules, which are applicable to it, until Rules of Conduct are approved by the dSB.

(2) Upon approval of Rules of Conduct by the dSB, such Rules of Conduct shall be directly incorporated and become part of these rules and shall supersede annex ii.

9. (1) Upon the filing of a notice of appeal, each Member shall take the steps set out in article Vi:4(b)(i) of annex ii, and a Member may consult with the other Members prior to completing the disclosure form.

(2) Upon the filing of a notice of appeal, the professional staff of the Secretariat assigned to that appeal shall take the steps set out in article Vi:4(b)(ii) of annex ii.

(3) Where information has been submitted pursuant to article Vi:4(b)(i) or (ii) of annex ii, the appellate Body shall consider whether further action is necessary.

(4) as a result of the appellate Body’s consideration of the matter pursuant to paragraph 3, the Member or the professional staff member concerned may continue to be assigned to the division or may be excused from the division.

10. (1) Where evidence of a material violation is filed by a participant pursuant to article Viii of annex ii, such evidence shall be confidential and shall be supported by affidavits made by persons having actual knowledge or a reasonable belief as to the truth of the facts stated.

(2) any evidence filed pursuant to article Viii:1 of annex ii shall be filed at the earliest practicable time: that is, forthwith after the participant submitting it knew or reasonably could have known of the facts supporting it. in no case shall such evidence be filed after the appellate report is circulated to the WTo Members.

(3) Where a participant fails to submit such evidence at the earliest practicable time, it shall file an explanation in writing of the reasons why it did not do so earlier, and the appellate Body may decide to consider or not to consider such evidence, as appropriate.

(4) While taking fully into account paragraph 5 of article 17 of the

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dSU, where evidence has been filed pursuant to article Viii of annex ii, an appeal shall be suspended for fifteen days or until the procedure referred to in article Viii:14-16 of annex ii is completed, whichever is earlier.

(5) as a result of the procedure referred to in article Viii:14-16 of annex ii, the appellate Body may decide to dismiss the allegation, to excuse the Member or professional staff member concerned from being assigned to the division or make such other order as it deems necessary in accordance with article Viii of annex ii.

11. (1) a Member who has submitted a disclosure form with information attached pursuant to article Vi:4(b)(i) or is the subject of evidence of a material violation pursuant to article Viii:1 of annex ii, shall not participate in any decision taken pursuant to paragraph 4 of rule 9 or paragraph 5 of rule 10.

(2) a Member who is excused from a division pursuant to paragraph 4 of rule 9 or paragraph 5 of rule 10 shall not take part in the exchange of views conducted in that appeal pursuant to paragraph 3 of rule 4.

(3) a Member who, had he/she been a Member of a division, would have been excused from that division pursuant to paragraph 4 of rule 9, shall not take part in the exchange of views conducted in that appeal pursuant to paragraph 3 of rule 4.

Incapacity

12. (1) a Member who is prevented from serving on a division by illness or for other serious reasons shall give notice and duly explain such reasons to the Chairman and to the Presiding Member.

(2) Upon receiving such notice, the Chairman and the Presiding Member shall forthwith inform the appellate Body.

Replacement

13. Where a Member is unable to serve on a division for a reason set out in paragraph 3 of rule 6, another Member shall be selected forthwith pursuant to paragraph 2 of rule 6 to replace the Member originally selected for that division.

264 WTo BiSd 2005


Resignation

14. (1) a Member who intends to resign from his/her office shall notify his/her intentions in writing to the Chairman of the appellate Body who shall immediately inform the Chairman of the dSB, the director-general and the other Members of the appellate Body.

(2) The resignation shall take effect 90 days after the notification has been made pursuant to paragraph 1, unless the dSB, in consultation with the appellate Body, decides otherwise.

Transition

15. a person who ceases to be a Member of the appellate Body may, with the authorization of the appellate Body and upon notification to the dSB, complete the disposition of any appeal to which that person was assigned while a Member, and that person shall, for that purpose only, be deemed to continue to be a Member of the appellate Body.

ParT ii

ProCeSS

General Provisions

16. (1) in the interests of fairness and orderly procedure in the conduct of an appeal, where a procedural question arises that is not covered by these rules, a division may adopt an appropriate procedure for the purposes of that appeal only, provided that it is not inconsistent with the dSU, the other covered agreements and these rules. Where such a procedure is adopted, the division shall immediately notify the parties to the dispute, participants, third parties and third participants as well as the other Members of the appellate Body.

(2) in exceptional circumstances, where strict adherence to a time-period set out in these rules would result in a manifest unfairness, a party to the dispute, a participant, a third party or a third participant may request that a division modify a time-period set out in these rules for the filing of documents or the date set out in the working schedule for the oral hearing. Where such a request

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is granted by a division, any modification of time shall be notified to the parties to the dispute, participants, third parties and third participants in a revised working schedule.

17. (1) Unless the dSB decides otherwise, in computing any time-period stipulated in the dSU or in the special or additional provisions of the covered agreements, or in these rules, within which a communication must be made or an action taken by a WTo Member to exercise or preserve its rights, the day from which the time-period begins to run shall be excluded and, subject to paragraph 2, the last day of the time-period shall be included.

(2) The dSB decision on “expiration of Time-Periods in the dSU”, WT/dSB/M/7, shall apply to appeals heard by divisions of the appellate Body.

Documents

18. (1) no document is considered filed with the appellate Body unless the document is received by the Secretariat within the time-period set out for filing in accordance with these rules.

(2) except as otherwise provided in these rules, every document filed by a party to the dispute, a participant, a third party or a third participant shall be served on each of the other parties to the dispute, participants, third parties and third participants in the appeal.

(3) a proof of service on the other parties to the dispute, participants, third parties and third participants shall appear on, or be affixed to, each document filed with the Secretariat under paragraph 1 above.

(4) a document shall be served by the most expeditious means of delivery or communication available, including by:

(a) delivering a copy of the document to the service address of the party to the dispute, participant, third party or third participant; or

266 WTo BiSd 2005


(b) sending a copy of the document to the service address of the party to the dispute, participant, third party or third participant by facsimile transmission, expedited delivery courier or expedited mail service.

(5) Upon authorization by the division, a participant or a third participant may correct clerical errors in any of its documents (including typographical mistakes, errors of grammar, or words or numbers placed in the wrong order). The request to correct clerical errors shall identify the specific errors to be corrected and shall be filed with the Secretariat no later than 30 days after the date of the filing of the notice of appeal. a copy of the request shall be served upon the other parties to the dispute, participants, third parties and third participants, each of whom shall be given an opportunity to comment in writing on the request. The division shall notify the parties to the dispute, participants, third parties and third participants of its decision.

Ex Parte Communications

19. (1) neither a division nor any of its Members shall meet with or contact one party to the dispute, participant, third party or third participant in the absence of the other parties to the dispute, participants, third parties and third participants.

(2) no Member of the division may discuss any aspect of the subject matter of an appeal with any party to the dispute, participant, third party or third participant in the absence of the other Members of the division.

(3) a Member who is not assigned to the division hearing the appeal shall not discuss any aspect of the subject matter of the appeal with any party to the dispute, participant, third party or third participant.

Commencement of Appeal

20. (1) an appeal shall be commenced by notification in writing to the dSB in accordance with paragraph 4 of article 16 of the dSU and simultaneous filing of a notice of appeal with the Secretariat.

(2) a notice of appeal shall include the following information:

(a) the title of the panel report under appeal;

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(b) the name of the party to the dispute filing the notice of appeal;

(c) the service address, telephone and facsimile numbers of the party to the dispute; and

(d) a brief statement of the nature of the appeal, including: (i) identification of the alleged errors in the issues

of law covered in the panel report and legal interpretations developed by the panel;

(ii) a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying; and

(iii) without prejudice to the ability of the appellant to refer to other paragraphs of the panel report in the context of its appeal, an indicative list of the paragraphs of the panel report containing the alleged errors.

Appellant’s Submission

21. (1) The appellant shall, within 7 days after the date of the filing of the notice of appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 and serve a copy of the submission on the other parties to the dispute and third parties.

(2) a written submission referred to in paragraph 1 shall

(a) be dated and signed by the appellant; and(b) set out

(i) a precise statement of the grounds for the appeal, including the specific allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel, and the legal arguments in support thereof;

(ii) a precise statement of the provisions of the covered agreements and other legal sources relied on; and

(iii) the nature of the decision or ruling sought.

Appellee’s Submission

22. (1) any party to the dispute that wishes to respond to allegations raised in an appellant’s submission filed pursuant to rule 21 may, within

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25 days after the date of the filing of the notice of appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 and serve a copy of the submission on the appellant, other parties to the dispute and third parties.

(2) a written submission referred to in paragraph 1 shall

(a) be dated and signed by the appellee; and(b) set out

(i) a precise statement of the grounds for opposing the specific allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel raised in the appellant’s submission, and the legal arguments in support thereof;

(ii) an acceptance of, or opposition to, each ground set out in the appellant’s submission;

(iii) a precise statement of the provisions of the covered agreements and other legal sources relied on; and

(iv) the nature of the decision or ruling sought.

Multiple Appeals

23. (1) Within 12 days after the date of the filing of the notice of appeal, a party to the dispute other than the original appellant may join in that appeal or appeal on the basis of other alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel. That party shall notify the dSB in writing of its appeal and shall simultaneously file a notice of other appeal with the Secretariat.

(2) a notice of other appeal shall include the following information:

(a) the title of the panel report under appeal;(b) the name of the party to the dispute filing the notice of

other appeal;(c) the service address, telephone and facsimile numbers of

the party to the dispute; and either(i) a statement of the issues raised on appeal by

another participant with which the party joins; or

(ii) a brief statement of the nature of the other appeal, including:

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(a) identification of the alleged errors in the issues of law covered in the panel report and legal interpretations developed by the panel;

(B) a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying; and

(C) without prejudice to the ability of the other appellant to refer to other paragraphs of the panel report in the context of its appeal, an indicative list of the paragraphs of the panel report containing the alleged errors.

(3) The other appellant shall, within 15 days after the date of the filing of the notice of appeal, file with the Secretariat a written submission prepared in accordance with paragraph 2 of rule 21 and serve a copy of the submission on the other parties to the dispute and third parties.

(4) The appellant, any appellee and any other party to the dispute that wishes to respond to a submission filed pursuant to paragraph 3 may file a written submission within 25 days after the date of the filing of the notice of appeal, and any such submission shall be in the format required by paragraph 2 of rule 22.

(5) This rule does not preclude a party to the dispute which has not filed a submission under rule 21 or a notice of other appeal under paragraph 1 of this rule from exercising its right of appeal pursuant to paragraph 4 of article 16 of the dSU.

(6) Where a party to the dispute which has not filed a submission under rule 21 or a notice of other appeal under paragraph 1 of this rule exercises its right to appeal as set out in paragraph 5, a single division shall examine the appeals.

Amending Notices of Appeal

23bis. (1) The division may authorize an original appellant to amend a notice of appeal or an other appellant to amend a notice of other appeal.

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(2) a request to amend a notice of appeal or a notice of other appeal shall be made as soon as possible in writing and shall state the reason(s) for the request and identify precisely the specific amendments that the appellant or other appellant wishes to make to the notice. a copy of the request shall be served on the other parties to the dispute, participants, third participants and third parties, each of whom shall be given an opportunity to comment in writing on the request.

(3) in deciding whether to authorize, in full or in part, a request to amend a notice of appeal or notice of other appeal, the division shall take into account:

(a) the requirement to circulate the appellate report within the time-period set out in article 17.5 of the dSU or, as appropriate, article 4.9 of the SCM Agreement; and,

(b) the interests of fairness and orderly procedure, including the nature and extent of the proposed amendment, the timing of the request to amend a notice of appeal or notice of other appeal, any reasons why the proposed amended notice of appeal or notice of other appeal was not or could not have been filed on its original date, and any other considerations that may be appropriate.

(4) The division shall notify the parties to the dispute, participants, third participants, and third parties of its decision. in the event that the division authorizes an amendment to a notice of appeal or a notice of other appeal, it shall provide an amended copy of the notice to the dSB.

Third Participants

24. (1) any third party may file a written submission containing the grounds(1) any third party may file a written submission containing the grounds and legal arguments in support of its position. Such submission shall be filed within 25 days after the date of the filing of the notice of appeal.

(2) a third party not filing a written submission shall, within the same period of 25 days, notify the Secretariat in writing if it intends to appear at the oral hearing, and, if so, whether it intends to make an oral statement.

(3) Third participants are encouraged to file written submissions to facilitate their positions being taken fully into account by the division hearing the appeal and in order that participants and other third participants will have notice of positions to be taken at the oral hearing.

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(4) any third party that has neither filed a written submission pursuant to paragraph (1), nor notified the Secretariat pursuant to paragraph (2), may notify the Secretariat that it intends to appear at the oral hearing, and may request to make an oral statement at the hearing. Such notifications and requests should be notified to the Secretariat in writing at the earliest opportunity.

Transmittal of Record

25. (1) Upon the filing of a notice of appeal, the director-general of the WTo shall transmit forthwith to the appellate Body the complete record of the panel proceeding.

(2) The complete record of the panel proceeding includes, but is not limited to:

(a) written submissions, rebuttal submissions, and supporting evidence attached thereto by the parties to the dispute and the third parties;

(b) written arguments submitted at the panel meetings with the parties to the dispute and the third parties, the recordings of such panel meetings, and any written answers to questions posed at such panel meetings;

(c) the correspondence relating to the panel dispute between the panel or the WTo Secretariat and the parties to the dispute or the third parties; and

(d) any other documentation submitted to the panel.

Working Schedule

26. (1) Forthwith after the commencement of an appeal, the division shall draw up an appropriate working schedule for that appeal in accordance with the time-periods stipulated in these rules.

(2) The working schedule shall set forth precise dates for the filing of documents and a timetable for the division’s work, including where possible, the date for the oral hearing.

(3) in accordance with paragraph 9 of article 4 of the dSU, in appeals of urgency, including those which concern perishable goods, the appellate Body shall make every effort to accelerate the appellate proceedings to the greatest extent possible. a division shall take this into account in drawing up its working schedule for that appeal.

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(4) The Secretariat shall serve forthwith a copy of the working schedule on the appellant, the parties to the dispute and any third parties.

Oral Hearing

27. (1) a division shall hold an oral hearing, which shall be held, as a general rule, between 35 and 45 days after the date of the filing of a notice of appeal.

(2) Where possible in the working schedule or otherwise at the earliest possible date, the Secretariat shall notify all parties to the dispute, participants, third parties and third participants of the date for the oral hearing.

(3) (a) any third party that has filed a submission pursuant to rule 24(1), or has notified the Secretariat pursuant to rule 24(2) that it intends to appear at the oral hearing, may appear at the oral hearing, make an oral statement at the hearing, and respond to questions posed by the division.(b) any third party that has notified the Secretariat pursuant

to rule 24(4) that it intends to appear at the oral hearing may appear at the oral hearing.

(c) any third party that has made a request pursuant to rule 24(4) may, at the discretion of the division hearingmay, at the discretion of the division hearing the appeal, taking into account the requirements of due process, make an oral statement at the hearing, and respond to questions posed by the division.

(4) The Presiding Member may set time-limits for oral arguments.

Written Responses

28. (1) at any time during the appellate proceeding, including, in particular, during the oral hearing, the division may address questions orally or in writing to, or request additional memoranda from, any participant or third participant, and specify the time-periods by which written responses or memoranda shall be received.

(2) any such questions, responses or memoranda shall be made available to the other participants and third participants in the appeal, who shall be given an opportunity to respond.

(3) When the questions or requests for memoranda are made prior to the oral hearing, then the questions or requests, as well as the responses or memoranda, shall also be made available to the third parties, who shall also be given an opportunity to respond.

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Failure to Appear

29. Where a participant fails to file a submission within the required time-periods or fails to appear at the oral hearing, the division shall, after hearing the views of the participants, issue such order, including dismissal of the appeal, as it deems appropriate.

Withdrawal of Appeal

30. (1) at any time during an appeal, the appellant may withdraw its appeal by notifying the appellate Body, which shall forthwith notify the dSB.

(2) Where a mutually agreed solution to a dispute which is the subject of an appeal has been notified to the dSB pursuant to paragraph 6 of article 3 of the dSU, it shall be notified to the appellate Body.

Prohibited Subsidies

31. (1) Subject to article 4 of the SCM Agreement, the general provisions of these rules shall apply to appeals relating to panel reports concerning prohibited subsidies under Part ii of that Agreement.

(2) The working schedule for an appeal involving prohibited subsidies under Part ii of the SCM Agreement shall be as set out in annex i to these rules.

Entry into Force and Amendment

32. (1) These rules shall enter into force on 15 February 1996.

(2) The appellate Body may amend these rules in compliance with the procedures set forth in paragraph 9 of article 17 of the dSU.

(3) Whenever there is an amendment to the dSU or to the special or additional rules and procedures of the covered agreements, the appellate Body shall examine whether amendments to these rules are necessary.

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anneX i

TiMeTaBle For aPPealS1

general appeals Prohibited Subsidies appeals

day day

notice of appeal2 0 0

appellant’s Submission3 7 4

notice of other appeal4 12 6

other appellant(s) Submission(s)5 15 7

appellee(s) Submission(s)6 25 12

Third Participant(s) Submission(s)7 25 12

Third Participant(s) notification(s)8 25 12

oral Hearing9 35-45 17-23

Circulation of appellate report 60 – 9010 30 – 6011

dSB Meeting for adoption 90 – 12012 50 – 8013

1 rule 17 applies to the computation of the time-periods below. 2 Rule 20.3 Rule 21(1).4 rule 23(1).5 rule 23(3).6 rules 22 and 23(4).7 rule 24(1).8 rule 24(2).9 rule 27.10 article 17:5, dSU.11 article 4:9, SCM Agreement.12 article 17:14, dSU.13 Article 4:9, SCM Agreement.

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anneX ii

rUleS oF CondUCT For THe UnderSTanding on rUleS and ProCedUreS

goVerning THe SeTTleMenT oF diSPUTeS

I. Preamble

Members,

Recalling that on 15 april 1994 in Marrakesh, Ministers welcomed the stronger and clearer legal framework they had adopted for the conduct of international trade, including a more effective and reliable dispute settlement mechanism;

Recognizing the importance of full adherence to the Understanding on rules and Procedures governing the Settlement of disputes (“dSU”) and the principles for the management of disputes applied under articles XXii and XXiii of gaTT 1947, as further elaborated and modified by the dSU;

Affirming that the operation of the dSU would be strengthened by rules of conduct designed to maintain the integrity, impartiality and confidentiality of proceedings conducted under the dSU thereby enhancing confidence in the new dispute settlement mechanism;

Hereby establish the following rules of Conduct.

II. Governing Principle

1. each person covered by these rules (as defined in paragraph 1 of Section iV below and hereinafter called “covered person”) shall be independent and impartial, shall avoid direct or indirect conflicts of interest and shall respect the confidentiality of proceedings of bodies pursuant to the dispute settlement mechanism, so that through the observance of such standards of conduct the integrity and impartiality of that mechanism are preserved. These rules shall in no way modify the rights and obligations of Members under the dSU nor the rules and procedures therein.

III. Observance of the Governing Principle

1. To ensure the observance of the governing Principle of these rules, each covered person is expected (1) to adhere strictly to the provisions of the dSU; (2) to disclose the existence or development of any interest, relationship or matter that that person could reasonably be expected to know and that is likely to affect, or give rise to justifiable doubts as to, that person’s independence or impartiality; and (3) to take due care in the performance of their duties to fulfil these expectations, including through avoidance of any direct or indirect conflicts of interest in respect of the subject matter of the proceedings.

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2. Pursuant to the governing Principle, each covered person, shall be independent and impartial, and shall maintain confidentiality. Moreover, such persons shall consider only issues raised in, and necessary to fulfil their responsibilities within, the dispute settlement proceeding and shall not delegate this responsibility to any other person. Such person shall not incur any obligation or accept any benefit that would in anyway interfere with, or which could give rise to, justifiable doubts as to the proper performance of that person’s dispute settlement duties.

IV. Scope

1. These rules shall apply, as specified in the text, to each person serving: (a) on a panel; (b) on the Standing appellate Body; (c) as an arbitrator pursuant to the provisions mentioned in annex “1a”; or (d) as an expert participating in the dispute settlement mechanism pursuant to the provisions mentioned in annex “1b”. These rules shall also apply, as specified in this text and the relevant provisions of the Staff regulations, to those members of the Secretariat called upon to assist the panel in accordance with article 27.1 of the dSU or to assist in formal arbitration proceedings pursuant to annex “1a”; to the Chairman of the Textiles Monitoring Body (hereinafter called “TMB”) and other members of the TMB Secretariat called upon to assist the TMB in formulating recommendations, findings or observations pursuant to the WTo agreement on Textiles and Clothing; and to Standing appellate Body support staff called upon to provide the Standing appellate Body with administrative or legal support in accordance with article 17.7 of the dSU (hereinafter “Member of the Secretariat or Standing appellate Body support staff ”), reflecting their acceptance of established norms regulating the conduct of such persons as international civil servants and the governing Principle of these rules.

2. The application of these rules shall not in any way impede the Secretariat’s discharge of its responsibility to continue to respond to Members’ requests for assistance and information.

3. These rules shall apply to the members of the TMB to the extent prescribed in Section V.

V. Textiles Monitoring Body

1. Members of the TMB shall discharge their functions on an ad personam basis, in accordance with the requirement of article 8.1 of the agreement on Textiles and Clothing, as further elaborated in the working procedures of the TMB, so as to preserve the integrity and impartiality of its proceedings.11

11 These working procedures, as adopted by the TMB on 26 July 1995 (g/TMB/r/1), currently include, inter alia, the following language in paragraph 1.4: “in discharging their functions in accordance with paragraph 1.1 above, the TMB members and alternates shall undertake not to solicit, accept or act upon instructions from governments, nor to be influenced by any other organisations or undue extraneous factors. They shall disclose to the Chairman any information that they may consider likely to impede their capacity to discharge their functions on an ad personam basis. Should serious doubts arise during the deliberations of the TMB regarding the ability of a TMB member to act on an ad personam basis, they shall be communicated to the Chairman. The Chairman shall deal with the particular matter as necessary”.

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VI. Self-Disclosure Requirements by Covered Persons

1. (a) each person requested to serve on a panel, on the Standing appellate Body, as an arbitrator, or as an expert shall, at the time of the request, receive from the Secretariat these rules, which include an illustrative list (annex 2) of examples of the matters subject to disclosure.

(b) any member of the Secretariat described in paragraph iV:1, who may expect to be called upon to assist in a dispute, and Standing appellate Body support staff, shall be familiar with these rules.

2. as set out in paragraph Vi:4 below, all covered persons described in paragraph Vi.1(a) and Vi.1(b) shall disclose any information that could reasonably be expected to be known to them at the time which, coming within the scope of the governing Principle of these rules, is likely to affect or give rise to justifiable doubts as to their independence or impartiality. These disclosures include the type of information described in the illustrative list, if relevant.

3. These disclosure requirements shall not extend to the identification of matters whose relevance to the issues to be considered in the proceedings would be insignificant. They shall take into account the need to respect the personal privacy of those to whom these rules apply and shall not be so administratively burdensome as to make it impracticable for otherwise qualified persons to serve on panels, the Standing appellate Body, or in other dispute settlement roles.

4. (a) all panelists, arbitrators and experts, prior to confirmation of their appointment, shall complete the form at annex 3 of these rules. Such information would be disclosed to the Chair of the dispute Settlement Body (“dSB”) for consideration by the parties to the dispute.

(b) (i) Persons serving on the Standing appellate Body who, through rotation, are selected to hear the appeal of a particular panel case, shall review the factual portion of the Panel report and complete the form at annex 3. Such information would be disclosed to the Standing appellate Body for its consideration whether the member concerned should hear a particular appeal.

(ii) Standing appellate Body support staff shall disclose any relevant matter to the Standing appellate Body, for its consideration in deciding on the assignment of staff to assist in a particular appeal.

(c) When considered to assist in a dispute, members of the Secretariat shall disclose to the director-general of the WTo the information required under paragraph Vi:2 of these rules and any other relevant information required under the Staff regulations, including the

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information described in the footnote.**2

5. during a dispute, each covered person shall also disclose any new information relevant to paragraph Vi:2 above at the earliest time they become aware of it.

6. The Chair of the dSB, the Secretariat, parties to the dispute, and other individuals involved in the dispute settlement mechanism shall maintain the confidentiality of any information revealed through this disclosure process, even after the panel process and its enforcement procedures, if any, are completed.

VII. Confidentiality

1. each covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential. no covered person shall at any time use such information acquired during such deliberations and proceedings to gain personal advantage or advantage for others.

2. during the proceedings, no covered person shall engage in ex parte contacts concerning matters under consideration. Subject to paragraph Vii:1, no covered person shall make any statements on such proceedings or the issues in dispute in which that person is participating, until the report of the panel or the Standing appellate Body has been derestricted.

**2 Pending adoption of the Staff regulations, members of the Secretariat shall make disclosures to the director-general in accordance with the following draft provision to be included in the Staff regula-tions:

“When paragraph Vi:4(c) of the rules of Conduct for the dSU is applicable, members of the Secre-tariat would disclose to the director-general of the WTo the information required in paragraph Vi:2 of those rules, as well as any information regarding their participation in earlier formal consideration of the specific measure at issue in a dispute under any provisions of the WTo agreement, including through formal legal advice under article 27.2 of the dSU, as well as any involvement with the dis-pute as an official of a WTo Member government or otherwise professionally, before having joined the Secretariat.

The director-general shall consider any such disclosures in deciding on the assignment of members of the Secretariat to assist in a dispute.

When the director-general, in the light of his consideration, including of available Secretariat re-sources, decides that a potential conflict of interest is not sufficiently material to warrant non-assign-ment of a particular member of the Secretariat to assist in a dispute, the director-general shall inform the panel of his decision and of the relevant supporting information.”

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VIII. Procedures Concerning Subsequent Disclosure and Possible Material Violations

1. any party to a dispute, conducted pursuant to the WTo agreement, who possesses or comes into possession of evidence of a material violation of the obligations of independence, impartiality or confidentiality or the avoidance of direct or indirect conflicts of interest by covered persons which may impair the integrity, impartiality or confidentiality of the dispute settlement mechanism, shall at the earliest possible time and on a confidential basis, submit such evidence to the Chair of the dSB, the director-general or the Standing appellate Body, as appropriate according to the respective procedures detailed in paragraphs Viii:5 to Viii:17 below, in a written statement specifying the relevant facts and circumstances. other Members who possess or come into possession of such evidence, may provide such evidence to the parties to the dispute in the interest of maintaining the integrity and impartiality of the dispute settlement mechanism.

2. When evidence as described in paragraph Viii:1 is based on an alleged failure of a covered person to disclose a relevant interest, relationship or matter, that failure to disclose, as such, shall not be a sufficient ground for disqualification unless there is also evidence of a material violation of the obligations of independence, impartiality, confidentiality or the avoidance of direct or indirect conflicts of interests and that the integrity, impartiality or confidentiality of the dispute settlement mechanism would be impaired thereby.

3. When such evidence is not provided at the earliest practicable time, the party submitting the evidence shall explain why it did not do so earlier and this explanation shall be taken into account in the procedures initiated in paragraph Viii:1.

4. Following the submission of such evidence to the Chair of the dSB, the director-general of the WTo or the Standing appellate Body, as specified below, the procedures outlined in paragraphs Viii:5 to Viii:17 below shall be completed within fifteen working days.

Panelists, arbitrators, experts

5. if the covered person who is the subject of the evidence is a panelist, an arbitrator or an expert, the party shall provide such evidence to the Chair of the dSB.

6. Upon receipt of the evidence referred to in paragraphs Viii:1 and Viii:2, the Chair of the dSB shall forthwith provide the evidence to the person who is the subject of such evidence, for consideration by the latter.

7. if, after having consulted with the person concerned, the matter is not resolved, the Chair of the dSB shall forthwith provide all the evidence, and any additional information from the person concerned, to the parties to the dispute. if the

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person concerned resigns, the Chair of the dSB shall inform the parties to the dispute and, as the case may be, the panelists, the arbitrator(s) or experts.

8. in all cases, the Chair of the dSB, in consultation with the director-general and a sufficient number of Chairs of the relevant Council or Councils to provide an odd number, and after having provided a reasonable opportunity for the views of the person concerned and the parties to the dispute to be heard, would decide whether a material violation of these rules as referred to in paragraphs Viii:1 and Viii:2 above has occurred. Where the parties agree that a material violation of these rules has occurred, it would be expected that, consistent with maintaining the integrity of the dispute settlement mechanism, the disqualification of the person concerned would be confirmed.

9. The person who is the subject of the evidence shall continue to participate in the consideration of the dispute unless it is decided that a material violation of these rules has occurred.

10. The Chair of the dSB shall thereafter take the necessary steps for the appointment of the person who is the subject of the evidence to be formally revoked, or excused from the dispute as the case may be, as of that time.

Secretariat

11. if the covered person who is the subject of the evidence is a member of the Secretariat, the party shall only provide the evidence to the director-general of the WTo, who shall forthwith provide the evidence to the person who is the subject of such evidence and shall further inform the other party or parties to the dispute and the panel.

12. it shall be for the director-general to take any appropriate action in accordance with the Staff regulations.***

13. The director-general shall inform the parties to the dispute, the panel and the Chair of the dSB of his decision, together with relevant supporting information.

Standing appellate Body

*** Pending adoption of the Staff regulations, the director-general would act in accordance with the following draft provision for the Staff regulations: “if paragraph Viii:11 of the rules of Conduct for the dSU governing the settlement of disputes is invoked, the director-general shall consult with the person who is the subject of the evidence and the panel and shall, if necessary, take appropriate disciplinary action”.

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14. if the covered person who is the subject of the evidence is a member of the Standing appellate Body or of the Standing appellate Body support staff, the party shall provide the evidence to the other party to the dispute and the evidence shall thereafter be provided to the Standing appellate Body.

15. Upon receipt of the evidence referred to in paragraphs Viii:1 and Viii:2 above, the Standing appellate Body shall forthwith provide it to the person who is the subject of such evidence, for consideration by the latter.

16. it shall be for the Standing appellate Body to take any appropriate action after having provided a reasonable opportunity for the views of the person concerned and the parties to the dispute to be heard.

17. The Standing appellate Body shall inform the parties to the dispute and the Chair of the dSB of its decision, together with relevant supporting information.

18. Following completion of the procedures in paragraphs Viii:5 to Viii:17, if the appointment of a covered person, other than a member of the Standing appellate Body, is revoked or that person is excused or resigns, the procedures specified in the dSU for initial appointment shall be followed for appointment of a replacement, but the time-periods shall be half those specified in the dSU.**** The member of the Standing appellate Body who, under that Body’s rules, would next be selected through rotation to consider the dispute, would automatically be assigned to the appeal. The panel, members of the Standing appellate Body hearing the appeal, or the arbitrator, as the case may be, may then decide after consulting with the parties to the dispute, on any necessary modifications to their working procedures or proposed timetable.

19. all covered persons and Members concerned shall resolve matters involving possible material violations of these rules as expeditiously as possible so as not to delay the completion of proceedings, as provided in the dSU.

20. except to the extent strictly necessary to carry out this decision, all information concerning possible or actual material violations of these rules shall be kept confidential.

IX. Review

1. These rules of Conduct shall be reviewed within two years of their adoption and a decision shall be taken by the dSB as to whether to continue, modify or terminate these rules.

**** appropriate adjustments would be made in the case of appointments pursuant to the agreement on Subsidies and Countervailing Measures.

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anneX 1a

arbitrators acting pursuant to the following provisions:

- articles 21.3(c); 22.6 and 22.7; 26.1(c) and 25 of the dSU;

- article 8.5 of the agreement on Subsidies and Countervailing Measures;

- articles XXi.3 and XXii.3 of the general agreement on Trade in Services.

anneX 1b

experts advising or providing information pursuant to the following provisions:

- article 13.1; 13.2 of the dSU;

- article 4.5 of the agreement on Subsidies and Countervailing Measures;

- article 11.2 of the agreement on the application of Sanitary and Phytosanitary Measures;

- article 14.2; 14.3 of the agreement on Technical Barriers to Trade.

anneX 2

illUSTraTiVe liST oF inForMaTion To Be diSCloSed

This list contains examples of information of the type that a person called upon to serve in a dispute should disclose pursuant to the Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes.

each covered person, as defined in Section iV:1 of these rules of Conduct has a continuing duty to disclose the information described in Section Vi:2 of these rules which may include the following:

(a) financial interests (e.g. investments, loans, shares, interests, other debts); business interests (e.g. directorship or other contractual interests); and property interests relevant to the dispute in question;

(b) professional interests (e.g. a past or present relationship with private clients, or any interests the person may have in domestic or international proceedings, and their implications, where these involve issues similar to those addressed in the dispute in question);

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(c) other active interests (e.g. active participation in public interest groups or other organisations which may have a declared agenda relevant to the dispute in question);

(d) considered statements of personal opinion on issues relevant to the dispute in question (e.g. publications, public statements);

(e) employment or family interests (e.g. the possibility of any indirect advantage or any likelihood of pressure which could arise from their employer, business associates or immediate family members).

anneX 3

dispute number: ________

World Trade organizaTiondiSCloSUre ForM

i have read the Understanding on rules and Procedures governing the Settlement of disputes (dSU) and the rules of Conduct for the dSU. i understand my continuing duty, while participating in the dispute settlement mechanism, and until such time as the dispute Settlement Body (dSB) makes a decision on adoption of a report relating to the proceeding or notes its settlement, to disclose herewith and in future any information likely to affect my independence or impartiality, or which could give rise to justifiable doubts as to the integrity and impartiality of the dispute settlement mechanism; and to respect my obligations regarding the confidentiality of dispute settlement proceedings.

Signed: dated:

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anneX iii

Table of Consolidated and revised Versions of the Working Procedures for Appellate Review

document number

effective date rules amended

Working documents/explanatory

Texts

Principal dSB Meeting(s) at

which amendments discussed, Minutes

WT/aB/WP/1

15 February 1996

n/a WT/aB/WP/W/1

31 January 1996, WT/dSB/M/10 and 21 February 1996,

WT/dSB/M/11

WT/aB/WP/2

28 February 1997

rule 5(2) and annex ii

WT/aB/WP/W/2, WT/aB/

WP/W/3

25 February 1997, WT/dSB/M/29

WT/aB/WP/3

24 January 2002

rule 5(2) WT/aB/WP/W/4, WT/aB/

WP/W/5

24 July 2001, WT/dSB/M/107

WT/aB/WP/4

1 May 2003 rules 24 and 27(3), with

consequential amendments to rules 1, 16, 18, 19, and 28, and

annex i


WP/W/7

23 october 2002, WT/dSB/M/134

WT/aB/WP/5

1 January 2005

rules 1, 18, 20, 21, 23, 23 bis, and 27, and annexes i

and iii


WP/W/9

19 May 2004, WT/dSB/M/169

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WorKing ProCedUreS For aPPellaTe reVieW

Communication from the Appellate Body - New Numbering System for Documents (Extract from WT/AB/WP/W/9)

new numbering System for documents

[...] The appellate Body has decided to introduce, a new, more coherent numbering system for the Working Procedures. Until now, all documents relating to the Working Procedures had been issued with a “WT/aB/WP” series number, irrespective of the nature of such documents. Thus, the several versions of the Working Procedures themselves as well as any explanatory documents or other communications about the Working Procedures have a “WT/aB/WP” series number. We believe that this numbering system could make it difficult for Members to identify the most recent version of the Working Procedures. accordingly, as from 2005, the “WT/aB/WP” series will be reserved for the various versions of the Working Procedures themselves. The latest number in the series will be the Working Procedures in force. all previous versions of the Working Procedures will be re-issued with a note indicating that they are no longer in force and, as necessary, a new “WT/aB/WP” number.

We will also introduce a new “WT/aB/WP/W” series for working or discussion papers, communications, and explanations relating to the Working Procedures. in this connection, certain documents previously issued with a “WT/aB/WP” number will be re-issued with a new “WT/aB/WP/W” number.1 in addition, three communications from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body that were previously provided to Members in hard copy only, without any document numbers, will be circulated for the first time as “WT/aB/WP/W” documents.

1 notes in both the new “WT/aB/WP/W” document and any renumbered “WT/aB/WP” document will explain the new document number(s) and allow readers to locate the document that they seek even if its number has changed. For example, the new WT/aB/WP/2 will contain a note explaining that the original document WT/aB/WP/2 has been re-issued as document WT/aB/WP/W/3. Thus far, documents WT/aB/WP/1 through WT/aB/WP/8 have been issued. Thus, once the eighth docu-ment in the updated “WT/aB/WP” series has been issued (that is, the eighth version of the Working Procedures themselves), there will no longer be a need for such explanatory notes about number changes.

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Finally we are introducing, as a new annex iii to the Working Procedures, a “Table of Consolidated and revised Versions of the Working Procedures for Appellate Review”. This table should provide a useful resource for Members wishing to track previous amendments to the Working Procedures as well as contemporaneous discussions of such amendments.

The table below identifies the document numbers that will change as we introduce the new system. a copy of the “Table of Consolidated and revised Versions of the Working Procedures for Appellate Review” is included in both annexes B and C to this letter.

old doCUMenT nUMBer

neW doCUMenT nUMBer doCUMenT TiTle, daTe

no document number assigned when hard copy circulated in 1996

WT/aB/WP/W/1 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 7 February 1996

WT/aB/WP/1 WT/aB/WP/1

(no change)

Working Procedures for Appellate Review, 15 February 1996

WT/dSB/rC/2 WT/dSB/rC/2, WT/aB/WP/W/2

Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 20 January 1997

WT/aB/WP/2 WT/aB/WP/W/3 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 24 February 1997

WT/aB/WP/3 WT/aB/WP/2 Working Procedures for Appellate Review,28 February 1997


WT/aB/WP/W/4 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 10 July 2001


WT/aB/WP/W/5 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 18 September 2001

WT/aB/WP/4 WT/aB/WP/3 Working Procedures for Appellate Review, 24 January 2002

WT/aB/WP/5 WT/aB/WP/W/6 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 17 december 2002

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old doCUMenT nUMBer

neW doCUMenT nUMBer doCUMenT TiTle, daTe

WT/aB/WP/6 WT/aB/WP/W/7 Communication from the Chairman of the appellate Body to the Chairman of the dispute Settlement Body, 9 april 2003

WT/aB/WP/7 WT/aB/WP/4 Working Procedures for Appellate Review, 1 May 2003

WT/aB/WP/8 WT/aB/WP/W/8 Communication from the Chairman of the appellate Body to the Chairperson of the dispute Settlement Body, 8 april 2004

MINISTERIAL CONFERENCE Sixth session, Hong Kong, China 2005

doHa WorK PrograMMe

MiniSTerial deClaraTion Adopted by the Ministerial Conference on 18 December 2005

(WT/MIN(05)/DEC)

1. We reaffirm the declarations and decisions we adopted at doha, as well as the decision adopted by the general Council on 1 august 2004, and our full commitment to give effect to them. We renew our resolve to complete the doha Work Programme fully and to conclude the negotiations launched at doha successfully in 2006.

2. We emphasize the central importance of the development dimension in every aspect of the doha Work Programme and recommit ourselves to making it a meaningful reality, in terms both of the results of the negotiations on market access and rule-making and of the specific development-related issues set out below.

3. in pursuance of these objectives, we agree as follows:

Agriculture negotiations

4. Wereaffirmourcommitmenttothemandateonagricultureassetoutinparagraph13oftheDohaMinisterialDeclarationandto theFrameworkadoptedby theGeneralCouncilon1August2004.WetakenoteofthereportbytheChairmanoftheSpecialSessiononhisownresponsibility(TN/AG/21,containedinAnnexA).WewelcometheprogressmadebytheSpecialSessionoftheCommitteeonAgriculturesince2004andrecordedtherein.

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5. On domestic support, there will be three bands forreductions inFinalBoundTotalAMSand in the overall cut intrade-distorting domestic support, with higher linear cuts inhigherbands.Inbothcases,theMemberwiththehighestlevelofpermittedsupportwillbeinthetopband,thetwoMemberswiththesecondandthirdhighestlevelsofsupportwillbeinthemiddleband and all otherMembers, including all developing countryMembers, will be in the bottom band. In addition, developedcountryMembersinthelowerbandswithhighrelativelevelsofFinalBoundTotalAMSwillmakeanadditionaleffort inAMSreduction. Wealsonote that therehasbeen someconvergenceconcerningthereductionsinFinalBoundTotalAMS,theoverallcut in trade-distorting domestic support and in both product-specificandnonproduct-specificde minimislimits.Disciplineswill be developed to achieve effective cuts in trade-distortingdomestic support consistent with the Framework. The overallreduction in trade-distorting domestic supportwill still need tobemadeevenifthesumofthereductionsinFinalBoundTotalAMS, de minimis andBlue Box paymentswould otherwise beless than that overall reduction. Developing countryMemberswithnoAMScommitmentswillbeexemptfromreductionsinde minimisandtheoverallcutintrade-distortingdomesticsupport.Green Box criteria will be reviewed in line with paragraph16 of the Framework, inter alia, to ensure that programmes ofdevelopingcountryMembers thatcausenotmore thanminimaltrade-distortionareeffectivelycovered.6. Weagreetoensuretheparalleleliminationofallformsof export subsidies anddisciplineson all exportmeasureswithequivalenteffecttobecompletedbytheendof2013.Thiswillbeachievedinaprogressiveandparallelmanner,tobespecifiedinthemodalities,sothatasubstantialpartisrealizedbytheendofthefirsthalfoftheimplementationperiod.Wenoteemergingconvergence on some elements of disciplines with respect toexportcredits,exportcreditguaranteesorinsuranceprogrammeswith repaymentperiodsof180daysandbelow. Weagree thatsuch programmes should be self-financing, reflecting marketconsistency,andthattheperiodshouldbeofasufficientlyshortduration so asnot to effectively circumvent real commercially-orienteddiscipline.Asameansofensuringthat trade-distortingpracticesofSTEsareeliminated,disciplinesrelatingtoexportingSTEswillextend to the futureuseofmonopolypowersso thatsuchpowerscannotbeexercisedinanywaythatwouldcircumvent

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Ministerial Conference

thedirect disciplinesonSTEson export subsidies, governmentfinancing and the underwriting of losses. On food aid, wereconfirmourcommitmenttomaintainanadequatelevelandtotakeintoaccounttheinterestsoffoodaidrecipientcountries.Tothis end, a «safe box» for bona fide food aidwill be providedtoensurethatthereisnounintendedimpedimenttodealingwithemergency situations. Beyond that,wewill ensure eliminationofcommercialdisplacement.Tothisend,wewillagreeeffectivedisciplinesonin-kindfoodaid,monetizationandre-exportssothattherecanbenoloop-holeforcontinuingexportsubsidization.Thedisciplinesonexportcredits,exportcreditguaranteesorinsuranceprogrammes,exportingstatetradingenterprisesandfoodaidwillbecompletedby30April2006aspartofthemodalities,includingappropriateprovisioninfavourofleast-developedandnetfood-importingdevelopingcountriesasprovidedforinparagraph4oftheMarrakeshDecision.Thedateabovefortheeliminationofallformsofexportsubsidies,togetherwiththeagreedprogressivityandparallelism,willbeconfirmedonlyupon thecompletionofthemodalities. Developing countryMemberswill continue tobenefit from the provisions ofArticle 9.4 of theAgreement onAgricultureforfiveyearsaftertheend-dateforeliminationofallformsofexportsubsidies.7. On market access, we note the progress made on ad valoremequivalents. Weadopt fourbandsforstructuring tariffcuts, recognizing that we need now to agree on the relevantthresholds – including those applicable for developing countryMembers. We recognize the need to agree on treatment ofsensitiveproducts,takingintoaccountalltheelementsinvolved.WealsonotethattherehavebeensomerecentmovementsonthedesignationandtreatmentofSpecialProductsandelementsoftheSpecial Safeguard Mechanism. Developing country Memberswillhavetheflexibility toself-designateanappropriatenumberof tariff lines as Special Products guided by indicators basedon the criteria of food security, livelihood security and ruraldevelopment. Developing countryMemberswill alsohave theright tohaverecoursetoaSpecialSafeguardMechanismbasedonimportquantityandpricetriggers,withprecisearrangementstobefurtherdefined.SpecialProductsandtheSpecialSafeguardMechanism shall be an integral part of the modalities and theoutcomeofnegotiationsinagriculture.

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8. Onotherelementsofspecialanddifferentialtreatment,wenoteinparticulartheconsensusthatexistsintheFrameworkonseveral issues inall threepillarsofdomesticsupport,exportcompetitionandmarketaccessandthatsomeprogresshasbeenmadeonotherspecialanddifferentialtreatmentissues.9. We reaffirm that nothing we have agreed herecompromisestheagreementalreadyreflectedintheFrameworkonotherissuesincludingtropicalproductsandproductsofparticularimportancetothediversificationofproductionfromthegrowingofillicitnarcoticcrops,long-standingpreferencesandpreferenceerosion.10. However,we recognize thatmuch remains to be doneinordertoestablishmodalitiesandtoconcludethenegotiations.Therefore,weagree to intensifyworkonalloutstanding issuesto fulfil the Doha objectives, in particular, we are resolved toestablishmodalities no later than 30April 2006 and to submitcomprehensivedraftSchedulesbasedonthesemodalitiesnolaterthan31July2006.

Cotton 11. We recall the mandate given by the Members in theDecision adoptedby theGeneralCouncil on 1August 2004 toaddresscottonambitiously,expeditiouslyandspecifically,withinthe agriculture negotiations in relation to all trade-distortingpoliciesaffectingthesectorinallthreepillarsofmarketaccess,domesticsupportandexportcompetition,asspecifiedintheDohatextandtheJuly2004Frameworktext.Wenotetheworkalreadyundertaken in the Sub-Committee onCotton and the proposalsmadewithregardtothismatter.WithoutprejudicetoMembers’currentWTOrightsandobligations,includingthoseflowingfromactions taken by theDispute SettlementBody,we reaffirmourcommitmenttoensurehavinganexplicitdecisiononcottonwithinthe agriculturenegotiations and through theSub-CommitteeonCottonambitiously,expeditiouslyandspecificallyasfollows:

– Allformsofexportsubsidiesforcottonwillbeeliminatedbydevelopedcountriesin2006.

– Onmarket access, developed countries will give dutyand quota free access for cotton exports from least-developedcountries(LDCs)fromthecommencementoftheimplementationperiod.

– Membersagreethattheobjectiveisthat,asanoutcomeforthenegotiations,tradedistortingdomesticsubsidiesfor cotton production be reduced more ambitiously

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thanunderwhatevergeneralformulaisagreedandthatitshouldbeimplementedoverashorterperiodoftimethangenerallyapplicable.Wecommitourselvestogivepriorityinthenegotiationstoreachsuchanoutcome.

12. With regard to the development assistance aspects ofcotton,wewelcometheConsultativeFrameworkprocessinitiatedby the Director-General to implement the decisions on theseaspectspursuanttoparagraph1.boftheDecisionadoptedbytheGeneralCouncilon1August2004.WetakenoteofhisPeriodicReports and the positive evolution of development assistancenotedtherein.WeurgetheDirector-Generaltofurtherintensifyhisconsultativeeffortswithbilateraldonorsandwithmultilateralandregionalinstitutions,withemphasisonimprovedcoherence,coordination and enhanced implementation and to explore thepossibilityofestablishingthroughsuchinstitutionsamechanismtodealwithincomedeclinesinthecottonsectoruntiltheendofsubsidies.Notingtheimportanceofachievingenhancedefficiencyandcompetitivenessinthecottonproducingprocess,weurgethedevelopment community to further scale up its cotton-specificassistanceandtosupporttheeffortsoftheDirector-General.Inthis context,we urgeMembers to promote and support South-Southcooperation,includingtransferoftechnology.Wewelcomethe domestic reform efforts byAfrican cotton producers aimedatenhancingproductivityandefficiency,andencouragethemtodeepenthisprocess.Wereaffirmthecomplementarityofthetradepolicyanddevelopmentassistanceaspectsofcotton. WeinvitetheDirector-GeneraltofurnishathirdPeriodicReporttoournextSessionwith updates, at appropriate intervals in themeantime,to the General Council, while keeping the Sub-Committee onCotton fully informed of progress. Finally, as regards followupandmonitoring,werequesttheDirector-Generaltosetupanappropriatefollow-upandmonitoringmechanism.

NAMA negotiations

13. We reaffirm our commitment to the mandate fornegotiationsonmarketaccessfornon-agriculturalproductsassetoutinparagraph16oftheDohaMinisterialDeclaration.Wealsoreaffirmall the elementsof theNAMAFramework adoptedbytheGeneralCouncilon1August2004.WetakenoteofthereportbytheChairmanoftheNegotiatingGrouponMarketAccessonhisownresponsibility(TN/MA/16,containedinAnnexB). WewelcometheprogressmadebytheNegotiatingGrouponMarketAccesssince2004andrecordedtherein.

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14. We adopt a Swiss Formula with coefficients at levelswhichshallinter alia:

− Reduce or as appropriate eliminate tariffs, includingthereductionoreliminationoftariffpeaks,hightariffsandtariffescalation,inparticularonproductsofexportinteresttodevelopingcountries;and

− Take fully into account the special needs and interestsofdevelopingcountries,includingthroughlessthanfullreciprocityinreductioncommitments.

We instruct the Negotiating Group to finalize its structure anddetails assoonaspossible15. We reaffirm the importance of special and differentialtreatmentandlessthanfullreciprocityinreductioncommitments,includingparagraph8oftheNAMAFramework,asintegralpartsofthemodalities.WeinstructtheNegotiatingGrouptofinalizeitsdetails assoonaspossible.16. Infurtheranceofparagraph7oftheNAMAFramework,werecognizethatMembersarepursuingsectoralinitiatives.Tothisend,weinstructtheNegotiatingGrouptoreviewproposalswith a view to identifying those which could garner sufficientparticipation to be realized. Participation should be on a non-mandatorybasis.17. Forthepurposeofthesecondindentofparagraph5oftheNAMAFramework,weadoptanon-linearmark-upapproachtoestablishbaseratesforcommencingtariffreductions.WeinstructtheNegotiatingGrouptofinalizeitsdetailsassoonaspossible.18. We take note of the progressmade to convert nonad valoremdutiestoad valoremequivalentsonthebasisofanagreedmethodologyascontainedinJOB(05)/166/Rev.1.19. We take note of the level of common understandingreachedontheissueofproductcoverageanddirecttheNegotiatingGrouptoresolvedifferencesonthelimitedissuesthatremainasquicklyaspossible.20. As a supplement to paragraph 16 of the NAMAFramework,we recognize the challenges thatmay be faced bynon-reciprocalpreferencebeneficiaryMembersasaconsequenceoftheMFNliberalizationthatwillresultfromthesenegotiations.

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We instruct the Negotiating Group to intensify work on theassessment of the scope of the problemwith a view to findingpossiblesolutions.21. We note the concerns raised by small, vulnerableeconomies,andinstructtheNegotiatingGrouptoestablishwaystoprovideflexibilitiesfortheseMemberswithoutcreatingasub-categoryofWTOMembers.22. WenotethattheNegotiatingGrouphasmadeprogressin the identification, categorization and examination of notifiedNTBs.WealsotakenotethatMembersaredevelopingbilateral,verticalandhorizontalapproachestotheNTBnegotiations,andthatsomeoftheNTBsarebeingaddressedinotherforaincludingother NegotiatingGroups. We recognize the need for specificnegotiating proposals and encourage participants tomake suchsubmissionsasquicklyaspossible.23. However,we recognize thatmuch remains to be doneinordertoestablishmodalitiesandtoconcludethenegotiations.Therefore,weagree to intensifyworkonalloutstanding issues to fulfil the Doha objectives, in particular, we are resolved toestablishmodalities no later than 30April 2006 and to submitcomprehensivedraftSchedulesbasedonthesemodalitiesnolaterthan31July2006.

Balance between Agriculture and NAMA

24. We recognize that it is important to advance thedevelopmentobjectivesofthisRoundthroughenhancedmarketaccessfordevelopingcountriesinbothAgricultureandNAMA.Tothatend,weinstructournegotiatorstoensurethatthereisacomparablyhighlevelofambitioninmarketaccessforAgricultureandNAMA.Thisambitionistobeachievedinabalancedandproportionatemannerconsistentwiththeprincipleofspecialanddifferentialtreatment.

Services negotiations

25. The negotiations on trade in services shall proceed totheirconclusionwithaviewtopromotingtheeconomicgrowthof all trading partners and the development of developing andleast-developed countries, and with due respect for the rightofMembers to regulate. In this regard,we recall and reaffirmthe objectives and principles stipulated in theGATS, theDohaMinisterial Declaration, the Guidelines and Procedures for theNegotiationsonTradeinServicesadoptedbytheSpecialSessionoftheCouncilforTradeinServiceson28March2001andtheModalitiesfortheSpecialTreatmentforLeast-DevelopedCountry

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MembersintheNegotiationsonTradeinServicesadoptedon3September2003,aswellasAnnexCoftheDecisionadoptedbytheGeneralCouncilon1August2004.26. We urge all Members to participate actively in thesenegotiations towards achieving a progressively higher level ofliberalizationoftradeinservices,withappropriateflexibilityforindividualdevelopingcountriesasprovidedforinArticleXIXoftheGATS.NegotiationsshallhaveregardtothesizeofeconomiesofindividualMembers,bothoverallandinindividualsectors.WerecognizetheparticulareconomicsituationofLDCs,includingthedifficultiestheyface,andacknowledgethattheyarenotexpectedtoundertakenewcommitments.27. We are determined to intensify the negotiations inaccordance with the above principles and the Objectives,ApproachesandTimelinessetout inAnnexCtothisdocumentwith a view to expanding the sectoral and modal coverage ofcommitmentsandimprovingtheirquality.Inthisregard,particularattentionwillbegiventosectorsandmodesofsupplyofexportinteresttodevelopingcountries.

Rules negotiations

28. We recall the mandates in paragraphs 28 and 29 oftheDohaMinisterialDeclaration and reaffirmour commitmentto thenegotiationson rules, asweset forth inAnnexD to thisdocument.

TRIPS negotiations

29. WetakenoteofthereportoftheChairmanoftheSpecialSessionoftheCouncilforTRIPSsettingouttheprogressinthenegotiations on the establishment of a multilateral system ofnotificationandregistrationofgeographicalindicationsforwinesandspirits,asmandatedinArticle23.4oftheTRIPSAgreementandparagraph18oftheDohaMinisterialDeclaration,containedindocumentTN/IP/14,andagreetointensifythesenegotiationsinorder tocomplete themwithin theoverall time-framefor theconclusion of the negotiations that were foreseen in the DohaMinisterialDeclaration.

Environment negotiations

30. We reaffirm the mandate in paragraph 31 of theDoha Ministerial Declaration aimed at enhancing the mutualsupportiveness of trade and environment and welcome thesignificant work undertaken in the Committee on Trade andEnvironment(CTE)inSpecialSession.WeinstructMemberstointensifythenegotiations,withoutprejudgingtheiroutcome,onallpartsofparagraph31tofulfilthemandate.

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31. Werecognizetheprogressintheworkunderparagraph31(i)basedonMembers’submissionsontherelationshipbetweenexisting WTO rules and specific trade obligations set out inmultilateral environmental agreements (MEAs). We furtherrecognize the work undertaken under paragraph 31(ii) towardsdevelopingeffectiveproceduresforregularinformationexchangebetweenMEA Secretariats and the relevantWTO committees,andcriteriaforthegrantingofobserverstatus.32. Werecognizethatrecentlymoreworkhasbeencarriedout under paragraph 31(iii) through numerous submissions byMembersanddiscussionsintheCTEinSpecialSession,includingtechnicaldiscussions,whichwerealsoheldininformalinformationexchangesessionswithoutprejudicetoMembers’positions.Weinstruct Members to complete the work expeditiously underparagraph31(iii).

Trade Facilitationnegotiations

33. We recall and reaffirm themandate andmodalities fornegotiations onTradeFacilitation contained inAnnexDof theDecision adopted by the General Council on 1 August 2004.Wenotewithappreciation the reportof theNegotiatingGroup,attached inAnnexE to thisdocument,and thecommentsmadebyourdelegationsonthatreportasreflectedindocumentTN/TF/M/11.Weendorsetherecommendationscontainedinparagraphs3,4,5,6and7ofthereport.

DSU negotiations

34. We take note of the progress made in the DisputeSettlementUnderstandingnegotiationsas reflected in thereportbytheChairmanoftheSpecialSessionoftheDisputeSettlementBodytotheTradeNegotiationsCommittee(TNC)anddirecttheSpecialSessiontocontinuetoworktowardsarapidconclusionofthenegotiations.

S&D treatment 35. We reaffirm thatprovisions for special anddifferential(S&D) treatment are an integral part of theWTOAgreements.We renew our determination to fulfil themandate contained inparagraph 44 of the Doha Ministerial Declaration and in theDecision adopted by the General Council on 1 August 2004,that all S&D treatment provisions be reviewedwith a view tostrengtheningthemandmakingthemmoreprecise,effectiveandoperational.36. We take note of the work done on the Agreement-specificproposals,especiallythefiveLDCproposals.Weagreeto adopt the decisions contained inAnnex F to this document.However,we also recognize that substantialwork still remains

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to be done. We commit ourselves to address the developmentinterests and concerns of developing countries, especially theLDCs, in the multilateral trading system, and we recommitourselves to complete the task we set ourselves at Doha. Weaccordingly instruct theCommittee onTrade andDevelopmentin Special Session to expeditiously complete the review of allthe outstandingAgreement-specific proposals and report to theGeneralCouncil,withclearrecommendationsforadecision,byDecember2006.37. WeareconcernedatthelackofprogressontheCategoryII proposals that had been referred to otherWTO bodies andnegotiating groups. We instruct these bodies to expeditiouslycomplete the consideration of these proposals and reportperiodicallytotheGeneralCouncil,withtheobjectiveofensuringthatclearrecommendationsforadecisionaremadenolaterthanDecember2006.WealsoinstructtheSpecialSessiontocontinuetocoordinateitseffortswiththesebodies,soastoensurethatthisworkiscompletedontime.38. We further instruct the Special Session, within theparameters of the Dohamandate, to resumework on all otheroutstanding issues, including on the cross-cutting issues, themonitoringmechanism,andtheincorporationofS&DtreatmentintothearchitectureofWTOrules,andreportonaregularbasistotheGeneralCouncil.

Implementation 39. Wereiterate the instruction in theDecisionadoptedbytheGeneralCouncilon1August2004 to theTNC,negotiatingbodies and other WTO bodies concerned to redouble theirefforts tofind appropriate solutions as a priority tooutstandingimplementation-related issues. We take note of the workundertaken by the Director-General in his consultative processonalloutstandingimplementationissuesunderparagraph12(b)of theDohaMinisterialDeclaration, includingonissuesrelatedto the extension of the protection of geographical indicationsprovided for inArticle23of theTRIPSAgreement toproductsotherthanwinesandspiritsandthoserelatedtotherelationshipbetweentheTRIPSAgreementandtheConventiononBiologicalDiversity.WerequesttheDirector-General,withoutprejudicetothepositionsofMembers,tointensifyhisconsultativeprocessonalloutstanding implementation issuesunderparagraph12(b), ifneedbeby appointingChairpersonsof concernedWTObodiesas his Friends and/or by holding dedicated consultations. The

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Director-GeneralshallreporttoeachregularmeetingoftheTNCandtheGeneralCouncil.TheCouncilshall

TRIPS &Public Health

40. We reaffirm the importance we attach to the GeneralCouncilDecision of 30August 2003 on the Implementation ofParagraph6 of theDohaDeclaration on theTRIPSAgreementandPublicHealth,andtoanamendmenttotheTRIPSAgreementreplacingitsprovisions.Inthisregard,wewelcometheworkthathastakenplaceintheCouncilforTRIPSandtheDecisionoftheGeneralCouncilof6December2005onanAmendmentof theTRIPSAgreement.

Small Economies

41. WereaffirmourcommitmenttotheWorkProgrammeonSmallEconomiesandurgeMemberstoadoptspecificmeasuresthat would facilitate the fuller integration of small, vulnerableeconomiesintothemultilateral tradingsystem,withoutcreatingasub-categoryofWTOMembers.WetakenoteofthereportoftheCommitteeonTradeandDevelopmentinDedicatedSessionon the Work Programme on Small Economies to the GeneralCouncilandagreetotherecommendationsonfuturework.Weinstruct the Committee on Trade and Development, under theoverallresponsibilityoftheGeneralCouncil,tocontinuetheworkin theDedicated Session and tomonitor progress of the smalleconomies’ proposals in the negotiating and other bodies,withtheaimofprovidingresponsestothetrade-relatedissuesofsmalleconomiesassoonaspossiblebutnolaterthan31December2006.WeinstructtheGeneralCounciltoreportonprogressandactiontaken,togetherwithanyfurtherrecommendationsasappropriate,toournextSession.

Trade, Debt & Finance

42. We take note of the report transmitted by theGeneralCouncil on the work undertaken and progress made in theexaminationof the relationshipbetween trade,debtandfinanceand on the consideration of any possible recommendations onstepsthatmightbetakenwithinthemandateandcompetenceoftheWTO as provided in paragraph 36 of theDohaMinisterialDeclarationandagree that, buildingon thework carriedout todate,thisworkshallcontinueonthebasisoftheDohamandate.We instruct the General Council to report further to our nextSession.

Trade & Transfer of Technology

43. We take note of the report transmitted by theGeneralCouncil on the work undertaken and progress made in theexamination of the relationship between trade and transferof technology and on the consideration of any possible

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recommendationsonstepsthatmightbetakenwithinthemandateof the WTO to increase flows of technology to developingcountries.Recognizingtherelevanceoftherelationshipbetweentrade and transfer of technology to the development dimensionoftheDohaWorkProgrammeandbuildingontheworkcarriedouttodate,weagreethatthisworkshallcontinueonthebasisofthemandatecontained inparagraph37of theDohaMinisterialDeclaration.WeinstructtheGeneralCounciltoreportfurthertoournextSession.

Doha paragraph 19

44. We take note of the work undertaken by the Councilfor TRIPS pursuant to paragraph 19 of the Doha MinisterialDeclarationandagreethatthisworkshallcontinueonthebasisofparagraph19oftheDohaMinisterialDeclarationandtheprogressmadeintheCouncilforTRIPStodate.TheGeneralCouncilshallreportonitsworkinthisregardtoournextSession.

TRIPS non-violation and situation complaints

45. WetakenoteoftheworkdonebytheCouncilforTrade-Related Aspects of Intellectual Property Rights pursuant toparagraph11.1oftheDohaDecisiononImplementation-RelatedIssuesandConcernsandparagraph1.hoftheDecisionadoptedbytheGeneralCouncilon1August2004,anddirectittocontinueitsexaminationofthescopeandmodalitiesforcomplaintsofthetypesprovidedforundersubparagraphs1(b)and1(c)ofArticleXXIII of GATT 1994 and make recommendations to our nextSession. It is agreed that, in themeantime,Memberswill notinitiatesuchcomplaintsundertheTRIPSAgreement.

E-commerce 46. We take note of the reports from theGeneralCounciland subsidiary bodies on the Work Programme on ElectronicCommerce, and that the examination of issues under theWorkProgramme is not yet complete. We agree to reinvigorate thatwork, including thedevelopment-related issuesunder theWorkProgramme and discussions on the trade treatment, inter alia, of electronically delivered software. We agree tomaintain thecurrentinstitutionalarrangementsfortheWorkProgramme.WedeclarethatMemberswillmaintaintheircurrentpracticeofnotimposing customs duties on electronic transmissions until ournextSession.

LDCs 47. We reaffirm our commitment to effectively andmeaningfully integrate LDCs into the multilateral tradingsystem and shall continue to implement the WTO WorkProgramme for LDCs adopted in February 2002. Weacknowledge the seriousness of the concerns and interests of

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the LDCs in the negotiations as expressed in the LivingstoneDeclaration, adoptedby theirMinisters in June2005. We takenote that issues of interest to LDCs are being addressed in allareasofnegotiations andwewelcome theprogressmade sincethe Doha Ministerial Declaration as reflected in the DecisionadoptedbytheGeneralCouncilon1August2004.BuildinguponthecommitmentintheDohaMinisterialDeclaration,developed-country Members, and developing-country Members declaringthemselves inaposition todoso,agree to implementduty-freeandquota-freemarketaccessforproductsoriginatingfromLDCsas provided for in Annex F to this document. Furthermore,in accordance with our commitment in the Doha MinisterialDeclaration,Membersshall takeadditionalmeasurestoprovideeffectivemarketaccess,bothattheborderandotherwise,includingsimplified and transparent rules of origin so as to facilitateexportsfromLDCs.Intheservicesnegotiations,Membersshallimplement the LDCmodalities and give priority to the sectorsand modes of supply of export interest to LDCs, particularlywithregardtomovementofserviceprovidersunderMode4.WeagreetofacilitateandacceleratenegotiationswithaccedingLDCsbasedontheaccessionguidelinesadoptedbytheGeneralCouncilinDecember2002.Wecommittocontinuegivingourattentionand priority to concluding the ongoing accession proceedingsasrapidlyaspossible.WewelcometheDecisionbytheTRIPSCounciltoextendthetransitionperiodunderArticle66.1oftheTRIPS Agreement. We reaffirm our commitment to enhanceeffectivetrade-relatedtechnicalassistanceandcapacitybuildingtoLDCsonaprioritybasisinhelpingtoovercometheirlimitedhuman and institutional trade-related capacity to enable LDCstomaximize thebenefits resulting from theDohaDevelopmentAgenda(DDA).

Integrated Framework

48. We continue to attach high priority to the effectiveimplementation of the Integrated Framework (IF) and reiterateourendorsementoftheIFasaviableinstrumentforLDCs’tradedevelopment, building on its principles of country ownershipandpartnership.Wehighlighttheimportanceofcontributingtoreducingtheirsupplysideconstraints.WereaffirmourcommitmentmadeatDoha,andrecognizetheurgentneedtomaketheIFmoreeffectiveandtimelyinaddressingthetrade-relateddevelopmentneedsofLDCs.49. Inthisregard,weareencouragedbytheendorsementbytheDevelopmentCommitteeoftheWorldBankand

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InternationalMonetaryFund(IMF)atitsautumn2005meetingofanenhancedIF.WewelcometheestablishmentofaTaskForcebytheIntegratedFrameworkWorkingGroupasendorsedbytheIF SteeringCommittee (IFSC) aswell as an agreement on thethree elements which together constitute an enhanced IF. TheTaskForce,composedofdonorandLDCmembers,willproviderecommendations to theIFSCbyApril2006. TheenhancedIFshallenterintoforcenolaterthan31December2006.50. Weagree that theTaskForce, in linewith itsMandateand based on the three elements agreed to, shall providerecommendations on how the implementation of the IF can beimproved,inter alia,byconsideringwaysto:

1. provideincreased,predictable,andadditionalfundingonamulti-yearbasis;

2. strengthen the IF in-country, including throughmainstreaming trade into national development plansand poverty reduction strategies; more effectivefollow-up to diagnostic trade integration studies andimplementationofactionmatrices;andachievinggreaterandmoreeffectivecoordinationamongstdonorsandIFstakeholders,includingbeneficiaries;

3. improve the IF decision-making and managementstructure to ensure an effective and timely delivery oftheincreasedfinancialresourcesandprogrammes.

51. WewelcometheincreasedcommitmentalreadyexpressedbysomeMembersintherun-upto,andduring,thisSession.Weurge other development partners to significantly increase theircontributiontotheIFTrustFund. WealsourgethesixIFcoreagencies tocontinuetocooperatecloselyin theimplementationof the IF, to increase their investments in this initiative and tointensify their assistance in trade-related infrastructure, privatesectordevelopmentandinstitutionbuildingtohelpLDCsexpandanddiversifytheirexportbase.

Technical Cooperation

52. We note with appreciation the substantial increasein trade-related technical assistance since our Fourth Session,whichreflectstheenhancedcommitmentofMemberstoaddressthe increased demand for technical assistance, through bothbilateral and multilateral programmes. We note the progressmadeinthecurrentapproachtoplanningandimplementationofWTO’s programmes, as embodied in the TechnicalAssistance

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andTrainingPlansadoptedbyMembers,aswellastheimprovedqualityofthoseprogrammes.WenotethatastrategicreviewofWTO’stechnicalassistanceistobecarriedoutbyMembers,andexpectthatinfutureplanningandimplementationoftrainingandtechnicalassistance,theconclusionsandrecommendationsofthereviewwillbetakenintoaccount,asappropriate.53. We reaffirm the priorities established in paragraph38 of the Doha Ministerial Declaration for the delivery oftechnical assistance and urge the Director-General to ensurethat programmes focus accordinglyon the needs of beneficiarycountries and reflect the priorities and mandates adopted byMembers. We endorse the application of appropriate needsassessment mechanisms and support the efforts to enhanceownershipbybeneficiaries, inorder toensure thesustainabilityoftrade-relatedcapacitybuilding.WeinvitetheDirector-Generaltoreinforcethepartnershipsandcoordinationwithotheragenciesandregionalbodiesinthedesignandimplementationoftechnicalassistance programmes, so that all dimensions of trade-relatedcapacity building are addressed, in amanner coherentwith theprogrammesofotherproviders. Inparticular,weencourageallMemberstocooperatewiththeInternationalTradeCentre,whichcomplementsWTOworkbyprovidingaplatformforbusinesstointeractwithtradenegotiators,andpracticaladviceforsmallandmedium-sizedenterprises(SMEs)tobenefitfromthemultilateraltradingsystem.Inthisconnection,wenotetheroleoftheJointIntegratedTechnicalAssistanceProgramme(JITAP)inbuildingthecapacityofparticipatingcountries.54. Inordertocontinueprogressintheeffectiveandtimelydeliveryoftrade-relatedcapacitybuilding,inlinewiththepriorityMembers attach to it, the relevant structures of the Secretariatshouldbestrengthenedanditsresourcesenhanced.Wereaffirmourcommitment toensuresecureandadequatelevelsoffundingfor trade-related capacity building, including in the DohaDevelopmentAgendaGlobalTrustFund, toconclude theDohaWorkProgramme andimplementitsresults.

Commodity Issues

55. Werecognizethedependenceofseveraldevelopingandleast-developedcountrieson theexportofcommoditiesand theproblemstheyfacebecauseoftheadverseimpactofthelong-termdeclineandsharpfluctuationinthepricesofthesecommodities.WetakenoteoftheworkundertakenintheCommitteeonTradeandDevelopmentoncommodityissues,andinstructtheCommittee,

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within its mandate, to intensify its work in cooperation withotherrelevantinternationalorganizationsandreportregularlytotheGeneralCouncilwithpossiblerecommendations. Weagreethattheparticulartrade-relatedconcernsofdevelopingandleast-developedcountriesrelatedtocommoditiesshallalsobeaddressedin the course of the agriculture and NAMA negotiations. Wefurtheracknowledge that thesecountriesmayneedsupport andtechnical assistance to overcome the particular problems theyface,andurgeMembersandrelevantinternationalorganizationstoconsiderfavourablyrequestsbythesecountriesforsupportandassistance.

Coherence 56. WewelcometheDirector-General’sactionstostrengthentheWTO’scooperationwiththeIMFandtheWorldBankinthecontext of theWTO’s Marrakesh mandate on Coherence, andinvitehimtocontinuetoworkcloselywiththeGeneralCouncilinthisarea.WevaluetheGeneralCouncilmeetingsthatareheldwiththeparticipationoftheheadsoftheIMFandtheWorldBanktoadvanceourCoherencemandate.Weagreetocontinuebuildingon thatexperienceandexpandthedebateon international tradeand development policymaking and inter-agency cooperationwiththeparticipationofrelevantUNagencies.Inthatregard,wenotethediscussionstakingplaceintheWorkingGrouponTrade,DebtandFinanceon,inter alia,theissueofCoherence,andlookforwardtoanypossiblerecommendationsitmaymakeonstepsthatmight be takenwithin themandate and competence of theWTOonthisissue.

Aid for Trade 57. WewelcomethediscussionsofFinanceandDevelopmentMinistersinvariousfora,includingtheDevelopmentCommitteeof theWorldBankand IMF, thathave takenplace thisyearonexpanding Aid for Trade. Aid for Trade should aim to helpdevelopingcountries,particularlyLDCs,tobuildthesupply-sidecapacityand trade-related infrastructure that theyneed toassistthemtoimplementandbenefitfromWTOAgreementsandmorebroadlytoexpandtheirtrade.AidforTradecannotbeasubstitutefor the development benefits that will result from a successfulconclusiontotheDDA,particularlyonmarketaccess.However,itcanbeavaluablecomplementtotheDDA.WeinvitetheDirector-Generaltocreateataskforcethatshallproviderecommendationson how to operationalizeAid for Trade. The Task Force willprovide recommendations to theGeneralCouncil by July 2006on howAid forTrademight contributemost effectively to thedevelopmentdimensionoftheDDA.WealsoinvitetheDirector-

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General to consultwithMembers aswell aswith the IMF andWorldBank,relevantinternationalorganisationsandtheregionaldevelopment banks with a view to reporting to the GeneralCouncilonappropriatemechanismstosecureadditionalfinancialresourcesforAidforTrade,whereappropriatethroughgrantsandconcessionalloans.

Recently-acceded Members

58. We recognize the special situation of recently-accededMembers who have undertaken extensive market accesscommitmentsatthetimeofaccession.Thissituationwillbetakenintoaccountinthenegotiations.

Accessions 59. WereaffirmourstrongcommitmenttomakingtheWTOtrulyglobal inscopeandmembership. WewelcomethosenewMembers who have completed their accession processes sinceour last Session, namely Nepal, Cambodia and Saudi Arabia.WenotewithsatisfactionthatTongahascompleteditsaccessionnegotiationstotheWTO.Theseaccessionsfurtherstrengthentherules-basedmultilateral trading system. We continue to attachprioritytothe29ongoingaccessionswithaviewtoconcludingthemasrapidlyandsmoothlyaspossible.Westresstheimportanceoffacilitatingandacceleratingtheaccessionnegotiationsofleast-developedcountries,takingdueaccountoftheguidelinesonLDCaccessionadoptedbytheGeneralCouncilinDecember2002.

AnnexA

Agriculture

ReportbytheChairmanoftheSpecialSession oftheCommitteeonAgriculturetotheTNC

1. The present report has been prepared on my own responsibility. i have done so in response to the direction of Members as expressed at the informal Special Session of the Committee on agriculture on 11 november 2005. at that meeting, following the informal Heads of delegation meeting the preceding day, Members made it crystal clear that they sought from me at this point an objective factual summary of where the negotiations have reached at this time. it was clear from that meeting that Members did not expect or desire anything that purported to be more than that. in particular, it was clear that, following the decision at the Heads of delegation meeting that full modalities will not be achieved at Hong Kong, Members did not want anything that suggested implicit or explicit agreement where it did not exist.

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2. This is not, of course, the kind of paper that i would have chosen or preferred to have prepared at this point. ideally, my task should have been to work with Members to generate a draft text of modalities. But this text reflects the reality of the present situation. There will be – because there must be if we are to conclude these negotiations – such a draft text in the future. i look at this now as a task postponed, but the precise timing of this is in the hands of Members.

3. as for this paper, it is precisely what it is described to be. no more, no less. it is the Chairman’s report and, as such, it goes from me to the TnC. it is not anything more than my personal report – in particular, it is not in any sense an agreed text of Members. it does not, therefore, in any way prejudge or prejudice the positions of Members on any matter within it or outside of it. and, it certainly does not bind Members in any way. it should go without saying that the agreed basis of our work is, and shall remain, the doha Mandate itself and the Framework in the decision adopted by the general Council on 1 august 2004.

4. as to the character of the paper, i have endeavoured to reflect what i discerned as the wishes of Members when they directed me to prepare this paper. i have tried to capture as clearly as i can such conditional progress and convergence as has developed in the post-July 2004 period. in doing so, i have not tried to brush under the carpet divergences that remain, and the paper tries to be just as clear on those points. of course, it is a summary report. as such, it cannot – and does not – recapitulate each and every detail on each and every issue. But i took from Members’ comments that they would prefer a paper which could ‘orient’ further discussion.

5. in that regard, i hope that anyone reading this paper would be able to get a pretty clear idea of what it is that remains to be done. Members made it clear that it was not my task as Chair to prescribe what is to be done next in a programmatic way. My task was to register where we are now, but i confess to having done so with an eye to genuinely clarifying where key convergences exist or key divergences remain, rather than obscuring or overcomplicating matters.

6. My own sense, when i review this myself, is the compelling urgency of seizing the moment and driving the process to a conclusion as rapidly as possible. We have made – particularly since august of this year – genuine and material progress. indeed, it has come at a relatively rapid pace. it is also clear to me that it has been the product of a genuinely negotiating process. in other words, it has been a case of making proposals and counterproposals. That is why the matters covered in this report have an essentially conditional character. as i see it, the reality is that we have yet to find that last bridge to agreement that we need to secure modalities. But it would be a grave error, in my view, to imagine that we can take much time to find that bridge. as Chair, i am convinced that we must maintain momentum. You don’t close divergences by taking time off to have a cup of tea. if you do so, you will find that everyone has moved backwards in the meantime. That, it seems to me, is a profound risk to our process. i would like to believe that this report at least underlines to us that

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there is indeed something real and important still within our grasp and we ought not to risk losing it. our over-riding challenge and responsibility is to meet the development objective of the doha development agenda. To meet this challenge and achieve this goal, we must act decisively and with real urgency.

7. The future life of this paper, if any, is a matter entirely in the hands of TnC Members to decide. This, as i see it, is the proper safeguard of the integrity of what has come to be described as a “bottom-up” process.

doMeSTiC SUPPorT

8. There has been very considerable potential convergence, albeit on a manifestly conditional basis.

Overall Cut- There is a working hypothesis of three bands for overall cuts by

developed countries. There is a strongly convergent working hypothesis that the thresholds for the three bands be US$ billion 0-10; 10-60; >60. on this basis, the european Communities would be in the top band, the United States and Japan in the second band, and all other developed countries at least in the third band. For developing countries, there is a view that either developing countries are assigned to the relevant integrated band (the bottom) or that there is a separate band for them.1

- Basedonpost-July2005proposals,therehasbeenanundeniablysignificantconvergenceontherangeofcuts.Ofcourse,thishasbeenconditional.Butsubjecttothatfeature,agreatdealofprogresshasbeenmadesincethebarebonesoftheJuly2004Framework.Thefollowingmatrixprovidesasnapshot:

Bands Thresholds(US$billion) Cuts

1 0-10 31%-70%2 10-60 53%-75%3 > 60 70%-80%

1 OntheproposedbasisthatcutremainstobedeterminedforthosedevelopingcountrieswithanAMS.Inanycase,thereisaview(notsharedbyall)thatcutsfordevelopingcountriesshouldbelessthan2/3ofthecutfordevelopedcountries.

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De Minimis- on product-specific de minimis and non-product-specific de

minimis, there is a zone of engagement for cuts between 50% and 80% for developed countries.

- Asregardsdevelopingcountries,therearestilldivergencestobebridged.InadditiontotheexemptionspecificallyprovidedforintheFramework,thereisaviewthat,foralldevelopingcountries,thereshouldbenocutinde minimisatall.Alternatively,atleastforthosewithnoAMS,thereshouldbenocutand,inanycase,anycutforthosewithanAMSshouldbelessthan2/3ofthecutfordevelopedcountries.

BlueBox

9. There is important and significant convergence onmoving beyond (i.e.furtherconstraining)BlueBoxprogrammepaymentsenvisaged in theJuly2004Framework.However,thetechniqueforachievingthisremainstobedetermined.Oneproposalistoshrinkthecurrent5%ceilingto2.5%.2Anotherproposalrejectsthisinfavourofadditionalcriteriadiscipliningtheso-called“new”BlueBoxonly.Othersfavouracombinationofboth,includingadditionaldisciplinesonthe“old”BlueBox.

AMS- There is a working hypothesis of three bands for developed

countries.

- There is close (but not full) convergence on the thresholds for those bands. There appears to be convergence that the top tier should be US$25 billion and above. There is some remaining divergence over the ceiling for the bottom band: between US$12 billion and 15 billion.

- There has been an undeniably significant convergence on the range of cuts. of course, this has been conditional. But, that understood, a great deal of progress has been made since the bare bones of

2 The exact extent of the flexibility to be provided pursuant to paragraph 15 of the July 2004 FrameworkTheexactextentoftheflexibilitytobeprovidedpursuanttoparagraph15oftheJuly2004Frameworkremainstobeagreed.

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the July 2004 Framework. The following matrix� provides asnapshot:

Bands Thresholds(US$billion) Cuts1 0-12/15 37-60%2 12/15-25 60-70%3 >25 70-83%

- There is therefore working hypothesis agreement that the european Communities should be in the top tier, and the United States in the second tier. However, while the basis for Japan’s placement as between these two tiers has been narrowed, it remains to be finally resolved.

- For developed countries in the bottom band, with a relatively high level of aMS relative to total value of agriculture production, there is emerging consensus that their band-related reduction should be complemented with an additional effort.

- What is needed now is a further step to bridge the remaining gap in positions – particularly as regards the United States and the european Communities, it being understood that this is not a matter to be resolved in isolation from the other elements in this pillar and beyond.

On the base period for product-specific caps, certain proposals (such as for 1995-2000 and 1999-2001) are on the table. This needs to be resolved appropriately, including themannerinwhichspecialanddifferentialtreatmentshouldbeapplied.

Green Box

10. The review and clarification commitment has not resulted in anydiscernibleconvergenceonoperationaloutcomes.Thereis,ontheoneside,afirmrejectionofanythingthatisseenasdepartingfromtheexistingdisciplineswhilethere is, on the other, an enduring sense thatmore could be done to review theGreenBoxwithoutunderminingongoingreform.Beyondthatthereis,however,sometangibleopennesstofindingappropriatewaystoensurethattheGreenBoxis

3 of course, this needs to be viewed as illustrative rather than overly literally, if for no other reason thanof course, this needs to be viewed as illustrative rather than overly literally, if for no other reason than that these are conditional figures. For instance, while the european Communities has indicated it could be prepared to go as far as 70% in the top tier, they make it clear that this is acceptable only if the United States will go to 60% in the second tier. The United States for its part, however, has only indicated preparedness to go to that 60% if the european Communities is prepared to go as high as 83% - which it has not indicated it is prepared to do.

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more“developmentfriendly”i.e.bettertailoredtomeettherealitiesofdevelopingcountryagriculturebut inaway that respects the fundamental requirementofatmostminimaltradedistortion.

eXPorT CoMPeTiTion

End Date

11. While concrete proposals4 have been made on the issue of an end date for elimination of all forms of export subsidies, there is at this stage no convergence. There are suggestions for the principle of front-loading or accelerated elimination for specific products, including particularly cotton.

Export Credits

12. Convergence has been achieved on a number of elements of disciplines with respect to export credits, export credit guarantee or insurance programmes with repayment periods of 180 days and below. However, a number of critical issues remain.5

Exporting State Trading Enterprises

13. There has been material convergence on rules to address trade-distorting practices identified in the July 2004 Framework text, although there are still major differences regarding the scope of practices to be covered by the new disciplines. Fundamentally opposing positions remain, however, on the issue of the future use of monopoly powers. There have been concrete drafting proposals on such matters as definition of entities and practices to be addressed as well as transparency. But there has been no genuine convergence in such areas.

Food Aid

14. There is consensus among Members that the WTo shall not stand in the way of the provision of genuine food aid. There is also consensus that what is to be eliminated is commercial displacement. There have been detailed and intensive discussions, some of which have even been text-based, but not to a point where a consolidated draft text could be developed. This has been precluded by Members

4 one Member has proposed the year 2010 for «export subsidies», with accelerated elimination for «spe-one Member has proposed the year 2010 for «export subsidies», with accelerated elimination for «spe-cific» products. another group of Members have proposed a period «no longer than five years» for all forms of export subsidies, with «direct» export subsidies subject to front-loading within that period.

5 This includes, but is not limited to: exemptions, if any, to the 180 day rule; whether the disciplinesThis includes, but is not limited to: exemptions, if any, to the 180 day rule; whether the disciplines should allow for pure cover only or also permit direct financing; the appropriate period for programmes to fully recover their costs and losses through the premia levied from the exporters (principle of self-financing - there needs to be convergence between position which range from one year to fifteen years); the disciplines regarding special circumstances; and the question of special and differential treatment, including whether, as some Members argue, developing countries should be allowed longer repayment terms for export credits extended by them to other developing countries and the specifics of differential treatment in favour of least-developed and net food-importing developing countries.

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clinging to fundamentally disparate conceptual premises. There are proposals that in the disciplines a distinction should be made between at least two types of food aid: emergency food aid and food aid to address other situations. However, there is not yet a common understanding where emergency food aid ends and other food aid begins, reflecting concerns that this distinction should not become a means to create a loophole in disciplines. a fundamental sticking point is whether, except in exceptional, genuine emergency situations, Members should (albeit gradually) move towards untied, in-cash food aid only, as some Members propose but other Members strongly oppose.6

Special and Differential Treatment

15. Framework provisions for special and differential treatment, including with respect to the monopoly status of state trading enterprises in developing countries and an extended lifetime for article 9.4, have been uncontroversial, but details remain to be established.

Special Circumstances

16. Work on the criteria and consultation procedures to govern any ad hoc temporary financing arrangements relating to exports to developing countries in exceptional circumstances is not much developed.

MarKeT aCCeSS

Tiered Formula

- We have progressed on ad valorem equivalents.7 This has successfully created a basis for allocating items into bands for the tiered formula.

- We have a working hypothesis of four bands for structuring tariff cuts.

- There has been very considerable convergence on adopting a linear-based approach for cuts within those bands. Members have, of course, by no means formally abandoned positions that are even more divergent.8 We need now to narrow the extent of divergence that remains. This will include whether or not to include any “pivot” in any band.

6 This fundamental divergence has effectively precluded convergence on such matters as what disci-This fundamental divergence has effectively precluded convergence on such matters as what disci-plines, if any, should be established with respect to monetization of food aid or the question of the provision of food aid in fully grant form only. The importance of operationally effective transparency requirements is generally acknowledged, but details have still to be developed, particularly those relating to the role of the WTo in this context. Further work is required to clarify the role of recipient countries and relevant international organizations or other entities in triggering or providing food aid.

7 The method for calculating the aVes for the sugar lines is still to be established.The method for calculating the aVes for the sugar lines is still to be established.8 at one end of the spectrum, as it were, a «harmonisation» formula within the bands; at the other endat one end of the spectrum, as it were, a «harmonisation» formula within the bands; at the other end

«flexibility» within the formula.

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- Members have made strong efforts to promote convergence on the size of actual cuts to be undertaken within those bands. But, even though genuine efforts have been made to move from formal positions (which of course remain), major gaps are yet to be bridged. Somewhat greater convergence has been achieved as regards the thresholds for the bands. Substantial movement is clearly essential to progress. 9

- Some Members continue to reject completely the concept of a tariffSome Members continue to reject completely the concept of a tariff cap. others have proposed10 a cap between 75-100%.

Sensitive Products

- Members have been prepared to make concrete - albeit conditionalMembers have been prepared to make concrete - albeit conditional - proposals on the number of sensitive products. But, in a situation where proposals extend from as little as 1% to as much as 15% of tariff lines, further bridging this difference is essential to progress.

- The fundamental divergence over the basic approach to treatment ofThe fundamental divergence over the basic approach to treatment of sensitive products needs to be resolved.11 Beyond that, there needs to be convergence on the consequential extent of liberalisation for such products.


- Just as for developed countries, there is a working hypothesis ofJust as for developed countries, there is a working hypothesis of four bands for developing countries. There is no disagreement on

9 The matrix below is an illustrative table that portrays the extent of divergences that remain, evenThe matrix below is an illustrative table that portrays the extent of divergences that remain, even on the basis of post-august 2005 proposals. This does not entirely cover all the subtleties of those proposals to utilize a «pivot» (although most are in fact within the ranges tabulated), but is intended to convey a snapshot of the status of average cuts proposed post-august.

Thresholds Rangeofcuts(%)

Band1 0%-20/30% 20-65

Band2 20/30%-40/60% 30-75

Band3 40/60%-60/90% 35-85

Band4 >60/90% 42-90

10 as an element in certain conditional proposals on overall market access, tabled post-July 2005.as an element in certain conditional proposals on overall market access, tabled post-July 2005.11 Some see this as being tariff quota based and expressed as a percentage of domestic consumption,Some see this as being tariff quota based and expressed as a percentage of domestic consumption,

with proposals of up to 10%. others propose pro rata expansion on an existing trade basis, including taking account of current imports. Some also propose no new TrQs, with sensitivity in such cases to be provided through other means, e.g. differential phasing. There is also a proposal for a “sliding scale” approach.

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lesser cuts within the bands. a certain body of opinion is open to considering cuts of two-thirds of the amount of the cuts for developed countries as a plausible zone in which to search more intensively for convergence.12 But significant disagreement on that remains, and divergence is, if anything, somewhat more marked on the connected issue of higher thresholds for developing countries.13

- Some Members continue to reject completely the concept of aSome Members continue to reject completely the concept of a tariff cap for developing countries. others have proposed14 a cap at 150%.

- For sensitive products, there is no disagreement that there shouldFor sensitive products, there is no disagreement that there should be greater flexibility for developing countries, but the extent of this needs to be further defined.15

Special Products

- regardingregarding designation of special products, there has been a clear divergence between those Members which consider that, prior to

12 in this pillar, as well as in the other two, there is general convergence on the point that develop-in this pillar, as well as in the other two, there is general convergence on the point that develop-ing countries will have entitlement to longer implementation periods, albeit that concrete precision remains to be determined.

13 The matrix below is an illustrative table that portrays the extent of divergences that remain, just on theThe matrix below is an illustrative table that portrays the extent of divergences that remain, just on the basis of post-august 2005 proposals.

Thresholds Rangeofcuts(%)Band1 0%-20/50% 15-25*

Band2 20/50%-40/100% 20-30*

Band3 40/100%-60/150% 25-35*

Band4 >60-150% 30-40*

*There is also a proposal that cuts for developing countries should be “slightly lesser” than the upper tariff cuts for developed countries shown in the preceding table (i.e.: “slightly lesser” than 65, 75, 85 and 90%).

14 as an element in certain conditional proposals on overall market access, tabled post-July 2005.as an element in certain conditional proposals on overall market access, tabled post-July 2005.15 While the eventual zone of convergence for developed countries undoubtedly has a bearing in this While the eventual zone of convergence for developed countries undoubtedly has a bearing in this

area, it has been proposed by a group of Members that the principles of sensitive products generally and for TrQs specifically should be different for developing countries. another group of Members has proposed, in the post-august period, an entitlement for developing countries of at least 50% more than the maximum number of lines used by any developed Member. This would (based on developed country proposals) amount to a potential variation between 1.5% and 22.5% of tariff lines. This latter group has also proposed that products relating to long-standing preferences shall be designated as sensitive and that any TrQ expansion should not be «at the detriment of existing aCP quotas». This particular view has been, however, strongly opposed by other Members which take the firm position that tropical and diversification products should not at all be designated as sensitive products.

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establishment of schedules, a list of non-exhaustive and illustrative criteria-based indicators should be established and those Members which are looking for a list which would act as a filter or screen for the selection of such products. latterly, it has been proposed (but not yet discussed with Members as a whole) that a developing country Member should have the right to designate at least 20 per cent of its agricultural tariff lines as Special Products, and be further entitled to designate an SP where, for that product, an aMS has been notified and exports have taken place. This issue needs to be resolved as part of modalities so that there is assurance of the basis upon which Members may designate special products.

- Some moves toward convergence onSome moves toward convergence on treatment of Special Products have been made recently. Some Members had considered that special products should be fully exempt from any new market access commitments whatsoever and have automatic access to the SSM. others had argued there should be some degree of market opening for these products, albeit reflecting more flexible treatment than for other products. in the presence of this fundamental divergence, it had clearly been impossible to undertake any definition of what such flexibility would be. genuine convergence is obviously urgently needed. There is now a new proposal for a tripartite categorization of Special Products involving limited tariff cuts for at least a proportion of such products which remains to be fully discussed. it remains to be seen whether this discussion can help move us forward.

Special Safeguard Mechanism

- There is agreement that there would be a special safeguardThere is agreement that there would be a special safeguard mechanism and that it should be tailored to the particular circumstances and needs of developing countries. There is no material disagreement with the view that it should have a quantity trigger. nor is there disagreement with the view that it should at least be capable of addressing effectively what might be described as import “surges”. divergence remains over whether, or if so how, situations that are lesser than “surge” are to be dealt with. There is, however, agreement that any remedy should be of a temporary nature. There remains strong divergence however on whether, or if so how, a special safeguard should be “price-based” to deal specifically with price effects.

- There is some discernible openness, albeit at varying levels, toThere is some discernible openness, albeit at varying levels, to at least consider coverage of products that are likely to undergo significant liberalisation effects, and/or are already bound at low

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levels and/or are special products. Beyond that, however, there remains a fundamental divergence between those considering all products should be eligible for such a mechanism and those opposing such a blanket approach.

Other Elements

17. There has been no further material convergence on the matters covered by paragraphs 35 and 37 of the July 2004 Framework text. The same may be said for paragraph 36 on tariff escalation, albeit that there is full agreement on the need for this to be done, and a genuine recognition of the particular importance of this for commodities exporters. Certain concrete proposals have been made on paragraph 38 (SSg) and met with opposition from some Members.

18. Concrete proposals have been made and discussed on how to implement paragraph 43 of the July 2004 Framework on tropical and diversification products. But there remains divergence over the precise interpretation of this section of the July Framework16 and no common approach has been established.

19. The importance of long-standing preferences pursuant to paragraph 44 of the July 2004 Framework is fully recognised and concrete proposals regarding preference erosion have been made and discussed.17 There seems not to be inherent difficulty with a role for capacity building. However, while there is some degree of support for e.g. longer implementation periods for at least certain products in order to facilitate adjustment, there is far from convergence on even this. Some argue it is not sufficient or certainly not in all cases, while others that it is not warranted at all.

leaST-deVeloPed CoUnTrieS

20. There is no questioning of the terms of paragraph 45 of the July Framework agreement, which exempts least-developed countries from any reduction requirement. The stipulation that “developed Members, and developing country Members in a position to do so, should provide duty-free and quota-free market access for products originating from least-developed countries” is not at this point concretely operational for all Members. at this stage, several Members have made undertakings. Proposals for this to be bound remain on the table.18

CoTTon

21. While there is genuine recognition of the problem to be addressed and concrete proposals have been made, Members remain at this point short of concrete and specific

16 it is argued by some Members that this is to be interpreted as meaning full duty- and tariff quota-freeit is argued by some Members that this is to be interpreted as meaning full duty- and tariff quota-free access, but by others as less than that.

17 note 15 above refers.note 15 above refers.18 it is also proposed that this should be accompanied by simple and transparent rules of origin and otherit is also proposed that this should be accompanied by simple and transparent rules of origin and other

measures to address non-tariff barriers.

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achievement that would be needed to meet the July Framework direction to address this matter ambitiously, expeditiously and specifically. There is no disagreement with the view that all forms of export subsidies are to be eliminated for cotton although the timing and speed remains to be specified. Proposals to eliminate them immediately or from day one of the implementation period are not at this point shared by all Members. in the case of trade distorting support, proponents seek full elimination with “front-loaded” implementation.19 There is a view that the extent to which this can occur, and its timing, can only be determined in the context of an overall agreement. another view is that there could be at least substantial and front-loaded reduction on cotton specifically from day one of implementation, with the major implementation achieved within twelve months, and the remainder to be completed within a period shorter than the overall implementation period for agriculture.20

reCenTlY-aCCeded MeMBerS

22. Concrete proposals have been made and discussed, but no specific flexibility provisions have commanded consensus.

MoniToring and SUrVeillanCe

23. a proposal has been made but there is no material advance at this point.

oTHer iSSUeS

24. on paragraph 49 (sectoral initiatives, differential export taxes, gis) certain positions and proposals have been tabled and/or referred to. They are issues that remain of interest but not agreed.

25. at this point, proposals on paragraph 50 have not advanced materially.

26. in the case of small and vulnerable economies, a concrete proposal has been made recently. it has not yet been subject to consultation.

19 Concrete proposals have been made, with a three-step approach: 80% on day one, an additional 10% Concrete proposals have been made, with a three-step approach: 80% on day one, an additional 10% after 12 months and the last 10% a year later.

20 a Member has indicated that it is prepared to implement all its commitments from day one and, a Member has indicated that it is prepared to implement all its commitments from day one and, in any case, to autonomously ensure that its commitments on eliminating the most trade-distorting domestic support, eliminating all forms of export subsidies and providing mfn duty- and quota-free access for cotton will take place from 2006.

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27. There is openness to the particular concerns of commodity-dependent developing and least-developed countries facing long-term decline and/or sharp fluctuations in prices. There is, at this point (where, overall, precise modalities are still pending), support for the view that such modalities should eventually be capable of addressing effectively key areas for them.21

annex B

Market access for non-agricultural Products

ReportbytheChairmanoftheNegotiatingGrouponMarketAccesstotheTNC

a. inTrodUCTion

1. a Chairman’s commentary of the state of play of the naMa negotiations was prepared in July 2005 and circulated in document JoB(05)/147 and add.1 (hereinafter referred to as the “Chairman’s commentary”). The current report, made on my responsibility, reflects the state of play of the naMa negotiations at this juncture of the doha development agenda, and supplements that commentary.

2. With an eye on the forthcoming Ministerial, Section B of this report attempts to highlight those areas of convergence and divergence on the elements of annex B of decision adopted by the general Council on 1 august 2004, (hereinafter referred to as the “naMa framework”), and to provide some guidance as to what may be a possible future course of action with respect to some of the elements. Section C of the report provides some final remarks about possible action by Ministers at Hong Kong.

3. in preparing this report, use has been made of documents provided by Members (as listed in Tn/Ma/S/16/rev.2) as well as the discussions in the open-ended sessions of the group, plurilateral meetings and bilateral contacts, as long as they were not in the nature of confessionals.

B. SUMMarY oF THe STaTe oF PlaY

4. Full modalities must have detailed language and, where required, final numbers on all elements of the naMa framework. Such an agreement should also contain a

21 This would appear to include in particular such a matter as tariff escalation, where it discourages theThis would appear to include in particular such a matter as tariff escalation, where it discourages the development of processing industries in the commodity producing countries. The idea of a review and clarification of what the current status is of gaTT 1994 provisions relating to the stabilisation of prices through the adoption of supply management systems by producing countries, and the use of export taxes and restrictions under such systems is also on the table. Proponents would seek something more than this such as more concrete undertakings in the area of non-tariff measures and actual revision of existing provisions. There is, at this point, no consensus in these latter areas, but an appreciation at least of the underlying issues at stake.

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detailed work plan concerning the process after the establishment of full modalities for the purpose of the submission, verification and annexation of doha Schedules to a legal instrument. While acknowledging that progress has been made since the adoption of the naMa framework, the establishment of full modalities is, at present, a difficult prospect given the lack of agreement on a number of elements in the naMa framework including the formula, paragraph 8 flexibilities and unbound tariffs.

5. regarding the structure of this section, generally Members recognize that the issues identified in the preceding paragraph are the three elements of the naMa framework on which solutions are required as a matter of priority, and that there is a need to address them in an interlinked fashion. So, this report will commence with these three subjects before moving on to the other elements of the naMa framework in the order in which they are presented therein.

Formula (paragraph 4 of the naMa framework)

6. on the non-linear formula, there has been movement since the adoption of the naMa framework. There is a more common understanding of the shape of the formula that Members are willing to adopt in these negotiations. in fact, Members have been focusing on a Swiss formula. during the past few months, much time and effort has been spent examining the impact of such a formula from both a defensive and offensive angle. in terms of the specifics of that formula, there are basically two variations on the table: a formula with a limited number of negotiated coefficients and a formula where the value of each country’s coefficient would be based essentially on the tariff average of bound rates of that Member, resulting in multiple coefficients.

7. in order to move beyond a debate on the merits of the two options (and in recognition of the fact that what matters in the final analysis is the level of the coefficient) more recently Members have engaged in a discussion of numbers. Such a debate has been particularly helpful, especially as it demonstrated in a quantifiable manner to what extent the benchmarks established in paragraph 16 of the doha Ministerial declaration would be achieved. While it is evident that one of the characteristics of such a formula is to address tariff peaks, tariff escalation and high tariffs (as it brings down high tariffs more than low tariffs), one benchmark which has been the subject of differences of opinion has been that of “less than full reciprocity in reduction commitments” and how it should be measured. Some developing Members are of the view that this means less than average percentage cuts i.e. as translated through a higher coefficient in the formula, than those undertaken by developed country Members. However, the latter have indicated that there are other measurements of less than full reciprocity in reduction commitments including the final rates after the formula cut which in their markets would be less than in developing country markets. also, in their view, such a measurement of less than full reciprocity in reduction commitments has to take into account not only the additional effort made by them in all areas but also of paragraph 8 flexibilities and the fact that several developing Members and the ldCs would be exempt from formula cuts.

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8. other objectives put forward by developed Members and some developing Members as being part of the doha naMa mandate are: harmonization of tariffs between Members; cuts into applied rates; and improvement of South-South trade. However, these objectives have been challenged by other developing Members who believe that, on the contrary, they are not part of that mandate.

9. during the informal discussions, many Members engaged in an exchange on the basis of an approach with two coefficients. in the context of such debates, the coefficients which were mentioned for developed Members fell generally within the range of 5 to 10, and for developing Members within the range of 15 to 30, although some developing Members did propose lower coefficients for developed Members and higher coefficients for developing Members. in addition, a developing country coefficient of 10 was also put forward by some developed Members. However, while this discussion of numbers is a positive development, the inescapable reality is that the range of coefficients is wide and reflects the divergence that exists as to Members’ expectations regarding the contributions that their trading partners should be making.

Flexibilities for developing Members subject to a formula (paragraph 8 of the naMa framework)

10. a central issue concerning the paragraph 8 flexibilities has been the question of linkage or non-linkage between these flexibilities and the coefficient in the formula. a view was expressed that the flexibilities currently provided for in paragraph 8 are equivalent to 4-5 additional points to the coefficient in the formula, and as a result there was need to take this aspect into account in the developing country coefficient. in response, the argument has been made by many developing Members that those flexibilities are a stand alone provision as reflected in the language of that provision, and should not be linked to the coefficient. otherwise, this would amount to re-opening the naMa framework. Some of those Members have also expressed the view that the numbers currently within square brackets are the minimum required for their sensitive tariff lines, and have expressed concern about the conditions attached to the use of such flexibilities, such as the capping of the import value. in response, the point has been made by developed Members that they are not seeking to remove the flexibilities under paragraph 8, and therefore are not re-opening the naMa framework. They further point out that the numbers in paragraph 8 are within square brackets precisely to reflect the fact that they are not fixed and may need to be adjusted downwards depending on the level of the coefficient. in addition, the need for more transparency and predictability with regard to the tariff lines which would be covered by paragraph 8 flexibilities has been raised by some of these Members. Some developing Members have also advanced the idea that there should be the option for those developing Members not wanting to use paragraph 8 flexibilities to have recourse to a higher coefficient in the formula in the interest of having a balanced outcome.

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Unbound Tariff lines (paragraph 5, indent two of the naMa framework)

11. There has been progress on the discussion of unbound tariff lines. There is an understanding that full bindings would be a desirable objective of the naMa negotiations, and a growing sense that unbound tariff lines should be subject to formula cuts provided there is a pragmatic solution for those lines with low applied rates. However, some Members have stressed that their unbound tariff lines with high applied rates are also sensitive and due consideration should be given to those lines. There now appears to be a willingness among several Members to move forward on the basis of a non-linear mark-up approach to establish base rates, and in the case of some of these Members, provided that such an approach yields an equitable result. a non-linear mark-up approach envisages the addition of a certain number of percentage points to the applied rate of the unbound tariff line in order to establish the base rate on which the formula is to be applied. There are two variations of such an approach. in one case, a constant number of percentage points are added to the applied rate in order to establish the base rate. The other variation consists of having a different number of percentage points depending on the level of the applied rate. in other words, the lower the applied rate the higher the mark-up and the higher the applied rate, the lower the mark-up. There is also one proposal on the table of a target average approach where an average is established through the use of a formula, with the unbound tariff lines expected to have final bindings around that average.

12. on a practical level, in their discussions on unbound tariff lines, Members have been referring mostly to the constant mark-up methodology to establish base rates. in the context of such discussions, the number for the mark-up has ranged from 5 to 30 percentage points. once again the gap between the two figures is wide, but Members have displayed willingness to be flexible.

other elements of the formula (paragraph 5 of the naMa framework)

13. Concerning product coverage (indent 1), Members have made good progress to establish a list of non-agricultural products as reflected in document JoB(05)/226/rev.2. The main issue is whether the outcome of this exercise should be an agreed list or guidelines. it would appear that several Members are in favour of the former outcome, however, some have expressed their preference for the latter. in any event, there are only a limited number of items (17) on which differences exist and Members should try and resolve these differences as quickly as possible.

14. on ad valorem equivalents (indent 5), agreement was reached to convert non ad valorem duties to ad valorem equivalents on the basis of the methodology contained in JoB(05)/166/rev.1 and to bind them in ad valorem terms. To date, four Members have submitted their preliminary aVe calculations, but there are many more due. Those Members would need to submit this information as quickly as possible so as to allow sufficient time for the multilateral verification process.

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15. The subject of how credit is to be given for autonomous liberalization (indent 4) by developing countries provided that the tariff lines are bound on an MFn basis in the WTo since the conclusion of the Uruguay round has not been discussed in detail since the adoption of the naMa framework. However, this issue may be more usefully taken up once there is a clearer picture of the formula.

16. all the other elements of the formula such as tariff cuts commencing from bound rates after full implementation of current commitments (indent 2), the base year (indent 3), the nomenclature (indent 6) and reference period for import data (indent 7) have not been discussed any further since July 2004, as they were acceptable to Members as currently reflected in the naMa framework.

other flexibilities for developing Members

Members with low binding coverage (paragraph 6 of the naMa framework)

17. a submission by a group of developing Members, covered under paragraph 6 provisions, was made in June 2005. The paper proposed that Members falling under this paragraph should be encouraged to substantially increase their binding coverage, and bind tariff lines at a level consistent with their individual development, trade, fiscal and strategic needs. a preliminary discussion of this proposal revealed that there were concerns about this proposal re-opening this paragraph by seeking to enhance the flexibilities contained therein. Further discussion of this proposal is required. However, it appears that the issue of concern to some of the paragraph 6 Members is not related so much to the full binding coverage, but rather to the average level at which these Members would be required to bind their tariffs.

Flexibilities for ldCs (paragraph 9 of the naMa framework)

18. There appears to be a common understanding that ldCs will be the judge of the extent and level of the bindings that they make. at the same time, Members have indicated that this substantial increase of the binding commitments which ldCs are expected to undertake should be done with a good faith effort. in this regard, some yardsticks for this effort were mentioned including the coverage and level of bindings made in the Uruguay round by other ldCs as well as the more recently acceded ldCs.

Small, vulnerable economies

19. a paper was submitted recently by a group of Members which proposes inter alia lesser and linear cuts to Members identified by a criterion using trade share. While some developing and developed Members were sympathetic to the situation of such Members, concerns were expressed with respect to the threshold used to establish eligibility, and also the treatment envisaged. other developing Members expressed serious reservations about this proposal which in their view appeared to be creating a new category of developing Members, and to be further diluting the ambition of the

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naMa negotiations. The sponsors of this proposal stressed that the small, vulnerable economies had characteristics which warranted special treatment.

20. This is an issue on which there is a serious divergence of opinion among developing Members. This subject will need to be debated further. discussions may be facilitated through additional statistical analysis.

Sectorals (paragraph 7 of the naMa framework)

21. it appears that good progress is being made on the sectoral tariff component of the naMa negotiations. Work which is taking place in an informal Member-driven process has focused on inter alia identification of sectors, product coverage, participation, end rates and adequate provisions of flexibilities for developing countries. Besides the sectorals based on a critical mass approach identified in the Chairman’s commentary – bicycles, chemicals, electronics/electrical equipment, fish, footwear, forest products, gems and jewellery, pharmaceuticals and medical equipment, raw materials and sporting goods – i understand that work is ongoing on other sectors namely apparel, auto/auto parts and textiles.

22. While this component of the naMa negotiations is recognized in the naMa framework to be a key element to delivering on the objectives of paragraph 16 of the doha naMa mandate, some developing Members have questioned the rationale of engaging in sectoral negotiations before having the formula finalized. Many have also re-iterated their view that sectorals are voluntary in nature. The point has also been made by other developing Members that sectorals harm smaller developing Members due to an erosion of their preferences. However, the proponents of such initiatives have argued that sectorals are another key element of the naMa negotiations and an important modality for delivering on the elimination of duties as mandated in paragraph 16 of the doha Ministerial declaration. in addition, they have pointed out that some of the sectorals were initiated by developing Members. Moreover, such initiatives require substantive work and were time-consuming to prepare. Concerning preference erosion, this was a cross-cutting issue.

23. Members will need to begin considering time-lines for the finalization of such work, and the submission of the outcomes which will be applied on an MFn basis.

Market access for ldCs (paragraph 10 of the naMa framework)

24. in the discussions on this subject, it was noted that the Committee on Trade and development in Special Session is examining the question of duty-free and quota-free access for non-agricultural products originating from ldCs. Consequently, there is recognition by Members that the discussions in that Committee would most probably have an impact on this element of the naMa framework, and would need to be factored in at the appropriate time.

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newly acceded Members (paragraph 11 of the naMa framework)

25. Members recognize the extensive market access commitments made by the naMs at the time of their accession. From the discussions held on this subject, it was clarified that those naMs which are developing Members have access to paragraph 8 flexibilities. as special provisions for tariff reductions for the naMs, some Members are willing to consider longer implementation periods than those to be provided to developing Members. other proposals such as a higher coefficient and “grace periods” for the naMs were also put forward, but a number of Members have objected to these ideas. There has also been a submission by four low-income economies in transition who have requested to be exempt from formula cuts in light of their substantive contributions at the time of their WTo accession and the current difficult state of their economies. While some Members showed sympathy for the situation of these Members, they expressed the view that other solutions may be more appropriate. Some developing Members also expressed concern about this proposal creating a differentiation between Members. Further discussion is required on these issues.

nTBs (paragraph 14 of the naMa framework)

26. Since adoption of the July 2004 framework, Members have been focusing their attention on non-tariff barriers in recognition of the fact that they are an integralintegral and equally important part of the naMa negotiations. Some Members claim that they constitute a greater barrier to their exports than tariffs. The group has spent has spent a considerable amount of time identifying, categorizing and examining the notified considerable amount of time identifying, categorizing and examining the notified nTBs. Members are using bilateral, vertical and horizontal approaches to the nTB negotiations. For example, many Members are raising issues bilaterally with their trading partners. Vertical initiatives are ongoing on automobiles, electronic products and wood products. There have been some proposals of a horizontal nature concerning export taxes, export restrictions and remanufactured products. on export taxes, some Members have expressed the view that such measures fall outside the mandate of the naMa negotiations. Some Members have also raised in other negotiating groups some of the nTBs they had notified initially in the context of the naMa negotiations. For example, a number of trade facilitation measures are now being examined in the negotiating group on Trade Facilitation. Some other Members have also indicated their intention to bring issues to the regular WTo Committees. nTBs currently proposed for negotiation in the naMa group are contained in document JoB(05)/85/rev.3.

27. Some proposals have been made of a procedural nature in order to expedite the nTB work, including a suggestion to hold dedicated nTB sessions. Further consideration will need to be given to this and other proposals. Members will also need to begin considering some time-lines for the submission of specific negotiating proposals and nTB outcomes.

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appropriate Studies and Capacity Building Measures (paragraph 15 of the naMa framework)

28. There has been no discussion as such on this element as it is an ongoing and integral part of the negotiating process. Several papers have been prepared by the Secretariat during the course of the negotiations and capacity building activities by the Secretariat have increased considerably since the launch of the doha development agenda. Such activities will need to continue taking into account the evolution of the negotiations.

non-reciprocal preferences (paragraph 16 of the naMa framework)

29. in response to calls by some Members for a better idea of the scope of the problem, the aCP group circulated an indicative list of products (170 HS 6-digit tariff lines) vulnerable to preference erosion in the eC and US markets as identified through a vulnerability index. Simulations were also submitted by the african group. Some developing Members expressed concern that the tariff lines listed covered the majority of their exports, or covered critical exports to those markets and were also precisely the lines on which they sought MFn cuts. as a result, for these Members, it was impossible to entertain any solution which related to less than full formula cuts or longer staging. in this regard, concern was expressed by them that non-trade solutions were not being examined. For the proponents of the issue, a trade solution was necessary as this was a trade problem. according to them, their proposal would not undermine trade liberalization because they were seeking to manage such liberalization on a limited number of products.

30. This subject is highly divisive precisely because the interests of the two groups of developing Members are in direct conflict. additionally, it is a cross-cutting issue which makes it even more sensitive. While, the aforementioned list of products has been helpful in providing a sense of the scope of the problem and may help Members to engage in a more focused discussion, it is clear that pragmatism will need to be shown by all concerned.

environmental goods (paragraph 17 of the naMa framework)

31. Since the adoption of the July framework in 2004, limited discussions have been held on this subject in the group. However, it is noted that much work under paragraph 31(iii) of the doha Ministerial declaration has been undertaken by the Committee on Trade and environment in Special Session. There would need to be close coordination between the two negotiating groups and a stock taking of the work undertaken in that Committee would be required at the appropriate time by the naMa negotiating group.

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other elements of the naMa framework

32. on the other elements of the naMa framework, such as supplementary modalities (paragraph 12), elimination of low duties (paragraph 13) and tariff revenue dependency (paragraph 16) the group has not had a substantive debate. This has in part to do with the nature of the issue or because more information is required from the proponents. regarding supplementary modalities, such modalities will become more relevant once the formula has been finalized. on elimination of low duties, this issue may be more suitable to consider once there is a better sense of the likely outcome of the naMa negotiations. on tariff revenue dependency, more clarity is required from the proponents on the nature and scope of the problem.

C. Final reMarKS

33. as may be observed from the above report, Members are far away from achieving full modalities. This is highly troubling. it will take a major effort by all if the objective of concluding the naMa negotiations by the end of 2006 is to be realized.

34. To this end, i would highlight as a critical objective for Hong Kong a common understanding on the formula, paragraph 8 flexibilities and unbound tariffs. it is crucial that Ministers move decisively on these elements so that the overall outcome is acceptable to all. This will give the necessary impetus to try and fulfil at a date soon thereafter the objective of full modalities for the naMa negotiations.

35. Specifically, Ministers should:

• Obtainagreementonthefinalstructureoftheformulaandnarrowtherangeofnumbers.

• Resolvetheirbasicdifferencesoverparagraph8flexibilities.

• Clarifywhethertheconstantmark-upapproachisthewayforward,andifso,narrowtherangeofnumbers.

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annex C

Services

objectives

1. in order to achieve a progressively higher level of liberalization of trade in services, with appropriate flexibility for individual developing country Members, we agree that Members should be guided, to the maximum extent possible, by the following objectives in making their new and improved commitments:

(a) Mode 1

(i) commitments at existing levels of market access on a non-discriminatory basis across sectors of interest to Members

(ii) removal of existing requirements of commercial presence

(b) Mode 2

(i) commitments at existing levels of market access on a non-discriminatory basis across sectors of interest to Members

(ii) commitments on mode 2 where commitments on mode 1 exist

(c) Mode 3

(i) commitments on enhanced levels of foreign equity participation

(ii) removal or substantial reduction of economic needs tests(iii) commitments allowing greater flexibility on the types of

legal entity permitted(d) Mode 4

(i) new or improved commitments on the categories of Contractual Services Suppliers, independent Professionals and others, de-linked from commercial presence, to reflect inter alia:

– removal or substantial reduction of economic needs tests_ indication of prescribed duration of stay and possibility

of renewal, if any(ii) new or improved commitments on the categories of intra-

corporate Transferees and Business Visitors, to reflect inter alia:

– removal or substantial reduction of economic needs tests

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– indication of prescribed duration of stay and possibility of renewal, if any

(e) MFn exemptions

(i) removal or substantial reduction of exemptions from most-favoured-nation (MFn) treatment

(ii) clarification of remaining MFn exemptions in terms of scope of application and duration

(f) Scheduling of Commitments

(i) ensuring clarity, certainty, comparability and coherence in the scheduling and classification of commitments through adherence to, inter alia, the Scheduling guidelines pursuant to the decision of the Council for Trade in Services adopted on 23 March 2001

(ii) ensuring that scheduling of any remaining economic needs tests adheres to the Scheduling guidelines pursuant to the decision of the Council for Trade in Services adopted on 23 March 2001.

2. as a reference for the request-offer negotiations, the sectoral and modal objectives as identified by Members may be considered.1

3. Members shall pursue full and effective implementation of the Modalities for the Special Treatment for least-developed Country Members in the negotiations on Trade in Services (ldC Modalities) adopted by the Special Session of the Council for Trade in Services on 3 September 2003, with a view to the beneficial and meaningful integration of ldCs into the multilateral trading system.

4. Members must intensify their efforts to conclude the negotiations on rule-making under gaTS articles X, Xiii, and XV in accordance with their respective mandates and timelines:

(a) Members should engage in more focused discussions in connection with the technical and procedural questions relating to the operation and application of any possible emergency safeguard measures in services.

(b) on government procurement, Members should engage in more focused discussions and in this context put greater emphasis on proposals by Members, in accordance with article Xiii of the gaTS.

1 as attached to the report by the Chairman to the Trade negotiations Committee on 28 november 2005,as attached to the report by the Chairman to the Trade negotiations Committee on 28 november 2005, contained in document Tn/S/23. This attachment has no legal standing.

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(c) on subsidies, Members should intensify their efforts to expedite and fulfil the information exchange required for the purpose of such negotiations, and should engage in more focused discussions on proposals by Members, including the development of a possible working definition of subsidies in services.

5. MembersshalldevelopdisciplinesondomesticregulationpursuanttothemandateunderArticleVI:4of theGATSbefore theendof the current roundofnegotiations. WecalluponMembers todevelop text foradoption. Insodoing,MembersshallconsiderproposalsandtheillustrativelistofpossibleelementsforArticleVI:4disciplines.2

Approaches

6. Pursuant to the principles and objectives above, we agree to intensify and expedite the request-offer negotiations, which shall remain the main method of negotiation, with a view to securing substantial commitments.

7. in addition to bilateral negotiations, we agree that the request-offer negotiations should also be pursued on a plurilateral basis in accordance with the principles of the gaTS and the guidelines and Procedures for the negotiations on Trade in Services. The results of such negotiations shall be extended on an MFn basis. These negotiations would be organized in the following manner:

(a) AnyMemberorgroupofMembersmaypresentrequestsorcollectiverequeststootherMembersinanyspecificsectorormodeofsupply,identifyingtheirobjectivesforthenegotiationsinthatsectorormodeofsupply.

(b) Memberstowhomsuchrequestshavebeenmadeshallconsidersuchrequestsinaccordancewithparagraphs2and4ofArticleXIXoftheGATSandparagraph11of theGuidelinesandProcedures for theNegotiationsonTradeinServices.

(c) Plurilateral negotiations should be organised with a view tofacilitatingtheparticipationofallMembers,takingintoaccountthelimitedcapacityofdevelopingcountriesandsmallerdelegationstoparticipateinsuchnegotiations.

2 as attached to the report of the Chairman of the Working Party on domestic regulation to theas attached to the report of the Chairman of the Working Party on domestic regulation to the Special Session of the Council for Trade in Services on 15 november 2005, contained in document JoB(05)/280.

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8. due consideration shall be given to proposals on trade-related concerns of small economies.

9. Members, in the course of negotiations, shall develop methods for the full and effective implementation of the ldC Modalities, including expeditiously:

(a) developing appropriate mechanisms for according special priority including to sectors and modes of supply of interest to ldCs in accordance with article iV:3 of the gaTS and paragraph 7 of the ldC Modalities.

(b) Undertaking commitments, to the extent possible, in such sectors and modes of supply identified, or to be identified, by ldCs that represent priority in their development policies in accordance with paragraphs 6 and 9 of the ldC Modalities.

(c) assisting ldCs to enable them to identify sectors and modes of supply that represent development priorities.

(d) Providing targeted and effective technical assistance and capacity building for ldCs in accordance with the ldC Modalities, particularly paragraphs 8 and 12.

(e) developing a reporting mechanism to facilitate the review requirement in paragraph 13 of the ldC Modalities.

10. Targeted technical assistance should be provided through, inter alia, the WTo Secretariat, with a view to enabling developing and least-developed countries to participate effectively in the negotiations. in particular and in accordance with paragraph 51 on Technical Cooperation of this declaration, targeted technical assistance should be given to all developing countries allowing them to fully engage in the negotiation. in addition, such assistance should be provided on, inter alia, compiling and analyzing statistical data on trade in services, assessing interests in and gains from services trade, building regulatory capacity, particularly on those services sectors where liberalization is being undertaken by developing countries.

Timelines

11. recognizing that an effective timeline is necessary in order to achieve a successful conclusion of the negotiations, we agree that the negotiations shall adhere to the following dates:

(a) any outstanding initial offers shall be submitted as soon asoffers shall be submitted as soon as shall be submitted as soon as possible.

(b) groups of Members presenting plurilateral requests to other Members should submit such requests by 28 February 2006 or as soon as possible thereafter.

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(c) a second round of revised offers shall be submitted by 31 Julyof revised offers shall be submitted by 31 July revised offers shall be submitted by 31 July 2006.

(d) Final draft schedules of commitments shall be submitted by 31 october 2006.

(e) Members shall strive to complete the requirements in 9(a) beforestrive to complete the requirements in 9(a) before to complete the requirements in 9(a) beforecomplete the requirements in 9(a) before the requirements in 9(a) before the date in 11(c).

ReviewofProgress

12. The Special Session of the Council for Trade in Services shall reviewprogress in the negotiations andmonitor the implementation of the Objectives,ApproachesandTimelinessetoutinthisAnnex.

annex d

rules

i. anti-dumping and Subsidies and Countervailing Measures including Fisheries Subsidies

We:

1. acknowledge that the achievement of substantial results on all aspects of the rules mandate, in the form of amendments to the anti-dumping (ad) and Subsidies and Countervailing Measures (SCM) agreements, is important to the development of the rules-based multilateral trading system and to the overall balance of results in the dda;

2. aim to achieve in the negotiations on rules further improvements, in particular, to the transparency, predictability and clarity of the relevant disciplines, to the benefit of all Members, including in particular developing and least-developed Members. in this respect, the development dimension of the negotiations must be addressed as an integral part of any outcome;

3. call on Participants, in considering possible clarifications and improvements in the area of anti-dumping, to take into account, inter alia, (a) the need to avoid the unwarranted use of anti-dumping measures, while preserving the basic concepts, principles and effectiveness of the instrument and its objectives where such measures are warranted; and (b) the desirability of limiting the costs and complexity of proceedings for interested parties and the investigating authorities alike, while strengthening the due process, transparency and predictability of such proceedings and measures;

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4. consider that negotiations on anti-dumping should, as appropriate, clarify and improve the rules regarding, inter alia, (a) determinations of dumping, injury and causation, and the application of measures; (b) procedures governing the initiation, conduct and completion of antidumping investigations, including with a view to strengthening due process and enhancing transparency; and (c) the level, scope and duration of measures, including duty assessment, interim and new shipper reviews, sunset, and anti-circumvention proceedings;

5. recognize that negotiations on anti-dumping have intensified and deepened, that Participants are showing a high level of constructive engagement, and that the process of rigorous discussion of the issues based on specific textual proposals for amendment to the ad agreement has been productive and is a necessary step in achieving the substantial results to which Ministers are committed;

6. note that, in the negotiations on anti-dumping, the negotiating group on rules has been discussing in detail proposals on such issues as determinations of injury/causation, the lesser duty rule, public interest, transparency and due process, interim reviews, sunset, duty assessment, circumvention, the use of facts available, limited examination and all others rates, dispute settlement, the definition of dumped imports, affiliated parties, product under consideration, and the initiation and completion of investigations, and that this process of discussing proposals before the group or yet to be submitted will continue after Hong Kong;

7. note, in respect of subsidies and countervailing measures, that while proposals for amendments to the SCM agreement have been submitted on a number of issues, including the definition of a subsidy, specificity, prohibited subsidies, serious prejudice, export credits and guarantees, and the allocation of benefit, there is a need to deepen the analysis on the basis of specific textual proposals in order to ensure a balanced outcome in all areas of the group’s mandate;

8. note the desirability of applying to both anti-dumping and countervailing measures any clarifications and improvements which are relevant and appropriate to both instruments;

9. recall our commitment at doha to enhancing the mutual supportiveness of trade and environment, note that there is broad agreement that the group should strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and

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over-fishing, and call on Participants promptly to undertake further detailed work to, inter alia, establish the nature and extent of those disciplines, including transparency and enforceability. appropriate and effective special and differential treatment for developing and least-developed Members should be an integral part of the fisheries subsidies negotiations, taking into account the importance of this sector to development priorities, poverty reduction, and livelihood and food security concerns;

10. direct the group to intensify and accelerate the negotiating process in all areas of its mandate, on the basis of detailed textual proposals before the group or yet to be submitted, and complete the process of analysing proposals by Participants on the ad and SCM agreements as soon as possible;

11. mandate the Chairman to prepare, early enough to assure a timely outcome within the context of the 2006 end date for the doha development agenda and taking account of progress in other areas of the negotiations, consolidated texts of the ad and SCM agreements that shall be the basis for the final stage of the negotiations.

ii. regional Trade agreements

1. We welcome the progress in negotiations to clarify and improve the WTo’s disciplines and procedures on regional trade agreements (rTas). Such agreements, which can foster trade liberalization and promote development, have become an important element in the trade policies of virtually all Members. Transparency of rTas is thus of systemic interest as are disciplines that ensure the complementarity of rTas with the WTo.

2. We commend the progress in defining the elements of a transparency mechanism for rTas, aimed, in particular, at improving existing WTo procedures for gathering factual information on rTas, without prejudice to the rights and obligations of Members. We instruct the negotiating group on rules to intensify its efforts to resolve outstanding issues, with a view to a provisional decision on rTa transparency by 30 april 2006.

3. We also note with appreciation the work of the negotiating group on rules on WTo’s disciplines governing rTas, including inter alia on the “substantially all the trade” requirement, the length of rTa transition periods and rTa developmental aspects. We instruct the group to intensify negotiations, based on text proposals as soon as possible after the Sixth Ministerial Conference, so as to arrive at appropriate outcomes by end 2006.

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annex e

Trade Facilitation

report by the negotiating group on Trade Facilitation to the TnC

1. Since its establishment on 12 october 2004, the negotiating group on Trade Facilitation met eleven times to carry out work under the mandate contained in annex d of the decision adopted by the general Council on 1 august 2004. The negotiations are benefiting from the fact that the mandate allows for the central development dimension of the doha negotiations to be addressed directly through the widely acknowledged benefits of trade facilitation reforms for all WTo Members, the enhancement of trade facilitation capacity in developing countries and ldCs, and provisions on special and differential treatment (S&dT) that provide flexibility. Based on the group’s Work Plan (Tn/TF/1), Members contributed to the agreed agenda of the group, tabling 60 written submissions sponsored by more than 100 delegations. Members appreciate the transparent and inclusive manner in which the negotiations are being conducted.

2. good progress has been made in all areas covered by the mandate, through both verbal and written contributions by Members. a considerable part of the negotiating group’s meetings has been spent on addressing the negotiating objective of improving and clarifying relevant aspects of gaTT articles V, Viii and X, on which about 40 written submissions1 have been tabled by Members representing the full spectrum of the WTo’s Membership. Through discussions on these submissions and related questions and answers (JoB(05)/222), Members have advanced their understanding of the measures in question and are working towards common ground on many aspects of this part of the negotiating mandate. Many of these submissions also covered the negotiating objective of enhancing technical assistance and support for capacity building on trade facilitation, as well as the practical application of the principle of S&dT. The group also discussed other valuable submissions dedicated to these issues.2 advances have also been made on the objective of arriving at provisions for effective cooperation between customs or any other appropriate authorities on trade facilitation and customs compliance issues, where two written proposals have been discussed.3 Members have also made valuable contributions on the identification of trade facilitation needs and priorities, development aspects, cost implications and inter-agency cooperation.4

1 Tn/TF/W/6-W/15, W/17-W/26, W/28, W/30-W32, W/34-36, W/38-W/40, W/42, W/44-W/49, W/53,Tn/TF/W/6-W/15, W/17-W/26, W/28, W/30-W32, W/34-36, W/38-W/40, W/42, W/44-W/49, W/53, W/55, W/58, W/60-W/62, W/64-W/67, W/69, W/70.

2 Tn/TF/W/33, W/41, W/56, W/63, W/73 and W/74Tn/TF/W/33, W/41, W/56, W/63, W/73 and W/743 Tn/TF/W/57 and W/68..Tn/TF/W/57 and W/68..4 Tn/TF/W/29, W/33, W/41, W/62 and W/63.Tn/TF/W/29, W/33, W/41, W/62 and W/63.

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3. Valuable input has been provided by a number of Members in the form of national experience papers5 describing national trade facilitation reform processes. in appreciation of the value to developing countries and ldCs of this aspect of the negotiations, the negotiating group recommends that Members be encouraged to continue this information sharing exercise.

4. Building on the progress made in the negotiations so far, and with a view to developing a set of multilateral commitments on all elements of the mandate, the negotiating group recommends that it continue to intensify its negotiations on the basis of Members’ proposals, as reflected currently in document Tn/TF/W/43/rev.4, and any new proposals to be presented. Without prejudice to individual Member’s positions on individual proposals, a list of (i) proposed measures to improve and clarify gaTT articles V, Viii and X; (ii) proposed provisions for effective cooperation between customs and other authorities on trade facilitation and customs compliance; and, (iii) cross-cutting submissions; is provided below to facilitate further negotiations. in carrying out this work and in tabling further proposals, Members should be mindful of the overall deadline for finishing the negotiations and the resulting need to move into focussed drafting mode early enough after the Sixth Ministerial Conference so as to allow for a timely conclusion of text-based negotiations on all aspects of the mandate.

5. Work needs to continue and broaden on the process of identifying individual Member’s trade facilitation needs and priorities, and the cost implications of possible measures. The negotiating group recommends that relevant international organizations be invited to continue to assist Members in this process, recognizing the important contributions being made by them already, and be encouraged to continue and intensify their work more generally in support of the negotiations.

6. in light of the vital importance of technical assistance and capacity building to allow developing countries and ldCs to fully participate in and benefit from the negotiations, the negotiating group recommends that the commitments in annex d’s mandate in this area be reaffirmed, reinforced and made operational in a timely manner. To bring the negotiations to a successful conclusion, special attention needs to be paid to support for technical assistance and capacity building that will allow developing counties and ldCs to participate effectively in the negotiations, and to technical assistance and capacity building to implement the results of the negotiations that is precise, effective and operational, and reflects the trade facilitation needs and priorities of developing countries and ldCs. recognizing the valuable assistance already being provided in this area, the negotiating group recommends that Members, in particular developed ones, continue to intensify their support in a comprehensive manner and on a long-term and sustainable basis, backed by secure funding.

5 Tn/TF/W/48, W/50 , W/53, W/55, W/58, W/60, W/61, W/65, W/69 and W/75.Tn/TF/W/48, W/50 , W/53, W/55, W/58, W/60, W/61, W/65, W/69 and W/75.

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7. The negotiating group also recommends that it deepen and intensify its negotiations on the issue of S&dT, with a view to arriving at S&dT provisions that are precise, effective and operational and that allow for necessary flexibility in implementing the results of the negotiations. reaffirming the linkages among the elements of annex d, the negotiating group recommends that further negotiations on S&dT build on input presented by Members in the context of measures related to gaTT articles V, Viii and X and in their proposals of a cross-cutting nature on S&dT.

i. ProPoSed MeaSUreS To iMProVe and ClariFY gaTT arTiCleS V, Viii and X

a. PUBliCaTion and aVailaBiliTY oF inForMaTion

• PublicationofTradeRegulations

• PublicationofPenaltyProvisions

• InternetPublication

(a) of elements set out in article X of gaTT 1994(b) of specified information setting forth procedural sequence

and other requirements for importing goods • NotificationofTradeRegulations

• EstablishmentofEnquiryPoints/SNFP/InformationCentres

• OtherMeasurestoEnhancetheAvailabilityofInformation

B. TiMe PeriodS BeTWeen PUBliCaTion and iMPleMenTaTion

• IntervalbetweenPublicationandEntryintoForce

C. ConSUlTaTion and CoMMenTS on neW and aMended rUleS

• PriorConsultationandCommentingonNewandAmendedRules

• InformationonPolicyObjectivesSought

D. adVanCe rUlingS

• ProvisionofAdvanceRulings

e. aPPeal ProCedUreS

• RightofAppeal

• ReleaseofGoodsinEventofAppeal

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F. oTHer MeaSUreS To enHanCe iMParTialiTY and non- diSCriMinaTion

• UniformAdministrationofTradeRegulations

• MaintenanceandReinforcementofIntegrityandEthicalConductAmongOfficials

(a) establishment of a Code of Conduct(b) Computerized System to reduce/eliminate discretion(c) System of Penalties(d) Technical assistance to Create/Build up Capacities to

Prevent and Control Customs offences(e) appointment of Staff for education and Training(f) Coordination and Control Mechanisms

g. FeeS and CHargeS ConneCTed WiTH iMPorTaTion and eXPorTaTion

• General Disciplines on Fees and Charges Imposed on or inConnectionwithImportationandExportation

(a) Specific Parameters for Fees/Charges(b) Publication/notification of Fees/Charges(c) Prohibition of Collection of Unpublished Fees and

Charges(d) Periodic review of Fees/Charges(e) automated Payment

• Reduction/Minimization of theNumber andDiversity of Fees/Charges

H. ForMaliTieS ConneCTed WiTH iMPorTaTion and eXPorTaTion

• Disciplines on Formalities/Procedures and Data/DocumentationRequirementsConnectedwithImportationandExportation

(a) non-discrimination(b) Periodic review of Formalities and requirements(c) reduction/limitation of Formalities and documentation

requirements(d) Use of international Standards(e) Uniform Customs Code(f) acceptance of Commercially available information and

of Copies(g) automation(h) Single Window/one-time Submission

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(i) elimination of Pre-Shipment inspection(j) Phasing out Mandatory Use of Customs Brokers

i. ConSUlarizaTion

• ProhibitionofConsularTransactionRequirement

J. Border agenCY CooPeraTion

• Coordination of Activities and Requirement of all BorderAgencies

K. releaSe and ClearanCe oF goodS

• Expedited/SimplifiedReleaseandClearanceofGoods

(a) Pre-arrival Clearance(b) expedited Procedures for express Shipments(c) risk Management /analysis, authorized Traders(d) Post-Clearance audit(e) Separating release from Clearance Procedures(f) other Measures to Simplify Customs release and

Clearance• EstablishmentandPublicationofAverageReleaseandClearance

Times

l. TariFF ClaSSiFiCaTion

• ObjectiveCriteriaforTariffClassification

M. MaTTerS relaTed To goodS TranSiT

• StrengthenedNon-discrimination

• DisciplinesonFeesandCharges

(a) Publication of Fees and Charges and Prohibition of Unpublished ones

(b) Periodic review of Fees and Charges(c) More effective disciplines on Charges for Transit(d) Periodic exchange Between neighbouring authorities

• Disciplines on Transit Formalities and DocumentationRequirements

(a) Periodic review(b) reduction/Simplification(c) Harmonization/Standardization(d) Promotion of regional Transit arrangements

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(e) Simplified and Preferential Clearance for Certain goods(f) limitation of inspections and Controls(g) Sealing(h) Cooperation and Coordination on document

requirements(i) Monitoring(j) Bonded Transport regime/guarantees

• ImprovedCoordinationandCooperation

(a) amongst authorities(b) Between authorities and the Private Sector

• OperationalizationandClarificationofTerms

ii. ProPoSed ProViSionS For eFFeCTiVe CooPeraTion BeTWeen CUSToMS and oTHer aUTHoriTieS on Trade FaCiliTaTion and CUSToMS CoMPlianCe

• Multilateral Mechanism for the Exchange and Handling ofInformation

iii. CroSS-CUTTing SUBMiSSionS

1. needs and Priorities identification

• General tool to assess needs andpriorities and current levels oftradefacilitation

• Take result of assessment as one basis for establishing tradefacilitationrules,arrangingS&Dtreatmentandprovidingtechnicalassistanceandcapacitybuildingsupport

2. TechnicalAssistanceandCapacityBuilding

- Technical assistance and Capacity Building in the Course of the negotiations

• IdentificationofNeedsandPriorities• CompilationofNeedsandPrioritiesofIndividualMembers• Support for Clarification and Educative Process Including

Training- Technical assistance and Capacity Building Beyond the

negotiations Phase• ImplementationoftheOutcome• CoordinationMechanismsforImplementingNeedsandPriorities

aswellasCommitments

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3. Multiple-Areas

• Identification of Trade Facilitation Needs and Priorities ofMembers

• CostAssessment• Inter-AgencyCooperation• LinksandInter-relationshipbetweentheElementsofAnnexD• InventoryofTradeFacilitationMeasures• AssessmentoftheCurrentSituation• TimingandSequencingofMeasures

annex F

Special and differential Treatment

ldC agreement-specific Proposals

23) Understanding in respect of Waivers of obligations under the gaTT 1994

(i) We agree that requests for waivers by least-developed country Members under article iX of the WTo agreement and the Understanding in respect of Waivers of obligations under the gaTT 1994 shall be given positive consideration and a decision taken within 60 days.

(ii) When considering requests for waivers by other Members exclusively in favour of least-developed country Members, we agree that a decision shall be taken within 60 days, or in exceptional circumstances as expeditiously as possible thereafter, without prejudice to the rights of other Members.

36) decision on Measures in Favour of least-developed Countries

We agree that developed-country Members shall, and developing-country Members declaring themselves in a position to do so should:

(a) (i) Provide duty-free and quota-free market access on a lasting basis, for all products originating from all ldCs by 2008 or no later than the start of the implementation period in a manner that ensures stability, security and predictability.

(ii) Members facing difficulties at this time to provide market access as set out above shall provide duty-free and quota-free market access for at least 97 per cent of products originating from ldCs, defined at the tariff line level, by 2008 or no later than the start of the implementation period. in addition, these Members shall take steps to progressively achieve compliance with the obligations

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set out above, taking into account the impact on other developing countries at similar levels of development, and, as appropriate, by incrementally building on the initial list of covered products.

(iii) developing-country Members shall be permitted to phase in their commitments and shall enjoy appropriate flexibility in coverage.

(b) ensure that preferential rules of origin applicable to imports from ldCs are transparent and simple, and contribute to facilitating market access.

Members shall notify the implementation of the schemes adopted under this decision every year to the Committee on Trade and development. The Committee on Trade and development shall annually review the steps taken to provide duty-free and quota-free market access to the ldCs and report to the general Council for appropriate action.

We urge all donors and relevant international institutions to increase financial and technical support aimed at the diversification of ldC economies, while providing additional financial and technical assistance through appropriate delivery mechanisms to meet their implementation obligations, including fulfilling SPS and TBT requirements, and to assist them in managing their adjustment processes, including those necessary to face the results of MFn multilateral trade liberalisation.

38) decision on Measures in Favour of least-developed Countries

it is reaffirmed that least-developed country Members will only be required to undertake commitments and concessions to the extent consistent with their individual development, financial or trade needs, or their administrative and institutional capacities.

Within the context of coherence arrangements with other international institutions, we urge donors, multilateral agencies and international financial institutions to coordinate their work to ensure that ldCs are not subjected to conditionalities on loans, grants and official development assistance that are inconsistent with their rights and obligations under the WTo agreements.

84) agreement on Trade-related investment Measures

ldCs shall be allowed to maintain on a temporary basis existing measures that deviate from their obligations under the TriMs agreement. For this purpose, ldCs shall notify the Council for Trade in goods (CTg) of such measures within two years, starting 30 days after the date of this declaration. ldCs will be allowed to maintain these existing measures until the end of a new transition period, lasting seven years. This transition period may be extended by the CTg under the existing procedures set out in the TriMs agreement, taking into account the individual financial, trade, and development needs of the Member in question.

ldCs shall also be allowed to introduce new measures that deviate from their obligations under the TriMs agreement. These new TriMs shall be notified to

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the CTg no later than six months after their adoption. The CTg shall give positive consideration to such notifications, taking into account the individual financial, trade, and development needs of the Member in question. The duration of these measures will not exceed five years, renewable subject to review and decision by the CTg.

any measures incompatible with the TriMs agreement and adopted under this decision shall be phased out by year 2020.

88) decision on Measures in Favour of least-developed Countries–Paragraph 1

least-developed country Members, whilst reaffirming their commitment to the fundamental principles of the WTo and relevant provisions of gaTT 1994, and while complying with the general rules set out in the aforesaid instruments, will only be required to undertake commitments and concessions to the extent consistent with their individual development, financial and trade needs, and their administrative and institutional capabilities. Should a least-developed country Member find that it is not in a position to comply with a specific obligation or commitment on these grounds, it shall bring the matter to the attention of the general Council for examination and appropriate action.

We agree that the implementation by ldCs of their obligations or commitments will agree that the implementation by ldCs of their obligations or commitments will require further technical and financial support directly related to the nature and scope of such obligations or commitments, and direct the WTo to coordinate its efforts with donors and relevant agencies to significantly increase aid for trade-related technical to significantly increase aid for trade-related technicalto significantly increase aid for trade-related technical assistance and capacity building

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GENERAL COUNCIL

a ProCedUre For THe inTrodUCTion oF HarMonized SYSTeM 2002 CHangeS To SCHedUleS oF ConCeSSionS USing THe ConSolidaTed

TariFF SCHedUleS (CTS) daTaBaSe

Decision of the General Council on 15 February 2005 (WT/L/605)

The general Council,

Having regard to articles iV:2 and iX:1 of the WTo agreement;

Recalling that the Contracting Parties to gaTT 1947, by their decision of 12 July 19831, agreed on a method to introduce the Harmonized System (HS) into schedules of concessions;

Recalling that the Contracting Parties to gaTT 1947, by their decision of 8 october 19912, decided on simplified procedures to introduce HS changes to schedules of concessions;

Recalling that the general Council, by its decision of 18 July 20013, established a Procedure for the introduction of Harmonized System 2002 changes to schedules of concessions;

Considering the increased complexity of introducing HS changes into schedules and the lengthy period of time it has taken to introduce HS1996 and HS2002 changes into schedules;

Noting that Members established a Consolidated Tariff Schedule (CTS) database which, although not legally binding, could serve as a valuable tool for the verification and certification of commitments;

Recalling that Members agreed, by their decision of 1 august 2004, to finalize the results of the on-going non-agricultural market access negotiations in the HS2002 nomenclature4;

Taking into account the desire of Members to further facilitate and simplify the introduction of HS2002 changes into WTo schedules by making a better use of the CTS database;

1 BISD 30S/17.BISD30S/17.2 BISD 39S/300.BISD39S/300.3 WT/L/407.WT/L/407.4 WT/L/579, Annex B, paragraph 5.WT/L/579,AnnexB,paragraph5.

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general Council

Decides that:

These procedures shall supersede attachment a of the general Council decision of 18 July 2001 (WT/l/407) relating to electronic verification, and amend and supplement the procedures outlined in attachment B of the same decision as follows:

i. Preparation and distribution of the draft CTS Schedule

1. The Secretariat shall introduce into each developing country Member’s schedule in the Consolidated Tariff Schedule (CTS) database the Harmonized System 2002 (HS2002) changes. These changes as reflected in each developing country Member’s schedule will be considered the “draft HS02 file” for the purpose of this decision. The Secretariat shall update in the schedules in the CTS database all the tariff numbers and descriptions that change due to the introduction of the HS2002 nomenclature, including those relating to tariff rate quotas and export subsidies, if applicable. in doing this work, the Secretariat shall abide by the technical procedures described in the annex to this decision.

2. in preparing the draft HS02 file, the Secretariat shall, to the extent possible, ensure that the scope of the concessions remain unchanged. The Secretariat shall highlight those tariff lines on which a change in the scope of the concession may have occurred due to the complex technical nature of the transposition.

3. The Secretariat shall send to each developing country Member its draft HS02 file for examination as soon as the technical work has been completed. Upon receipt of this file, the Member shall have the possibility to seek clarifications from the Secretariat and propose changes as laid out in Section ii.

4. developed country Members are expected to prepare their own draft HS02 files, which they are expected to submit to the Secretariat for examination and final formatting. in this regard, developed country Members may use the submission they prepared under the general Council decision of 18 July 2001 (WT/l/407). Following examination of these files, if the Secretariat has no comments on the file, the procedure outlined in paragraph 6 shall be followed. if the Secretariat has comments, those comments will be transmitted to the developed country Member concerned (the date of transmittal of those comments is hereinafter referred to as the “first date”) and the procedure under paragraph 7 shall be followed. Thereafter, the draft HS202 files of developed country Members will be subject to the procedures contained in paragraph 9 and onwards.

ii. examination of draft CTS Files and release for Multilateral review

5. developing country Members are expected to examine their draft HS02 file and provide the Secretariat with a written communication which either (1) approves the file, or (2) provides specific comments on the contents of the draft HS02 file. Such communications are expected to reach the Secretariat no later than 60 days following

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the date of the communication transmitting the draft HS02 file to the Member (hereinafter referred to as the “first date”).

6. in case (1), the Secretariat shall release the draft HS02 file for multilateral review with a headnote indicating that the draft HS02 file has been approved by the Member.

7. in case (2), both the Member concerned and the Secretariat shall endeavour to reach a common understanding on the issue(s) raised, and reflect any changes accordingly in the draft HS02 file, with a view to releasing it for multilateral review no later than 90 days from the “first date”. in this regard,

(a) when a common understanding is reached and no change is required, the Secretariat shall release the original draft HS02 file for multilateral review with a headnote indicating that the file has been approved by the Member.

(b) when a common understanding is reached and changes to the draft HS02 file are required, the Secretariat shall prepare a revised file and release it for multilateral review with a headnote indicating that the file has been approved by the Member.

(c) when a common understanding has not been reached within the 90-day period, the Secretariat shall prepare a revised draft HS02 file including the specific changes proposed by the Member and release the file for multilateral review. The revised file shall include a headnote indicating that the file has been approved by the Member, and shall also provide the Secretariat observations on the file.

8. if the Secretariat does not receive any response from the Member concerned after the 60 days referred to in paragraph 5, the draft HS02 file will be released for multilateral review with a headnote indicating that the Member concerned has neither provided any comments nor approved the file.

iii. Multilateral review Process

9. Multilateral review of the released electronic file shall take place in the framework of informal dedicated sessions of the Committee on Market access, which shall be scheduled as required. For the purpose of the multilateral review of the draft HS02 file, the Secretariat will post the files three or four times a year on the Members’ website and on dates that should be at least six weeks prior to the informal sessions scheduled to this effect. Members shall be notified of such postings through a communication by the Secretariat.

10. Modifications agreed at the multilateral review sessions shall be incorporated by the Secretariat into a revised version of the file, which shall then be resubmitted for multilateral review. in case a Member has a query or comment concerning another Member’s draft HS02 file, but is unable to attend the meeting at which these changes

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general Council

are to be reviewed, it may request the Chair to convey those queries/comments to the other Member at the time of the multilateral review.

11. in case the scope of a concession has been modified as a result of the transposition, gaTT article XXViii consultations and renegotiations shall be entered into by the Member concerned. The status of discussions and consultations between Members, including article XXViii renegotiations, should be reported to other Members at the multilateral sessions to ensure full transparency.

iV. Certification of the HS2002 Changes

12. When there is no objection remaining on a draft HS02 file at a multilateral review session, it may then be considered approved by the Committee, with the exception of any draft HS02 file released under paragraph 8 where a written communication by the Member approving the file would also be required.

13. ApaperversionoftheHS2002changesascontainedintheapprovedHS02fileshallbepreparedbytheSecretariatforthepurposeofcertification.Theproceduresformodificationandrectificationofschedulesoftariffconcessions(L/4962)shallbefollowedinthisregard.

V. Periodic report by the Secretariat

14. The Secretariat shall prepare a periodic report(s) on the status of work which shall include the following information, to the extent possible: (i) the draft HS02 files that remain to be done, (ii) the draft HS02 files that have been completed and the date when they were sent to Members, (iii) the draft HS02 files released for multilateral review, including a mention of any relevant headnotes, (iv) the progress made on each draft HS02 file, including Members raising reservations, the tariff lines subject to reservation, a summary of the reason for the reservation; (v) the draft HS02 files that have been approved in the multilateral review and the date of their circulation for certification; (vi) the approved HS02 files that have been certified.

Vi. relationship with the Previous Procedure to introduce HS2002 Changes to Schedules of Concessions

15. in preparing the draft HS02 files, the Secretariat shall use the information submitted by developing country Members under the procedures contained in the general Council decision of 18 July 2001 (WT/l/407). The Secretariat shall also give priority to the preparation of such files.

Vii. Waiver for the introduction of Harmonized System 2002 Changes

16. For those Members which are currently waived from the application of the provisions of article ii of gaTT 1994, the waiver shall continue to apply for such Members under the conditions set out in the relevant decision(s) granting the waiver.

17. Those Members not currently covered by a waiver may notify the Committee of their wish to be included in the waiver decision once they have approved their

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draft HS02 file and it has been released for multilateral review. The latter action will be considered equivalent to the submission as foreseen in paragraph (i) of the general Council decision WT/l/469 granting a waiver and the relevant paragraphs of subsequent waiver decisions. Such a notification should also include the date of domestic implementation of the HS2002 changes by that Member.

anneX

1. The Consolidated Tariff Schedules (CTS) database contains all WTo Members’ concessions on goods in a standardized format. it currently contains 131 schedules representing more than 700,000 tariff lines. in the light of the slow progress in the HS2002 transposition and also in the context of requirements arising from the ongoing negotiations on goods, it has been suggested to transpose the CTS database to the HS2002 nomenclature.5 Should Members agree, a transposition of the CTS to HS2002 could be undertaken by the Secretariat and this could feed into the HS2002 transposition exercise as well as into the current negotiating process. The following note describes the relevant technical issues thus far identified by the Secretariat, which would need to be addressed in a transposition of the CTS to HS2002.

HS2002 Changes

2. as noted in document WT/l/407, the HS2002 nomenclature has 373 changes or sets of changes, which can be summarized as follows:

Table 1 - HS2002 Changes or Sets of Changes6

Category Changes NumberofItems1 Newbreak-outsofthenomenclature 872 Condensing(ordeletion)ofthenomenclature 483 Textualchangesofthenomenclature 1304 Typographicalchangesorcorrections 108

3. The 238 textual changes (categories 3 and 4) are relatively straightforward and could be done automatically in many cases. Moreover, as noted in WT/l/407, 102 of them are items related only to chapter or subheading notes. Categories 1 and 2 are changes of codes, descriptions or structures, which could be mergers or splits of

5 it should be noted that a procedure to implement HS 2002 changes to Schedules of Concessions it should be noted that a procedure to implement HS 2002 changes to Schedules of Concessions started in 2001. Since then, 33 members have submitted documentation as required, which include loose-leaf schedules and concordance tables (WT/l/407).

6 Changes related to a set of headings or subheadings.Changesrelatedtoasetofheadingsorsubheadings.

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headings or subheadings. They could also include more complex changes combining splits and mergers. These changes will become more complicated when they have to be transposed to the level of national tariff lines, i.e. more disaggregated than the HS 6-digit subheading level. examples 1 and 2 (below) show the complexity of split and merger transpositions applied to national subheadings. Manual work would be needed for processing these tariff lines. The number of HS subheadings affected by changes in the HS2002 nomenclature can be summarized as follows:

Table 2 - HS2002 Changes to HS Subheadings(number of HS sub-headings)

Case HS96 HS2002

a no change 4713 4713

B Change in codes only 31 31

C Split or merger 369 480

Total 5113 5224

data

4. among the 131 schedules, three of them are already filed in HS2002 and need no further work; seven schedules are still in HS 1992, which could be transposed to HS2002 in a two step process (HS92 to HS96 and then HS96 to HS2002). The remaining 121 schedules are in HS96. it is suggested not to include the schedules of the ten new members of the european Communities in the transposition exercise.7

Transposition Procedure

Concession elements

5. The CTS database contains not only tariff concessions but also other elements, which can either be on tariff-line basis, such as base duties, initial negotiating rights (inrs) and special safeguards (SSgs), or in other parts of the schedule, such as tariff rate quotas (TrQs). not all elements currently included in the CTS are needed either for the HS2002 transposition or for the preparation and evaluation of offers in the context of the negotiations. it is therefore suggested to retain only those elements which are required for both purposes (see attachment).

recording of concessions in HS2002

6. each new HS2002 subheading/tariff line will come from one or more HS96 tariff lines or part of these lines. if a HS2002 subheading/tariff line matches with

7 of these, one schedule is in HS 2002 and the remaining nine are in HS 1996.of these, one schedule is in HS 2002 and the remaining nine are in HS 1996.

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two or more HS96 tariff lines and if these lines have the same levels or contents of concessions (e.g. same bound duties), the original concession elements would be merged into one new concession at the level of the new HS2002 subheading/tariff line. if the concessions of the original HS96 tariff lines are different, the concession elements of new HS2002 subheading/tariff line would have to reflect this. in this case, the HS2002 subheading/tariff line would be broken down to a more detailed level so that the CTS in HS2002 would reflect fully the same level of concessions as the CTS in HS96.

7. examples 1 and 2 show that the “collapsing” of tariff lines to HS 6 digit subheadings could significantly simplify the tariff structure and the workload involved. it would require much less manual intervention and would thus be less likely to be controversial. Having a maximum number of concessions defined at the level of HS 6-digit subheadings would also make it easier to transpose the new schedule into any new national applied schedule based on HS2002 nomenclature.8

Procedural issues

8. It isproposed that theSecretariatconvertall tariff lines into theHS2002nomenclature. Those tariff lines that have been affected by changes in the HSnomenclaturewouldbeflagged.Wheneverpossible,automatedprocessingwouldbeusedtoreducetheworkload(casesA,BandpartsofC).However,aconsiderablenumberoftarifflineswouldhavetobeprocessedmanually.Thesetarifflinesneedtobereviewedlinebylinetodeterminethenewtarifflinecode(s)anddescription(s)andtheirrespectivelevelofconcessionaccordingtotheamendmentsandcorrelationtablesbetweenHS96andHS2002.Althoughsomemethodologiesandsoftwarecouldbedevelopedtofacilitatethemanualrevisionandverifyoutcomes,theywouldworkonlyastools,andnotasthesubstituteformanualrevisions.Ithastoberecognizedthat the Secretariatmay have to adjust detailed tariff line codes and descriptionsincertaininstances(e.g.example2, table12)inordertogeneratemeaningfulandintelligiblenewtariffschedules.AnymodificationsthatrequiremanualmodificationswouldneedtobeclearlyflaggedforverificationandapprovalbyMembers.

reference documents

9. The transposition should be based on the information from the World Customs organization, which is included in the WTo documents g/Ma/W/24, g/Ma/W/26, g/Ma/W/27 and g/Ma/W/27/add.1. The key element for such a transposition would be a detailed concordance table between the HS96 and the HS2002 nomenclatures.

10. The concordance tables submitted by the 33 Members under the procedure for the HS2002 transposition (WT/l/407) could also be used in the procedures developed for the HS2002 CTS transposition, so that the workload could be reduced.

8 This would not preclude that concessions defined only at the level of subheadings could be brokenThiswouldnotprecludethatconcessionsdefinedonlyatthelevelofsubheadingscouldbebrokendownagainintotarifflinedetailbytheMembersconcerned.

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Furthermore, for Members that already have made their idB submissions in HS2002, this could be useful reference for the exercise.

example 1: Category 1 - Split

11. one HS96 subheading 010600 becomes eight new HS2002 subheadings:

Table3b HS2002HS Code Product description

0106 other live animals.

01061 - Mammals:

Table 3a HS96 010611 -- Primates

HS Code Product description 010612 -- Whales, dolphins and porpoises (mammals of…

0106other animals, live birds, foxes, monkeys, rabbits, worms, bait, nesoi

010619 -- Other

010600 Animals, live, nesoi 010620 - Reptiles (including snakes and turtles)

01063 - Birds:

010631 -- Birds of prey

010632

-- Psittaciformes (including parrots, parakeets, macaws and cockatoos)

010639 -- Other

010690 - Other

12. in this example, in the CTS database, a Member has three tariff lines (Tl) under subheading 010600:

Table 4 HS96

Tl code Product description

0106 other live animals.

010600 other live animals

01060010 - Domestic rabbits

01060020 - Pigeons

01060090 - Other

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13. in theory, the three national subheadings could go under each of the eight new HS2002 subheadings. if the conversion is done by computer program, it may generate 24 possible HS2002 tariff lines. However, not all of the 24 new national subheadings are appropriate when the product descriptions are considered. For instance, the national subheading “domestic rabbits” should not be under the subheading “primates”. Therefore, in this case, each tariff line generated by computer program needs to be reviewed manually to determine whether it should stay under the corresponding new HS2002 subheading. From all these possible new tariff lines and product descriptions, the following tariff lines would be retained.

Table 5 HS2002

Tl code Product description0106 other live animals.

01061 - Mammals:

01061100 -- Primates01061200 -- Whales, dolphins and porpoises …010619 -- other

01061910 --- Domestic rabbits01061990 --- Other01062000 - Reptiles (including snakes and turtles)

01063 - Birds:

01063100 -- Birds of prey01063200 -- Psittaciformes …010639 -- other

01063910 --- Pigeons01063990 --- Other01069000 - Other

14. if all national subheadings (tariff lines) under a 6-digit subheading have the same duties (and same other concession elements), these lines could be collapsed to HS 6-digit subheading level. For example, assuming HS96 tariff lines 01060020 and 01060090 have the same bound rate of 20, and the duty on 01060010 is 10 percent as shown in the table below:

Table 6 HS96

Tl code Product description Bound duty

0106 Otherliveanimals.010600 Otherliveanimals01060010 - Domestic rabbits 1001060020 - Pigeons 2001060090 - Other 20

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15. HS2002 tariff lines 01063910 and 01063990 could then be collapsed to 01063900 because they have same duty rate of 20 percent. However, tariff lines 01061910 and 01061990 could not be collapsed because they have different duty rates.

Table 7a HS2002 before collapsing Table 7b HS2002 after collapsing

Tl code Product description Bound duty Tl code Product description Bound duty

0106 other live animals. 0106 other live animals.

01061 - Mammals: 01061 - Mammals:

01061100 -- Primates 20 01061100 -- Primates 20

01061200 -- Whales, dolphins and porpoises … 20 01061200 -- Whales, dolphins

and porpoises … 20

010619 -- other 010619 -- other

01061910 --- Domestic rabbits 10 01061910 --- Domestic

rabbits 10

01061990 --- Other 20 01061990 --- Other 20

01062000 - Reptiles (including snakes and turtles) 20 01062000 - Reptiles (including

snakes and turtles) 20

01063 - Birds: 01063 - Birds:

01063100 -- Birds of prey 20 01063100 -- Birds of prey 20

01063200 -- Psittaciformes … 20 01063200 -- Psittaciformes … 20

010639 -- other

01063910 --- Pigeons 20 01063900 -- Other 20

01063990 --- Other 20

01069000 - Other 20 01069000 - Other 20

16. a concordance table between the HS96 and HS2002 nomenclature at the tariff line level would be constructed as follows:

Table 8a HS96 to HS2002 Table 8b HS2002 to HS96

HS96 exBound rate

in HS96

HS2002 exBound rate

in HS02

HS2002 exBound rate

in HS02

HS96 exBound rate

in HS96

01060010 10 01061910 10 01061100 20 01060090 x 2001060020 20 01063900 x 20 01061200 20 01060090 x 2001060090 x 20 01061100 20 01061910 10 01060010 1001060090 x 20 01061200 20 01061990 20 01060090 x 2001060090 x 20 01061990 20 01062000 20 01060090 x 2001060090 x 20 01062000 20 01063100 20 01060090 x 2001060090 x 20 01063100 20 01063200 20 01060090 x 2001060090 x 20 01063200 20 01063900 x 20 01060020 2001060090 x 20 01063900 x 20 01063900 x 20 01060090 x 2001060090 x 20 01069000 20 01069000 20 01060090 x 20

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example 2: Category 2 - Merger

17. Three HS96 subheadings merge to one new HS2002 subheading:

Table 9a HS96 Table 9b HS2002

HS code Product description HS code Product description

1103 Cereal groats, meal and pellets. 1103 Cereal groats, meal and pellets.

11031 - groats and meal : 11031 - groats and meal:

110311 - - of wheat 110311 -- of wheat110312 - - Of oats 110313 -- of maize (corn)110313 - - of maize (corn) 110319 -- Of other cereals110314 - - Of rice110319 - - Of other cereals

18. in the CTS database, a Member has five tariff lines related to the three subheadings:

Table 10 HS96


1103 Cereal groats, meal and pellets.11031 - groats and meal :110311 - - of wheat11031110 - - - durum wheat11031190 - - - Common wheat and spelt11031200 - - Of oats110313 - - of maize (corn)11031310 - - - of a fat content not exceeding 1,5 % by weight11031390 - - - other11031400 - - Of rice110319 - - of other cereals11031910 - - - Of rye11031930 - - - Of barley11031990 - - - Other

19. if the first 6 digits of the HS96 tariff lines are substituted by the new HS2002 subheadings:

Table 11a HS96 Table 11bHS2002

Tl code Tl code Product description

11031200 11031900 - - Of oats11031400 substitute first 6 digits with 110319 11031900 - - Of rice11031910 11031910 - - - of rye11031930 11031930 - - - of barley11031990 11031990 - - - other

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20. The new HS2002 codes do not conform to the HS coding rules, since “00” exists twice. Furthermore an HS code ending in “00” cannot coexist under the same subheading with other codes, in this case “10”, “30” and “90”. These lines could be corrected by assigning new codes for HS codes 11031900 as follows:

Table 12 HS2002


11031910 - - - of rye

11031930 - - - of barley

11031940 - - - Of oats

11031950 - - - Of rice

11031990 - - - other

21. if all national subheadings (tariff lines) under a 6-digit subheading have the same duties (or other concession elements), these lines could be collapsed to HS 6-digit subheading level and the transposition exercise could be significantly simplified as shown below. For example if the duties in the original CTS schedule were as shown in the table below:

Table 13 HS96

Tl code Product description Bound duty

1103 Cereal groats, meal and pellets.

11031 - groats and meal :

110311 - - of wheat

11031110 - - - durum wheat 10

11031190 - - - Common wheat and spelt 10

11031200 - - Of oats 10

110313 - - of maize (corn)

11031310 - - - of a fat content not exceeding 1,5 % by weight 10

11031390 - - - other 10

11031400 - - Of rice 10

110319 - - of other cereals

11031910 - - - Of rye 10

11031930 - - - Of barley 10

11031990 - - - Other 10

22. Then the resulting table in HS2002 could be simplified as shown below.

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Table 14a HS2002 before collapsing Table 14b HS2002 after collapsing


Bound duty Tl code Product

description Bound duty

11031910 - - - of rye 10 110319 -- of other cereals 10

11031930 - - - of barley 10

11031940 - - - of oats 10

11031950 - - - of rice 10

11031990 - - - other 10

23. a concordance table between the HS96 and HS2002 nomenclature at the tariff line level would be constructed as follows:

Table 15a HS96 to HS2002 Table 15b HS2002 to HS96

HS96 exBound rate in HS96




11031200 10 110319 x 10 110319 x 10 11031200 10

11031400 10 110319 x 10 110319 x 10 11031400 10

11031910 10 110319 x 10 110319 x 10 11031910 10

11031930 10 110319 x 10 110319 x 10 11031930 10

11031990 10 110319 x 10 110319 x 10 11031990 10

attachment

The new HS2002 concession table to be constructed based on the CTS would cover all bound tariff lines. it would contain for each tariff line, inter alia, the following data elements:

• Tariff line code in HS2002 nomenclature (including suffix or ex)• Product description• Base duty (if year of implementation is later than 2005) • Final bound duty• other duties and charges• Special safeguard• Present legal instrument• Present inr (if available in the CTS)• implementation period (if year of implementation is later than 2005)• Certification indicator

additional tables containing the supplementary agricultural commitments (tariff quotas, export subsidies, domestic support) would be included.

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aMendMenT oF THe TriPS agreeMenT

Decision of the General Council on 6 December 2005 (WT/L/641)

The general Council;

Having regard to paragraph 1 of article X of the Marrakesh agreement establishing the World Trade organization (“the WTo agreement”);

Conducting the functions of the Ministerial Conference in the interval between meetings pursuant to paragraph 2 of article iV of the WTo agreement;

Noting the declaration on the TriPS agreement and Public Health (WT/Min(01)/deC/2) and, in particular, the instruction of the Ministerial Conference to the Council for TriPS contained in paragraph 6 of the declaration to find an expeditious solution to the problem of the difficulties that WTo Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing under the TriPS agreement;

Recognizing, where eligible importing Members seek to obtain supplies under the system set out in the proposed amendment of the TriPS agreement, the importance of a rapid response to those needs consistent with the provisions of the proposed amendment of the TriPS agreement;

Recalling paragraph 11 of the general Council decision of 30 august 2003 on the implementation of Paragraph 6 of the doha declaration on the TriPS agreement and Public Health;

Having considered the proposal to amend the TriPS agreement submitted by the Council for TriPS (iP/C/41);

Noting the consensus to submit this proposed amendment to the Members for acceptance;

Decides as follows:

1. The Protocol amending the TriPS agreement attached to this decision is hereby adopted and submitted to the Members for acceptance.

2. The Protocol shall be open for acceptance by Members until 1 december 2007 or such later date as may be decided by the Ministerial Conference.

3. The Protocol shall take effect in accordance with the provisions of paragraph 3 of article X of the WTo agreement.

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aTTaCHMenT

ProToCol aMending THe TriPS agreeMenT

Members of the World Trade Organization;

Having regard totheDecisionoftheGeneralCouncilindocumentWT/L/641,adoptedpursuanttoparagraph1ofArticleXoftheMarrakeshAgreementEstablishingtheWorldTradeOrganization(“theWTOAgreement”);

Hereby agree asfollows:

1. The agreement on Trade-related aspects of intellectual Property rights (the “TriPS agreement”) shall, upon the entry into force of the Protocol pursuant to paragraph 4, be amended as set out in the annex to this Protocol, by inserting article 31bis after article 31 and by inserting the annex to the TriPS agreement after article 73.

2. reservations may not be entered in respect of any of the provisions of this Protocol without the consent of the other Members.

3. This Protocol shall be open for acceptance by Members until 1 december 2007 or such later date as may be decided by the Ministerial Conference.

4. This Protocol shall enter into force in accordance with paragraph 3 of article X of the WTo agreement.

5. This Protocol shall be deposited with the director-general of the World Trade organization who shall promptly furnish to each Member a certified copy thereof and a notification of each acceptance thereof pursuant to paragraph 3.

6. This Protocol shall be registered in accordance with the provisions of article 102 of the Charter of the United nations.

Done at geneva this sixth day of december two thousand and five, in a single copy in the english, French and Spanish languages, each text being authentic.

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anneX To THe ProToCol aMending THe TriPS agreeMenT

Article 31bis

1. The obligations of an exporting Member under article 31(f) shall not apply with respect to the grant by it of a compulsory licence to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) in accordance with the terms set out in paragraph 2 of the annex to this agreement.

2. Where a compulsory licence is granted by an exporting Member under the system set out in this article and the annex to this agreement, adequate remuneration pursuant to article 31(h) shall be paid in that Member taking into account the economic value to the importing Member of the use that has been authorized in the exporting Member. Where a compulsory licence is granted for the same products in the eligible importing Member, the obligation of that Member under article 31(h) shall not apply in respect of those products for which remuneration in accordance with the first sentence of this paragraph is paid in the exporting Member.

3. With a view to harnessing economies of scale for the purposes of enhancing purchasing power for, and facilitating the local production of, pharmaceutical products: where a developing or least-developed country WTo Member is a party to a regional trade agreement within the meaning of article XXiV of the gaTT 1994 and the decision of 28 november 1979 on differential and More Favourable Treatment reciprocity and Fuller Participation of developing Countries (l/4903), at least half of the current membership of which is made up of countries presently on the United nations list of least-developed countries, the obligation of that Member under article 31(f) shall not apply to the extent necessary to enable a pharmaceutical product produced or imported under a compulsory licence in that Member to be exported to the markets of those other developing or least-developed country parties to the regional trade agreement that share the health problem in question. it is understood that this will not prejudice the territorial nature of the patent rights in question.

4. Members shall not challenge any measures taken in conformity with the provisions of this article and the annex to this agreement under subparagraphs 1(b) and 1(c) of article XXiii of gaTT 1994.

5. This article and the annex to this agreement are without prejudice to the rights, obligations and flexibilities that Members have under the provisions of this agreement other than paragraphs (f) and (h) of article 31, including those reaffirmed by the declaration on the TriPS agreement and Public Health (WT/Min(01)/deC/2), and to their interpretation. They are also without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under the provisions of article 31(f).

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anneX To THe TriPS agreeMenT

1. For the purposes of article 31bis and this annex:

(a) “pharmaceutical product” means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems as recognized in paragraph 1 of the declaration on the TriPS agreement and Public Health (WT/Min(01)/deC/2). it is understood that active ingredients necessary for its manufacture and diagnostic kits needed for its use would be included1;

(b) “eligible importing Member” means any least-developed country Member, and any other Member that has made a notification2 to the Council for TriPS of its intention to use the system set out in article 31bis and this annex (“system”) as an importer, it being understood that a Member may notify at any time that it will use the system in whole or in a limited way, for example only in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. it is noted that some Members will not use the system as importing Members3 and that some other Members have stated that, if they use the system, it would be in no more than situations of national emergency or other circumstances of extreme urgency;

(c) “exporting Member” means a Member using the system to produce pharmaceutical products for, and export them to, an eligible importing Member.

2. The terms referred to in paragraph 1 of article 31bis are that:

(a) the eligible importing Member(s)4 has made a notification2 to the Council for TriPS, that:

(i) specifies the names and expected quantities of the product(s) needed5;

1 This subparagraph is without prejudice to subparagraph 1(b)This subparagraph is without prejudice to subparagraph 1(b)2 it is understood that this notification does not need to be approved by a WTo body in order to use theit is understood that this notification does not need to be approved by a WTo body in order to use the

system..3 australia, Canada, the european Communities with, for the purposes of article 31australia, Canada, the european Communities with, for the purposes of article 31bis and this annex,

its member States, iceland, Japan, new zealand, norway, Switzerland, and the United States.4 Joint notifications providing the information required under this subparagraph may be made by theJoint notifications providing the information required under this subparagraph may be made by the

regional organizations referred to in paragraph 3 of article 31bis on behalf of eligible importing Mem-bers using the system that are parties to them, with the agreement of those parties.

5 The notification will be made available publicly by the WTo Secretariat through a page on the WToThe notification will be made available publicly by the WTo Secretariat through a page on the WTo website dedicated to the system.

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(ii) confirms that the eligible importing Member in question, other than a least-developed country Member, has established that it has insufficient or no manufacturing capacities in the pharmaceutical sector for the product(s) in question in one of the ways set out in the appendix to this annex; and

(iii) confirms that, where a pharmaceutical product is patented in its territory, it has granted or intends to grant a compulsory licence in accordance with articles 31 and 31bis of this agreement and the provisions of this annex6;

(b) the compulsory licence issued by the exporting Member under the system shall contain the following conditions:

(i) only the amount necessary to meet the needs of the eligible importing Member(s) may be manufactured under the licence and the entirety of this production shall be exported to the Member(s) which has notified its needs to the Council for TriPS;

(ii) products produced under the licence shall be clearly identified as being produced under the system through specific labelling or marking. Suppliers should distinguish such products through special packaging and/or special colouring/shaping of the products themselves, provided that such distinction is feasible and does not have a significant impact on price; and

(iii) before shipment begins, the licensee shall post on a website7 the following information:

- the quantities being supplied to each destination as referred to in indent (i) above; and

- the distinguishing features of the product(s) referred to in indent (ii) above;

(c) the exporting Member shall notify8 the Council for TriPS of the grant of the licence, including the conditions attached to it.9 The information provided shall include the name and address of the licensee, the product(s) for which the licence has been granted,

6 This subparagraph is without prejudice to article 66.1 of this agreement.This subparagraph is without prejudice to article 66.1 of this agreement.7 The licensee may use for this purpose its own website or, with the assistance of the WTo Secretariat,The licensee may use for this purpose its own website or, with the assistance of the WTo Secretariat,

the page on the WTo website dedicated to the system.8 it is understood that this notification does not need to be approved by a WTo body in order to use theit is understood that this notification does not need to be approved by a WTo body in order to use the

system.9 The notification will be made available publicly by the WTo Secretariat through a page on the WToThe notification will be made available publicly by the WTo Secretariat through a page on the WTo

website dedicated to the system.

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the quantity(ies) for which it has been granted, the country(ies) to which the product(s) is (are) to be supplied and the duration of the licence. The notification shall also indicate the address of the website referred to in subparagraph (b)(iii) above.

3. in order to ensure that the products imported under the system are used for the public health purposes underlying their importation, eligible importing Members shall take reasonable measures within their means, proportionate to their administrative capacities and to the risk of trade diversion to prevent re-exportation of the products that have actually been imported into their territories under the system. in the event that an eligible importing Member that is a developing country Member or a least-developed country Member experiences difficulty in implementing this provision, developed country Members shall provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in order to facilitate its implementation.

4. Members shall ensure the availability of effective legal means to prevent the importation into, and sale in, their territories of products produced under the system and diverted to their markets inconsistently with its provisions, using the means already required to be available under this agreement. if any Member considers that such measures are proving insufficient for this purpose, the matter may be reviewed in the Council for TriPS at the request of that Member.

5. With a view to harnessing economies of scale for the purposes of enhancing purchasing power for, and facilitating the local production of, pharmaceutical products, it is recognized that the development of systems providing for the grant of regional patents to be applicable in the Members described in paragraph 3 of article 31bis should be promoted. To this end, developed country Members undertake to provide technical cooperation in accordance with article 67 of this agreement, including in conjunction with other relevant intergovernmental organizations.

6. Members recognize the desirability of promoting the transfer of technology and capacity building in the pharmaceutical sector in order to overcome the problem faced by Members with insufficient or no manufacturing capacities in the pharmaceutical sector. To this end, eligible importing Members and exporting Members are encouraged to use the system in a way which would promote this objective. Members undertake to cooperate in paying special attention to the transfer of technology and capacity building in the pharmaceutical sector in the work to be undertaken pursuant to article 66.2 of this agreement, paragraph 7 of the declaration on the TriPS agreement and Public Health and any other relevant work of the Council for TriPS.

7. The Council for TriPS shall review annually the functioning of the system with a view to ensuring its effective operation and shall annually report on its operation to the general Council.

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aPPendiX To THe anneX To THe TriPS agreeMenT

AssessmentofManufacturingCapacitiesinthePharmaceuticalSector

least-developed country Members are deemed to have insufficient or no manufacturing capacities in the pharmaceutical sector.

For other eligible importing Members insufficient or no manufacturing capacities for the product(s) in question may be established in either of the following ways:

(i) the Member in question has established that it has no manufacturing capacity in the pharmaceutical sector;

or

(ii) where the Member has some manufacturing capacity in this sector, it has examined this capacity and found that, excluding any capacity owned or controlled by the patent owner, it is currently insufficient for the purposes of meeting its needs. When it is established that such capacity has become sufficient to meet the Member’s needs, the system shall no longer apply.

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WTo PenSion Plan

AMENDMENTSTOTHEPLANREGULATIONS

Adopted by the General Council on 1 December 2005(Extract from WT/GC/W/552)

article 28Disability benefits

(a) a total disability benefit shall, subject to article 34, be payable to a participant who is found by the Management Board to be fully incapacitated for further service reasonably compatible with the participant’s abilities, due to injury or illness constituting an impairment to health which is likely to be permanent or of long duration.

(b) The total disability benefit shall commence on separation or, if earlier, on the expiration of the paid leave due to the participant and shall continue for as long as the participant remains fully incapacitated, provided that after age 55 incapacity shall be deemed to be permanent.

(c) The total disability benefit shall, if the age of the participant on entitlement is the normal retirement age or more, be payable at the standard annual rate for a retirement benefit. if the age of the participant is less than the normal retirement age, the benefit shall be payable at the rate of the retirement benefit which would have been payable had the participant remained in service until the normal retirement age and had the participant’s Far remained unchanged.

(d) a partial disability benefit shall, subject to article 34, be payable to a participant who is found by the Management Board to be partially incapacitated due to injury or illness constituting an impairment to health and who, as a consequence of that incapacity, is assigned to other duties at a reduced salary.

(e) The partial disability benefit shall be payable at the rate of the retirement benefit which would be payable if the participant remained in service until the normal retirement age and if the participant’s Far were equal to the difference between the participant’s Far before and after the assignment to duties at a reduced salary.

(f) a benefit which is discontinued shall, if a participant who has been separated does not upon such discontinuance again become a participant, be converted to a deferred retirement benefit if the participant would have been so eligible at the date of separation. otherwise, a single payment shall be made of the balance between the value of the withdrawal settlement under article 26 and the value of payments received under this article.

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(g) The Management Board shall prescribe the extent to which and the circumstances in which a disability benefit shall be reduced or when it shall be terminated as the beneficiary’s degree of incapacity changes, when the beneficiary is in paid employment or in such other circumstances as the Management Board deems appropriate.

aMendMenTS To THe adMiniSTraTiVe rUleS

SeCTion Hdeterminations of incapacity and inability to engage in gainful employment

general

H.1 (a) The determination of incapacity for the purpose of disability benefits under article 28 of the Regulations and of children’s and secondary dependants’ benefits under article 30(b) and 31(a), respectively, shall be made in each case by the Management Board.

(b) For entitlement to a total disability benefit, the incapacity for further service must be found to exist or to have existed on the participant’s date of separation.

H.2 in each case in which the Management Board has determined that a participant or a child is incapacitated, the medical adviser of the WTo shall transmit a report on the medical aspects of the case to the Secretary.

disability benefits

H.3 a request for a determination by the Management Board under articles 28(a) or 28(d) of the Regulations shall be made by the WTo:

(a) whenever during, or on the expiry of, the contract of a participant there is reason to believe that the participant may be incapacitated within the meaning of articles 28(a) or 28(d) of the Regulations; or

(b) whenever a participant is placed, or is proposed to be placed, on special leave without pay for reasons of health; or

(c) whenever the contract of a participant is terminated, or is proposed to be terminated, for reasons of health.

H.4 a determination under articles 28(a) or 28(d) of the Regulations shall be made by the Management Board at the request of a participant:

(a) Whenever the WTo has not acted in accordance with Rule H.3 above; or

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(b) Whenever a participant alleges an incapacity within the meaning of articles 28(a) or 28(d) of the Regulations.

H.5 (a) The request shall be in writing, addressed to the Secretary, and in the case of a participant shall be made not later than four months after the date of separation or commencement of special leave without pay, unless in the opinion of the Management Board there are exceptional circumstances justifying submission of the request at a later date.

(b) The request shall state the material facts on which the WTo or the participant relies and the conclusions which are deduced therefrom, and shall be accompanied where practicable by a report from the medical adviser of the WTo or a medical practitioner retained by the participant, as the case may be.

(c) in application of rule H.5(b), above, the WTo shall in each case certify the following:

(i) the date at which the participant concerned will have exhausted his/her paid sick leave;

(ii) that, after consultation with the medical adviser, it has been determined that it is not possible to assign the participant to other duties reasonably compatible with his/her abilities, whether on a full-time or part-time basis;

(iii) that a formal request for determination of partial or total disability has been made either by the WTo or by the participant concerned;

(iv) that, in the case of total disability, the WTo has initiated the necessary procedure for termination of the contract of the participant for reasons of health under Staff regulation 10.3(b).

The WTo shall keep a complete record of the above-mentioned information in order to support its certifications.

(d) in further application of rule H.5(b), above, the medical adviser shall in each case certify the following:

(i) that the participant has an incapacity which prevents him/her from carrying out duties reasonably compatible with his/her abilities, with specific reference to the participant’s current duties and accompanied by the necessary supporting evidence from the participant’s medical practitioner or practitioners;

(ii) that the participant’s disability is such that it has not been

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possible to assign him/her to other duties reasonably compatible with his/her abilities as described by the administration.

The medical adviser shall present each case in person to the Management Board in order to explain the details of the case and respond to questions.

(e) The WTo, or the participant if the request has been submitted by the participant, may be required by the Management Board to provide further evidence or information thereon prior to a determination being made.

(f) except where deemed unnecessary or inappropriate, the Secretary shall, for the purposes of the determination by the Management Board, obtain a further, independent medical report from a recognized medical expert other than the medical adviser and the participant’s medical practitioner(s).

H.6 (a) a determination of incapacity within the meaning of articles 28(a) or 28(d) shall, until the beneficiary reaches age fifty-five, be reviewed by the Management Board from time to time for the purpose of establishing the continued eligibility or otherwise of the beneficiary for a disability benefit.

(b) The date for each such review shall be set by the Management Board, having regard to the opinion of the medical adviser on the prospects for the beneficiary’s recovery, and in such manner that the interval between reviews does not normally exceed three years; the Management Board may nevertheless review a determination at an earlier date than that set if there is reason to believe that the beneficiary is no longer incapacitated.

(c) The beneficiary shall be informed in writing by the Secretary of the date or interval set for the review in each case and shall, as and when required, submit to a medical examination by the medical adviser, or a medical practitioner designated by the medical adviser, for the purpose of providing evidence enabling the Management Board to determine whether or not the beneficiary continues to be incapacitated.

(d) Upon review, the Management Board shall continue a disability benefit if it determines that the beneficiary remains incapacitated; it may decide to suspend or discontinue a benefit if the beneficiary has failed to submit to a medical examination when required to do so, or if the results of a medical examination are inconclusive; it may

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render the continuation of a benefit or the removal of a suspension subject to certain conditions; and it shall discontinue a benefit when the evidence before it shows beyond reasonable doubt that the beneficiary is no longer incapacitated, provided that a benefit so discontinued may be re-instated by the Management Board if it is satisfied, upon further evidence, that the beneficiary was in fact then incapacitated.

H.7 (a) a disability benefit which is suspended or discontinued shall cease to be paid at the end of the third complete month after the month in which the decision was taken.

(b) a disability benefit which is re-instated after suspension or discontinuance shall be paid from the date of reinstatement, unless the Management Board, after a review of the circumstances of the case, decides that it shall be paid from an earlier date.

disabled children’s (and brother’s or sister’s) benefits

H.8 a determination under article 30(b) or 31(a) of the Regulations shall be made by the Management Board whenever the child, or the brother or sister, of a participant, eligible in other respects for a child’s or secondary dependant’s benefit, claims, or is claimed, to be incapacitated by illness or injury for substantial gainful employment:

(a) upon reaching the age of 21, if immediately prior thereto a child’s or a secondary dependant’s benefit was payable, as the case may be;

(b) upon the death in service or entitlement to a retirement or disability benefit of the participant, if the child is then over the age of 21;

(c) upon the entitlement of the participant to an early retirement benefit, provided that a child under the age of 21 shall be considered to be incapacitated only if the child would have been considered to be such had the child been 21 years of age on the date of the participant’s separation;

(d) upon the death of a participant entitled to a retirement, early retirement, or disability benefit, if a brother or sister is then over the age of 21 and is claimed to have been incapacitated at the date of the participant’s separation.

H.9 The claim shall be made in writing, addressed to the Secretary, by or on behalf of the child or secondary dependant, and shall be accompanied by a report from a medical practitioner on the nature of the illness or injury and the extent, if any, to which gainful employment is possible; in the case of

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general Council

Rule H.8(b) above, the report shall be submitted by the medical adviser of the WTo.

H.10 a determination that a child or secondary dependant is incapacitated within the meaning of article 30(b) or 31(a) of the Regulations shall be reviewed, mutatis mutandis, in accordance with the provisions applicable to disability benefits in Rules H.6 and H.7 above, save that the intervals between reviews may exceed three years.

CoMPenSaTion negoTiaTionS Under arTiCleS XXiV:6 and XXViii oF gaTT 1994

ProPoSed ModiFiCaTion To SCHedUle CXl – eUroPean CoMMUniTieS:

ProlongaTion oF rigHTS Under arTiCle XXViii oF gaTT 1994(Extract from WT/GC/M/93)

The Chairman drew attention to the communication from the United States in document WT/gC/87 requesting a prolongation of its rights under article XXViii of gaTT 1994. She recalled that this issue related to the modification of concessions by the eC pertaining to husked rice and semi-milled and milled rice, which had been notified in 2003. on 28 January 2005, the United States had notified Members that unless agreement could be reached with the eC regarding compensation, it would withdraw substantially equivalent tariff concessions effective midnight on 1 March 2005, i.e. when the six-month period provided for this purpose under article XXViii:3 expired. However, as the United States had indicated in its communication in WT/gC/87, it had been negotiating with the eC on a solution to this issue, which it hoped could be agreed before 1 March. in order to allow these negotiations to be able to continue beyond this date, and to avoid having the US withdrawal of concessions take effect automatically at midnight on 1 March, it would be necessary to extend the deadline for exercising the United States’ rights under article XXViii. The United States had therefore proposed that the general Council agree that any withdrawal of concessions by it in this connection after 1 March would be deemed to have been taken within the six-month period referred to in article XXViii:3.

[... ]

The representative of the european Communities [... ][noted] that it believed that a solution had been found via the extension of rights under article XXViii:3, i.e. regarding the withdrawal of substantially equivalent concessions, to be agreed in the general Council. accordingly, in the course of the consultations, the eC had put together a document which the Secretariat was in the process of circulating to Members as document WT/gC/89. [...] The first page was a simple paragraph which

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was a communication from the european Communities, and the second page was a proposed decision of the general Council in a slightly different format from the one the United States had submitted. The two pages read as follows:

“in continuation of the eC’s notification of 31 July 2003, circulated in document g/SeCreT/18, concerning the eC’s intention to modify certain concessions concerning tariff items 1006 20 (husked rice) and 1006 30 (semi-milled and milled rice) in Schedule CXl of the european Communities, the Commission of the european Communities wishes hereby to inform that the eC will not assert that the United States, Thailand, india and Pakistan, as regards to their claims submitted pursuant to article XXViii of gaTT 1994 and relating to the said notification, are precluded from withdrawing substantially equivalent concessions under article XXViii:3 of gaTT 1994 because any such withdrawal does not occur within the six months provided for in article XXViii:3 of gaTT 1994.”

This wording had been discussed at length with those with whom the Chairman had been holding consultations. The proposed decision, which was quite short and had some similarity to the communication, read as follows:

“The general Council agrees that, consistent with eC communication WT/gC/89 dated 28 February 2005 and in relation to the eC’s notification of 31 July 2003 circulated in document g/SeCreT/18, the United States, Thailand, india and Pakistan shall not be precluded from withdrawing substantially equivalent concessions under article XXViii:3 of gaTT 1994 on the grounds that any such withdrawal does not occur within the six months provided for in article XXViii:3 of gaTT 1994.

“This decision shall not be treated as a precedent in any future negotiations between Members under article XXViii of gaTT 1994.”

[…]

The Chairman proposed for Members’ consideration that the general Council adopt the proposed decision as read out by the european Communities, and which had been circulated to delegations in document WT/gC/89.

The general Council […] so agreed.

enlargeMenT oF THe eUroPean Union – CoMMUniCaTion FroM THe eUroPean CoMMUniTieS

(Extract from WT/GC/M/94)

The Chairman drew attention to the communication from the europeandrew attention to the communication from the european Communities in document g/l/695/add.1/rev.1, which concerned the accession to the european Union on 1 May 2004 of Cyprus, the Czech republic, estonia, Hungary, latvia, lithuania, Malta, Poland, the Slovak republic and Slovenia. in that

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communication, the eC had indicated that it would not assert that Members who had submitted a claim pursuant to article XXiV:6 of gaTT 1994 were precluded from withdrawing substantially equivalent concessions under article XXViii:3 of gaTT 1994 because this withdrawal occurred later than six months after the eC’s withdrawal of concessions, provided that the claiming WTo Member withdrew concessions no later than fifteen months after the eC’s modification of concessions. [... ]

This matter had been considered by the Council for Trade in goods at its meeting on 11 March. in the absence of the Chairman of the Council for Trade in goods, she wished to report, on his request and behalf, that the goods Council had agreed on the extension of the deadline for withdrawal of concessions under article XXViii:3 from six months to fifteen months, as set out in the eC’s communication, and had forwarded this agreement to the general Council for adoption. in the light of the goods Council’s consideration and action on this matter – and the report by the goods Council Chair which she had just read out – she wished to propose for Members’ consideration that the general Council take note of the communication from the eC in document g/l/695/add.1/rev.1, and adopt the agreement reached in the goods Council on the extension of the deadline for the withdrawal of concessions referred to in article XXViii:3 of gaTT 1994 from six months to fifteen months following the eC’s modification of concessions, on the understanding that Members who found themselves still in need of a further extension might raise the matter at the 10 May meeting of the goods Council for consideration.

The general Council so agreed.



The Chairman drew attention to the communication from the europeanattention to the communication from the european Communities in g/l/695/add.2, which concerned the accession to the european Union on 1 May 2004 of Cyprus, the Czech republic, estonia, Hungary, latvia, lithuania, Malta, Poland, the Slovak republic and Slovenia. in that communication, the eC had indicated that it would not assert that Members who had submitted a claim pursuant to article XXiV:6 of gaTT 1994 were precluded from withdrawing substantially equivalent concessions under article XXViii:3 of gaTT 1994 because this withdrawal occurred later than six months after the eC’s withdrawal of concessions, provided that the claiming Member withdrew concessions no later than 21 months after the eC’s modification of concessions. She recalled, in connection with the negotiations relating to enlargement of the european Communities, that the general Council had on two earlier occasions, on the basis of similar communications from the eC, extended the deadline in article XXViii:3, namely at its meetings in october 2004 and March 2005. Under the provisions of article XXViii:3, and the

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most recent extension of the deadline as agreed at the March 2005 meeting of the general Council, Members could withdraw substantially equivalent concessions no later than fifteen months after the eC’s withdrawal and modification of concessions – in other words, no later than 1 august 2005. Furthermore, Members had to provide at least 30 days’ notification of their intent to withdraw substantially equivalent concessions – in other words, no later than 1 July.

in the light of these impending deadlines under article XXViii:3, and to ensure that action could be taken on this matter in a timely manner, the delegations of Canada, Colombia and the United States had requested that the general Council convene on or before 30 June to consider the communication in g/l/695/add.2, in which the eC had proposed that this deadline be extended a further six months for a total of 21 months following the eC’s modification of concessions. as indicated in the convening notice for this meeting, in subsequent communications addressed to her, ecuador had indicated that it associated itself with this request, and Costa rica, Honduras and Panama had also indicated that they considered it necessary that a meeting of the general Council be convened to consider the eC communication. [... ]

[...]

The general Council [...] agreed on the extension of the deadline for the withdrawal of concessions referred to in article XXViii:3 of gaTT 1994 from six months to 21 months, i.e. until 1 February 2006.



The Chairman drew attention to the communication from the eC in WT/gC/98, which concerned the accession to the european Union on 1 May 2004 of Cyprus, the Czech republic, estonia, Hungary, latvia, lithuania, Malta, Poland, the Slovak republic and Slovenia. in that communication, the eC had indicated that it would not assert that Members who had submitted a claim pursuant to article XXiV:6 of gaTT 1994 were precluded from withdrawing substantially equivalent concessions under article XXViii:3 of gaTT 1994 because this withdrawal occurred later than six months after the eC’s withdrawal of concessions, provided that the claiming WTo Member withdrew concessions no later than 27 months after the eC’s modification of concessions.

She recalled that the general Council had on three earlier occasions, on the basis of similar communications from the eC, extended the deadline for withdrawal of concessions referred to in article XXViii:3 of gaTT 1994, namely, at its meetings in october 2004, and March and June 2005. Under the provisions of article XXViii:3 –

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dispute Settlement Body

and following the most recent extension of the deadline as agreed at the June meeting of the general Council – Members could withdraw substantially equivalent concessions no later than 21 months after the eC’s withdrawal and modification of concessions, in other words, no later than 1 February 2006. Furthermore, these Members had to provide at least 30 days’ notification of their intent to withdraw substantially equivalent concessions – in other words, no later than 1 January 2006. in the light of these impending deadlines under article XXViii:3, and the ongoing negotiations under article XXiV:6, the eC had proposed that this deadline be extended a further six months for a total of 27 months following the eC’s modification of concessions, in other words until 1 august 2006. if this extension were agreed, Members would had to provide notification of intention to withdraw substantially equivalent concessions by no later than 2 July 2006.

[... ]

The general Council [...] agreed on the extension of the deadline for the withdrawal of concessions referred to in article XXViii:3 of gaTT 1994 from six months to 27 months, i.e. until 1 august 2006.

DISPUTE SETTLEMENT BODY

deCiSion oF THe diSPUTe SeTTleMenT BodY on 27 SePTeMBer 2005

on THe reaPPoinTMenT oF aPPellaTe BodY MeMBerS

(Extract from WT/DSB/M/198)

The Chairman recalled that article 17.2 of the dSU provided that appellate Body members shall each serve a four-year term and may be reappointed once. He said that Messrs. luiz olavo Baptista, John lockhart, and giorgio Sacerdoti had been appointed to serve as appellate Body Members in december 2001. as a result, the terms of office for these three appellate Body Members would expire in december 2005. Following the process outlined at the dSB meeting held on 20 June 2005, he said that he had consulted informally with delegations regarding the positions held by those individuals. He had reported on the results of those consultations to the dSB at its meeting on 20 July 2005 and had proposed that a decision on the reappointment of Messrs. Baptista, lockhart, and Sacerdoti be taken by the dSB at the present meeting. no delegation had objected to his proposal. Therefore, at the present meeting, he wished to propose that the dSB agree to appoint Messrs. Baptista, lockhart, and Sacerdoti as appellate Body Members for a second four-year term, to begin on 12 december 2005. He then invited delegations wishing to make statements to take the floor.

[...]

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The Chairman proposed that the dSB take note of the statements and agree to appoint Messrs. luiz olavo Baptista, John lockhart, and giorgio Sacerdoti as appellate Body Members for a second four-year term, to begin on 12 december 2005.

The dSB took note of the statements and so agreed.

arTiCle 22 oF THe diSPUTe SeTTleMenT UnderSTanding

UniTed STaTeS – ConTinUed dUMPing and SUBSidY oFFSeT aCT oF 2000

UnderSTandingS BeTWeen THe UniTed STaTeS and aUSTralia, THailand and indoneSia


The Chairperson proposed that the three sub-items to which she had just referred be considered together since they pertained to the same matter. [...]

The representative of australia said that in document WT/dS217/44 her country and the United States had informed the dSB of an Understanding reached with respect to the dispute “United States – Continued dumping and Subsidy offset act of 2000” (WT/dS217). as set out in that document, australia requested, jointly with the United States, that the dSB adopt the draft decision contained in WT/dS217/44. The Understanding reached between australia and the United States recognized that the United States remained in non-compliance with the recommendations and rulings of the dSB in this dispute, and that australia was entitled to request authorization from the dSB to suspend concessions or other obligations, pursuant to article 22.2 of the dSU. nevertheless, because australia did not wish to proceed to seek authorization to retaliate at this point, the Understanding and the requested dSB decision were designed to preserve the respective rights of both parties at this point in time. Consequently, as set out in document WT/dS217/44, australia requested, jointly with the United States, that at the present meeting the dSB “take note of the Understanding reached between australia and the United States and agree that, upon a request by australia, the dSB shall grant australia authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU”.

The Chairperson drew attention to the communication from Thailand and the United States contained in document WT/dS217/45 [...].

The representative of Thailand said that, first of all, his country was grateful for the opportunity to include this item on the agenda of the present meeting. in

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document WT/dS217/45, Thailand and the United States had informed the dSB of an Understanding reached with respect to the dispute “United States – Continued dumping and Subsidy offset act of 2000” (WT/dS217). as set out in that document, Thailand was requesting, jointly with the United States, that the dSB adopt the draft decision contained in WT/dS217/45. The Understanding reached between the United States and Thailand coincided in terms of format and substance with the Understanding reached between the United States and australia as well as the one between the United States and indonesia. [...]

The Chairperson drew attention to the communication from indonesia and the United States contained in document WT/dS217/46 [...].

The representative of indonesia recalled that on 11 January 2005, indonesia and the United States had agreed to an Understanding with respect to the dispute “United States – Continued dumping and Subsidy offset act of 2000” (WT/dS217). accordingly, indonesia and the United States, at the present meeting, jointly requested the dSB to adopt the draft decision as contained in document WT/dS217/46. Furthermore, indonesia asked that “the dSB take note the Understanding reached by the United States and indonesia and agree that, upon a request by indonesia, the dSB shall grant indonesia authorization to suspend concession or other obligation unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU”.

[...]

The Chairperson proposed that: “The dSB take note of the Understanding reached between australia and the United States and agree that, upon a request by australia, the dSB shall grant australia authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU.”

The dSB so agreed.

The Chairperson proposed that: “The dSB take note of the Understanding reached between Thailand and the United States and agree that, upon a request by Thailand, the dSB shall grant Thailand authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU.”

The dSB so agreed.

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Finally, the Chairperson proposed that: “The dSB take note of the Understanding reached between indonesia and the United States and agree that, upon a request by indonesia, the dSB shall grant indonesia authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU.”

The dSB so agreed.

UniTed STaTeS – SeCTion 211 oMniBUS aPProPriaTionS aCT oF 1998

JoinT reQUeST BY THe eUroPean CoMMUniTieS and THe UniTed STaTeS


The Chairman drew attention to the communication from the european Communities and the United States contained in document WT/dS176/16 [...].

[...]

The Chairman proposed that: “The dSB take note of the Understanding reached between the european Communities and the United States and agree that, upon a request by the european Communities, the dSB shall grant the european Communities authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU.”

The dSB so agreed.

UniTed STaTeS – anTi-dUMPing MeaSUreS on CerTain HoT-rolled STeel ProdUCTS FroM JaPan

JoinT reQUeST BY JaPan and THe UniTed STaTeS


The Chairman drew attention to the communication from Japan and the United States contained in document WT/dS184/19 [...].

[...]

The Chairman proposed that: “The dSB take note of the Understanding reached between Japan and the United States and agree that, upon a request by Japan, the dSB shall grant Japan authorization to suspend concessions or other obligations unless (i) the dSB decides by consensus not to do so or (ii) the United States objects

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to the level of suspension proposed or claims that the principles and procedures in dSU article 22.3 have not been followed, referring the matter to arbitration under article 22.6 of the dSU.”

The dSB so agreed.

eXTenSion oF TiMe-liMiT PUrSUanT To arTiCle 16.4 oF diSPUTe SeTTleMenT UnderSTanding

UniTed STaTeS – laWS, regUlaTionS and MeTHodologY For CalCUlaTing dUMPing MarginS (“zeroing”)

JoinT reQUeST BY THe eUroPean CoMMUniTieS and THe UniTed STaTeS


The Chairman drew attention to the communication from the european Communities and the United States contained in document WT/dS294/11 [...].

The representative of the european Communities said that the Panel hadhe Panel had circulated its final report in the dispute under consideration on 31 october 2005. He noted that the 60-day period within which the dSB shall adopt the Panel report unless there was consensus against adoption or appeal would expire on 30 december 2005, in accordance with article 16.4 of the dSU. in order to take account of the end of year period, and to avoid inconveniencing any appeal procedure, the eC and the United States had agreed that the time-period for adoption of the Panel report should be extended to 31 January 2006. He said that the draft decision submitted at the present meeting for adoption (WT/dS294/11) endorsed that agreement. The extension had been agreed on the understanding that the rights of the european Communities and the United States with respect to adoption or appeal of the Panel report would be preserved, as if such adoption or appeal had been requested within the 60 days specified in article 16.4 of the dSU. This was without prejudice to the question of whether these rights would not be preserved without such extension. The eC would be grateful if the dSB could accede to the joint request to agree to the extension of the 60-day time period.

The representative of the United States said that his country joined the eCjoined the eC in asking that the dSB agree to provide additional time for adoption of the Panel report in the dispute under consideration by adopting the draft decision set forth in document WT/dS294/11, which was the document that was before the dSB at the present meeting, and which expressed the agreement between the United States and the eC on this matter. The draft decision would provide for adoption by negative consensus by no later than 31 January 2006. Such additional time would provide greater flexibility in scheduling given the many demands on delegations, as well as the appellate Body and its staff, during the year-end period. The United States appreciated the support of all the Members of the dSB in this regard.

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The dSB took note of the statements made.

The Chairman proposed that: “The dSB agree that, upon a request by the european Communities or the United States, the dSB shall no later than 31 January 2006, adopt the report of the Panel in the dispute: United States – Laws, Regulations and Methodology for Calculating Dumping Margins (‘Zeroing’) contained in document WT/dS294/r unless (i) the dSB decides by consensus not to do so or (ii) the european Communities or the United States notifies the dSB of its decision to appeal pursuant to article 16.4 of the dSU”.

The dSB so agreed.

eUroPean CoMMUniTieS and CerTain MeMBer STaTeS – MeaSUreS aFFeCTing Trade in large CiVil airCraFT iniTiaTion oF THe ProCedUreS For deVeloPing inForMaTion ConCerning

SerioUS PreJUdiCe Under anneX V oF THe SCM agreeMenT and deSignaTion oF THe rePreSenTaTiVe reFerred To in

ParagraPH 4 oF THaT anneX


The Chairman [..] drew attention to the communication from the United States contained in document WT/dS316/2[...].

[...]

The Chairman proposed that the dSB [..] agree, as requested by the United States in document WT/dS316/2, to initiate the procedures for developing information concerning serious prejudice under annex V of the SCM agreement, pursuant to paragraph 2 of annex V of the SCM agreement.

The dSB [...] so agreed.

The Chairman said that, with regard to the second issue, namely the US request to designate a dSB facilitator pursuant to paragraph 4 of annex V, he wished to recall that on 22 September 2005, a fax had been sent to delegations. in that fax, he had informed Members that he had identified, and that the parties to the dispute had agreed to, a representative whom he had proposed that the dSB designate to serve the function of facilitating the information-gathering process, pursuant to paragraph 4 of annex V of the SCM agreement. He had invited any delegation that desired further information to contact him. at the present meeting, he wished to propose that the dSB designate Mr. Mateo diego-Fernández as a representative to serve the function of facilitating the information-gathering process, pursuant to paragraph 4 of annex V of the SCM agreement.

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The dSB so agreed.

[...]

UniTed STaTeS – MeaSUreS aFFeCTing Trade in large CiVil airCraFT – iniTiaTion oF THe ProCedUreS For deVeloPing

inForMaTion ConCerning SerioUS PreJUdiCe Under anneX V oF THe SCM agreeMenT and deSignaTion oF THe

rePreSenTaTiVe reFerred To in ParagraPH 4 oF THaT anneX


The Chairman [..] drew attention to the communication from the european Communities contained in document WT/dS317/2 [...].

[...]

The Chairman proposed that the dSB [...] agree, as requested by the european Communities in document WT/dS317/2, to initiate the procedures for developing information concerning serious prejudice under annex V of the SCM agreement, pursuant to paragraph 2 of annex V of the SCM agreement.

The dSB [...] so agreed.

The Chairman said that, with regard to the second issue, namely, the eC request to designate a dSB facilitator, pursuant to paragraph 4 of annex V, he wished to recall that on 22 September 2005, a fax had been sent to delegations. in that fax, he had informed Members that he had identified, and that the parties to the dispute had agreed to, a representative whom he had proposed that the dSB designate to serve the function of facilitating the information-gathering process, pursuant to paragraph 4 of annex V of the SCM agreement. He had invited any delegation that desired further information to contact him. at the present meeting, he wished to propose that the dSB designate Mr. Mateo diego-Fernández as a representative to serve the function of facilitating the information-gathering process, pursuant to paragraph 4 of annex V of the SCM agreement.

The dSB so agreed.

[...]

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COUNCIL FOR TRADE IN GOODS

COMMITTEE ON SANITARY AND PHYTOSANITARY MEASURES

rePorT on ProPoSalS For SPeCial and diFFerenTial TreaTMenT

Adopted by the Committee on Sanitary and Phytosanitary Measures on 30 June 2005

(G/SPS/35)

i. inTrodUCTion

a. BaCKgroUnd

1. on 1 august 2004, the general Council adopted the following decision with respect to special and differential treatment:

“... the general Council reaffirms that provisions for special and differential (S&d) treatment are an integral part of the WTo agreements. The Council recalls Ministers’ decision in doha to review all S&d treatment provisions with a view to strengthening them and making them more precise, effective and operational. The Council recognizes the progress that has been made so far ...

The Council also instructs all WTo bodies to which proposals in Category ii have been referred to expeditiously complete the consideration of these proposals and report to the general Council, with clear recommendations for a decision, as soon as possible and no later than July 2005. in doing so these bodies will ensure that, as far as possible, their meetings do not overlap so as to enable full and effective participation of developing countries in these discussions.” 1

Furthermore, in the doha development round declaration, Ministers agreed:

“... that all special and differential treatment provisions shall be reviewed with a view to strengthening them, and making them more precise, effective and operational. in this connection, we endorse the work programme on special and differential treatment set out in the

1 WT/L/579.

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decision on implementation-related issues and Concerns.”2

2. among the 38 proposals in Category ii, five were referred to the SPS Committee. These proposals concern specifically the provisions of articles 9 and 10 of the SPS agreement. The text of these articles and of the five proposals are reproduced below for ease of reference.

3. These proposals have previously been considered in various formal and informal meetings of the general Council, the Committee on Trade and development, and the SPS Committee. 3 This draft report is based on the discussions of these proposals and of special and differential treatment in the formal and informal meetings of the SPS Committee, as well as during informal consultations held on 28 January, 15 and 18 February, 18 and 24 May 2005. it also includes comments on the background document prepared by the Secretariat (g/SPS/gen/543).

B. ConSideraTionS in PreParing THiS rePorT

4. in the context of the discussions of the proposals in the SPS Committee and in other WTo bodies, many Members have indicated that they are opposed to any formal modification of the text of the SPS agreement at this time, whereas other Members have indicated that they would agree to consider such modification if this were deemed necessary. a broad consensus exists to actively seek alternative, concrete avenues to fulfil the mandate before undertaking specific changes in the text of the SPS agreement. one major concern is that modification of articles 9 and 10 could result in changes to the balance of rights and obligations established by the SPS

2 WT/Min(01)/deC/1, para. 44. Paragraph 12.1 of the decision on implementation-related issues and44. Paragraph 12.1 of the decision on implementation-related issues and Concerns.(WT/Min(01)/17) reads as follows:

12. Cross-cutting issues 12.1 The Committee on Trade and development is instructed:

(i) to identify those special and differential treatment provisions that are already mandatory in nature and those that are non-binding in character, to consider the legal and practical implications for developed and developing Members of converting special and differential treatment measures into mandatory provisions, to identify those that Members consider should be made mandatory, and to report to the General Council with clear recommendations for a decision by July 2002;

(ii) to examine additional ways in which special and differential treatment provisions can be made more effective, to consider ways, including improved information flows, in which developing countries, in particular the least-developed countries, may be assisted to make best use of special and differential treatment provisions, and to report to the General Council with clear recommen-dations for a decision by July 2002; and

(iii) to consider, in the context of the work programme adopted at the Fourth Session of the Ministerial Conference, how special and differential treatment may be incorporated into the architecture of WTO rules.

TheworkoftheCommitteeonTradeandDevelopmentinthisregardshalltakefullyintoconsiderationpreviousworkundertakenasnotedinWT/COMTD/W/77/Rev.1.ItwillalsobewithoutprejudicetoworkinrespectofimplementationofWTOAgreementsintheGeneralCouncilandinotherCouncilsandCommittees.

3 See relevant sections of reports of meetings of the SPS Committee (g/SPS/r/Series), as well asSee relevant sections of reports of meetings of the SPS Committee (g/SPS/r/Series), as well as g/SPS/23, g/SPS/24, g/SPS/27 and Corr.1, g/SPS/30.

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agreement, and could lead to changes in the text of other provisions. Many Members consider any such changes to be unacceptable, unnecessary to address the underlying concerns of developing country Members, and in particular least-developed country Members.

5. Members have stressed that it is not the intention of any of the proposals to impinge on the right of any Member to implement scientifically justified SPS measures necessary to ensure that products moving in international trade do not present unacceptable risks to human, animal or plant life or health, or to the territory of a Member. Trade in products considered to be unsafe or sub-standard would have deleterious effects on consumer demand, reflect poorly on the exporting Member’s reputation, and unnecessarily call regulatory competencies into question. at the same time, Members recognize that developing country Members, and in particular least-developed country Members, face specific difficulties in meeting the sanitary and phytosanitary requirements of many of their trading partners, and need targeted technical assistance. import requirements that differ from those based on the relevant international standards, while not necessarily inconsistent with the SPS agreement4, can pose considerable difficulties to developing countries.

6. The SPS agreement is relatively new, and some Members are still in the process of adjusting to and developing more effective implementation of the expanded new disciplines established by the agreement. For developing country Members, most of the provisions of the agreement became applicable only as of January 1997; for the least-developed country Members, the date of application was January 2000. recent studies have shown that the level of knowledge and understanding of the agreement remains relatively low, and that academic and institutional responses are also nascent.5 a number of WTo Members have not as yet fulfilled obligations relating to the identification of a national notification authority and of an SPS enquiry point, and many have not submitted any notifications of new or revised SPS measures.6

7. at the same time, it is apparent from the studies undertaken by the World Bank7 and others that SPS measures and the application of the SPS agreement are of increasing importance to the movement of goods in agricultural trade. This importance is expected to increase, for all WTo Members. Members have recognized that developing country Members, and in particular least-developed country Members, face specific difficulties in effectively implementing provisions of the SPS agreement, including the transparency provisions. Members have indicated their commitment to assist in addressing the specific difficulties and to ensure improved capacities and efficiencies.

4 See,See, inter alia, article 3.35 «Food Safety and agricultural Health Standards: Challenges and opportunities for developing Coun-«Food Safety and agricultural Health Standards: Challenges and opportunities for developing Coun-

try exports», World Bank report no. 31207, 10 January 2005.6 g/SPS/W/173/rev.2, paragraphs 26 and 27.g/SPS/W/173/rev.2, paragraphs 26 and 27.7 Idem.

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8. This report describes some underlying concerns and common objectives as identified by Members in the Committee’s discussions. developments which have occurred since the proposals were submitted in 2002, and which address, in part, these concerns or objectives are also described. The report also describes constraints faced by the Committee in the development of precise, effective and operational recommendations on the five proposals referred to it by the general Council. The report identifies initial elements that could be examined by the SPS Committee with a view to providing more precise, effective and operational means to address, at least in part, identified concerns.

ii. releVanT SPS ProViSionS

Article 9

Technical Assistance

1. Members agree to facilitate the provision of technical assistance to other Members, especially developing country Members, either bilaterally or through the appropriate international organizations. Such assistance may be, inter alia, in the areas of processing technologies, research and infrastructure, including in the establishment of national regulatory bodies, and may take the form of advice, credits, donations and grants, including for the purpose of seeking technical expertise, training and equipment to allow such countries to adjust to, and comply with, sanitary or phytosanitary measures necessary to achieve the appropriate level of sanitary or phytosanitary protection in their export markets.

2. Where substantial investments are required in order for an exporting developing country Member to fulfil the sanitary or phytosanitary requirements of an importing Member, the latter shall consider providing such technical assistance as will permit the developing country Member to maintain and expand its market access opportunities for the product involved.

Article 10


1. in the preparation and application of sanitary or phytosanitary measures, Members shall take account of the special needs of developing country Members, and in particular of the least-developed country Members.

2. Where the appropriate level of sanitary or phytosanitary protection allows scope for the phased introduction of new sanitary or phytosanitary measures, longer time-frames for compliance should be accorded on products of interest to developing country Members so as to maintain opportunities for their exports.

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3. With a view to ensuring that developing country Members are able to comply with the provisions of this agreement, the Committee is enabled to grant to such countries, upon request, specified, time-limited exceptions in whole or in part from obligations under this agreement, taking into account their financial, trade and development needs.

4. Members should encourage and facilitate the active participation of developing country Members in the relevant international organizations.

iii. TeXTS oF THe ProPoSalS

a. ProPoSalS relaTing To arTiCle 9.2

9. To make this mandatory provision effective and operational it is proposed that the clause “shall consider providing” be changed to “shall provide”. it is further proposed to add the following sentence to the provision:

“if an exporting developing country Member identifies specific problems of inadequate technology and infrastructure in fulfilling the sanitary or phytosanitary requirements of an importing developed country Member, the latter shall provide the former with relevant technology and technical facilities on preferential and non-commercial terms, preferably free of cost, keeping in view the development, financial and trade needs of the exporting developing country.”8

10. The phrase “substantial investments” in article 9.2 shall be construed relative to resources of concerned government departments in developing and least-developed country Members and to their development needs. any changes that would require additional resources to existing levels of current expenditure or their restructuring, or additional training or staffing, shall be construed to amount to “substantial investments”.9

11. Where the importing Member does not actually provide such technical assistance, that Member shall withdraw the measures immediately and unconditionally; or the importing Member shall compensate the exporting developing country Members for loss resulting directly or indirectly from the measures.10

8 Tn/CTd/W/2. Tn/CTd/W/2.9 Tn/CTd/W/3/rev.2. Tn/CTd/W/3/rev.2.10 ibid. ibid.

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12. it is understood that technical assistance shall be fully funded technical assistance and shall not entail financial obligations on the part of the exporting developing and least-developed country Members.11

13. it is agreed that the WTo shall recommend that impact assessments shall be conducted to determine the likely effect on the trade of developing and least-developed country Members for any proposed standards before adoption, and if the impact would be adverse, the standards would not become applicable until it is established that developing and least-developed country Members that would be affected have acquired the capacity to beneficially comply with them.12

B. ProPoSalS relaTing To arTiCle 10.1

14. For effective operationalization of article 10.1, it is suggested that the following addition be made to the existing provision:

“if an exporting developing country Member identifies specific problems in complying with a sanitary or phytosanitary measures of an importing developed country Member, the latter shall upon request enter into consultations with a view to finding a mutually satisfactory solution.

in this regard, such special needs shall include: securing and enhancing current levels of exports from developing and least developed country members, maintain their market shares in their export markets, as well as developing their technological and infrastructural capabilities. While notifying a measure, Members shall, inter-alia, indicate the following: (i) systems and/or equivalent systems that could be used to comply with such a measure; (ii) the names of the developing and least-developed country Members that could be affected by the applied measure.”13

15. Therequirementto“takeaccountofthespecialneedsofdevelopingcountryMembers,andinparticularleastdevelopedcountryMembers”inArticle10.1shallbeunderstoodtomeanthatMembersshalleitherwithdrawmeasuresthatadverselyaffectanydevelopingandleast-developedcountryMembersorwhichtheyfinddifficulttocomplywith,orshallprovidethetechnicalandfinancialresourcesnecessaryforthedevelopingandleast-developedcountryMemberstocomplywiththemeasures.14

11 ibid. ibid.12 ibid. ibid.13 Tn/CTd/W/2. Tn/CTd/W/2.14 Tn/CTd/W/3/rev.2. Tn/CTd/W/3/rev.2.

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16. The requirement shall be further understood to mean that Members shall always initiate consultations in the Committee whenever they propose or intend to take any measures that are likely to affect imports from developing and least-developed country Members. in the consultations, Members shall establish whether or not the proposed or intended measures, if justified under the agreement, would adversely affect any developing and least-developed country Members.15

17. Members shall establish a facility within the global Trust Fund for ensuring that:

(a) developing and least-developed country Members have the financial and technical capacity to meet the requirements under the agreement;

(b) delegations from developing and least-developed country Members attend and effectively participate in meetings of the Committee and relevant international standard-setting organisations;

(c) developing and least-developed country Members effectively utilise the flexibility under the agreement; and

(d) measures adopted under the agreement do not contravene the rights of developing and least-developed country Members.16

18. it is understood that technology transfer and any technical and financial assistance under the agreement to developing and least-developed country Members shall be cost free.17

C. ProPoSal relaTed To arTiCle 10.4

19. in article 10.4 of the agreement on the application of Sanitary and Phytosanitary Measures the term “should” be read to express “duty” rather than mere exhortation. This could be clarified through an authoritative interpretation under article iX.2 of the Marrakesh agreement establishing the WTo. This would help achieve the intended objective of this S&d provision.18

iV. UnderlYing ConCernS

20. The underlying concerns relate to key difficulties developing countries may face in meeting new or modified SPS requirements of their trading partners, and hence in achieving or maintaining access to markets for their products. import requirements that differ from those based on the relevant international standards, while not necessarily inconsistent with the agreement19, can pose considerable difficulties

15 Ibid.Ibid.16 Ibid.Ibid.17 Ibid.Ibid.18 TN/CTD/W/6.TN/CTD/W/6.19 See,See,inter alia, Article 3.3

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to developing countries. developing country Members may lack the necessary knowledge, infrastructure or technology to deal with new requirements. These deficiencies can often not be overcome without initial institutional development, technical and financial assistance. These deficiencies can have negative consequences on the acceptability of products for trade.

21. Members attach importance to technical assistance being provided both on a bilateral basis and through relevant international organizations. However, such assistance is often characterized as supply-driven, and may be determined to a greater extent by the policy interests of the donor rather than the specific needs of the recipient. at the same time, Members noted the general paucity of demand-driven requests, apparently partially due to institutional capacity constraints. Furthermore, Members expressed concern that in the absence of more targeted, specific trade assistance goals, addressing timeliness and sustainability in an efficient manner is highly difficult. a particular concern is provision of assistance only after a developing country Member has lost market access due to a SPS measure. another concern reflects the uncertainty of support and a desire to ensure that technical assistance is more predictable. Some developing country Members also maintain that a simplification of the administrative procedures of developed country Members would make it less costly and easier for developing country Members to comply with their SPS requirements and export. Some Members have indicated that one advantage of making these provisions binding is that developing country Members would no longer be required to specifically request technical assistance; however, all Members recognize that technical assistance should be more needs- and results-driven.

22. The general effectiveness of technical assistance has been questioned. in particular, a number of developing country Members have indicated that much of the assistance they have received has not had the desired effect of allowing them to maintain or achieve export opportunities in the face of new or existing SPS requirements. This concern underlies a desire to find more effective means to ensure the better overall performance and demonstrated specific results of technical assistance.

23. developing country Members have further identified the need for special and differential treatment, in particular in the context of allowing more time for them to adjust to new requirements for the products they export.

24. another underlying concern relates to the difficulties faced by developing country Members in effectively participating in the work of the SPS Committee and relevant international standard-setting bodies. Physical presence at meetings is necessary, but to ensure that participation is effective the necessary expertise and coordination must be built-up within developing country Members.

V. releVanT deVeloPMenTS

25. The decision on implementation taken at the doha Ministerial Conference

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in 2001 included inter alia a clarification on article 10.2.20 it specifies that where the appropriate level of protection allows scope for the phased introduction of SPS measures, the “longer time-frame for compliance” referred to in article 10.2 shall be understood to mean normally a period of not less than six months. Where the phased introduction of a new measure is not possible, but a Member identifies specific problems, the Member applying the new measure shall enter into consultations, upon request, to try to find a mutually satisfactory solution. The decision also indicated that, subject to the conditions specified in paragraph 2 of annex B of the SPS agreement, a period of not less than six months shall normally be provided between the publication of a measure and its entry into force. Finally, the doha Ministerial decision instructed the SPS Committee to undertake a review of the operation and implementation of the SPS agreement every four years.21

26. Since the proposals were submitted in 2002, a number of developments have occurred which address some of the underlying concerns. With respect to the three standard-setting bodies of relevance under the SPS agreement, trust funds have been established to increase participation of developing country Members in the standard-setting activities of the international Plant Protection Convention (iPPC) and of the Fao/WHo Codex alimentarius Commission (Codex) 22, and the World organization for animal Health (oie) will establish a trust fund before the end of 2005. These trust funds are supported through contributions by donor agencies and member countries.

27. With respect to the Codex trust fund established by Fao/WHo, during the period March to december 2004, a total of 83 persons from 75 countries attended 14 separate Codex meetings, including the Codex alimentarius Commission meeting held in June-July 2004. all 83 participants were funded entirely by the Codex Trust Fund and most were government officials from least developed countries. The breakdown of participants was: 60 per cent from least-developed and other lower income countries; 29 per cent from lower middle income countries; and 11 per cent from upper middle income countries.23 in order to improve the effectiveness of the trust fund, Fao/WHo plan an information meeting of both donor and beneficiary Members in July 2005.

28. in 2004, the iPPC established a trust fund under Fao rules to be used trust fund under Fao rules to be used exclusively to the direct benefit of developing countries. it is used to facilitate their participation and involvement in all iPPC activities, including in the interim Commission on Phytosanitary Measures, in regional workshops on draft international standards for phytosanitary measures, in expert Working groups, and also in

22 See proposals in paras. 17(b) and 19 above.See proposals in paras. 17(b) and 19 above.23 More information on the Codex Trust Fund is available in documents g/SPS/gen/564 and 565, andMore information on the Codex Trust Fund is available in documents g/SPS/gen/564 and 565, and

from the web site http://www.who.int/foodsafety/codex/trustfund/en/

20 WT/MIN(01)/17, paragraph 3.1.WT/MIN(01)/17,paragraph3.1.21 The report of this review, the second since the entry into force of the agreement, is contained in docu-The report of this review, the second since the entry into force of the agreement, is contained in docu-

ment g/SPS/36.

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phytosanitary capacity-building and information exchange.24

29. The oie will establish a trust fund before the end of 2005. The oie also continues to provide financial support for the participation of Chief Veterinary officers of its member countries in oie standard-setting activities.

30. Since the SPS agreement entered into force, the Fao/WHo, oie and iPPC have also developed and/or strengthened technical assistance programmes, including conferences, seminars and workshops, to enhance national capacities on SPS matters. The iPPC developed a diagnostic tool, the Phytosanitary Capacity evaluation (PCe), to help countries address their current capacity and identify needs for assistance.25 Similar diagnostic tools have been developed by the Fao/WHo with respect to food safety, and recently by oie.26 in addition, other international and regional organizations, including the World Bank, oirSa, iiCa, Unido and UnCTad, provide regular updates to the SPS Committee on their programmes related to SPS capacity building.

31. in order to address some of the needs identified with respect to technical assistance, the Secretariat has undertaken numerous regional and national training workshops on the SPS agreement, and, in particular, on how Members can use the provisions of the agreement to facilitate their trade interests.27 The Secretariat also organized workshops in geneva on: technical assistance needs and how to best address these in relation to the SPS agreement (november 2002); the principles and methods of risk analysis (June 2000); the processes and procedures of the relevant standard-setting organizations (March 2001); and on the effective operation of national SPS enquiry points (november 2003). Furthermore, the Secretariat has developed a number of tools to assist Members with the understanding and implementation of the agreement, including a booklet on “Understanding the SPS agreement”28; a handbook on the application of the transparency provisions of the agreement; and an inter-active Cd-roM explaining and discussing in detail the provisions of the agreement and circulated two questionnaires on technical assistance to Members.

32. in September 2002, following consultations by the director-general with the Fao, oie, WHo and the World Bank as requested by the general Council in october 2000, the Standards and Trade development Facility (STdF) was established. The purpose of the STdF, which is administered by the WTo, is to enhance the capacity of developing countries in the SPS area through the provision of funding for projects in developing countries, as well as through cooperation between the relevant institutions

24 g/SPS/gen/482.g/SPS/gen/482.25 http://www.ippc.int.http://www.ippc.int.26 See g/SPS/gen/525; also «Performance, Vision and Strategy (PVS) for national VeterinarySee g/SPS/gen/525; also «Performance, Vision and Strategy (PVS) for national Veterinary

Services», available from http://www.oie.int.27 These training activities are described in more detail in document g/SPS/gen/521.These training activities are described in more detail in document g/SPS/gen/521.28 WTo agreements Series, Volume no. 4.WTo agreements Series, Volume no. 4.

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in SPS-related activities including joint institutional projects. 29 This facility can be used to finance projects to assist developing country Members, and in particular least-developed country Members, make more effective use of all of the provisions of the SPS agreement, including those related to dispute resolution.30 as of June 2005, the STdF had funded approximately US$2 million of projects and project preparation grants. These include projects proposed by developing country Members, as well as pilot projects developed to address specific needs identified by developing country Members in the SPS Committee. The STdF also maintains a database, which provides information on SPS-related technical assistance and capacity building projects.31

33. Several Members have also created specific mechanisms to assist developing countries to participate in the relevant international institutions and in the activities of the SPS Committee, such as the initiative for the americas on Sanitary and Phytosanitary Measures.32 Furthermore, bilateral technical assistance related to SPS capacity is being provided by many Members.33

34. guidelines and decisions adopted by the Committee have regularly taken into consideration the specific needs and concerns expressed by developing country Members. These include the recommended procedures for implementing the transparency provisions of the SPS agreement (g/SPS/7/rev.2 and add.1 and 2); the guidelines to further the practical implementation of article 5.5 (g/SPS/15), and the decision on the implementation of article 4 of the agreement regarding recognition of equivalence (g/SPS/19/rev.2). For example, the most recently revised recommended procedures for the implementation of the transparency provisions of the agreement, and the related format for the notification of SPS measures, request the identification of which Members or regions may be particularly affected by the measure being notified (g/SPS/7/rev.2).34

35. Furthermore, in october 2004, the Committee finalized a procedure to enhance both the provision and the transparency of special and differential treatment or technical assistance (g/SPS/33). The decision by the Committee requires an importing Member to consider any requests for special and differential treatment or technical assistance which are made in response to the importing Member’s notification of a new or modified SPS measure. The importing Member is to subsequently submit a specific addendum to its notification which indicates that special and differential treatment or technical assistance had been requested; the Member(s) affected; the

29 The Secretariat reports regularly to the SPS Committee on the STdF, most recently in g/SPS/ The Secretariat reports regularly to the SPS Committee on the STdF, most recently in g/SPS/gen/523.

30 See proposals in paras. 9, 15 and 17 (a), (c) and (d). See proposals in paras. 9, 15 and 17 (a), (c) and (d).31 available on-line at http:/stdfdb.wto.org. available on-line at http:/stdfdb.wto.org.32 g/SPS/gen/549. g/SPS/gen/549.33 Paragraphs 27 to 46 of document g/SPS/gen/543 provide a summary description of recent actions Paragraphs 27 to 46 of document g/SPS/gen/543 provide a summary description of recent actions

taken to enhance the provision of SPS-related technical assistance.34 See proposal in para. 13. See proposal in para. 13.

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concern(s) identified; if special and differential treatment was provided, and if so, the treatment provided. This procedure is intended to ensure that the importing Member consults with any developing country Member that has expressed a concern regarding the potential effect of the proposed new/modified measure on its exports with the aim of finding a means to address their concerns.35 The notification of solutions ensures fullest transparency, especially for other developing country Members.

36. each regular meeting of the SPS Committee provides any Member with the opportunity to raise specific trade concerns, including proposed measures not yet implemented. Unfortunately, many developing country Members, and in particular least-developed country Members, continue to find it difficult to participate in the meetings of the SPS Committee. nonetheless, a growing number of developing countries are participating actively under this agenda item in the SPS Committee meetings. developing country Members have raised 101 of the approximately 200 specific trade concerns with respect to measures proposed or taken by other trading partners which adversely affect their trade interests, although least-developed country Members have raised only two concerns.36 in 149 cases, a developing country Member has supported another Member raising an issue. in a number of cases, discussions in the Committee have provided the impetus for bilateral actions to resolve these problems.37 Several developing country Members have also made use of the good offices of the Chair of the SPS Committee to seek resolution of specific trade problems.38 The WTo also provides assistance to developing country Members, and in particular least-developed country Members, involved in dispute settlement proceedings, as does the advisory Centre on WTo law, established in 2001.39

Vi. ConSTrainTS To FraMing reCoMMendaTionS

37. The Committee faces a number of constraints in elaborating recommendations to ensure that the concerns of developing country Members are addressed in a precise, effective and operational manner. First, there has been a paucity of concrete recommendations submitted by Members since the Committee was first requested to consider this issue in 2003. Second, the proposals submitted in 2002 have implications at many levels, including at the bilateral level, within the WTo as a whole, within the SPS Committee, at the level of the international standard-setting bodies, as well as

35 See proposals in paras. 9, 13, 14, 15 and 16.36 The european Communities was counted as one Member. Similarly, when one Member spoke on The european Communities was counted as one Member. Similarly, when one Member spoke on

behalf of aSean, it was counted as one Member only. on certain issues, more than one Member has raised the same concern at a Committee meeting. Hence although the total number of specific trade concerns raised since 1995 is 204, the number of Members raising concerns, 246, is higher.

37 g/SPS/gen/204/rev.5. g/SPS/gen/204/rev.5.38 argentina, Chile, South africa and Uruguay with respect to measures relating to citrus canker taken argentina, Chile, South africa and Uruguay with respect to measures relating to citrus canker taken

by the european Communities; the United States with respect to restrictions on wheat and oilseeds maintained by Poland; and Canada with respect to import restrictions on bovine semen maintained by india.

39 http://www.acwl.ch/e/index_e.aspx http://www.acwl.ch/e/index_e.aspx

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at technical levels for executing capacity building, and in political and negotiating contexts.

38. a number of the submitted proposals would require actions outside of the sphere of influence of the SPS Committee, such as actions by the international standard-setting bodies, or by other institutions. The SPS Committee could, however, agree to draw certain issues to the attention of these other bodies, and encourage WTo Members to pursue certain results within the context of Members’ involvement in the work of these other bodies.

39. of particular note is that the SPS Committee has only recently discussed the proposals and the underlying concerns with some specificity and frankness, and only recently have some concrete examples been described of problems due to the lack of specific trade-related, needs-based technical assistance or of special and differential treatment. Formulation of precise modifications or operational recommendations on the five proposals remains a challenge.

40. Finally, these discussions have revealed an “expectations gap” between Members. all Members acknowledge that better-targeted and more effective technical assistance aimed at specific results will benefit developing country Members. This can, however, only be achieved by more successful communications and competent teamwork among involved Members. This commitment appears necessary to, at minimum, maintain the market access opportunities for products from developing country Members.

Vii. ConClUSionS

41. The SPS Committee has to date been unable to develop any clear recommendations for a decision on the proposals on special and differential treatment referred to it by the general Council.

42. The Committee notes that some Members have indicated their intention to revise some of these proposals, and would welcome an opportunity to consider the revised proposals. Furthermore, the Committee agrees to continue to examine the proposals before it with the aim of developing specific recommendations.

43. Building on previous discussions in the SPS Committee on special and differential treatment and technical assistance, the SPS Committee agrees to expeditiously undertake discussions on further work to assist the Committee to address the concerns underlying the proposals as identified by Members with a view to fulfilling the doha development Mandate. The following represent some initial elements for this discussion:

(a) identify best practices, through which developing country Members, and in particular least-developed country Members, can become informed in a timely manner of SPS requirements of priority to their trade. The Committee will, inter alia, undertake to:

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• identify specific actions to make existing transparencyprocedures more effective and operational for developingcountryMembers,andinparticularleast-developedcountryMembers;

• determinehowMembersand theSecretariatcanfacilitatesuchactions;

• examine whether further changes in the recommendedtransparencyprocedureswouldbeuseful.

(b) identify means through which developing country Members, and in particular least-developed country Members, can more productively evaluate which SPS requirements of their trading partners present trade problems. The Committee will consider, inter alia:

• theextent towhichMemberscanmoreefficientlyidentifyat the earliest possible stage potential trade problems fordeveloping country Members, and in particular least-developedcountryMembers;

• if a forum for the exchange of comments on notificationscanoperationallyaddresssomekeyconcernsofdevelopingcountryMembers,andinparticularleast-developedcountryMembers;

• if problems identified in respect to any specific notifiedmeasure are limited to a particular country or region, orif they represent a more systemic barrier for developingcountryMembers,andinparticularleast-developedcountryMembers.

(c) Consider how developing country Members, and in particular least-developed country Members, can make greater use of the opportunities provided by the SPS Committee to identify and resolve specific trade concerns. The Committee will, inter alia, examine:

• how to facilitate the effective participation of developingcountryMembers,andinparticularleast-developedcountryMembers,intheSPSCommittee;

• howtofacilitatetheuseofexistingornewmechanismsforresolvingspecifictradeproblems.

(d) develop more effective mechanisms to monitor the demand and supply of technical assistance with the objectives of improving predictability, timeliness and results relative to specific trade-related needs of developing country Members, and in particular least-developed country Members. The SPS Committee will, inter alia:

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• evaluatetheeffectivenessofcurrentsourcesofinformationon technical assistance, including the STDF database, thetwo SPS Secretariat questionnaires, and ad hoc summarysubmissionsbyMembers;

• identifymechanisms toprovideopportunities for recipientcountries to report on how they have utilized technicalassistance received, and to identify areas where futuretechnicalassistancecouldbemosteffectivelytargeted;

• identifymechanismsfortheCommitteetoassesstheoveralleffectiveness of current technical assistance programmesand the extent to which recipient countries have utilizedavailable technical assistance tomeet specified needs andachievedesiredresults;

• consider how to improve "global SPS clearing-house"instruments to better align trade-related SPS technicalassistanceresourceswithassessedSPSneeds;

• identify how to reduce repetitive questionnaire requeststo recipient Members, including through exploring thefeasibility of establishing "balance sheets" on SPS-relatedtechnicalassistanceatthenationallevel;

• identifyexamplesandpursuerecommendationsofhowSPScapacity-buildingcanbeeffectivelyintegratedintonationaldevelopmentplans;

• identifyhowdevelopingcountryMembers,andinparticularleast-developed country Members, can more effectivelyrequest trade-related technical assistance, in particularthrough improved identification of, and access to, keytechnicalassistancedecision-makingprocessesinbothdonorandrecipientMembers,andasappropriate,inotherrelevantbodies.

(e) develop best practices for SPS technical assistance under the WTo global Trust Fund with the aim of making these programmes more effective, precise and operational. The Committee will, inter alia,

• identifywaystoeffectivelyimproveanddemonstratespecificresultspriorto,duringandfollowingnationalandregionaltraining events, focusing on goal-oriented preparation,appropriate (decision-making) participants, and specificfollow-upworkprogrammes;

• identifywaystoimprovethetargetingoftechnicalassistanceby(i)evaluating,onthebasisoffeedbackfromrecipients,theeffectivenessofpreviousassistance,and(ii)identifyingthespecificneedsofdevelopingcountriesforfuturetechnicalassistance.

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• develop an informal modus operandi to monitor theeffectivenessandsustainabilityofSPStrainingeventsundertheWTOGlobalTrustFund;

• evaluate the first WTO specialized course on the SPSAgreementtobeheldinthefall2005attheWTOTrainingInstitute,andmakerecommendationsasappropriate.

Viii. reCoMMendaTion

44. The SPS Committee recommends that the general Council:

(a) Take note of this report.

(b) Take note of the Committee’s commitment to continue to examine the proposals before it, and any revision of these proposals, with the aim of developing specific recommendations for a decision.

(c) Take note of the Committee’s commitment to expeditiously undertake discussions on further work to assist the Committee to address the concerns underlying the proposals as identified by Members.

(d) instruct the Committee to report progress to the general Council on (b) and (c) above.

reVieW oF THe oPeraTion and iMPleMenTaTion oF THe agreeMenT on THe aPPliCaTion oF SaniTarY and

PHYToSaniTarY MeaSUreS

Report adopted by the Committee on Sanitary and Phytosanitary Measures on 30 June 2005

(G/SPS/36)

i. inTrodUCTion

1. article 12.7 of the agreement on the application of Sanitary and Phytosanitary Measures (“the agreement”) provides that “the Committee shall review the operation and implementation of this agreement three years after the date of entry, and thereafter as the need arises”. a First review of the agreement was completed in March 1999.1

1 g/SPS/12.g/SPS/12.

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2. at the Fourth Session of the Ministerial Conference, Ministers instructed the Committee to review the operation and implementation of the agreement at least once every four years. The SPS Committee adopted a procedure and timetable to undertake the Second review of the agreement at its meeting of 22-23 June 2004.2 in 2004-2005, the Committee held three informal meetings and three formal meetings, at which it considered issues and proposals identified by Members. These discussions were informed by a number of background papers submitted by Members.

3. in both the First and Second reviews, the Committee discussions have focused on implementation and operation of the agreement. in the first review, the Committee considered issues and proposals related to:

• Equivalence(Article4);

• Transparency(Article7andAnnexB);

• Internationalharmonization(Article3.5and12.4);

• Technicalassistance(Article9);

• Specialanddifferentialtreatment(Article10);

• Adaptationtoregionalconditions(Article6);

• Riskassessment(Articles5.1,5.2and5.3)

• Disputeresolution(Articles11and12.2).

4. in the Second review, the Committee also considered all of the above provisions, except risk assessment, as well as the following additional issues:

• Consistency(Article5.5);

• Specifictradeconcerns;

• Useofadhocconsultations;

• Co-operationwiththeCodexAlimentariusCommission(Codex),WorldOrganizationforAnimalHealth(OIE),andtheInternationalPlantProtectionConvention(IPPC)(Article12.3);

• Clarificationofdefinitionsofterms;

• ClarificationoftherelationshipbetweencertainArticles;

• Unduedelays;

• Goodregulatorypractice;and

• Control, Inspection and Approval Procedures (Article 8 andAnnexC).

2 g/SPS/32. g/SPS/32.

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5. appendix a of this document provides a summary of Committee activities since the First review in 1999. appendix B provides information about SPS-related dispute settlement activities. appendix C provides a list of documents submitted by Members since the last review of the agreement relevant to the various issues raised in the background paper (g/SPS/gen/510/rev.1). relevant decisions of the Committee have also been included along with documents produced by the Secretariat which summarized submissions on certain issues (e.g. relating to transparency) or which gave rise to submissions from Members (e.g. the technical assistance questionnaires).

ii. oVerVieW

6. at the time of this review, the SPS agreement has been in force for 10 years for developed country Members (as of January 1995), 8 years for developing country Members (as of January 1997), and 5 years for least-developed country Members (as of January 2000). The SPS agreement is thus still relatively new, and some Members are still in the process of adjusting to and implementing the new disciplines established by the agreement.

7. The SPS agreement has provided, as designed, a multilateral framework of rules and disciplines to guide the development, adoption and enforcement of sanitary and phytosanitary measures in order to minimize their negative effects on trade. it has also provided a framework for bilateral arrangements and protocols. Committee meetings provide a regular forum for national experts to make contacts, engage in consultations, and to explore solutions to trade problems. a growing number of Members have been participating in Committee meetings, but effective participation, including adequate preparation in anticipation of meetings as well as timely follow-up, is still a problem for many developing country Members, and in particular least-developed country Members.

8. SPS measures and the application of the SPS agreement are of increasing importance to the movement of goods in agricultural trade. This importance is expected to increase, for all WTo Members. The SPS agreement is serving its purpose to the benefit of both importing and exporting Members. To date, no Member has proposed changes to the basic provisions of the SPS agreement, or questioned its science-based requirements, the encouragement of harmonization with international standards, or the obligations for transparency.

9. as of May 2005, 139 (94 per cent) of WTo Members had identified a national notification authority; 130 (87 per cent) had established an SPS enquiry point, and 87 (59 per cent) had notified at least one new or revised SPS measure.

10. The number of specific trade concerns raised in the Committee during the years 1995-2004 gives, on the one hand, an indication of the number of problems (204) faced by Members, and on the other hand, evidence of the increasing use of the Committee as a forum to try to resolve these problems (56 problems were reported resolved during the same period).

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11. over 300 disputes have formally been raised under the WTo’s dispute settlement system, of which 30 alleged violation of the SPS agreement. eleven dispute resolution panels have been established to examine complaints relating to the SPS agreement, and in six of these cases the appellate Body has also given a ruling. Two panels were established to examine the United States’ and Canada’s complaints regarding the eC ban on meat treated with growth-promoting hormones; two panels to examine complaints against australia’s restrictions on imports of fresh, chilled or frozen salmon and salmonids; one to examine Japan’s requirement that each variety of certain fruits be tested with regard to the efficacy of fumigation treatment; one regarding Japan’s restrictions on apples due to fire blight. in on-going complaints, two panels have been established to examine complaints against australia’s quarantine procedures; and three panels to examine complaints by the United States, Canada and argentina concerning eC measures affecting the approval and marketing of biotech products (see appendix B for details). in each of the cases alleging violation of the SPS agreement, the panel has, in accordance with article 11.2 of the agreement, sought advice from scientific and technical experts.

12. Since the entry into force of the SPS agreement, the three standard-setting organizations referenced in the SPS agreement have continuously demonstrated their commitment to address the specific concerns identified in Committee meetings and to assist Members with the implementation of the provisions of the agreement at the national level. excellent co-operation exists between these organizations at the secretariat level, especially on technical assistance activities.

13. Specific progress has been made in the Committee on a number of issues it has decided to address, including the development of guidelines and recommendations on consistency, equivalence, monitoring and transparency. However, Members recognize that more work can be done by the Committee to ensure an effective implementation of the agreement. This report focuses on what has been achieved since the last review, and in particular on issues where Members are proposing further work by the Committee. The recommendations emanating from this review have been compiled in an attachment to this report.

iii. ConSiSTenCY (arTiCle 5.5)

14. While the First review did not examine the Committee’s early efforts to develop guidelines for consistency, deliberations on this issue began during the Committee’s first meeting in March 1995 and progressed through informal and formal meetings. during these discussions, Members raised conceptual issues related to the links between appropriate level of protection, measures and risk assessment.

15. in July 2000, the Committee adopted guidelines to further the practical implementation of article 5.5.3 The decision marked the culmination of sustained

3 g/SPS/15.g/SPS/15.

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efforts by the Committee to promote the consistent application of the concept of appropriate level of sanitary or phytosanitary protection. The guidelines are designed to assist national regulatory officials in avoiding arbitrary or unjustifiable distinctions in the level of health risk they determine to be appropriate in different situations, if these differences result in discrimination or a disguised restriction on trade. The Committee agreed to review the guidelines periodically and revise them as necessary.

16. a first review of the article 5.5 guidelines was conducted as part of the Second review process. it was noted that Members had not raised any concerns related to these guidelines since their adoption in July 2000.

17. recommendations:

• The Committee should undertake another review of the operation of the guidelines to further the practical implementation of Article 5.5 whenever Members identify the need, and in any case not later than December 2008.

• Members are encouraged to provide information regarding their experiences in the implementation of Article 5.5 and in the use of the guidelines (G/SPS/15).

iV. eQUiValenCe (arTiCle 4)

18. in the First review of the agreement, the Committee recognized the need for further efforts to facilitate the practical application of article 4, including the recognition of equivalence of measures applied by developing country Members. in response to the conclusions of the First review, the Committee held a first informal meeting to discuss the issue of equivalence and the implementation of article 4 in June 2000. The importance of these deliberations was emphasized by the general Council when it requested, during a Special Session on 18 october 2000, that the SPS Committee “… examine the concerns of developing countries regarding the equivalence of SPS measures and to come up with concrete options as to how to deal with them …” discussions by the Committee in a series of informal meetings and Special Meetings lead to the adoption of a formal decision on equivalence.4 in adopting this decision, several Members noted the need to clarify certain provisions of the decision.

19. in March 2002, subsequent to this decision and in response to the decision at the Fourth Ministerial Conference regarding implementation-related issues5, the Committee adopted a programme of work to clarify its decision on equivalence.6 Furthermore, in June 2002, the Committee adopted a format for the notification of equivalence agreements.7 To date, no Member has submitted an equivalence notification.

4 g/SPS/19.g/SPS/19.5 WT/Min(01)/17, paragraph 3.3.WT/Min(01)/17, paragraph 3.3.6 g/SPS/20. g/SPS/20..

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20. in March 2004, the Committee completed its work programme on equivalence which included clarifications on the decision on equivalence related to:

• thefacilitationofrecognitionofequivalencebasedonhistorictrade(Paragraph5);

• the effect of a request for recognition of equivalence on trade(Paragraph6);and

• theimportanceofscientificinformationinevaluatingtheimpactofexportingcountries'measures(Paragraph7).

The decision, including the agreed clarifications, is contained in g/SPS/19/rev.2. equivalence remains a standing agenda item for the Committee.

21. The international standard-setting organizations have developed guidance in this area. The Codex alimentarius Commission has adopted Principles for the development of equivalence agreements regarding food import and export inspection and certification systems and guidelines on the judgement of equivalence of such systems. The oie has developed guidelines for reaching a judgement of the equivalence of sanitary measures. at the seventh session of the interim Commission on Phytosanitary Measures (iCPM) in spring 2005, the iCPM adopted guidelines for the determination and recognition of equivalence of phytosanitary measures.


• The Committee should maintain equivalence as a standing item of the agenda for its regular meetings.

• Members are encouraged to provide information regarding their experiences in the implementation of Article 4 and in the use of the guidance developed by the Committee (G/SPS/19/Rev.2). In particular, Members are encouraged to notify any agreements reached on the recognition of equivalence in accordance with the agreed procedure.

• The relevant international organizations are invited to keep the Committee informed of any work they undertake with regard to the recognition of equivalence.

V. TranSParenCY (arTiCle 7 and anneX B)

23. in the 1999 review, the Committee recalled that it had adopted recommended notification procedures, as well as formats for routine and emergency notifications.

7 g/SPS/7/rev.2/add.1. g/SPS/7/rev.2/add.1.

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The Committee stressed the need for an accurate summary of the notified measure in one of the WTo official languages.

24. in response to a number of concerns about the implementation of the transparency obligations, in november 1999, the Committee agreed on a first revision of recommended notification procedures and notification formats.8 in 2002, the Committee adopted its second revision of the recommended procedures for implementing transparency obligations.9 This revision addressed, inter alia, Members’ concerns over the timing of notifications; notification of final rules; how to deal with addenda, revisions and corrigenda; extensions to the comment period; what to do when a regulation contained both SPS and TBT measures; relevant standard-setting bodies for the purposes of the agreement; multiple and single enquiry points; as well as changes to the notification formats.

25. To further facilitate the implementation of the transparency provisions of the SPS agreement, the Secretariat produced a handbook “How to apply thehe Secretariat produced a handbook “How to apply the Transparency Provisions of the SPS agreement” in 2000 and updated it in 2003.10 This handbook, which is available in english, French and Spanish, provides guidance on the establishment and operation of notification authorities and enquiry points. The handbook also covers all three areas of transparency: the publication of regulations, notifications, and responding to enquiries.

26. as of May 2005, 4376 notifications had been circulated, not including corrigenda, addenda and revisions. The number of annual notifications in 2004 (617) was 42 per cent higher than the number of annual notifications in 1999 (432). out of 148 Members, 87 had notified at least one SPS measure since 1995. The regional breakdown of all notifications, including corrigenda, addenda and revisions, submitted before the end of 2004 is represented in Figure 1.

27. Under the SPS agreement, Members are required to notify both an enquiry point to provide answers to all reasonable questions from interested Members and a national notification authority to implement the notification procedures detailed in the agreement. in July 1999, 103 out of 134 members (77 per cent) had notified an enquiry point and 97 members (72 per cent) had identified their national notification authority.11 as of May 2005, 139 out of 148 Members (94 per cent) had notified an enquiry point, 130 (87 per cent) had identified their national notification authority, and 87 Members (59 per cent) had notified at least one new or revised SPS measure.12

28. The Secretariat facilitates information exchange among Members concerning enquiry points and national notification authorities in a variety of ways. The Secretariat

8 g/SPS/7/rev.1. g/SPS/7/rev.1.9 g/SPS/7/rev.2. g/SPS/7/rev.2.10 The most recent version of the handbook is available on the SPS website. The most recent version of the handbook is available on the SPS website.11 g/SPS/gen/27/rev.5. g/SPS/gen/27/rev.5.g/SPS/gen/27/rev.5.12 g/SPS/gen/27/rev.13, and see paras. 26 and 27. g/SPS/gen/27/rev.13, and see paras. 26 and 27.g/SPS/gen/27/rev.13, and see paras. 26 and 27. and see paras. 26 and 27.

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regularly updates a document containing contact information of national enquiry points and of national notification authorities.13 in addition, the Secretariat maintains links to these documents from the SPS website on the WTo web page.

29. The Committee held a SpecialMeeting on the Transparency Provisionsof the SPSAgreement in November 1999 and another Special Meeting on theOperationofEnquiryPointsinOctober2003.TheseeventsbroughttogetherofficialsfromMembers’enquirypointsandnationalnotificationauthoritiesforanin-depthdiscussionofconcernsandsuggestionsrelatinginparticulartonotificationsandthefunctioningofenquirypointsandnationalnotificationauthorities.14

Figure 1 - regional Breakdown of notification 1995-2004

Asia and the Pacific30%

Europe15%

North America35%

Africa and the Middle East2%

Latin America and theCaribbean

18%

30. Since the 1999 review the Secretariat has circulated several questionnaires to gather information from Members regarding the management at the national level of their SPS transparency obligations, including the challenges and constraints they face. The Secretariat distributed two questionnaires on enquiry points: the first in 1999 and the second in 2003.15 More than 80 Members responded to the second questionnaire and key points from these responses were included in the summary of the special

13 The most recent enquiry point contact information is contained in g/SPS/enQ/18 and add.1 andThe most recent enquiry point contact information is contained in g/SPS/enQ/18 and add.1 and the most recent national notification authority contact information is contained in g/SPS/nna/8 and add.1.

14 g/SPS/r/16, g/SPS/gen/458, g/SPS/r/32.g/SPS/r/16, g/SPS/gen/458, g/SPS/r/32.15 g/SPS/W/103, g/SPS/W/103/rev.1.g/SPS/W/103, g/SPS/W/103/rev.1.

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meeting on enquiry points.16 The Secretariat also circulated questionnaires to gather information concerning Members’ SPS related websites in 1999 and in 2003.17 To date the Secretariat has received detailed information from 20 Members, including eC member States.18 The Secretariat has placed the list on the SPS homepage and established appropriate links. Some links lead to official websites; others connect to email addresses of officials with SPS-related responsibilities.

31. To facilitate Members’ management of the large volume of SPS-related information, the Secretariat regularly produces summary documents containing relevant SPS-related information, including monthly summaries of notifications19 received by the Secretariat and an annual listing of all SPS documents.20 links to all these documents can be found on the SPS web page. The Secretariat has also initiated the establishment of a searchable database containing notifications and other SPS documents (the “SPS information management system”).

32. in the First review, the Committee noted that access to informal translations (especially in a WTo official language) of texts of notified measures would facilitate their consideration by other Members, particularly if made available to Members through electronic means. in March 2004, the Secretariat established a mechanism to circulate information on the availability of unofficial translations of draft regulations notified by Members.21 This will be done via the circulation of a supplement (in the three official languages of the WTo) to the original notification submitted by a Member. To date, only one Member (the United States) has made available to the Committee nine such informal translations of the full texts of measures notified by other Members.

33. The Committee’s discussions of transparency in the context of the review benefited from submissions by argentina, Canada, Chile, China, the european Communities, Mexico and new zealand.22

34. The Committee discussed expanding current recommended notification procedures to enhance transparency, including a proposal that Members notify all

16 g/SPS/r/32.g/SPS/r/32.17 g/SPS/W/102 and rev.1, g/SPS/gen/144/rev.1 and addenda.g/SPS/W/102 and rev.1, g/SPS/gen/144/rev.1 and addenda.18 argentina, australia, Cambodia, Canada, Czech republic, Finland, european Communities, den-argentina, australia, Cambodia, Canada, Czech republic, Finland, european Communities, den-

mark, France, italy, netherlands, Hong Kong-China, Japan, new zealand, norway, Peru, Poland, Slovak, Thailand, and Turkey.

19 For example, see documents g/SPS/gen/465, 471, 485, 488, 493, 507 and 509 for 2004 notificationFor example, see documents g/SPS/gen/465, 471, 485, 488, 493, 507 and 509 for 2004 notification summaries.

20 g/SPS/gen/467.g/SPS/gen/467.21 G/SPS/GEN/487.G/SPS/GEN/487.22 argentina (g/SPS/W/167); Canada (g/SPS/W/158); Chile (g/SPS/W/170); China (g/SPS/W/162/argentina (g/SPS/W/167); Canada (g/SPS/W/158); Chile (g/SPS/W/170); China (g/SPS/W/162/

rev.1); european Communities (g/SPS/W/159); Mexico (g/SPS/W/166); and new zealand (g/SPS/W/150, 157 & 168).150, 157 & 168).).

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measures that have significant impact on trade, including those based on international standards.23 Proponents of these proposals highlighted the potential trade disruption associated with the implementation of international standards, such as iSPM 15, andiSPM 15, and, and observed that notification of measures based on such standards would provide useful information to Members. neither the oie nor the iPPC had a mechanism to captureneither the oie nor the iPPC had a mechanism to capture information about the national application of international standards, and while the Codex had a notification mechanism, the mechanism was not used. Using the well-established and active SPS notification system to enhance transparency regarding the use of international standards could be an efficient option.

35. another proposal is to enhance transparency by encouraging Members to provide advance notification of regulatory calendars or programmes.24 Some Members consider this would contribute to the implementation of paragraph 5(a) of annex B of the SPS agreement.

36. The Committee also discussed concerns about expanding notification responsibilities when Members were not yet adequately fulfilling their existing notification obligations. Members emphasized the importance of seeking mechanismsMembers emphasized the importance of seeking mechanisms to improve implementation of the existing transparency obligations.

37. The Committee noted that previous modifications to the recommended notification procedures and the notification format had led to improvements in the quality of the information submitted on these forms. another possible modification would be to include a box on the notification format that specifically indicated the comment period would be at least 60-days as of the date of circulation of the notification, unless a notifying Member explicitly identified a different period, and indicated whether a 60-day period was not provided because the notified measure was trade liberalizing.

38. The Secretariat informed the Committee of its development of an SPS database to facilitate information management by the Secretariat.25 The intention is to make the database also available to Members, and therefore to ensure that it is structured to also address Members’ information needs.


• The Committee should maintain transparency as a standing item of the agenda for its regular meetings.

• Members should ensure their full implementation of the transparency provisions of the SPS Agreement, including those relating to the

23 See comments by Canada (g/SPS/W/158), the european Communities (g/SPS/W/159) and newSee comments by Canada (g/SPS/W/158), the european Communities (g/SPS/W/159) and new zealand (g/SPS/W/157).

24 See proposals by Mexico (g/SPS/W/136 and W/166).See proposals by Mexico (g/SPS/W/136 and W/166).25 See comments by new zealand (g/SPS/W/150).See comments by new zealand (g/SPS/W/150).150).).

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publishing and notifying of draft measure at a sufficiently early stage to allow comments to be made and taken into consideration, publication of measures, and establishment of effective national notification authorities and enquiry points.

• Developing country Members should clearly identify specific problems they face in implementing the transparency provisions of the Agreement. Assistance should be provided to least developed and developing country Members in order to enable them to fully implement the transparency provisions and to make use of the benefits associated with transparency.

• Recognizing that the recommended procedures established by the Committee (G/SPS/7/Rev.2), while not creating legal obligations, can facilitate Members’ implementation of the provisions of the SPS Agreement, the Committee should consider whether further recommendations could be beneficial, inter alia:

- to ensure that an adequate period of time is provided to receive and consider comments from Members;

- to encourage advance notification of regulatory calendars or programmes, where they exist;

- to encourage transparency regarding the use of the relevant international standards.

• Members welcome the development of an SPS information management system by the Secretariat.

Vi. MoniToring THe USe oF inTernaTional STandardS (arTiCleS 3.5 and 12.4)

40. in the 1999 review, the Committee recalled that, as required by articles 3.5 and 12.4 of the SPS agreement, it had adopted a preliminary procedure to monitor the process of international harmonization and the use of international standards, guidelines or recommendations.26 The Committee noted that several concrete examples had been submitted to the Committee as reflected in the annual report on the procedure.27 The Committee recalled that the operation of the monitoring procedure was to be reviewed 18 months after its initial implementation. The procedure has been extended three times: in 1999, in 2001 and in 2003.28 at its october 2004 meeting, the Committee agreed to modify the deadline for identifying issues of international

26 g/SPS/11. g/SPS/11.27 g/SPS/13. g/SPS/13.28 g/SPS/14, g/SPS/17, and g/SPS/25. g/SPS/14, g/SPS/17, and g/SPS/25.

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harmonization and the use of international standards, guidelines or recommendations on its agenda from 30 days to 10 days in advance of the Committee’s meetings.29

41. The Committee has produced annual reports relating to the process of monitoring international harmonization.30 Since the implementation of the procedure, Members have raised eleven issues. The standard-setting bodies have promptly addressed these concerns in their respective competent bodies and regularly reported on their actions to the SPS Committee. in 2001, the Committee organized a workshop to discuss standard setting procedures (see paragraph 53 below).

42. The Committee noted the concerns raised by developing country Members about their limited ability to actively participate in the development of international standards and the lack of a mechanism to take into account the economic and technical capacity of developing country Members to implement such standards. in this context, the Committee considered that it was more appropriate for some of these concerns to be addressed within the relevant international organizations. The Committee agreed to communicate developing country concerns to these organizations and to request the representatives of these organizations to keep the Committee informed of actions taken to address these concerns.

43. Partly in response to the concerns identified by the SPS Committee, the Fao/WHo (for Codex) and the iPPC have established trust funds to enhance the participation of developing countries in standard-setting meetings and activities, training programmes and regional technical consultations on standards and their implementation. The oie will establish a trust fund before the end of 2005. These trust funds will be supported through contributions by donor agencies and member countries. The oie also continues to provide financial support for the participation of Chief Veterinary officers of its Member countries in oie standard-setting activities.


• The Committee should continue to monitor the use of international standards at each of its regular meetings.

Vii. TeCHniCal aSSiSTanCe (arTiCle 9)

45. in the First review, the Committee stressed the need for enhanced technical assistance and cooperation to developing country Members, in particular with regard to human resource development, national capacity building and the transfer of technology and information. it recognized that technical assistance had been

29 g/SPS/11/rev.1. g/SPS/11/rev.1.30 g/SPS/13, g/SPS/16, g/SPS/18, g/SPS/21, g/SPS/28 and g/SPS/31. g/SPS/13, g/SPS/16, g/SPS/18, g/SPS/21, g/SPS/28 and g/SPS/31.

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provided by the Secretariat, by Members on a bilateral basis, and by the international organizations recognized in the agreement, as well as other international organizations. However, the Committee emphasized the need for further assistance from the relevant standard-setting international organizations and agreed to bring this matter to their attention. The Committee also reiterated the need for Members and the relevant international organizations to provide information on their technical cooperation and assistance programmes on a regular basis. Members agreed to make available such information.

46. in the SPS Committee, technical assistance is discussed as a regular agenda item. Under this agenda item, Members are invited to identify any specific technical assistance needs which they may have, and/or to report on any SPS-related capacity building activities in which they are involved. The WTo Secretariat, as well as observer organizations, report on their assistance activities. The WTo Secretariat also prepared a note on typology of technical assistance. 31

47. The Secretariat has circulated two questionnaires seeking information on technical assistance which has been provided and on technical assistance needs in the context of the SPS agreement. Most replies to the first questionnaire circulated in July 1999 reported on assistance provided.32 The second questionnaire, focusing on technical assistance needs, was circulated to WTo Members in July 2001 and has been used as a basis for technical assistance discussions.33 By June 2005, 33 Members had submitted responses to the questionnaire regarding their technical assistance needs.34

48. The Secretariat has developed a number of other tools to assist Members with the understanding and implementation of the agreement. in particular, a booklet discussing the text of the SPS agreement was published under the WTo agreements Series (Volume no. 4). The Secretariat has also issued a handbook on the application of the transparency provisions of the agreement (see paragraph 27). Finally a Cd-roM explaining and discussing in detail the provisions of the agreement, and dealing in particular with implementation, transparency, special and differential treatment and dispute settlement issues, has been produced by the Secretariat. The Cd-roM includes text, video and audio material and is complemented by multiple-choice tests to enable users to monitor their individual progress.

31 g/SPS/gen/206.g/SPS/gen/206.32 a summary of the replies to this questionnaire (g/SPS/W/101) are contained in document g/SPS/a summary of the replies to this questionnaire (g/SPS/W/101) are contained in document g/SPS/

gen/143/rev.1 and addenda. replies to the same questionnaire have also been provided separately by australia (g/SPS/gen/472); the US (g/SPS/gen/181 and add. 1-5); and new zealand (g/SPS/gen/352 and rev.1). information has also been provided by the eC (g/SPS/gen/244).

33 g/SPS/W/113.g/SPS/W/113.34 These responses are circulated as addenda to g/SPS/gen/295.These responses are circulated as addenda to g/SPS/gen/295.

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49. The Secretariat has sponsored workshops and seminars on risk analysis (see paragraph 52), enquiry point operation (see paragraph 31), standard setting procedures (see paragraph 53) and capacity building (see paragraph 54), to address concerns raised in the questionnaire responses and to promote information exchange.

50. in June 2000, the Committee held a workshop on SPS risk analysis which focused on the complex relationship between risk analysis, the disciplines of the SPS agreement, the work of the relevant standard-setting organizations and actual policies of WTo Members.35 Many of the presentations from this workshop highlighted the importance of establishing links among government institutions, scientists, international standard-setting organizations, and the general public. in addition, participants stressed that even rudimentary risk analyses based upon rational arguments can provide crucial foundations for policy dialogue among trading partners.

51. in March 2001, the Secretariat organized a workshop entitled “international Standard-Setting organizations: Process and Participation”.36 representatives from the oie, the Codex and the iPPC described the processes and procedures used in the development and adoption of international standards, guidelines, and recommendations of relevance to the SPS agreement. The presentations focused in particular on the degree of involvement of developing countries in their standard-setting procedures.

52. in november 2002, the Secretariat held a seminar on technical assistance and capacity-building related to the SPS agreement. representatives of the Fao (including Codex and iPPC), oie, UnCTad, Unido and the World Bank, as well as of regional organizations (SadC, aPeC, iiCa) reported on technical assistance activities. Two developing country Members, Mauritius and the Philippines, reported on their technical assistance needs and experiences. The presentations described technical assistance and capacity building activities at both national and regional level and emphasized the need to improve coordination and cooperation among donor agencies.

53. WTo’s technical assistance activities in the SPS area contribute towards the strengthening of the capacities of developing countries in meeting standards for market access of food and other agricultural commodities. The activities increase participants’ awareness about rights and obligations under the SPS agreement and its implications at the national level. in the organization of SPS technical assistance activities the levels of familiarity with the agreement and advancement in its implementation are taken into consideration to meet and respond to individual country/regional needs. The programmes of national/regional activities include presentations on the transparency obligations, dispute settlement, implementation problems, specific trade concerns and technical/scientific issues such as risk analysis and equivalence, as well

35 g/SPS/gen/209. g/SPS/gen/209.g/SPS/gen/209.36 g/SPS/gen/250. g/SPS/gen/250.

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as the work undertaken by the three standard-setting organizations referenced in the SPS agreement (Codex, oie and iPPC).

54. Since 1999, SPS technical assistance activities organized by the Secretariat have included 36 regional (or sub-regional) and 34 national workshops. Table 1 provides information about the number of (sub)regional and national activities per year since 1999. Table 2 shows the number of Secretariat activities per region since 1999.

55. Since the First review of the SPS agreement, the international standard- setting bodies have consistently provided updates about technical assistance activities in their respective areas of work. The oie and the iPPC have developed training programmes, including conferences, seminars and workshops, to enhance national capacities on WTo matters. The iPPC developed a diagnostic tool, the Phytosanitary Capacity evaluation (PCe), to help countries address their current capacity and identify needs for assistance. The PCe is available on Cd-roM and can be downloaded from the iPPC website.37 Similar diagnostic tools have been developed by the Fao/WHo with respect to food safety, and recently by oie.

56. in the case of the Codex, technical assistance regarding food safety and food control, including conferences, seminars, workshops, tools and training materials, and specific projects at the global, regional and country levels, continues to be provided by the Fao and the WHo.

57. in addition to information from the oie, iPPC and the Codex, other observers organizations, including Fao, the World Bank, oirSa, iiCa, Unido and UnCTad, provide regular updates concerning their provision of technical assistance. in March 2005, these organizations and others provided information on their SPS-related technical assistance activities at information sessions organized in conjunction with the regular meeting of the SPS Committee.

Table 1: number of SPS Technical assistance activities

YearSPS Ta activity

national Seminar (Sub) regional Workshop other* Total

1999 3 2 1 62000 6 3 6 152001 4 3 1 82002 8 11 3 222003 7 10 4 212004 6 7 4 17Total 34 36 19 89

* OtheractivitiesincludeTAactivitiesnotorganizedbytheWTOSecretariatbutinwhichtheSecre-tariatparticipated.

37 http://www.ippc.int.http://www.ippc.int.

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Table 2: SPS Technical assistance activities per region (1999-2004)

regionSPS Ta activity

national Seminar (Sub) regional Workshop other Total

africa 7 12 4 23

arab and Middle east Countries 8 3 1 12

asia and the Pacific 8 5 8 21

Central and eastern europe and Central asia

4 4 8

europe 1 1 3 5

latin america and the Caribbean 6 11 2 19

north america 1 1

Total 34 36 19 89

58. in September 2002, the Standards and Trade development Facility (STdF) was established following the commitment made by the Heads of the WHo, the Fao, the WTo, the oie and the World Bank at the doha Ministerial Conference to explore new technical and financial mechanisms to promote the efficient use of resources in SPS-related activities. The purpose of the STdF, which is administered by the WTo, is to enhance the capacity of developing countries in the standards area through co-operation between the relevant institutions in SPS-related activities, including through the development of joint institutional projects, and provision of STdF-funding to projects in developing countries (g/SPS/gen/523). The first results from the medium-term projects currently underway are expected in the first half of 2006. The STdF maintains a database which provides information on SPS-related technical assistance and capacity building projects.38


• The Committee should maintain technical assistance as a standing item of the agenda of its regular meetings.

• Members requiring technical assistance are encouraged to identify their specific needs in a clear and detailed manner that will permit these needs to be effectively addressed.

• Members providing technical assistance are encouraged to keep the Committee informed of specific programmes of assistance.

38 available on-line at http:/stdfdb.wto.org.

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• Members are encouraged to report on the effectiveness of the technical assistance they have received. On the basis of this information, and information on the experiences of Members in the provision of technical assistance, the Committee may wish to consider identifying best practices in the area of SPS-related technical assistance.

• Members are invited to share information on their experiences regarding the use of the tools developed by the Secretariat to assist Members with the understanding and implementation of the SPS Agreement.

• The Secretariat is requested to the keep the Committee informed of its relevant technical assistance activities and of the activities of the Standards and Trade Development Facility.

• The observer organizations are invited to keep the Committee informed of their capacity building activities relevant to the SPS Agreement.

Viii. SPeCial and diFFerenTial TreaTMenT (arTiCle 10)

60. in the First review, the Committee noted that it had no information on the extent to which the special and differential treatment provided for in articles 10.1 and 10.2 had been provided to developing country Members, nor information on the extent to which developing country Members had made use of any special and differential treatment provided to them. The Committee encouraged Members to further the practical implementation of articles 10.1 and 10.2.

61. The Committee also recalled the provisions of article 14, which allowed for delays in the application of certain provisions of the agreement by least developed and developing country Members. This provision has since lapsed. reference was also made to article 10.3, according to which the Committee can grant, upon request, specified time-limited exceptions in whole or in part from obligations under the SPS agreement to developing countries, taking into account their financial, trade and development needs.

62. Since the First review, the Committee’s discussions related to special and differential treatment have been pursued through three tracks: (i) issues raised in the SPS Committee under the agenda item on special and differential treatment, relating in particular to article 10; (ii) issues raised in the SPS Committee in the context of other specific topics discussed in the Committee; and (iii) issues referred to the SPS Committee by the general Council. in addsition, (iv) there have been relevant actions and decisions taken in bodies other than the SPS Committee.

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63. during the course of this review, the Committee’s discussion of the issue of Special and differential Treatment progressed through a series of informal meetings. in particular, the Committee considered the proposals for implementation of the provisions on technical assistance and special and differential treatment which had been referred by the general Council.39

(i) Issues raised in the SPS Committee under the agenda item on special and differential treatment

64. Special and differential treatment is a standing agenda item for the Committee.

65. one of the specific issues raised in the Committee has been the need to enhance transparency regarding the provision of special and differential treatment. in this regard, egypt proposed the inclusion of a special and differential treatment box in the SPS notification format.40 in response, Canada proposed that an importing country should consider any requests for special and differential treatment or technical assistance made in response to their notification of a new measure and notify the SPS Committee of any subsequent action.41 in March 2003, the Committee adopted in principle the Canadian proposal and in october 2004 it adopted an elaboration of the steps to implement this procedure.42 This procedure provides for the submission of specific addenda to notifications which indicate when special and differential treatment or technical assistance has been requested in the context of the notification of a new or modified SPS measure, and what response has been given to the request. The Committee agreed to review the proposed notification process one year after its adoption, to evaluate its implementation, and determine whether changes are required and/or its continuance is warranted.

(ii) Special and differential treatment in other SPS Committee activities

66. other guidelines and decisions adopted by the Committee have taken into consideration the specific needs and concerns expressed by developing country Members. These include the recommended procedures for implementing the transparency provisions of the SPS agreement (g/SPS/7/rev.2 and add.1 and 2); the guidelines to further the practical implementation of article 5.5 (g/SPS/15), and the decision on the implementation of article 4 of the agreement regarding recognition of equivalence (g/SPS/19/rev.2).

39 g/SPS/gen/543. g/SPS/gen/543.40 g/SPS/gen/358. g/SPS/gen/358.g/SPS/gen/358.41 g/SPS/W/127. g/SPS/W/127.42 g/SPS/33. g/SPS/33.

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(iii) Special and differential treatment proposals referred to the SPS Committee

67. in May 2003, the Chairman of the general Council referred five proposals to the SPS Committee.43 These proposals relating to articles 9, 10.1 and 10.4 of the SPS agreement had originally been put forward in the context of the doha mandate to review all special and differential treatment provisions, with a view to strengthening them and making them more precise, effective and operational.44 in the discussions, proponents of several proposals argued that they would help developing countries comply with importing countries’ SPS measures. noting their growing interest in trading with other developing countries, a number of developing country Members expressed concern that proposals for technical assistance to be provided by developed countries to specific developing country trading partners could discriminate among trading partners. While recognizing the importance of needs-based technical assistance, other delegations also disagreed with language that would require some countries to provide technical assistance. in addition, a number of delegations suggested that special and differential treatment and technical assistance could be provided by some developing countries to other developing countries. Some Members also noted that justified SPS measures should not be withdrawn simply because some Members might have difficulty complying with the requirement.

68. although the Committee completed its work programme envisaged for 2003 on these proposals, it did not reach a decision on any of the specific issues raised. 45 in november 2003, the Chair of the SPS Committee submitted a report to the general Council regarding the work of the Committee on these as well as other special and differential treatment and implementation issues.46

69. in august 2004, the general Council decided to again refer the agreement-specific proposals for special and differential treatment to the respective WTo bodies, with the stipulation that these bodies expeditiously complete the consideration of these proposals and report to the general Council, with clear recommendations for a decision, by no later than July 2005. The report of the Committee is contained in g/SPS/35.

(iv) Other activities related to special and differential treatment in the context of the SPS Agreement

70. Since the First review, some Members have called for specific actions to address obligations outlined in article 10.4 of the agreement which states that Members “should encourage and facilitate the active participation of developing

43 Job(03)/100. Job(03)/100.44 WT/Min(01)/17, paragraph 12.45 g/SPS/26.46 g/SPS/30. g/SPS/30.

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country Members in the relevant international organizations.” in october 2000, the general Council asked the director-general of the WTo to work with the standard-setting organizations as well as international financial institutions to identify ways to increase the participation of developing countries in international standard-setting activities. He provided three reports regarding his efforts in this area, the last one in the lead up to the doha Ministerial Conference.47 at the doha Ministerial Conference, Members urged him to continue his efforts to facilitate participation of developing countries in standard setting.

71. The growing consensus that financial support was needed to enhance participation of developing country Members in international organizations led to the creation of several funding initiatives. The Heads of the Fao, the oie, the WHo, the World Bank and the WTo issued a joint statement during the doha Ministerial Conference reaffirming their commitment to enhance developing countries’ capacity to participate effectively in the development and application of international standards and in taking full advantage of trade opportunities.48 (These discussions led to the establishment of the STdF, described in more detail in paragraph 58). The Fao/WHo have established a trust fund to enhance the participation of developing countries in Codex; the iPPC has established a trust fund under Fao rules, and the oie will establish its fund before the end of 2005 (see paragraph 43). as for the meetings of the SPS Committee, iiCa (inter-american institute for Co-operation on agriculture), with additional financial support provided by the United States, has funded the participation of a large number of latin american, Central american and Caribbean countries in some of the meetings of the SPS Committee.

72. The decision on implementation taken at the doha Ministerial Conference in 2001 included inter alia a clarification on article 10.2.49 it specifies that where the appropriate level of protection allows scope for the phased introduction of SPS measures, the “longer time-frame for compliance” referred to in article 10.2 shall normally mean at least 6 months. Where the phased introduction of a new measure is not possible, but a Member identifies specific problems, the Member applying the new measure shall enter into consultations, upon request, to try to find a mutually satisfactory solution. The decision also indicated that in the context of paragraph 2 of annex B of the SPS agreement, a period of 6 months shall normally be provided between the publication of a measure and its entry into force.

73. With respect to the provisions of article 10.3, as of april 2005, no Member has asked for such an exception.


47 WT/gC/45, WT/gC/46, WT/gC/54. WT/gC/45, WT/gC/46, WT/gC/54.48 WT/Min(01)/ST/97. WT/Min(01)/ST/97.49 WT/Min(01)/17, paragraph 3.1. WT/Min(01)/17, paragraph 3.1.WT/Min(01)/17, paragraph 3.1.

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• The Committee should maintain special and differential treatment as a standing item of the agenda for its regular meetings.

• The Committee should continue to consider specific, concrete actions to address the problems faced by developing country Members, and in particular least-developed country Members, in the implementation of the SPS Agreement and in making use of the benefits of the Agreement.

• Members are encouraged to provide information regarding the special and differential treatment or technical assistance they have provided in response to specific needs identified by Members in accordance with the procedure adopted by the Committee (G/SPS/33).

iX. regionalizaTion (arTiCle 6)

75. in the 1999 review, the Committee noted that the recognition of pest or disease-free areas or areas of low pest or disease prevalence could facilitate trade in agricultural products. in this regard the Committee welcomed the application of these concepts by an increasing number of Members. at the same time, the Committee noted Members faced difficulties in implementing the provisions of article 6, including excessively lengthy administrative processes for recognition in importing countries, divergences in interpretation and implementation of international guidelines, and complexities involved in risk assessment.

76. The Committee initiated substantive discussion of problems linked with the implementation of the provisions for recognition of pest- and disease-free areas at the June 2003 Committee Meeting. The Committee held informal meetings on the issue in 2003 and 2004.

77. These discussions have focused on two aspects of regionalization: the establishment of pest- or disease-free areas by exporters and the recognition of the pest- or disease-free status by importing countries. Both the iPPC and the oie have provided guidance for countries seeking to establish, or to be recognized for pest- or disease-free status.

78. The iPPC currently has three standards addressing regionalization: iSPM 4 on requirements for the establishment of pest-free areas; iSPM 10 on the establishment of pest-free places of production and production sites; and iSPM 22 on requirements for the establishment of areas of low pest prevalence. at the seventh interim Commission on Phytosanitary Measures (iCPM) in april 2005, agreement was reached to urgently develop a concept standard on “guidelines for the recognition of the establishment of pest free areas and areas of low pest prevalence”. in addition, the iPPC has a number of supporting standards such as guidelines for surveillance.

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79. The oie Terrestrial animal Health Code describes the requirements for obtaining disease free status including requirements for surveillance and monitoring based on the concept of geographic zones. at the 73rd general Session of the oie in May 2005, member countries of the oie adopted a revised chapter of the Terrestrial animal Health Code on zoning and compartmentalization. This includes procedures for implementing zoning and compartmentalization, which take into account issues raised by Members in the SPS Committee.

80. despite the oie and iPPC guidelines, exporting countries still suffer from delayed recognition of their pest- or disease-free status by importing countries. a number of delegations, including developing countries, have proposed that the Committee develop clear procedures with timelines for the recognition of pest- or disease-free areas, while others maintain that oie and iPPC should have the primary responsibility in this regard.

81. during the course of this review the Committee’s discussion of the issue of regionalization progressed through a series of informal meetings.50


• The Committee should maintain regionalization as a standing item of the agenda for its regular meetings.

• The Committee should develop a proposal for a decision on the effective application of Article 6, taking as the point of departure the various proposals submitted by Members and the discussions in the Committee.

• Members are encouraged to provide information on their experiences in the implementation of Article 6.

• The observer organizations are invited to keep the Committee informed of their activities relevant to the recognition of pest- or disease-free areas or areas of low pest or disease prevalence.

X. SPeCiFiC Trade ConCernS

83. PartofeachCommitteemeetingisdevotedtotheconsiderationofspecifictradeconcernsraisedbyMembers.AttheMarch2000meetingoftheSPSCommittee,the Secretariat was requested to prepare a paper summarizing the specific tradeconcernsthathadbeenbroughttotheCommittee’sattentionsince1995andtoupdatethis document annually to includenew informationprovidedbyMembers.51 ThefifthrevisionincludesallissueswhichhavebeenraisedatSPSCommitteemeetingsthroughthethirty-firstregularmeetingoftheCommitteeon27-28October2004.

50 Several Members highlighted the importance of continued work in this area within the context of theirSeveral Members highlighted the importance of continued work in this area within the context of their proposals for the review. See g/SPS/W/162/rev.1, g/SPS/W/166, g/SPS/W/167, g/SPS/W/170, g/SPS/W/171, g/SPS/W/176 and g/SPS/W/177.

51 g/SPS/gen/204 and revisions 1 through 5.g/SPS/gen/204 and revisions 1 through 5.

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84. Altogether,204specifictradeconcernswereraisedinthetenyearsbetween1995and2004.Fifty-six specific tradeconcerns (27percent)havebeen reportedresolvedinthesameperiod.Figure2showsthenumberofnewconcernsraisedeachyear.Figure3acategorizesthetradeconcernsraisedbysubject.Overall,27percentoftradeconcernsrelatetofoodsafetyconcerns,29percentrelatetoplanthealth,and4percentconcernotherissuessuchascertificationrequirementsortranslation.Fortypercentofconcernsraisedrelatetoanimalhealthandzoonoses,butthiscategoryincludesissuessuchastransmissiblespongiformencephalopathy(TSEs)thatarealsorelevantforfoodsafety.Figure3bshowsthatTSEsaccountfor40percentofanimalhealthconcerns,whileissuesrelatedtofoot-and-mouthdisease(FMD)accountfor25percent.Theremaining35percentrelatetootheranimalhealthconcernssuchasavianinfluenza.

Figure 2 – number of new Specific Trade Concerns raised

2

11

24 23

13 10

29

42

29

21

0

5

10

15

20

25

30

35

40

45

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Figure 3a – Trade Concerns by Subject

Food Safety27%

Animal Health& Zoonoses

40%

Plant Health29%

OtherConcerns

4%

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Figure 3B – Trade Concerns related to animal Health

TSEs 40%

FMD 25%

Other AnimalConcerns

35%

Figure 4 – Participation of developing Countries

124

99

143

99

149

101 2

0 20 40 60 80 100 120 140 160

Members Maintaining the Measure in

Question

Supporting Members

Members Raising the Issue

Developed countries Developing countries Least-Developed Countries

Number of countries

85. developing countries are participating actively under this agenda item in the SPS Committee meetings. Figure 4 indicates that least-developed country Members have raised two specific trade concerns, whereas other developing country Members have raised 101 trade concerns, compared to 143 raised by developed country Members.52 in 149 cases, a developing country Member has supported another Member raising an issue, compared to 99 for developed country Members. in 124 cases, the measure at issue was maintained by a developed country Member, and in

52 The european Communities was counted as one Member. Similarly, when one Member spoke on The european Communities was counted as one Member. Similarly, when one Member spoke on behalf of aSean, it was counted as one Member only. on certain issues, more than one Member has raised the same concern at a Committee meeting. Hence although the total number of specific trade concerns raised since 1995 is 204, the number of Members raising concerns, 246, is higher.

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99 cases it was maintained by a developing country Member. no trade concerns regarding measures maintained by least-developed country Members have been raised.


• The Committee should continue to consider specific trade concerns raised by Members as a standing item of the agenda of its regular meetings.

• Members are encouraged to make use of this opportunity to identify specific trade problems and to seek to find mutually satisfactory resolutions of these problems.

• Members are encouraged to inform the Committee of all specific trade concerns resolved.

• The Secretariat is requested to continue to provide regularly updated information on the specific trade concerns considered by the Committee.

Xi. USe oF ad HoC ConSUlTaTionS

87. The Committee recalled that ad hoc consultations among Members, as provided for in article 12.2 of the agreement, on specific sanitary and phytosanitary measures, otherwise referred to as the “good offices” of the Chair, had been used on several occasions since 1995.53 The Committee recalled that this was a useful route to facilitate agreement between Members and encouraged Members to take advantage of this option where appropriate.


• Members are encouraged to make use of the possibility for ad hoc consultations, including through the good offices of the Chairperson of the SPS Committee, to facilitate the resolution of specific trade concerns.

Xii. Co-oPeraTion WiTH THe CodeX, oie and iPPC

89. representatives from each of these organizations attend the SPS Committee meetings and representatives from the WTo Secretariat attend the meetings of these international organizations as observers. Co-operation between the SPS Committee and

53 By argentina, Chile, South africa and Uruguay with respect to measures relating to citrus canker takenBy argentina, Chile, South africa and Uruguay with respect to measures relating to citrus canker taken by the european Communities, in March 1998 (g/SPS/gen/204/rev.5/add.1, paras. 113-116); by the United States with respect to restrictions on wheat and oilseeds maintained by Poland, in november 1998 (g/SPS/gen/204/rev.5/add.2, paras. 220-221); and by Canada with respect to import restric-tions on bovine semen maintained by india, in March 2001 (g/SPS/gen/204/rev.5/add.2, paras. 179-187).

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the international standard-setting organizations is enhanced by coordinating meeting schedules to facilitate Member participation in regularly scheduled meetings. Several of the activities of the international standard setting bodies have been discussed in the sections above on technical assistance and on special and differential treatment. The STdF provides an additional forum for coordination among its partner organizations, including the WTo, iPPC, oie and Codex (see paragraph 60).

90. in discussions on the review, Members noted that by further clarifying the relationship between the Committee and the international standards-setting bodies, the Committee could avoid duplication of effort in the development of its work programme.54 at the same time, Members stressed the independence of the work of the Committee and of the international standards-setting bodies.


• The Committee should further clarify the relationship between the Committee and the Codex, OIE and IPPC with a view to facilitating the implementation of the SPS Agreement while avoiding duplication of activities.

• Members are invited to provide information regarding their experiences in this regard and to submit specific suggestions for consideration by the Committee.

Xiii. ClariFiCaTion oF deFiniTion oF TerMS

92. Some Members identified terms within the agreement which they considered were not clearly specified and had overlapping meanings.55 in particular, it was suggested that clarification of the definition of “measures” and “regulations” in the context of article 7 and annex B would permit better and more uniform implementation of the transparency provisions. The Committee noted that, as indicated in the footnote to the recommended Procedures for implementing the Transparency obligations of the SPS agreement (S/SPS/7/rev.2), the SPS agreement uses the terms “measures” and “regulations” interchangeably when referring to any sanitary or phytosanitary measure such as laws, decrees, or ordinances applied to protect human, animal or plant life or health as defined under paragraph 1 of annex a to the SPS agreement.


• The Committee should consider clarification of the terms "measures" and "regulations" as contained in the SPS Agreement.

54 See submissions by Canada (g/SPS/W/158) and new zealand (g/SPS/W/168). See submissions by Canada (g/SPS/W/158) and new zealand (g/SPS/W/168).See submissions by Canada (g/SPS/W/158) and new zealand (g/SPS/W/168).55 See submission by China (g/SPS/W/162/rev.1). See submission by China (g/SPS/W/162/rev.1).See submission by China (g/SPS/W/162/rev.1).

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XiV. eXaMinaTion oF THe relaTionSHiP BeTWeen CerTain arTiCleS

94. in the context of the review, several Members suggested that the Committee could clarify the relationship among various articles of the agreement, with priority placed on the examination of the relationship between articles 2.1 and 5.6 relating to no more trade restrictive than necessary.56 it was also suggested that the Committee clarify the relationship between articles 2.2, 2.3, 3.4 and 5.6 and the implementation of these. it was noted that the work of the Committee would benefit from specific submissions from Members regarding their experiences and concerns.


• The Committee should consider examining the relationship between various Articles of the SPS Agreement, with a focus on those specifically identified by Members, including the relationship between Articles 2.1 and 5.6 relating to no more trade restrictive than necessary.


XV. UndUe delaYS

96. The Committee discussed the need to broadly consider the issue of undue delays in the context of the SPS agreement, rather than to confine discussion on this topic to a narrow subset of issues.57 Many Members supported Uruguay’s proposal to encourage discussion of this subject, particularly in the context of the review.


• The Committee should consider how to ensure the timely implementation of various provisions of the SPS Agreement in specific circumstances, so as to avoid unnecessary delays, inter alia, in the recognition of equivalence; in the adaptation of measures to the pest or disease status of a trading partner; in the completion of risk assessments related to the granting of market access; in the operation of control, inspection and approval procedures; and in the suspension or adjustment of measures when SPS conditions have changed.


56 See submissions by the United States (g/SPS/W/163) and new zealand (g/SPS/W/168). See submissions by the United States (g/SPS/W/163) and new zealand (g/SPS/W/168).57 See proposals by Uruguay (g/SPS/W/160 & 169). See proposals by Uruguay (g/SPS/W/160 & 169).

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XVi. good regUlaTorY PraCTiCe

98. Some Members noted that problems related to gaining market access were directly linked to failure to comply in a timely fashion with certain obligations laid down in the SPS agreement. Mexico proposed that the Committee consider developing guidelines that would promote practical implementation of specific provisions of the SPS agreement.58 This type of guideline on good regulatory practices would enable Members to check, before definitively issuing their respective sanitary and phytosanitary measures, that the substantive obligations laid down by the SPS agreement had been fulfilled.


• The Committee should consider how to facilitate Member’s practical implementation of specific provisions of the SPS Agreement, including through the possible identification of good regulatory practices.


XVii. arTiCle 8 and anneX C

100. during the discussions related to the review, the european Communities suggested that a discussion on issues related to implementation of control measures would be useful to clarify ambiguity regarding who should bear the cost of Members’ inspections. The european Communities drew attention to the increasing number of requests for inspection visits and the resource intensive nature of these visits. The european Communities suggested that the Committee should discuss the possibility of developing common practices in this regard.


• The Committee should consider the most effective way of facilitating the implementation of Article 8 and Annex C of the SPS Agreement, with a focus on those problems identified by Members, including the issue of costs related to inspection visits and conformity assessment. Members are invited to provide information regarding their experiences in this regard and to submit specific suggestions for consideration by the Committee.

XViii. WorK PrograMMe

102. as a result of the Second review of the operation and implementation of the agreement, the Committee agreed to continue to pursue work on equivalence,

58 See g/SPS/W/166. See g/SPS/W/166.

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transparency, monitoring of international standards, technical assistance, special and differential treatment and regionalization. These issues, along with specific trade concerns, will remain as standing agenda items for future Committee meetings.

103. The Committee also agreed to pursue work on new issues raised by Members during the review including co-operation with the Codex, iPPC and oie (paragraph 93), clarification of the definition of certain terms (paragraph 95), examination of the relationship between articles 2.1 and 5.6 (paragraph 97), undue delays (paragraph 99), good regulatory practice (paragraph 101), and article 8 and annex C (paragraph 103). The work of the Committee on these issues is to be based on information provided by Members regarding their experiences and on specific suggestions submitted by Members for consideration by the Committee. The issues may be considered individually, or where it would be more effective, several related issues may be considered together.

104. The recommendations arising from this review are compiled in the attachment.

aTTaCHMenT

Compilation of recommendations contained in the report

a. ConSiSTenCY (arTiCle 5.5)

1. The Committee should undertake another review of the operation of the guidelines to further the practical implementation of article 5.5 whenever Members identify the need, and in any case not later than december 2008.

2. Members are encouraged to provide information regarding their experiences in the implementation of article 5.5 and in the use of the guidelines (g/SPS/15).

B. eQUiValenCe (arTiCle 4)

3. The Committee should maintain equivalence as a standing item of the agenda for its regular meetings.

4. Members are encouraged to provide information regarding their experiences in the implementation of article 4 and in the use of the guidance developed by the Committee (g/SPS/19/rev.2). in particular, Members are encouraged to notify any agreements reached on the recognition of equivalence in accordance with the agreed procedure.

5. The relevant international organizations are invited to keep the Committee informed of any work they undertake with regard to the recognition of equivalence.

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C. TranSParenCY (arTiCle 7 and anneX B)

6. The Committee should maintain transparency as a standing item of the agenda for its regular meetings.

7. Members should ensure their full implementation of the transparency provisions of the SPS agreement, including those relating to the publishing and notifying of draft measure at a sufficiently early stage to allow comments to be made and taken into consideration, publication of measures, and establishment of effective national notification authorities and enquiry points.

8. developing country Members should clearly identify specific problems they face in implementing the transparency provisions of the agreement. assistance should be provided to least developed and developing country Members in order to enable them to fully implement the transparency provisions and to make use of the benefits associated with transparency.

9. recognizing that the recommended procedures established by the Committee (g/SPS/7/rev.2), while not creating legal obligations, can facilitate Members’ implementation of the provisions of the SPS agreement, the Committee should consider whether further recommendations could be beneficial, inter alia:

(a) to ensure that an adequate period of time is provided to receive and consider comments from Members;

(b) to encourage advance notification of regulatory calendars or programmes, where they exist;

(c) to encourage transparency regarding the use of the relevant international standards.

10. Members welcome the development of an SPS information management system by the Secretariat.

d. MoniToring THe USe oF inTernaTional STandardS (arTiCleS 3.5 and 12.4)

11. The Committee should continue to monitor the use of international standards at each of its regular meetings.

e. TeCHniCal aSSiSTanCe (arTiCle 9)

12. The Committee should maintain technical assistance as a standing item of the agenda of its regular meetings.

13. Members requiring technical assistance are encouraged to identify their specific needs in a clear and detailed manner that will permit these needs to be effectively addressed.

14. Members providing technical assistance are encouraged to keep the

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Committee informed of specific programmes of assistance.

15. Members are encouraged to report on the effectiveness of the technical assistance they have received. on the basis of this information, and information on the experiences of Members in the provision of technical assistance, the Committee may wish to consider identifying best practices in the area of SPS-related technical assistance.

16. Members are invited to share information on their experiences regarding the use of the tools developed by the Secretariat to assist Members with the understanding and implementation of the SPS agreement.

17. The Secretariat is requested to keep the Committee informed of its relevant technical assistance activities and of the activities of the Standards and Trade development Facility.

18. The observer organizations are invited to keep the Committee informed of their capacity building activities relevant to the SPS agreement.

F. SPeCial and diFFerenTial TreaTMenT (arTiCle 10)

19. The Committee should maintain special and differential treatment as a standing item of the agenda for its regular meetings.

20. The Committee should continue to consider specific, concrete actions to address the problems faced by least developed and developing country Members in the implementation of the SPS agreement and in making use of the benefits of the agreement.

21. Members are encouraged to provide information regarding the special and differential treatment or technical assistance they have provided in response to specific needs identified by Members in accordance with the procedure adopted by the Committee (g/SPS/33).

g. regionalizaTion (arTiCle 6)

22. The Committee should maintain regionalization as a standing item of the agenda for its regular meetings.

23. The Committee should develop a proposal for a decision on the effective application of article 6, taking as the point of departure the various proposals submitted by Members and discussions in the Committee.

24. Members are encouraged to provide information on their experiences in the implementation of article 6.

25. The observer organizations are invited to keep the Committee informed of their activities relevant to the recognition of pest- or disease-free areas or areas of low pest or disease prevalence.

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H. SPeCiFiC Trade ConCernS

26. The Committee should continue to consider specific trade concerns raised by Members as a standing item of the agenda of its regular meetings.

27. Members are encouraged to make use of this opportunity to identify specific trade problems and to seek to find mutually satisfactory resolutions of these problems.

28. Members are encouraged to inform the Committee of all specific trade concerns resolved.

29. The Secretariat is requested to continue to provide regularly updated information on the specific trade concerns considered by the Committee.

i. USe oF ad HoC ConSUlTaTionS

30. Members are encouraged to make use of the possibility for ad hoc consultations, including through the good offices of the Chairperson of the SPS Committee, to facilitate the resolution of specific trade concerns.

J. Co-oPeraTion WiTH THe CodeX, oie and iPPC

31. The Committee should further clarify the relationship between the Committee and the Codex, oie and iPPC with a view to facilitating the implementation of the SPS agreement while avoiding duplication of activities.

32. Members are invited to provide information regarding their experiences in this regard and to submit specific suggestions for consideration by the Committee.

K. ClariFiCaTion oF deFiniTion oF TerMS

33. The Committee should consider clarification of the terms “measures” and “regulations” as contained in the SPS agreement.

l. eXaMinaTion oF THe relaTionSHiP BeTWeen CerTain arTiCleS

34. The Committee should consider examining the relationship between various articles of the SPS agreement, with a focus on those specifically identified by Members, including the relationship between articles 2.1 and 5.6 relating to no more trade restrictive than necessary.


M. UndUe delaYS

36. The Committee should consider how to ensure the timely implementation of various provisions of the SPS agreement in specific circumstances, so as to avoid unnecessary delays, inter alia, in the recognition of equivalence; in the adaptation

423WTo BiSd 2005


of measures to the pest or disease status of a trading partner; in the completion of risk assessments related to the granting of market access; in the operation of control, inspection and approval procedures; and in the suspension or adjustment of measures, when SPS conditions have changed.


n. good regUlaTorY PraCTiCe

38. The Committee should consider how to facilitate Member’s practical implementation of specific provisions of the SPS agreement, including through the possible identification of good regulatory practices.


o. arTiCle 8 and anneX C

40. The Committee should consider the most effective way of facilitating the implementation of article 8 and annex C of the SPS agreement, with a focus on those problems identified by Members, including the issue of costs related to inspection visits and conformity assessment. Members are invited to provide information regarding their experiences in this regard and to submit specific suggestions for consideration by the Committee.

424 WTo BiSd 2005

aP

Pen

diX

a

Sum

mar

y of

maj

or S

PS

Com

mitt

ee a

ctiv

ities

Sub

ject

Yea

rTy

pe o

f act

ivit

yr

elat

ed d

ocum

ents

Con

sist

ency

2000

Com

mit

tee

dec

isio

ng

/SP

S/1

5

equ

ival

ence

2004

Com

mit

tee

dec

isio

ng

/SP

S/1

9/r

ev.1

and

rev

.2

impl

emen

tati

on o

f th

e a

gree

men

t- S

peci

fic

Tra

de

Con

cern

s

2000

-200

5S

umm

ary

docu

men

t of

spec

ific

trad

e co

ncer

nsg

/SP

S/g

en

/204

/rev

.5 a

nd a

dd. 1

-3.

Mon

itor

ing

inte

rnat

iona

l S

tand

ards

1999

Pro

cedu

re e

xten

ded

g/S

PS

/14

1999

ann

ual r

epor

tg

/SP

S/1

3

2000

ann

ual r

epor

tg

/SP

S/1

6

2001

ann

ual r

epor

t g

/SP

S/1

8

2002

ann

ual r

epor

tg

/SP

S/2

1

2003

ann

ual r

epor

tg

/SP

S/2

8

2003

Pro

cedu

re e

xten

ded

g/S

PS

/25

2004

ann

ual r

epor

tg

/SP

S/3

1

2004

init

iati

on o

f C

odex

trus

t fun

d

2004

init

iati

on o

f iP

PC

trus

t fun

d

2004

init

iati

on o

f o

ie tr

ust f

unds

2004

Mod

ifica

tion

of

tim

efra

me

for

incl

usio

n of

it

ems

conc

erni

ng h

arm

oniz

atio

n on

SP

S

Com

mit

tee

agen

da

g/S

PS

/11/

rev

.1

2005

dra

ft a

nnua

l rep

ort

g/S

PS

/W/1

74

reg

iona

liza

tion

2003

-200

5in

form

al C

omm

itte

e m

eeti

ngs

rev

iew

of

the

ope

rati

on a

nd

impl

emen

tati

on o

f th

e S

PS

a

gree

men

t

2005

rep

ort o

n th

e r

evie

w o

f th

e op

erat

ion

and

impl

emen

tati

on o

f th

e S

PS

agr

eem

ent

g/S

PS

/36

Spe

cial

and

dif

fere

ntia

l T

reat

men

t20

03a

dopt

ion

in p

rinc

iple

of

tran

spar

ency

pr

opos

alg

/SP

S/W

/127

425WTo BiSd 2005

Sub

ject

Yea

rTy

pe o

f act

ivit

yr

elat

ed d

ocum

ents

Spe

cial

and

dif

fere

ntia

l T

reat

men

t20

04C

omm

itte

e d

ecis

ion

on P

roce

dure

to

enh

ance

Tra

nspa

renc

y of

Spe

cial

and

d

iffe

rent

ial T

reat

men

t in

favo

ur o

f d

evel

opin

g C

ount

ry M

embe

rs

g/S

PS

/33

2005

Pro

posa

ls a

nd p

rogr

ess

on s

peci

al a

nd

diff

eren

tial

trea

tmen

tg

/SP

S/g

en

/543

, g/S

PS

/W/1

75, g

/SP

S/W

/175

/r

ev.1

and

rev

.2

2005

rep

ort o

n pr

opos

als

for

spec

ial a

nd

diff

eren

tial

trea

tmen

tg

/SP

S/3

5

Tech

nica

l ass

ista

nce

1999

Que

stio

nnai

reg

/SP

S/W

/101

; g/S

PS

/ge

n/1

43/r

ev.1

and

add

enda

1999

Spe

cial

Mee

ting

on

Tra

nspa

renc

yg

/SP

S/r

/16

2000

Wor

ksho

p: «

SP

S r

isk

ana

lysi

s»g

/SP

S/g

en

/209

Cd

-ro

M

2001

Que

stio

nnai

reg

/SP

S/W

/113

; g/S

PS

/ge

n/2

95 a

nd a

dden

da.

2001

Wor

ksho

p: «

inte

rnat

iona

l Sta

ndar

d-se

ttin

g o

rgan

izat

ions

: P

roce

ss a

nd P

arti

cipa

tion

»g

/SP

S/g

en

/250

2003

Spe

cial

enq

uiry

Poi

nt M

eeti

ngg

/SP

S/g

en

/458

; g/S

PS

/r/3

2

2004

ado

ptio

n of

ST

dF

Bus

ines

s P

lan

by p

artn

er

agen

cies

and

ove

rvie

w o

f pr

ojec

t act

ivit

ies

g/S

PS

/ge

n/5

23

2005

rev

iew

of

stan

dard

s re

late

d is

sues

iden

tified

in

the

inte

grat

ed f

ram

ewor

k di

agno

stic

trad

e in

tegr

atio

n st

udie

s

g/S

PS

/ge

n/5

45

Tra

nspa

renc

y20

00

2003

(r

evis

ion)

Han

dboo

k: «

How

to a

pply

the

Tra

nspa

renc

y P

rovi

sion

s of

the

SP

S a

gree

men

t»

http

://w

ww

.wto

.org

/eng

lish

/tra

top_

e/sp

s_e/

spsh

and_

e.do

c

http

://w

ww

.wto

.org

/eng

lish

/tra

top_

e/sp

s_e/

spsh

and_

e.pd

f20

00

2003

(r

evis

ion)

Que

stio

nnai

re o

n S

PS

-rel

ated

web

site

sg

/SP

S/W

/102

; g/S

PS

/ge

n/1

44/r

ev.1

and

add

enda

g

/SP

S/W

/102

/rev

.1

http

://w

ww

.wto

.org

/eng

lish

/tra

top_

e/sp

s_e/

spsl

inks

_e.

htm

2002

rev

ised

rec

omm

ende

d pr

oced

ures

g/S

PS

/7/r

ev.2

2004

new

mec

hani

sm o

n un

offi

cial

tran

slat

ions

g/S

PS

/ge

n/4

87

2005

enq

uiry

poi

nt in

form

atio

n -

upda

teg

/SP

S/e

nQ

/18

and

add

.1

2005

nat

iona

l not

ifica

tion

aut

hori

ty -

upd

ate

g/S

PS

/nn

a/8

and

add

.1

426 WTo BiSd 2005

aPP

en

diX

B

WT

o d

ispu

tes

invo

king

the

SPS

agr

eem

ent

Sinc

e 1

Janu

ary

1995

, vio

latio

ns o

f th

e SP

S a

gree

men

t ha

ve b

een

alle

ged

in t

he f

ollo

win

g in

voca

tions

of

the

form

al d

ispu

te s

ettle

men

t pr

ovis

ions

of

the

WT

o.

Tho

se w

hich

hav

e be

en r

efer

red

to a

pan

el a

re h

ighl

ight

ed.

dS

n

umbe

rPa

rtie

s an

d na

ture

of

com

plai

ntPa

nel r

epor

t / a

ppel

late

B

ody

rep

ort c

ircu

latio

nC

omm

ents

1W

T/d

S3

US

com

plai

nt a

gain

st K

orea

’s in

spec

tion

proc

e-du

res

for

fres

h fr

uits

Mut

ually

sat

isfa

ctor

y so

lutio

n no

tified

in J

uly

2001

(g

/SP

S/g

en

/265

)2

WT

/dS

41U

S c

ompl

aint

aga

inst

Kor

ea’s

insp

ectio

n pr

oce-

dure

s fo

r fr

esh

frui

tsM

utua

lly s

atis

fact

ory

solu

tion

notifi

ed in

Jul

y 20

01

(g/S

PS

/ge

n/2

65)

3W

T/d

S5

US

com

plai

nt a

gain

st K

orea

’s s

helf

-lif

e re

quir

e-m

ents

for

fro

zen

proc

esse

d m

eats

and

oth

er

prod

ucts

Mut

ually

agr

eed

solu

tion

notifi

ed in

Jul

y 19

95.

4W

T/d

S18

Can

ada’

s co

mpl

aint

aga

inst

aus

tral

ia’s

impo

rt

rest

rict

ions

on

fres

h, c

hille

d or

fro

zen

salm

ona

ustr

alia

- S

alm

on

WT

/dS

18/r

(19

98)

WT

/dS

18/a

B/r

(19

98)

WT

/dS

18/r

W (

2000

)

Mut

ually

agr

eed

solu

tion

notifi

ed in

May

200

0.

5W

T/d

S21

US

com

plai

nt a

gain

st a

ustr

alia

’s im

port

res

tric

-tio

ns o

n fr

esh,

chi

lled

or f

roze

n sa

lmon

aus

tral

ia -

Sal

mon

ids

Mut

ually

agr

eed

settl

emen

t not

ified

in n

ovem

ber

2000

.

6W

T/d

S20

Can

ada’

s co

mpl

aint

aga

inst

Kor

ea’s

res

tric

tions

on

trea

tmen

t met

hods

for

bot

tled

wat

erM

utua

lly a

gree

d so

lutio

n no

tified

in a

pril

1996

.

7W

T/d

S26

US

com

plai

nt a

gain

st e

C’s

pro

hibi

tion

of m

eat

from

ani

mal

s tr

eate

d w

ith g

row

th-p

rom

otin

g ho

rmon

ese

C –

Hor

mon

es (

US

)

WT

/dS

26/r

/US

a (

1997

)W

T/d

S26

/aB

/r (

1998

)W

T/d

S26

/ar

B (

1990

)

Sus

pens

ion

of c

once

ssio

ns a

utho

rize

d on

26

July

19

99.

8W

T/d

S48

Can

ada’

s co

mpl

aint

aga

inst

eC

’s p

rohi

bitio

n of

m

eat f

rom

ani

mal

s tr

eate

d w

ith g

row

th-p

rom

otin

g ho

rmon

ese

C –

Hor

mon

es (

Can

ada)

WT

/dS

48/r

/Ca

n (

1997

)W

T/d

S48

/aB

/r (

1998

)W

T/d

S48

/ar

B (

1999

)

Sam

e pa

nel h

andl

ed b

oth

com

plai

nts.

See

abo

ve.

427WTo BiSd 2005

dS

n

umbe

rPa

rtie

s an

d na

ture

of

com

plai

ntPa

nel r

epor

t / a

ppel

late

B

ody

rep

ort c

ircu

latio

nC

omm

ents

9W

T/d

S76

US

com

plai

nt a

gain

st J

apan

’s «

vari

etal

test

ing»

re

quir

emen

t for

fre

sh f

ruits

Japa

n –

agr

icul

tura

l Pro

duct

s ii

WT

/dS

76/r

(19

98)

WT

/dS

76/a

B/r

(19

99)

Mut

ually

agr

eed

solu

tion

notifi

ed in

Sep

tem

ber

2001

.

10W

T/d

S96

eC

com

plai

nt a

gain

st i

ndia

’s q

uant

itativ

e re

stri

c-tio

ns o

n ag

ricu

ltura

l and

oth

er p

rodu

cts

Mut

ually

agr

eed

solu

tion

notifi

ed in

apr

il 19

98.

11W

T/d

S10

0e

C c

ompl

aint

aga

inst

US

res

tric

tions

on

poul

try

impo

rts

Con

sulta

tions

req

uest

ed o

n 18

aug

ust 1

997;

pen

d-in

g.12

WT

/dS

133

Sw

iss

com

plai

nt a

gain

st S

lova

kia’

s B

Se

-rel

ated

re

stri

ctio

ns o

n ca

ttle

and

mea

tC

onsu

ltatio

ns r

eque

sted

on

11 M

ay 1

998;

pen

ding

.

13W

T/d

S13

4in

dia’

s co

mpl

aint

aga

inst

eC

res

tric

tions

on

rice

im

port

sC

onsu

ltatio

ns r

eque

sted

on

25 M

ay 1

998;

pen

ding

.

14W

T/d

S13

5C

anad

a’s

com

plai

nt a

gain

st e

C (

Fren

ch)

mea

sure

s af

fect

ing

asbe

stos

eC

- a

sbes

tos

WT

/dS

/135

/r (

2000

) W

T/d

S/1

35/a

B/r

(20

01)

SP

S a

gree

men

t not

invo

ked

in th

e re

port

s.

15W

T/d

S13

7C

anad

a’s

com

plai

nt a

gain

st e

C r

estr

ictio

ns d

ue to

pi

ne w

ood

nem

atod

esC

onsu

ltatio

ns r

eque

sted

on

17 J

une

1998

; pen

ding

.

16W

T/d

S14

4C

anad

a’s

com

plai

nt a

gain

st U

S s

tate

res

tric

tions

on

mov

emen

t of

Can

adia

n tr

ucks

car

ryin

g liv

e an

imal

s an

d gr

ains

Con

sulta

tions

req

uest

ed o

n 25

Sep

tem

ber

1998

; pe

ndin

g.

17W

T/d

S20

3U

S c

ompl

aint

aga

inst

Mex

ico

on m

easu

res

affe

ct-

ing

trad

e in

live

sw

ine

Con

sulta

tions

req

uest

ed o

n 10

Jul

y 20

00; p

endi

ng.

18W

T/d

S20

5T

hai c

ompl

aint

aga

inst

egy

pt’s

gM

o-r

elat

ed p

ro-

hibi

tion

on im

port

s of

can

ned

tuna

with

soy

bean

oi

l

Con

sulta

tions

req

uest

ed o

n 22

Sep

tem

ber

2000

; pe

ndin

g.

19W

T/d

S23

7e

cuad

or’s

com

plai

nt a

gain

st T

urke

y’s

impo

rt

requ

irem

ents

for

fre

sh f

ruit,

esp

ecia

lly b

anan

asTu

rkey

– F

resh

Fru

it im

port

Pro

cedu

res

Mut

ually

agr

eed

solu

tion

notifi

ed in

nov

embe

r 20

02.

20W

T/d

S24

5U

S c

ompl

aint

aga

inst

Jap

an’s

res

tric

tions

on

appl

es d

ue to

fire

blig

htJa

pan

- app

les

WT

/dS

245/

r (

2003

)W

T/d

S24

5/a

B/r

(20

03)

WT

/dS

245/

rW (

2005

)

art

icle

21.

5 (p

endi

ng)

and

art

icle

22.

6 (s

uspe

n-de

d) p

anel

s es

tabl

ishe

d in

Jul

y 20

04.

21W

T/d

S25

6H

unga

rian

com

plai

nt a

gain

st T

urke

y’s

rest

rict

ions

on

impo

rts

of p

et f

ood

(BS

e)

Con

sulta

tions

req

uest

ed o

n 3

May

200

2; p

endi

ng.

428 WTo BiSd 2005

dS

n

umbe

rPa

rtie

s an

d na

ture

of

com

plai

ntPa

nel r

epor

t / a

ppel

late

B

ody

rep

ort c

ircu

latio

nC

omm

ents

22W

T/d

S27

0P

hilip

pine

com

plai

nt a

gain

st a

ustr

alia

’s r

estr

ic-

tions

on

fres

h fr

uits

and

veg

etab

les,

incl

udin

g ba

nana

sa

ustr

alia

- F

resh

Fru

it an

d V

eget

able

s

Pane

l est

ablis

hed

aug

ust 2

003.

23

WT

/dS

271

Phi

lippi

ne c

ompl

aint

aga

inst

aus

tral

ia’s

res

tric

-tio

ns o

n pi

neap

ple

Con

sulta

tions

req

uest

ed o

n 18

oct

ober

200

2;

pend

ing.

24W

T/d

S27

9e

C c

ompl

aint

aga

inst

ind

ia’s

exp

ort a

nd i

mpo

rt

Polic

yC

onsu

ltatio

ns r

eque

sted

on

23 d

ecem

ber

2002

; pe

ndin

g.25

WT

/dS

284

nic

arag

ua c

ompl

aint

aga

inst

Mex

ico’

s ph

ytos

ani-

tary

res

tric

tions

on

blac

k be

ans

Mut

ually

agr

eed

solu

tion

notifi

ed in

Mar

ch 2

004.

26W

T/d

S28

7e

C c

ompl

aint

aga

inst

aus

tral

ian

quar

antin

e re

gim

ea

ustr

alia

– Q

uara

ntin

e r

egim

e

Pane

l est

ablis

hed

nov

embe

r 20

03.

27W

T/d

S29

1U

S c

ompl

aint

aga

inst

eC

on

gM

o a

ppro

vals

eC

– a

ppro

val a

nd M

arke

ting

of B

iote

ch P

rod-

ucts

Pane

l est

ablis

hed

aug

ust 2

003.

Sam

e pa

nel t

o ha

ndle

thre

e co

mpl

aint

s.

28W

T/d

S29

2C

anad

ian

com

plai

nt a

gain

st e

C o

n g

Mo

app

rov-

als

eC

– a

ppro

val a

nd M

arke

ting

of B

iote

ch P

rod-

ucts

See

abo

ve.

29W

T/d

S29

3a

rgen

tina

com

plai

nt a

gain

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list of SPS Committee documents from Members and other relevant documents, 1999-2004

a. Comments/proposals regarding Consistency (article 5.5)

Year Member Title/Subject Symbol2000 egypt Comments on the proposed guidelines to

further the practical implementation of article 5.5

g/SPS/W/106

SPS Committee Guidelines to further the practical implementation of Article 5.5

G/SPS/15

B1. Comments/proposals regarding the decision on equivalence (article 4)

Year Member Title/Subject Symbol2000 United States experiences of the United States regarding

the practical implementation of article 4g/SPS/gen/212

2001 argentina equivalence of control systems g/SPS/gen/268SPS Committee Decision on the implementation of Article

4 of the Agreement on the Application of Sanitary and Phytosanitary Measures

G/SPS/19

2002 argentina equivalence (paragraph 5 of the decision - guidelines for «accelerating» the procedure)

g/SPS/W/116

argentina interpretation of paragraph 7 of the decision on equivalence

g/SPS/W/117

argentina Clarification of paragraph 5 of the decision on equivalence

g/SPS/W/123

australia interpretation of paragraphs 5, 6 and 7 of decision g/SPS/19 on the implementation of article 4 of the SPS agreement

g/SPS/gen/331

new zealand equivalence (background information and new zealand’s views on associated issues)

g/SPS/gen/326

2003 argentina Paragraph 5 of the decision on equivalence: guidance for accelerated procedures for the recognition of equivalence of products historically traded

g/SPS/W/123/add.1

argentina guideline for accelerated procedures for the recognition of equivalence of SPS measures (paragraph 5 of the decision)

g/SPSW/123/add.2

argentina Comments on the proposed clarification of paragraph 7 of the decision on equivalence

g/SPS/W/130

european Communities

Comments on argentina’s proposal (g/SPS/W/123/add.1)

JoB(03)/110

Chinese Taipei Comments on argentina’s proposal (g/SPS/W/123/add.1)

JoB(03)/114

2004 SPS Committee Revision: Decision on the implementation of Article 4 of the Agreement on the Application of Sanitary and Phytosanitary Measures

G/SPS/19/Rev.1 & Rev.2

430 WTo BiSd 2005


B2. information on Members’ experiences related to equivalence (article 4)

Year Member Title/Subject Symbol2001 australia an example of equivalence g/SPS/gen/243

Fiji experience on equivalence g/SPS/gen/238Japan experience of equivalence in the area of

sanitary and phytosanitary measuresg/SPS/gen/261

new zealand experiences in recognizing equivalence of phytosanitary measures

g/SPS/gen/232

Thailand experience with recognition of equivalence g/SPS/gen/2422002 european

Communitiesa practical example of implementation of the principle of equivalence

g/SPS/gen/304

SPS Committee Notification of determination of the recognition of equivalence of sanitary or phytosanitary measures

G/SPS/7/Rev.2/Add.1

2005 Brazil equivalence g/SPS/gen/586

C1. Comments/proposals regarding Transparency (article 7 and annex B)

Year Member Title/Subject Symbol1999 United States Transparency issues after 5 years of

implementation of the SPS agreementg/SPS/gen/147

United States Voluntary transparency –Thoughts from the US SPS enquiry point/notification authority

g/SPS/gen/152

SPS Committee Recommended notification procedures G/SPS/7/Rev.12001 new zealand enhancing transparency – Proposed

changes to the recommended notification procedures (g/SPS/7/rev.1)

g/SPS/W/112

2002 european Communities

Comments on transparency and in particular on g/SPS/W/112 (new zealand’s proposal for review of the notification procedure)

g/SPS/W/118

new zealand enhancing transparency: Proposed changes to the recommended notification procedures (g/SPS/7/rev.1)

g/SPS/W/112/rev.1

2003 China Proposal for amending the recommended transparency procedures relating to the comment period of SPS notifications

g/SPS/W/131 & Corr.1

China report of the analysis on SPS notifications in 2002

g/SPS/gen/378

China SPS and developing countries – Transparency: (article 10.1) «Pre-notification»

g/SPS/W/143

Cyprus, the Czech republic, estonia, Hungary, latvia, lithuania, Malta, Poland, Slovakia, Slovenia and the european Communities

Transparency – Joint communication g/SPS/gen/426 & Corr.1

431WTo BiSd 2005


Year Member Title/Subject Symbol2003 Mauritania Proposal on the operation of enquiry points

for sanitary and phytosanitary measuresg/SPS/gen/457

Mexico Transparency (Proposed procedures to ensure compliance)

g/SPS/W/136

2004 China report of the analysis on SPS notifications in 2003

g/SPS/gen/498

Secretariat Unofficial translations G/SPS/GEN/4872005 Barbados establishment of a national enquiry point g/SPS/gen/554

Kazakhstan Transparency g/SPS/gen/544

C2. information/Proposals submitted in the Context of the Special Meetings on Transparency Provisions, 1999 and 2003

Year Member Title/Subject Symbol1999 Chile Case studies – enquiry point-national

notification authorities g/SPS/gen/154


Case studies – enquiry point-national notification authorities

g/SPS/gen/149

Malawi Case studies – enquiry point-national notification authorities

g/SPS/gen/150

Thailand Case studies – enquiry point-national notification authorities

g/SPS/gen/155

zambia Case studies – enquiry point-national notification authorities

g/SPS/gen/156

2000 new zealand The new zealand experience: operation of the SPS notification authority and SPS enquiry point

g/SPS/gen/161

Secretariat Summary of the special meeting of the SPS Committee on the transparency provisions of the SPS Agreement – 9 November 1999

G/SPS/R/16

2002 Malawi establishment of national WTo TBT/SPS enquiry Point – Project proposal

g/SPS/gen/349

SPS Committee Recommended notification procedures G/SPS/7/Rev.22003 argentina Special meeting on the strengthening

of national notification authorities (argentina’s experience)

g/SPS/gen/425 & Corr.1

australia Special meeting of the SPS Committee on enquiry points (australia’s experience)

g/SPS/gen/429


Comments from the eC notification authority and enquiry point to the issues proposed for consideration by the Secretariat and to Members reactions

g/SPS/gen/455


The eC notification authority and enquiry point for the WTo SPS agreement (operational procedures and recent experience)


Mexico Special meeting on the strengthening of national notification authorities (Mexico’s improvements to its national enquiry point)

g/SPS/gen/451

432 WTo BiSd 2005


Year Member Title/Subject Symbol2003 Pakistan Special meeting of the SPS Committee

on the operation of enquiry points-Communication by Pakistan’s department of Plant Protection

g/SPS/gen/436

Panama Special meeting on the strengthening of national enquiry points and notification authorities (Panama’s notification procedures)

g/SPS/gen/438

Secretariat Special meeting of the SPS Committee on the operation of enquiry points held on 31 october 2003 - Presentations by participants


Senegal Special meeting of the SPS Committee on the operation of enquiry points (Senegal’s experience)

g/SPS/gen/441

Thailand Thailand’s implementation of the transparency provisions under the SPS agreement

g/SPS/gen/450

2004 Secretariat Committee on Sanitary and Phytosanitary Measures - Special meeting of the SPS Committee on the operation of enquiry points Held on 31 October 2003

G/SPS/R/32

d. Comments/proposals regarding monitoring the use of international standards (article 3.5 and 12.4)

Year Member Title/Subject Symbol

1999 SPS Committee Annual report G/SPS/13Thailand Procedure to monitor the process of

international harmonization (infectious Bursal disease)

g/SPS/W/99

United States Procedure to monitor the process of international harmonization (definitions of quarantine pests)

g/SPS/W/97

2000 SPS Committee Annual report G/SPS/162001 South africa Monitoring/revision of an international

standard (african Horse Sickness)g/SPS/gen/289

SPS Committee Annual report G/SPS/182002 SPS Committee Annual report G/SPS/21

United States Procedure to monitor the process of international harmonization (avian influenza)

g/SPS/gen/343

2003 SPS Committee Annual report G/SPS/282004 new zealand Monitoring of international harmonization:

regionalizationg/SPS/W/151

SPS Committee Annual report G/SPS/31SPS Committee Revision of procedure G/SPS/11/Rev.1

2005 australia Monitoring of international harmonization: regionalization

g/SPS/W/172

Bahrain adoption of international Codex Standards g/SPS/gen/537China Monitoring the use of international

standards: iSPM 15g/SPS/gen/551

433WTo BiSd 2005


Year Member Title/Subject Symbol


implementation of iSPM 15 from 1 March 2005: new requirements for the import of wood packaging material and dunnage for a better protection against the introduction of pests or diseases in the european Union

g/SPS/gen/556

iPPC Status on international standards for phytosanitary measures

g/SPS/gen/571

Mauritius implementation of international standards g/SPS/gen/547oie new or revised standards being proposed

for adoption at the 73rd oie general Session (May 2005)

g/SPS/gen/552

SPS Committee Procedure to monitor the process of international harmonization - Draft Seventh Annual Report

g/SPS/W/174

e1. information regarding Members’ provision of technical assistance and training activities (article 9)

Year Member Title/Subject Symbol1999 australia Quarantine and other sanitary and

phytosanitary capacity building and training activities undertaken by australia

g/SPS/gen/124

Secretariat Questionnaire on technical assistance G/SPS/W/101Secretariat Summary of the replies to the questionnaire

on technical assistanceG/SPS/GEN/143

2000 Secretariat Summary of the replies to the questionnaire on technical assistance – Revision and addenda

G/SPS/GEN/143/Rev.1, Add.1 & Add.2

United States Technical assistance to developing countries provided by the United States

g/SPS/gen/181


Technical assistance to developing countries g/SPS/gen/244


g/SPS/gen/181/add.1

2002 new zealand Technical assistance provided to developing country Members by new zealand since 1 January 2002

g/SPS/gen/352


g/SPS/gen/181/add.2

2003 Mexico Sanitary and phytosanitary measures- Technical co-operation programmes

g/SPS/gen/382

Secretariat Summary of the replies to the questionnaire on technical assistance

G/SPS/GEN/143/Add.3


g/SPS/gen/181/add.3

2004 australia Technical assistance to developing countries provided by australia

g/SPS/gen/472


g/SPS/gen/181/add.4

434 WTo BiSd 2005


Year Member Title/Subject Symbol2005 new zealand Technical assistance provided to developing

country Members by new zealand since 1995

g/SPS/gen/352/rev.1


g/SPS/gen/181/add.5

e2. information regarding Members’ technical assistance and training activities needs (article 9)

Year Member Title/Subject Symbol2000 Jordan Technical assistance g/SPS/gen/199

Jordan request for technical assistance g/SPS/gen/208

zambia request for technical assistance g/SPS/gen/174

2001 Chile Technical assistance g/SPS/gen/287

gabon Technical assistance g/SPS/gen/257

Secretariat Questionnaire on technical assistance G/SPS/W/113

2002 Secretariat Responses to the questionnaire G/SPS/GEN/295

Belarus response to the questionnaire g/SPS/gen/295/add.7

China response to the questionnaire g/SPS/gen/295/add.24

Colombia response to the questionnaire g/SPS/gen/295/add.10

Costa rica response to the questionnaire g/SPS/gen/295/add.18

Costa rica response to the questionnaire g/SPS/gen/295/add.29

Cuba response to the questionnaire g/SPS/gen/295/add.13

Cyprus response to the questionnaire g/SPS/gen/295/add.11

egypt response to the questionnaire g/SPS/gen/295/add.1

gambia response to the questionnaire g/SPS/gen/295/add.23

georgia response to the questionnaire g/SPS/gen/295/add.3

guatemala response to the questionnaire g/SPS/gen/295/add.22

Honduras response to the questionnaire g/SPS/gen/295/add.26

indonesia response to the questionnaire g/SPS/gen/295/add.6

Kenya response to the questionnaire g/SPS/gen/295/add.21

Maldives response to the questionnaire g/SPS/gen/295/add.15

435WTo BiSd 2005


Year Member Title/Subject Symbol2002 Mauritius response to the questionnaire g/SPS/gen/295/

add.27Morocco response to the questionnaire g/SPS/gen/295/

add.17Panama response to the questionnaire g/SPS/gen/295/

add.16Panama response to the questionnaire g/SPS/gen/295/

add.25Philippines response to the questionnaire g/SPS/gen/295/

add.14Saudi arabia response to the questionnaire g/SPS/gen/295/

add.8Senegal response to the questionnaire g/SPS/gen/295/

add.20 & rev.1South africa response to the questionnaire g/SPS/gen/295/

add.19 & rev.1Sri lanka response to the questionnaire g/SPS/gen/295/

add.2, rev.1 & rev.2

Thailand response to the questionnaire g/SPS/gen/295/add.9

Trinidad and Tobago

response to the questionnaire g/SPS/gen/295/add.4 & rev.1

Tunisia response to the questionnaire g/SPS/gen/295/add.12

Uganda response to the questionnaire g/SPS/gen/295/add.5

Yugoslavia response to the questionnaire g/SPS/gen/295/add.28

2003 Barbados response to the questionnaire g/SPS/gen/295/add.30

Cameroon response to the questionnaire g/SPS/gen/401

Cyprus response to the questionnaire g/SPS/gen/295/add.32

dominican republic

response to the questionnaire g/SPS/gen/295/add.33 & Corr.1

Paraguay response to the questionnaire g/SPS/gen/295/add.34

Peru response to the questionnaire g/SPS/gen/295/add.31

2004 antigua and Barbuda

response to the questionnaire g/SPS/gen/295/add.35

nicaragua response to the questionnaire g/SPS/gen/295/add.36 and Corr.1

2005 Peru Technical assistance g/SPS/gen/579

436 WTo BiSd 2005


F. Comments/proposals regarding special and differential treatment (article 10)

Year Member Title/Subject Symbol1999 egypt SPS agreement and developing countries g/SPS/gen/128

guatemala development and adaptation of sanitary and phytosanitary systems in developing countries for the purpose of complying with commitments under the SPS agreement

g/SPS/gen/157

2000 Cameroon Summary of Cameroon’s statements on SPS agreement and developing countries and technical assistance and cooperation

g/SPS/gen/192

india implementation of the provisions for special and differential treatment

g/SPS/gen/197

Thailand implementation of the provisions for special and differential treatment (availability of translations)

g/SPS/gen/190

2001 Brazil agreement on the application of SPS Measures (implementation proposal under paragraph 21)

g/SPS/W/108

2002 Canada enhancing transparency of special and differential treatment within the SPS agreement

g/SPS/W/127

egypt Comments on the Canadian proposal (Transparency)

g/SPS/gen/358

Secretariat Proposals on special and differential treatment referred to the SPS Committee

JOB(03)/100

2003 Japan Comments on the special and differential proposals set out in JoB(03)/100

JoB(03)/194

United States elaboration of the proposal to enhance transparency of special and differential treatment in favour of developing country Members

g/SPS/W/141

Secretariat Elaboration of the proposal to enhance transparency of special and differential treatment

G/SPS/W/132 & Rev.1

2004 antigua and Barbuda

elaboration of the proposal to enhance transparency of S&d treatment in favour of developing country Members

g/SPS/W/156

Canada elaboration of the proposal to enhance transparency of S&d treatment in favour of developing country Members

g/SPS/W/155

Papua new guinea

SPS and developing countries: Special and differential treatment, technical assistance, transparency

g/SPS/gen/469

Secretariat Elaboration of the proposal to enhance transparency of special and differential treatment

G/SPS/W/132/ Rev. 2 & Rev. 3

SPS Committee Committee Decision on Procedure to Enhance Transparency of Special and Differential Treatment in favour of Developing Country Members

G/SPS/33

437WTo BiSd 2005


Year Member Title/Subject Symbol2005 Secretariat Proposals and Progress on Special and

Differential Treatment – Background NoteG/SPS/GEN/543

Secretariat Draft report on proposals for special and differential treatment

G/SPS/W/175

Secretariat Idem - Revision G/SPS/W/175/Rev.1 &Rev.2

Secretariat Report on proposals for special and differential treatment

G/SPS/35

g1. Comments/proposals regarding regionalization (article 6)

Year Member Title/Subject Symbol1999 South africa article 6.2, 6.3 and annex a3(B):

recognition of the concept of pest- or disease-free areas as an international standard, guideline or recommendation

g/SPS/gen/139

2003 argentina implementation of the regionalization principle (experiences with recognition of plant pest-free areas)

g/SPS/gen/433

Chile Comments on article 6 of the SPS agreement (recognition procedures)

g/SPS/W/129


review of the SPS agreement – Update on adaptation to regional conditions

g/SPS/gen/461

Mexico Comments on article 6 of the SPS agreement (Procedures related to the recognition of disease-free areas)

g/SPS/gen/388

2004 Canada decision on the implementation of article 6 of the SPS agreement (Proposal)

g/SPS/W/145

Chile additional comments on article 6 of the SPS agreement (Proposed guidelines for the recognition procedure)

g/SPS/gen/381

Chile draft decision on the implementation of article 6 of the SPS agreement

g/SPS/W/140, rev.1 & rev.2

Chile Clarifications – regionalization and the need for guidelines to improve its implementation

g/SPS/W/164

Chile responses to questions from the Chairman of the WTo SPS Committee concerning regionalization

g/SPS/W/165


draft decision on the implementation of article 6 of the SPS agreement – Comments on the proposal of Chile (W/140/rev.1)

g/SPS/W/144

iPPC regionalization and the international Plant Protection Convention

g/SPS/gen/529

new zealand Monitoring of international harmonization: regionalization

g/SPS/W/151

Peru regionalization g/SPS/W/148United States regionalization (experiences and

observations)g/SPS/gen/477

438 WTo BiSd 2005


Year Member Title/Subject Symbol2005 australia Monitoring of international harmonization:

regionalizationg/SPS/W/172

Brazil improving the application of article 6 of the SPS agreement

g/SPS/W/177

Chile Proposal by Chile to further the discussion concerning the implementation of article 6 on regionalization

g/SPS/W/171


Clarification of article 6 of the SPS agreement

g/SPS/gen/588

iPPC regionalization (excerpts of the 7th Commission on Phytosanitary Measures report)

g/SPS/gen/568

oie recognition of member Countries Health Status

g/SPS/gen/542

oie new or revised standards being proposed for adoption at the 73rd oie general Session (May 2005)

g/SPS/gen/552

oie Chapter 1..3.5 – zoning and compartmentalization

g/SPS/gen/574

g2. information regarding Members’ experiences related to regionalization (article 6)

Year Member Title/Subject Symbol1999 Costa rica declaration of Costa rica as a country free

of classical swine feverg/SPS/gen/110

Costa rica declaration that Costa rica is a country free of newcastle disease, velogenic, viscerotropic form

g/SPS/gen/119

2000 indonesia declaration of disease-free status g/SPS/gen/1622001 argentina Foot-and-mouth disease measures affecting

exports of argentine productsg/SPS/gen/269 & rev.1

Canada Canadian BSe policy and related information

g/SPS/gen/245

Paraguay Country free from foot-and-mouth disease g/SPS/gen/2542002 argentina evolution of the national foot-and- mouth

disease eradication plan in argentinag/SPS/gen/315

argentina evolution of the national foot-and-mouth disease eradication plan in argentina

g/SPS/gen/323

Paraguay Statement made at the meeting of 7-8 november 2002 (newcastle disease)

g/SPS/gen/359

Paraguay Foot-and-mouth disease g/SPS/gen/360Paraguay Situation in Paraguay regarding the

programme to keep the country free of newcastle disease

g/SPS/gen/361

2003 argentina evolution of the foot-and-mouth disease eradication plan in argentina

g/SPS/gen/377

Chile Chile: Free of avian influenza g/SPS/gen/383Chinese Taipei eradication of foot-and-mouth disease in

Chinese Taipeig/SPS/gen/402 & Corr.1

Chinese Taipei approval of foot-and-mouth disease -free with vaccination status

g/SPS/gen/419

439WTo BiSd 2005


Year Member Title/Subject Symbol2003 Paraguay Foot-and-mouth disease (Paraguay’s

sanitary policy regime)g/SPS/gen/413

Paraguay Health information concerning foot-and-mouth disease

g/SPS/gen/454

Peru Peru: Country free from «citrus black spot», «sweet orange scab» and «citrus canker»

g/SPS/gen/386

Peru Peru initiates a process for the declaration and recognition of areas free from and of low prevalence of fruit flies Ceratitis capitata and Anastrepha spp

g/SPS/gen/417

Peru Peru close to eradicating foot-and-mouth disease

g/SPS/gen/418

Peru Fruit fly-free areas and areas of low prevalence of fruit flies

g/SPS/gen/445

Peru Monitoring and control of poultry diseases g/SPS/gen/4462004 Colombia report on the situation and control of foot-

and-mouth diseaseg/SPS/gen/492

Costa rica establishment of areas free from Ceratitis Capitata

g/SPS/gen/527

Mexico regionalization: information for the recognition of fruit fly-free areas

g/SPS/gen/440

Paraguay Foot-and-mouth disease eradication programme

g/SPS/gen/505

United States regionalization g/SPS/gen/4772005 Brazil Pest free area of minas gerais state -

micosphaerella fijiensisg/SPS/gen/561

Brazil Pest Free area of Ceará State - Anastrepha grandis

g/SPS/gen/562

Brazil FMd – free zone – Brazilian experience on regionalization

g/SPS/gen/585

H. Comments/proposals regarding Monitoring implementation of the agreement (articles 12.1 and 12.2) – Specific trade concerns

Year Member Title/Subject Symbol1999 european

Communitiesimplementation of the SPS agreement – Trade Concerns

g/SPS/gen/132

2001 United States Specific Trade Concerns (g/SPS/gen/204/rev.1)

g/SPS/gen/265

440 WTo BiSd 2005


i. Comments/proposals regarding the Second review of the agreement

Year Member Title/Subject Symbol2004 argentina review of the operation and implementation

of the SPS agreementg/SPS/W/167

Canada issues for consideration as part of the second review of the operation and implementation of the SPS agreement – Further elaboration of issues for consideration

g/SPS/W/158

China Second review of the operation and implementation of the SPS agreement

g/SPS/W/162 and rev.1


review of the operation and implementation of the SPS agreement

g/SPS/W/159

Mexico Second review of the operation and implementation of the SPS agreement

g/SPS/W/166

new zealand Second review of the operation and implementation of the SPS agreement

g/SPS/W/150

new zealand The second review of the operation and implementation of the SPS agreement – Further elaboration of issues for consideration

g/SPS/W/157

new zealand Second review– Prioritization of issues for the future work of the SPS Committee

g/SPS/W/168

Secretariat Proposed process for the review of the operation and the implementation of the Agreement

G/SPS/W/147

Secretariat Review of the operation and implementation of the SPS Agreement – Submissions by Members of issues to be considered during the review

G/SPS/W/149

SPS Committee Process for the review of the operation and implementation of the Agreement – Decision by the Committee

G/SPS/32

Chinese Taipei Second review of the operation and implementation of the SPS agreement – Monitoring the use of international standards

g/SPS/W/161

United States review of the SPS agreement – Proposal for consideration

g/SPS/W/163

Uruguay Undue delays (review) g/SPS/W/1602005 Brazil improving the application of article 6 of

the SPS agreementg/SPS/W/177

Chile Second review of the operation and implementation of the SPS agreement

g/SPS/W/170

Chile Proposal by Chile to further the discussions concerning the implementation of article 6 on regionalization

g/SPS/W/171

Peru draft report of the Committee on the review of the operation and implementation of the SPS agreement

g/SPS/W/176

Secretariat Review of the operation and implementation of the SPS Agreement – Background document and Revision

G/SPS/GEN/510 and Rev.1

441WTo BiSd 2005


Year Member Title/Subject Symbol2005 Secretariat Review of the operation and

implementation of the SPS Agreement – Draft report

G/SPS/W/173&Corr.1

Secretariat Idem - Revision G/SPS/W/173/Rev.1

Secretariat Report on the review of the operation and implementation of the SPS Agreement

G/SPS/26

Uruguay Undue delays g/SPS/W/169

J. other relevant documents


CommunitiesCommunication from the Commission on the precautionary principle

g/SPS/gen/168


White paper on food safety g/SPS/gen/169

United States The role of the centers for epidemiology and animal health as an oie collaborating center for animal disease surveillance systems and risk analysis

g/SPS/gen/182

United States national regulatory measures related to trade in agricultural and food products modified by modern biotechnology

g/SPS/gen/186

2001 Canada The treatment of precaution in the SPS agreement

g/SPS/gen/246


european Council resolution on the precautionary principle

g/SPS/gen/225

Kuwait arab Scientific Veterinary association g/SPS/gen/279namibia SadC consultative forum on SPS/food

safety issues- declarations of the Windhoek Workshop on SPS/Food Safety – 20-22 november 2000

g/SPS/gen/272

new zealand Biosecurity risk analysis policy statement g/SPS/gen/233new zealand Biosecurity awareness programme g/SPS/gen/280new zealand development of a biosecurity strategy for

new zealandg/SPS/gen/284

new zealand new zealand pest risk assessment standard for plant biosecurity

g/SPS/gen/285

2002 argentina response from the european Commission to comments submitted by WTo Members under g/SPS/n/eeC/149 and 150

g/SPS/gen/354


Statement by the european Communities concerning notifications g/SPS/n/eeC/149 and g/SPS/n/eeC/150 and notifications g/TBT/n/eeC/6 and g/TBT/n/eeC/7

g/SPS/gen/297


response from the eC to comments submitted by WTo Members under either or both g/TBT/n/eeC/6 and g/SPS/n/eeC/149

g/SPS/gen/337

442 WTo BiSd 2005



Communitiesresponse from the eC to comments submitted by WTo Members under either or both g/TBT/n/eeC/7 and g/SPS/n/eeC/150


Korea Standards & Procedures for authorization of domestic-foreign official laboratories and for recognition of inspection certificates or certificates of laboratory test results

g/SPS/gen/318

Chinese Taipei relevant laws, decrees, regulations and administrative rulings of general application relating to SPS

g/SPS/gen/339& Corr.1

United States information on the process for development of United States SPS measures and explanation for the volume of recent United States SPS notifications

g/SPS/gen/311


response to the comments from argentina (g/SPS/gen/354)

g/SPS/gen/405

Mexico Communication from Mexico – Mexican official standards

g/SPS/gen/387

Venezuela executive report by Venezuela g/SPS/gen/4422004 european

Communitiesestablishment of the trade control and expert system (TraCeS)

g/SPS/gen/489

Mexico Communication from Mexico – Mexican official standards

g/SPS/gen/491

Peru Compliance with phytosanitary regulations for the importation into Peru of plants, plant products and other regulated articles

g/SPS/gen/484

2005 Cuba Measures implemented in the field of veterinary medicine

g/SPS/gen/538


Traceability of food, feed, food-producing animals, and any other substance intended to be, or expected to be, incorporated into a food or feed imported into the Community for placing on the market

g/SPS/gen/539


Questions and answers on the procedure to obtain import tolerances and the inclusion of active substances for plant protection uses in the european Communities list.

g/SPS/gen/557

oie official oie recognition of member countries’ health status

g/SPS/gen/542 & add.1

Secretariat Review of standards related issues identified in the integrated framework diagnostic trade integration studies

G/SPS/GEN/545

Secretariat Update on the operation of the STDF G/SPS/GEN/572

443WTo BiSd 2005

Committee on Subsidies and Countervailing Measures

COMMITTEE ON SUBSIDIES AND COUNTERVAILING MEASURES

eXTenSion Under arTiCle 27.4 oF THe agreeMenT on SUBSidieS and CoUnTerVailing MeaSUreS oF THe TranSiTion Period

Under arTiCle 27.2(B) For THe eliMinaTion oF eXPorT SUBSidieS

The following table lists all decisions adopted in 2005 relating to extensions under SCM article 27.4 of the transition period under article 27.2(b) for the elimination of export subsidies, pursuant to the procedures in g/SCM/39.

Member Programme decision of documentantigua and Barbuda Fiscal incentives act Cap 172 27 october 2005 g/SCM/50/add.3

antigua and Barbuda

Free Trade and Processing zone act no. 12 of 1994 27 october 2005 g/SCM/51/add.3

Barbados Fiscal incentive Programme 27 october 2005 g/SCM/52/add.3

Barbados export allowance 27 october 2005 g/SCM/53/add.3

Barbados research and development allowance 27 october 2005 g/SCM/54/add.3

Barbados international Business incentives 27 october 2005 g/SCM/55/add.3

Barbados Societies with restricted liability 27 october 2005 g/SCM/56/add.3

Belize Fiscal incentives act 27 october 2005 g/SCM/57/add.3

Belize export Processing zone act 27 october 2005 g/SCM/58/add.3

Belize Commercial Free zone act 27 october 2005 g/SCM/59/add.3

BelizeConditional duty exemptions Facility under the Treaty of Chaguaramas

27 october 2005 g/SCM/60/add.3

Costa rica Free zone regime 27 october 2005 g/SCM/61/add.3

Costa rica inward Processing regime 27 october 2005 g/SCM/62/add.3

dominica Fiscal incentives Programme 27 october 2005 g/SCM/63/add.3

dominican republic

law no. 8-90 to «Promote the establishment of new Free zones and expand existing ones


el Salvador export Processing zones and Marketing act, as amended 27 october 2005 g/SCM/65/add.3

Fiji Short-term export Profit deduction 27 october 2005 g/SCM/66/add.3

Fiji export Processing Factories/export Processing zones Scheme 27 october 2005 g/SCM/67/add.3

FijiThe income Tax act (Film Making and audio Visual incentive amendment decree 2000)


grenada Fiscal incentives act no. 41 of 1974 27 october 2005 g/SCM/69/add.3

444 WTo BiSd 2005


Member Programme decision of document

grenada Statutory rules and orders no. 37 of 1999 27 october 2005 g/SCM/70/add.3

grenada Qualified enterprises act no. 18 of 1978 27 october 2005 g/SCM/71/add.3

guatemala

exemption from Company Tax, Customs duties and other import Taxes for Companies under Special Customs regimes


guatemala

exemption from Company Tax, Customs duties and other import Taxes for the Production Process relating to activities of Managers and Users of Free zones


guatemala

exemption from Company Tax, Customs duties and other import Taxes for the Production Process of Commercial and industrial enterprises operating in the industrial and Free Trade zone

27 october 2005 g/SCM/74/add.3 & Corr.1

Jamaica export industry encouragement act 27 october 2005 g/SCM/75/add.3

& Corr.1

Jamaica Jamaica export Free zone act 27 october 2005 g/SCM/76/add.3 & Corr.1

Jamaica Foreign Sales Corporation act 27 october 2005 g/SCM/77/add.3 & Corr.1

Jamaica industrial incentives (Factory Construction) act 27 october 2005 g/SCM/78/add.3

& Corr.1

Jordan

Partial or Total exemption from income Tax of Profits generated from exports under law no. 57 of 1985, as amended


Mauritius export enterprise Scheme 27 october 2005 g/SCM/80/add.3

Mauritius Pioneer Status enterprise Scheme 27 october 2005 g/SCM/81/add.3

Mauritius export Promotion 27 october 2005 g/SCM/82/add.3

Mauritius Freeport Scheme 27 october 2005 g/SCM/83/add.3

Panama official industry register 27 october 2005 g/SCM/84/add.3

Panama export Processing zones 27 october 2005 g/SCM/85/add.3Papua new guinea Section 45 of the income Tax 27 october 2005 g/SCM/86/add.3

St. lucia Fiscal incentives act, no. 15 of 1974 27 october 2005 g/SCM/87/add.3

St. lucia Free zone act, no. 10 of 1999 27 october 2005 g/SCM/88/add.3

St. lucia Micro and Small Scale Business enterprises act, no. 19 of 1998 27 october 2005 g/SCM/89/add.3

St. Kitts and nevis

Fiscal incentives act no. 17 of 1974 27 october 2005 g/SCM/90/add.3

445WTo BiSd 2005

Committee on Subsidies and Countervailing Measures

Member Programme decision of documentSt. Vincent and The grenadines

Fiscal incentives act no. 5 of 1982, as amended 27 october 2005 g/SCM/91/add.3

& Corr.1

Uruguay automotive industry export Promotion regime 27 october 2005 g/SCM/92/add.3

COMMITTEE ON BUDGET, FINANCE AND ADMINISTRATION

Abstract of the Report Adopted by the General Council on 1-2 December 2005 (WT/BFA/82)

The director general is authorized to make budgetary expenditures of the Secretariat of the World Trade organization for 2006 (CHF 170,274,150), and for the appellate Body and its Secretariat for 2006 (CHF 4,726,000) amounting to a total of CHF 175,000,150.

This expenditure is to be financed by contributions amounting to CHF 173,700,000 and miscellaneous income estimated at CHF 1,300,150.

The contributions of the Members shall be assessed in accordance with the attached scale of contributions. Contributions from Members in respect of the 2006 budget are considered as due and payable in full as at 1 January 2006.

SCale oF ConTriBUTionS For 2006(Minimum contribution of 0.015%)

Member % CHF

Albania 0.017% 29,529 Angola 0.079% 137,223 AntiguaandBarbuda 0.015% 26,055 Argentina 0.360% 625,320 Armenia 0.015% 26,055 Australia 1.113% 1,933,281 Austria 1.382% 2,400,534 Bahrain 0.078% 135,486 Bangladesh 0.105% 182,385 Barbados 0.018% 31,266 Belgium 2.619% 4,549,203 Belize 0.015% 26,055 Benin 0.015% 26,055 Bolivia 0.023% 39,951 Botswana 0.033% 57,321 Brazil 0.869% 1,509,453 BruneiDarussalam 0.036% 62,532 Bulgaria 0.108% 187,596

446 WTo BiSd 2005


Member % CHF

BurkinaFaso 0.015% 26,055 Burundi 0.015% 26,055 Cambodia 0.029% 50,373 Cameroon 0.031% 53,847 Canada 3.830% 6,652,710 CentralAfricanRepublic 0.015% 26,055 Chad 0.015% 26,055 Chile 0.289% 501,993 China, People’s Republic of 4.089% 7,102,593 Colombia 0.195% 338,715 Congo 0.023% 39,951 CostaRica 0.098% 170,226 Côte d’Ivoire 0.060% 104,220 Croatia 0.146% 253,602 Cuba 0.058% 100,746 Cyprus 0.068% 118,116 CzechRepublic 0.561% 974,457 DemocraticRepublicoftheCongo 0.015% 26,055 Denmark 0.970% 1,684,890 Djibouti 0.015% 26,055 Dominica 0.015% 26,055 DominicanRepublic 0.119% 206,703 Ecuador 0.080% 138,960 Egypt 0.242% 420,354 ElSalvador 0.061% 105,957 Estonia 0.069% 119,853 EuropeanCommunities 0.000% -Fiji 0.015% 26,055 Finland 0.608% 1,056,096 FormerYugoslaveRepublicofMacedonia 0.024% 41,688 France 5.022% 8,723,214 Gabon 0.030% 52,110 Gambia 0.015% 26,055 Georgia 0.015% 26,055 Germany 8.807% 15,297,759 Ghana 0.040% 69,480 Greece 0.468% 812,916 Grenada 0.015% 26,055 Guatemala 0.065% 112,905 Guinea 0.015% 26,055 Guinea-Bissau 0.015% 26,055 Guyana 0.015% 26,055 Haiti 0.015% 26,055 Honduras 0.038% 66,006

447WTo BiSd 2005

Committee on Budget, Finance and administration

Member % CHF

Hong Kong, China 3.052% 5,301,324 Hungary 0.527% 915,399 Iceland 0.043% 74,691 India 0.913% 1,585,881 Indonesia 0.757% 1,314,909 Ireland 1.237% 2,148,669 Israel 0.548% 951,876 Italy 3.995% 6,939,315 Jamaica 0.052% 90,324 Japan 5.945% 10,326,465 Jordan 0.063% 109,431 Kenya 0.042% 72,954 Korea, Republic of 2.455% 4,264,335 Kuwait 0.200% 347,400 KyrgyzRepublic 0.015% 26,055 Latvia 0.053% 92,061 Lesotho 0.015% 26,055 Liechtenstein 0.025% 43,425 Lithuania 0.090% 156,330 Luxembourg 0.360% 625,320 Macao, China 0.066% 114,642 Madagascar 0.015% 26,055 Malawi 0.015% 26,055 Malaysia 1.273% 2,211,201 Maldives 0.015% 26,055 Mali 0.015% 26,055 Malta 0.046% 79,902 Mauritania 0.015% 26,055 Mauritius 0.037% 64,269 Mexico 2.289% 3,975,993 Moldova 0.015% 26,055 Mongolia 0.015% 26,055 Morocco 0.158% 274,446 Mozambique 0.016% 27,792 Myanmar, Union of 0.032% 55,584 Namibia 0.021% 36,477 Nepal 0.018% 31,266 Netherlands 3.342% 5,805,054 NewZealand 0.247% 429,039 Nicaragua 0.021% 36,477 Niger 0.015% 26,055 Nigeria 0.172% 298,764 Norway 0.841% 1,460,817 Oman 0.117% 203,229

448 WTo BiSd 2005


Member % CHF

Pakistan 0.153% 265,761 Panama 0.100% 173,700 Papua New Guinea 0.027% 46,899 Paraguay 0.036% 62,532 Peru 0.121% 210,177 Philippines 0.497% 863,289 Poland 0.747% 1,297,539 Portugal 0.548% 951,876 Qatar 0.108% 187,596 Romania 0.206% 357,822 Rwanda 0.015% 26,055 SaintLucia 0.015% 26,055 Saudi Arabia, Kingdom of 0.751% 1,304,487 Senegal 0.021% 36,477 SierraLeone 0.015% 26,055 Singapore 2.085% 3,621,645 SlovakRepublic 0.221% 383,877 Slovenia 0.161% 279,657 Solomon Islands 0.015% 26,055 SouthAfrica 0.466% 809,442 Spain 2.506% 4,352,922 SriLanka 0.088% 152,856 St.KittsandNevis 0.015% 26,055 St.VincentandtheGrenadines 0.015% 26,055 Suriname 0.015% 26,055 Swaziland 0.015% 26,055 Sweden 1.345% 2,336,265 Switzerland 1.423% 2,471,751 ChineseTaipei 1.894% 3,289,878 Tanzania 0.022% 38,214 Thailand 0.990% 1,719,630 Togo 0.015% 26,055 TrinidadandTobago 0.050% 86,850 Tunisia 0.127% 220,599 Turkey 0.709% 1,231,533 Uganda 0.015% 26,055 United Arab Emirates 0.633% 1,099,521 United Kingdom 5.564% 9,664,668 United States 15.410% 26,767,170 Uruguay 0.043% 74,691 Venezuela 0.306% 531,522 Zambia 0.015% 26,055 Zimbabwe 0.029% 50,373 TOTAL 100.00% 173,700,000

WTo BiSd 2005 449

Council for Trade-related aspects of intellectual Property rights-related aspects of intellectual Property rights

COunCil fOr TraDe-relaTeD asPeCTs Of inTelleCTual PrOPerTy righTs

MaldiVeS – eXTenSion oF THe TranSiTion Period Under arTiCle 66.1 oF THe TriPS agreeMenT

Decision of the Council for TRIPS of 15 June 2005 (IP/C/35)

The Council for Trade-related aspects of intellectual Property rights (the “Council for TriPS”),

Having regard to paragraph 1 of article 66 of the TriPS agreement;

Having regard to the request from the Maldives, dated 15 august 2004, for an extension of its transition period under article 66.1 of the TriPS agreement, including the attached note on the motivation of the request, contained in document iP/C/W/425;

Recognizing that the United nations’ general assembly resolutions 59/21059/210 and 59/209 of 20 december 2004 provide that the graduation of the Maldives fromgraduation of the Maldives from the group of least-developed countries will become effective on 21 december 2007;

Recognizing the exceptional circumstances faced by the Maldives and that this decision is without prejudice to future decisions of the Council for TriPS under article 66.1;

Decides that the Maldives shall not be required to apply the provisions of the TriPS agreement, other than articles 3, 4 and 5, until 20 december 2007.

eXTenSion oF THe TranSiTion Period Under arTiCle 66.1 For leaST-deVeloPed CoUnTrY MeMBerS

Decision of the Council for TRIPS of 29 November 2005 (IP/C/40)

The Council for Trade-related aspects of intellectual Property rights (the “Council for TriPS”),

Having regard to paragraph 1 of article 66 of the TriPS agreement (the “agreement”);

Recalling that, unless extended, the transition period granted to least-developed country Members under article 66.1 of the agreement will expire on 1 January 2006;

Having regard to the request from least-developed country Members of the World Trade organization (the “WTo”), dated 13 october 2005, for an extension of

450 WTo BiSd 2005


their transition period under article 66.1 of the agreement contained in document iP/C/W/457;

Recognizing the special needs and requirements of least-developed country Members, the economic, financial and administrative constraints that they continue to face, and their need for flexibility to create a viable technological base;

Recognizing the continuing needs of least-developed country Members for technical and financial cooperation so as to enable them to realize the cultural, social, technological and other developmental objectives of intellectual property protection;

Decides as follows:

i

Extension of the transition period under Article 66.1 of the Agreement for least-developed country Members

1. least-developed country Members shall not be required to apply the provisions of the agreement, other than articles 3, 4 and 5, until 1 July 2013, or until such a date on which they cease to be a least-developed country Member, whichever date is earlier.

ii

Enhanced technical cooperation for least-developed country Members

2. With a view to facilitating targeted technical and financial cooperation programmes, all the least-developed country Members will provide to the Council for TriPS, preferably by 1 January 2008, as much information as possible on their individual priority needs for technical and financial cooperation in order to assist them taking steps necessary to implement the TriPS agreement.

3. developed country Members shall provide technical and financial cooperation in favour of least-developed country Members in accordance with article 67 of the agreement in order to effectively address the needs identified in accordance with paragraph 2.

4. in order to assist least-developed country Members to draw up the information to be presented in accordance with paragraph 2, and with a view to making technical assistance and capacity building as effective and operational as possible, the WTo shall seek to enhance its cooperation with the World intellectual Property organization and with other relevant international organizations.

iii

General provisions

5. least-developed country Members will ensure that any changes in their

451WTo BiSd 2005

Waivers

laws, regulations and practice made during the additional transitional period do not result in a lesser degree of consistency with the provisions of the TriPS agreement.

6. This decision is without prejudice to the decision of the Council for TriPS of 27 June 2002 on “extension of the Transition Period under article 66.1 of the TriPS agreement for least-developed Country Members for Certain obligations with respect to Pharmaceutical Products” (iP/C/25), and to the right of least-developed country Members to seek further extensions of the period provided for in paragraph 1 of article 66 of the agreement.

WAIVERS

WaiVerS Under arTiCle iX oF THe WTo agreeMenT

during the period under review, the general Council granted the following waivers from obligations under the WTo agreements, which are still in effect.

MeMBer TYPe deCiSion oF eXPirY doCUMenT

albania implementation of specific commitments – extension of the staging period of implementation for a number of products

26 May 2005 • 1 January 2007 or 1 January 2009 for Part a of the annex

• 1 January 2005 or 1 January 2007 for Part B of the annex

WT/l/610

argentina introduction of Harmonized System 1996 changes into WTo Schedules of Tariff Concessions - extension of Time-limit

27 July 2005 30 april 2006 WT/l/618

Malaysia introduction of Harmonized System 1996 changes into WTo Schedules of Tariff Concessions - extension of Time-limit

27 July 2005 30 april 2006 WT/l/619

Panama introduction of Harmonized System 1996 changes into WTo Schedules of Tariff Concessions - extension of Time-limit

27 July 2005 30 april 2006 WT/l/620

452 WTo BiSd 2005


MeMBer TYPe deCiSion oF eXPirY doCUMenT

israel introduction of Harmonized System 1996 changes into WTo Schedules of Tariff Concessions - extension of Time-limit

1 december 2005

31 october 2006 WT/l/639

argentina, australia, Brazil, Bulgaria, Canada, China, Costa rica, Croatia, el Salvador, european Communities; Hong Kong, China; iceland, india, republic of Korea; Macao, China; Mexico, new zealand, nicaragua, norway, romania, Singapore, Switzerland, Chinese Taipei, Thailand, United States, and Uruguay

introduction of Harmonized System 2002 changes into WTo Schedules of Tariff Concessions

1 december 2005

31 december 2006 WT/l/638

WTo BiSd 2005 453

Committee on government Procurement

PLURILATERAL TRADE AGREEMENTS

COMMITTEE ON GOVERNMENT PROCUREMENT

ModaliTieS For THe negoTiaTionS on eXTenSion oF CoVerage and eliMinaTion oF diSCriMinaTorY MeaSUreS and PraCTiCeS

Decision of the Committee on Government Procurement on 21 July 2005 (GPA/79/Add.1)

The Committee on government Procurement,

Noting that the preparation of initial offers as called for by the Committee’s decision on Modalities for the negotiations on extension of Coverage and elimination of discriminatory Measures and Practices (gPa/79) requires extensive research and internal consultation and, therefore, is taking longer than initially foreseen;

Reaffirming the importance it attaches to the successful completion of these negotiations;

Decides that:

(i) each Party shall table its initial offer prior to the october meeting of the Committee (week of 10 october 2005) but not later than the Hong Kong Ministerial Conference (13-18 december 2005); and

(ii) the negotiations on extension of coverage and elimination of discriminatory measures as well as other aspects of the article XXiV:7 negotiations aim to be concluded by the end of 2006.

deCiSion PUrSUanT To arTiCle XXiV:6(a) oF THe agreeMenT on goVernMenT ProCUreMenT

Decision of the Committee on Government Procurement on 21 December 2005

(GPA/86)

The Committee on government Procurement,

Having regard to the provisions of paragraph 6(a) of article XXiV of the agreement on government Procurement;

Noting that, pursuant to the Committee’s decision of 16 december 2004 as set forth in document gPa/83, israel committed in its note to appendix i to reduce by 1 January 2006 its offsets to 20 per cent of the value of a contract;

454 WTo BiSd 2005


Having considered israel’s submission in document gPa/W/294, dated 18 July 2005, and having regard to the statements made by israel emphasizing the importance of offsets to its economy as a development tool;

Having considered israel’s proposal in document gPa/Mod/iSr/5, dated 12 december 2005, to further modify its note to appendix i, based on article XXiV:6(a);

Noting that israel has offered compensatory adjustments in the above-referenced proposal, pursuant to article XXiV:6(a), and that the Parties have accepted those adjustments;

Noting the long-standing views of several Parties that offsets are only transitional measures and that israel must eliminate its offsets; and

Noting the intention of israel to engage in consultations with the Parties, in the framework of the negotiations on the revision of the agreement on government Procurement under article XXiV:7, with a view to agreeing on a revised note, including a schedule to reduce its use of offsets,

Hereby decides as follows:

Article I

Paragraph 1(c) of israel’s note to appendix i shall be modified to read as follows:

“offsets in any form may be required up to 35 per cent of the contract going down to 30 per cent after five years, 28 per cent after ten years and 20 per cent after 13 years, beginning from the date israel implements the agreement.”

Article II

Paragraph 2(a) of israel’s note to appendix i shall be modified to read as follows:

“at the end of each period mentioned in paragraph 1(c), israel will submit a report concerning the implementation of this note.”

Article III

israel’s annex 4 shall be replaced by the text attached hereto.

Article IV

israel’s annexes 1, 2, 3 and 5, referring to the thresholds for construction services, shall be modified to read as follows:

“Threshold: 8,500,000 Sdr; during the period beginning from 1 January 2006 until 31 december 2008 the threshold shall be set at 5,000,000 Sdr.”

WTo BiSd 2005 455

Committee on government Procurement

Article V

israel’s note to appendix i, as modified by this decision, shall remain in force until the entry into force in israel of the revision of the agreement on government Procurement presently being negotiated under article XXiV:7 of the government Procurement agreement.

aPPendiX i

aTTaCHMenT1

anneX 4

Services

of the Universal list of Services, as contained in document MTn.gnS/W/120, the following services are included:

CPC Description

6112, 6122, 633, 886 Maintenance and repair services

641 Hotel and similar accommodation services

642-3 Food and beverage serving services

712 land transport services

73 Passenger transportation services

7471 Travel agency and tour operator services

752 Telecommunications services

821 real estate services involving own or leased property

83106 leasing or rental services concerning machinery and to 83109 equipment withoutoperator only

83203 leasing or rental services concerning personal and to 83209 household goods only

84 Computer and related services

861 legal Services (advisory services on foreign and international law only)

862 accounting, auditing and bookkeeping services

863 Taxation Services (excluding legal services)

1 in english only.in english only.

456 WTo BiSd 2005


864 Market research and public opinion

865-6 Management consulting

867 architectural services; engineering services and integrated engineering services, urban planning and landscape architectural services; related scientific and technical consulting services; technical testing and analysis services

871 advertising services

874, 82201-82206 Building-cleaning services and property management services

876 Packaging services

8814 Services incidental to forestry and logging, including forest management

883 Services incidental to mining, including drilling and field services

88442 Publishing and printing services on a fee or contract basis

887 Services incidental to energy distribution

9401-5 environmental services

Note to Annex 4

The offer regarding services (including construction) is subject to the limitation and conditions specified in israel’s schedule of the gaTS.

457WTo BiSd 2005

decisions and reports not included

deCiSionS and rePorTS noT inClUded

General CouncilAnnual report (2005) WT/GC/101Report (2005) on China’s Transitional Review WT/GC/99

Dispute Settlement BodyAnnual report (2005) WT/�S�/39 and Add.1/�S�/39 and Add.1

Trade Policy Review BodyAnnual report (2005) WT/TPR/173Overview of �evelopments in the International Trading Environment - Annual Report by the �irector-General WT/TPR/OV/11

Reviews �olivia WT/TPR/M/154 and Add.1 Ecuador WT/TPR/M/148 and Add.1-2 Egypt WT/TPR/M/150 and Add.1 Guinea WT/TPR/M/153 and Add.1 Jamaica WT/TPR/M/139 and Add.1 Japan WT/TPR/M/142 and Add.1 Mongolia WT/TPR/M/145 and Add.1 Nigeria WT/TPR/M/147 and Add.1 Paraguay WT/TPR/M/146 and Add.1-2 Philippines WT/TPR/M/149 and Add.1 Qatar WT/TPR/M/144 and Add.1 Romania WT/TPR/M/155 and Add.1 Sierra Leone WT/TPR/M/143 and Add.1 Trinidad and Tobago WT/TPR/M/151 and Add.1-2 Tunisia WT/TPR/M/152 and Add.1

Council for Trade in Goods Annual report (2005) G/L/763G/L/763 Report (2005) to the General Council on China’s Transitional Review G/L/764

Committee on Agriculture Annual report (2005) G/L/746 WTO List of Net Food-Importing �eveloping Countries for the Purposes of the Marrakesh Ministerial �ecision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-�eveloped and Net Food-Importing �eveloping Countries G/AG/5/Rev.8

458 WTo BiSd 2005


Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/AG/21

Committee on Anti-Dumping Practices Annual report (2005) G/L/758 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/A�P/14 and Corr.1

Committee on Customs Valuation Annual report (2005) G/L/750 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/VAL/59G/VAL/59

Committee on Import Licensing Annual report (2005) G/L/753 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/LIC/14G/LIC/14

Committee on Market Access Annual report (2005) G/L/748 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/MA/164 and Corr.1

Committee on Rules of Origin Annual report (2005) G/L/747 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/RO/61

Committee on Safeguards Annual report (2005) G/L/761 Proposals on Special and �ifferential Treatment ReferredtotheCommitteeonSafeguardsbytheChairman of the General Council (Report to the General Council by the Chairperson) G/SG/78 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/SG/80

Committee on Sanitary and Phytosanitary Measures Annual report (2005) G/L/755 Procedure to Monitor the Process of International Harmonization – Seventh Annual Report Adopted on 30 June 2005 G/SPS/37 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/SPS/38G/SPS/38

459WTo BiSd 2005


Committee on Subsidies and Countervailing Measures Annual report (2005) G/L/754 Note by the Secretariat, Annex VII(b) of the Agreement on Subsidies and Countervailing Measures, Updating GNP per capita for Members listed in Annex VII(b) as foreseen in paragraph 10.1 of the �oha Ministerial �ecision and in accordance with the methodology in G/SCM/38 G/SCM/110/Add.2 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/SCM/118

Committee on Technical Barriers to Trade Annual report (2005) G/L/760 Tenth Annual Review of the Implementation and Operation of the T�T Agreement G/T�T/15 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/T�T/17G/T�T/17 Format for the voluntary notification of specific technical assistance needs and responses – �ecision by the Committee G/T�T/16

Committee on Trade-Related Investment Measures Annual report (2005) G/L/752 Report (2005) to the Council for Trade in Goods on China’s Transitional Review G/L/751G/L/751 Consideration of Proposal on S&� Treatment Provisions ReportbytheChairmanoftheCommittee onTrade-Related Investment Measures to the General Council G/L/742

Working Party on State Trading Enterprises Annual report (2005) G/L/749

Independent entity established under Article 4 of the Agreement on Preshipment Inspection Annual report (2005) G/L/757 BodiesestablishedundertheauspicesoftheCouncilforTradeinGoods

Committee of Participants on the Expansion of Trade in Information Technology Products Annual report (2005) G/L/756Committee on Balance-of-Payments Restrictions Annual report (2005) WT/�OP/R/81Report (2005) to the General Council on China’s Transitional Review WT/�OP/R/80WT/�OP/R/80

460 WTo BiSd 2005


Committee on Budget, Finance and AdministrationAnnual report (2005) WT/�FA/81Reports (2005) WT/�FA/77-80, 82-83

Committee on Regional Trade AgreementsAnnual report (2005) WT/REG/15

Committee on Trade and DevelopmentAnnual Report (2005) of the Committee on Trade and �evelopment, Committee on Trade and �evelopment in �edicated Session, and the Sub-Committee on Least-�eveloped Countries WT/COMT�/55Work Programme on Small Economies - Report of theCommitteeonTradeandDevelopmentinDedicated Session to the General Council WT/COMT�/SE/4

Committee on Trade and EnvironmentAnnual report (2005) WT/CTE/12

Council for Trade in ServicesAnnual report (2005) S/C/24Report (2005) to the General Council on China’s Transitional Review S/C/25S/C/25

CommitteeonSpecificCommitments Annual report (2005) S/CSC/11

Committee on Trade in Financial Services Annual report (2005) S/FIN/14 Report (2005) to the Council for Trade in Services on China’s Transitional Review S/FIN/15

Working Party on GATS Rules Annual report (2005) S/WPGR/15

Working Party on Domestic Regulation Annual report (2005) S/WP�R/8

Council for Trade-Related Aspects of Intellectual Property RightsAnnual report (2005) IP/C/38 and Add.1IP/C/38 and Add.1Annual Review of the �ecision on the Implementation of Paragraph 6 of the �oha �eclaration on the TRIPS Agreement and Public Health IP/C/37Report (2005) to the General Council on China’s Transitional Review IP/C/39

461WTo BiSd 2005


Working Group on Trade, Debt and Finance Annual report (2005) WT/WGT�F/4

Working Group on Trade and Transfer of TechnologyAnnual report (2005) WT/WGTTT/7WT/WGTTT/7

Trade Negotiations CommitteeMinutes (2005) TN/C/M/16-22Report by the Chairman to the General Council TN/C/5

Committee on Agriculture in Special Session ReportbytheChairmantothe Trade Negotiations Committee TN/AG/15-17, 20-21 Proposals for Special and �ifferential Treatment Referred to the Committee by the Chairman of the General Council – Report by the Chairman to the General Council TN/AG/18

Council for Trade in Services in Special Session ReportsbytheChairmantothe Trade Negotiations Committee TN/S/19 and Suppl.1, 20 and Corr.1, 22-23 Proposals for Special and �ifferential Treatment Referred to the Council by the Chairman of the General Council – Report by the Chairman to the General Council TN/S/21

Negotiating Group on Market Access ReportbytheChairmantothe Trade Negotiations Committee TN/MA/14-16

Council for Trade-Related Aspects of Intellectual Property Rights in Special Session Reports by the Chairman to the Trade Negotiations Committee TN/IP/12-14

Negotiating Group on Rules ReportsbytheChairmantothe Trade Negotiations Committee TN/RL/11-13 and 15 Proposals for Special and �ifferential Treatment Referred to the Group by the Chairman of the General Council – Report by the Chairman to the General Council TN/RL/14

Dispute Settlement Body in Special Session Reports by the Chairman to the Trade Negotiations Committee TN/�S/12, 14

462 WTo BiSd 2005


Proposals for Special and �ifferential Treatment Referred to the �ody by the Chairman of the General Council – Report by the Chairman to the General Council TN/�S/13

Committee on Trade and Environment in Special Session ReportsbytheChairpersontothe Trade Negotiations Committee TN/TE/11-14 Committee on Trade and Development in Special Session ReportbytheChairmantothe Trade Negotiations Committee TN/CT�/11-12, 14 Proposals for Special and �ifferential Treatment Referred to the Committee by the Chairman of the General Council – Report by the Chairman to the General Council TN/CT�/13

Negotiating Group on Trade Facilitation Report by the Chairman to the Trade Negotiations Committee TN/TF/2 Report to the Trade Negotiations Committee TN/TF/3

Selected DocumentsCoherence in Global Economic Policy-Making: WTO Cooperation with the IMF and the World �ank – Report (2005) by the �irector-General WT/TF/COH/S/11Committees under the Plurilateral Trade Agreements

Committee on Government Procurement Annual report (2005) GPA/85GPA/85

Committee on Trade in Civil Aircraft Annual report (2005) WT/L/629WT/L/629

Appellate BodyAnnual report (2005) WT/A�/5

463WTo BiSd 2005

index

INDEx

PageAccession

albania 2000/17,113armenia 2002/9,110,111Bulgaria 1996/50,95Cambodia 2003/11,109 extension of Time-limit for acceptance 2004/5Congo, republic of the extension of Time-limit for acceptance 1997/7Croatia 2000/113,213ecuador 1995/15,56estonia 1999/13,70Former Yugoslav republic of Macedonia 2002/112,255georgia 1999/71,141 extension of Time-limit for acceptance 2000/213grenada See general Council - Finalization of negotiations on Schedules on goods and ServicesJordan 1999/142,230Kyrgyz republic 1998/17,96latvia 1998/97,149least-developed Countries See general Councillithuania 2000/214,330Mongolia 1996/97,120nepal 2003/110/201oman 2000/330,394Panama 1996/121 extension of Time-limit for acceptance 1997/7Papua new guinea See also general Council - Finalization of negotiations on Schedules on goods and Services extension of Time-limit for acceptance 1996/159,160People’s republic of China 2001/153,252Qatar See general Council - Finalization of negotiations on Schedules on goods and Servicesrepublic of Moldova 2001/253,353Saudi arabia 2005/11,181

464 WTo BiSd 2005

index

Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 2001/354,442St Kitts and nevis See general Council - Finalization of negotiations on Schedules on goods and ServicesTonga 2005/182,255United arab emirates 1996/18,160Protocols of Accession albania 2000/3 armenia 2002/3 Bulgaria 1996/13 Cambodia 2003/5 Croatia 2000/4 ecuador 1995/4 estonia 1999/5 Former Yugoslav republic of Macedonia 2002/5 georgia 1999/7 grenada 1995/6 Jordan 1999/10 Kyrgyz republic 1998/5 latvia 1998/7 lithuania 2000/8 Mongolia 1996/14 nepal 2003/7 oman 2000/6 Panama 1996/16 Papua new guinea 1995/7 People’s republic of China 2001/5 Qatar 1995/9 republic of armenia 2002/3 republic of Moldova 2001/115 Saudi arabia 2005/5 Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu 2001/117 St Kitts and nevis 1995/11 Tonga 2005/7 United arab emirates 1996/18

administrative mattersamendments to the regulations and administrative rules of the Pension Plan 2005/361

465WTo BiSd 2005

index

Conditions of service applicable to the staff of the WTo Secretariat 1997/40, 1998/156, 2005/360rules of Procedures of the Management Board of the WTo Pension Plan 2001/453WTo Secretariat and senior management structure 1997/39

agreements with the Swiss authorities agreement between the WTo and the Swiss Confederation 1995/59 Headquarters agreement 1995/59

agriculture See Committee on agriculture and also general Council

anti-Dumping See Committee on anti-dumping Practices

appellate Body1

amendments to the Working Procedures for appellate review 2002/256 Composition 1995/111 establishment 1995/107 Working procedures for appellate review 1996/162, 1997/9, 2003/202, 2005/256,285

appointment of Officers to WtO bodies guidelines 1995/95

Balance-of-payments Restrictions See Committee on Balance-of-Payments restrictions and also general Council

Budget, Finance and administration See Committee on Budget, Finance and administration and also general Council

Civil aircraft See under Plurilateral Trade agreements

1 WTO panels and Appellate �ody reports, as well as arbitration awards, can be found in the �ispute Settlement Reports �SR series co-published by the WTO and Cambridge University Press.

466 WTo BiSd 2005

index

Committee of participants on the Expansion of trade in Information technology productsrules of procedures for meetings of the Committee 1997/181non-Tariff Measures Work Programme 2000/460

Committee on agricultureMarrakesh Ministerial decision on Measures Concerning the Possible negative effects of the reform Programme on least -developed and net Food-importing developing Countries Preparatory Work Programme 1995/117 reports 1996/264 WTo lists of nFidCs 1995/118, 1996/262notification requirements and Formats 1995/121organization of work and working procedures 1995/118 rules of Procedure 1996/261report 1996 1996/269Terms of reference - see general Council

Committee on anti-Dumping practicesMinimum information to be Provided under article 16.4 of the anti-dumping agreement 1995/150recommendation Concerning indicative list of elements relevant to a decision on a request for extension of Time to Provide information 2001/469recommendation Concerning the Periods of data Collection for anti-dumping investigations 2000/423recommendation Concerning the Time-Period to be Considered in Making a determination of negligible import Volumes for Purposes of article 5.8 of the agreement 2002/280recommendation Concerning the Timing of the notifications under article 5.5 1998/184recommendation regarding annual review of the anti-dumping agreement 2002/279rules of Procedure 1996/274Semi-annual reports - guidelines 1995/145

Committee on Balance-of-payments Restrictionsrules of procedure 1996/410Terms of reference - see general Council

Committee on Budget, Finance and administrationFinancial arrangements for the scales of contributions to the budget abstract of report of 1995 1995/191

467WTo BiSd 2005

index

abstract of report of 1996 1996/411 abstract of report of 1997 1997/184 abstract of report of 1998 1998/159 abstract of report of 1999 1999/325 abstract of report of 2000 2000/462 abstract of report of 2001 2001/480 abstract of report of 2002 2002/291 abstract of report of 2003 2003/281 abstract of report of 2004 2004/52 abstract of report of 2005 2005/445Terms of reference - see general Council

Committee on Customs Valuationdecisions on extensions of delay periods as well as on minimum values according to paragraphs 1 and 2, annex iii of the agreement on implementation of article Vii of the gaTT 2000/425, 2001/471, 2002/281, 2003/250rules of Procedure 1996/282

Committee on Import Licensingrules of Procedure 1996/284

Committee on market accessConsolidated Tariff Schedules database 1999/267Consolidated Tariff Schedules database Project: Formats for Specific Commitments in agriculture 2000/427dissemination of the integrated database 1999/254review of paragraph 1 of the Understanding on the interpretation of article XXViii of gaTT 1994 2000/442rules of Procedure 1996/286Statement by the Chairman of the Committee relating to the Consolidated Tariff Schedules database 1999/315Terms of reference - see general Council

Committee on Regional trade agreementsrules of Procedure 1996/416

Committee on Rules of Originnotification Procedures 1995/151rules of Procedure 1996/288

468 WTo BiSd 2005

index

Committee on SafeguardsFormats for Certain notifications under the agreement on Safeguards 1996/297information to be notified to the Committee Where a Safeguard investigation is Terminated with no Safeguard Measure imposed 1996/301Notifications article 11.2 of the agreement on Safeguard Measures exception under article11.2 1995/155 article 12.1(a) of the agreement on Safeguards on initiation of an investigation and the reasons for it 1995/157 article 12.7 of the agreement on Safeguards of Measures subject to the prohibition and elimination of certain measures under article 11.1 of agreement on Safeguards 1995/154 laws, regulations and administrative Procedures relating to Safeguard Measures 1995/152 Pre-existing article XiX of gaTT 1994 Measures 1995/153rules of Procedure 1996/290

Committee on Sanitary and phytosanitary measuresagreement between the WTo and the office international des Épizooties 1997/53decision on the implementation of article 4 of the agreement on the application of Sanitary and Phytosanitary Measures 2001/472, 2002/282 2004/34equivalence – Programme for Further Work 2002/283guidelines to further the practical implementation of article 5.5 2000/443Procedure to enhance transparency of Special and differential Treatment in favour of developing Country Members 2004/45Procedure to monitor the process of international harmonization 1997/50, 2002/286Process for the review of the operation and implementation of the agreement 2004/43report on Proposals for Special and differential Treatment 2005/376revision of the Procedure to Monitor the Process of international Harmonization 2004/31review of the operation and implementation of the agreement on the application of Sanitary and Phytosanitary Measures 2005/391

Committee on Specific CommitmentsTerms of reference See under Council for Trade in Services - Specific Commitments

469WTo BiSd 2005

index

Committee on Subsidies and Countervailing measuresdecisions relating to extensions under the SCM article 27.4 of the transition period under the SCM article 27.2(B) for the elimination of export subsidies, including decisions pursuant to the procedures in g/SCM/39 or pursuant to paragraph 10.6 of the Ministerial decision on implementation-related issues and Concerns 2002/288, 2003/251, 2004/49, 2005/443 Format for notifications under article 8.3 of the agreement 1998/185Format for notifications under article 27.11 of the agreement 1998/191Format for notifications under article 27.13 of the agreement 1998/190Format for updates of notifications under article 8.3 of the agreement 1997/59Minimum information to be provided under article 25.11 of the agreement 1995/163Permanent group of experts - election 1995/164, 1996/310Procedures for arbitration under article 8.5 of the agreement 1998/191Procedures for extensions under article 27.4 for certain developing country Members 2001/476Questionnaire format for subsidy notification under article 25 of the agreement 1995/166report by the informal group of experts to the Committee 1998/198rules of Procedure 1996/303Semi-annual reports - guidelines 1995/159Supplemental report of the informal group of experts on Calculation issues related to annex iV of the agreement 1999/316

Committee on technical Barriers to tradedecisions and recommendations on notification procedures for draft technical regulations and conformity assessment procedures 2000/451decision of the Committee on principles for the development of international standards, guides and recommendations in relation to articles 2 and 5 and annex 3 of the agreement 2000/455decisions and recommendations on procedures for information exchange 2000/455rules of Procedure 1996/311Third Triennial review of the operation and implementation of the agreement on Technical Barriers to Trade 2003/253

Committee on trade and Developmentimplementation modalities to be observed by the Secretariat in its administration of technical cooperation activities 1997/189report of the High-level Meeting on integrated initiatives for least-developed Countries’ Trade development 1997/194

470 WTo BiSd 2005

index

rules of Procedure 1996/418Terms of reference - see general CouncilWTo Technical Co-operation - guidelines 1996/420Sub-Committee on Least-Developed Countries See also Ministerial Conferencesestablishment of the Sub-Committee 1995/195 Pilot Scheme for an integrated Framework 2001/485Work Programme for the least-developed Countries 2002/295

Committee on trade and Environmentestablishment of the Committee - See general Council report of the 5th Session of the WTo Ministerial Conference in Cancún – Paragraphs 32 and 33 of the doha Ministerial declaration 2003/286

Committee on trade-Related Investment measuresnotifications article 5.5 of the TriMS agreement 1995/168 article 6.2 of the TriMS agreement 1996/322report 1996 1996/323rules of Procedure 1996/321

Committees under the plurilateral trade agreements See under Plurilateral Trade agreements

ConciliationSee under appellate Body as well as dispute Settlement Body

Council for trade in goodsad-personam status of TMB Members 1997/44decision on extensions of the transition period for the elimination of trade-related investment measures notified under article 5.1 of the agreement on Trade-related investment Measures 2001/469establishment of a loose-leaf Schedule 1996/257Harmonized Commodity description and Coding System geneva (1995) Protocol to gaTT 1994 1995/3illustrative list of relationships between governments and State-Trading enterprises 1999/248implementation of the Ministerial declaration on Trade in information Technology Products 1997/44Major review of the agreement on Textiles and Cloting in the First Stage of the integration Process 1998/163notifications Procedures for Quantitative restrictions 1995/114Questionnaire on State Trading 1998/177

471WTo BiSd 2005

index

reverse notification of non-Tariff Measures 1995/116 rules of Procedure 1996/255

Council for trade in Services See also Uruguay round - documents relevant to the application of certain provisions of the general agreement on Trade in ServicesBasic Telecommunications 1996/397Certification – Schedule of Specific Commitments in Basic Telecommunications of Brazil – Communication from Brazil 2001/535Certification – Schedule of Specific Commitments in Basic Telecommunications of Brazil – notification of objection from the european Communities and their Member States 2001/533Certification – Schedule of Specific Commitments in Basic Telecommunications of Brazil – notification of objection from Hong Kong, China 2001/532Certification – Schedule of Specific Commitments in Basic Telecommunications of Brazil – notification of objection from Japan 2001/534Certification – Schedule of Specific Commitments in Basic Telecommunications of Brazil – notification of objection from the United States 2001/532Certification – Schedule of Specific Commitments in Basic Telecommunications of egypt – notification of objection from the european Communities and the Member States 2001/535Certification – Schedule of Specific Commitments in Basic Telecommunications of egypt – notification of objection from the United States 2001/536Commitments 1996/395Communication from Members which have accepted the Fifth Protocol to the gaTS 1999/330decision on acceptance of the Fifth Protocol to the gaTS 1999/330decision on disciplines relating to the accountancy Sector 1998/246decision on domestic regulation 1999/331decision on Procedures for the Certification of Terminations, reduction and rectifications of article ii(MFn) exemptions 2002/304decision on Procedures for the implementation of article XXi of the gaTS 1999/333disciplines on domestic regulation in the accountancy Sector 1998/246dispute Settlement Procedures 1995/170enquiry and Contact PointsSee under notificationsenvironment 1995/171

472 WTo BiSd 2005

index

Financial Services application of the Second annex 1995/175 Commitments 1995/176, 1997/216 decision on negotiations 1997/214 Second decision on Financial Services 1995/177 Second Protocol to gaTS See under Council for Trade in Services - Protocols to gaTSFifth decision on negotiations on emergency Safeguard Measures 2004/57Fourth decision on negotiations on emergency Safeguard Measures 2002/305guidelines and Procedures for the negotiations on Trade in Services 2001/529guidelines for Mutual recognition agreements or arrangements in the accountancy Sector 1997/206guidelines for the Scheduling of Specific Commitments under the gaTS 2001/490institutional arrangements 1995/169 issues relating to the scope of the gaTS 1995/179Maritime Transport Services - decision 1996/396Movement of natural Persons decision 1995/176 decision on Movement of natural Persons Commitments 1995/177 Third Protocol to gaTS See under Council for Trade in Services - Protocols to gaTSnegotiations on emergency Safeguards Measures 1997/214 Third decision 2000/468notifications establishment of enquiry and Contact Points 1996/396 guidelines 1995/172 Procedures for the Certification of rectifications or improvements to Schedules of Specific Commitments 2000/469Procedures for the Certification of Terminations, reduction and rectifications of article ii (MFn) exemptions 2002/303Procedures for the implementation of article XXi of the gaTS - Modification of Schedules 1999/334 Professional Services 1995/170 Protocols to the general agreement on Trade in Services Fifth Protocol to the gaTS acceptance-decision 1999/333 adoption-decision 1997/215, 1998/9 Procès-verbal of rectification 1998/10 Fourth Protocol to the gaTS acceptance-decision 1997/217 notification of acceptance – Commonwealth of dominica 2000/10

473WTo BiSd 2005

index

Protocol 1997/4 Second Protocol to the gaTS (Financial Services) acceptance - decision 1996/397 decision 1995/178 Protocol 1995/13 Third Protocol to the gaTS (Movement of natural Persons) acceptance - decision 1996/397 Protocol 1995/14rules of Procedure 1996/394Second decision of the acceptance of the Fifth Protocol 2000/467Second decision of the acceptance of the Second, Third and Fourth Protocols 1998/245Second decision on negotiations on emergency Safeguards Measures 1999/332Specific Commitments Terms of reference for the Committee on Specific Commitments 1995/178Third decision on the acceptance of the Fifth Protocol 2000/468Third decision on the acceptance of the Fourth Protocol 2000/467Turkey – Certain import procedures for fresh fruit – request for Consultations by ecuador 2001/537

Council for trade in Services in Special SessionModalities for the Special Treatment for least-developed Country Members in the negotiations on Trade in Services 2003/317Modalities for the Treatment of autonomous liberalization 2003/314

Council for trade-Related aspects of Intellectual property Rightsamendment of the TriPS agreement 2005/353Calculation of renewable periods of ten years under the provisions of the appendix to the Berne Convention as incorporated by reference into the TriPS agreement 1998/251 enforcement - Check-list 1995/186extension of the Transition Period under article 66.1 of the TriPS agreement for least-developed Country Members 2002/306, 2005/449 implementation obligations relating to article 6ter of the Paris Convention (1967) 1995/190 article 66.2 of the TriPS agreement 2003/310notifications laws and regulations relating to articles 3, 4 and 5 of the TriPS agreement 1997/218 Procedures under article 63.2 of the TriPS agreement 1995/183,185Priority rights and the application of article 6ter of the Paris Convention as incorporated into the TriPS agreement 1997/220

474 WTo BiSd 2005

index

report 1996 1996/401rules of Procedure 1996/399

Countervailing measures See Committee on Subsidies and Countervailing Measures

Customs Valuation See Committee on Customs Valuation

Dairy See Plurilateral Trade agreements

Decision-making procedures under articles Ix and xII of the WtO agreement See general Council

Development See Committee on Trade and development

Dispute Settlement Body2

See also appellate Bodyadditional Procedures for Consultations between the Chairperson of the dSB and WTo Members in relation to amendments to the Working Procedures for appellate review 2002/278 adoption of the agenda 1999/235amendment to rule 5(2) of the Working Procedures 2001/468amendments to the Working Procedures for appellate review 2004/29amicus Curiae Briefs and article 17.9 of the dSU 2000/417appointment of appellate Body Members 1999/242, 2001/457, 2003/242appointment of appellate Body Members – group System 2000/419 article 5 of the dispute Settlement Understanding – good offices, Conciliation and mediation 2001/462Competence to review the legal validity of a request to authorize the suspension of concessions or other obligations 1999/236european Communities – export Subsidies on Sugar – Procedural agreement between australia, Brazil, Thailand and the european Communities regarding Time-Period under article 16.4 of the dSU 2004/27

2 WTO panels and Appellate �ody reports, as well as arbitration awards, can be found in the �is pute Settlement Reports �SR series co-published by the WTO and Cambridge University Press.

475WTo BiSd 2005

index

european Communities and certain member States – Measures affecting trade in large civil aircraft – initiation of the procedures for developing information concerning serious prejudice under annex V of the SCM and designation of the representative referred to in paragraph 4 of that annex 2005/374extension for the application of the rules of Conduct 1999/238extension of time-limit pursuant to article 16.4 of the dSU – United States – laws, regulations and methodology for calculating dumping margins – Joint request by the european Communities and the United States 2005/373Modification of the time-period for compliance in relation to the case on “United States – Tax treatment for ‘Foreign Sales Corporations’” 2000/419Proposed amendments to the Working Procedures for appellate review 2003/238reappointment of appellate Body Members 2005/369relationship between articles 21.5 and 22 of the dSU 1999/237recourse to article 22.7 of the dSU by Chile 2004/30remuneration of appellate Body Members 2001/459review of the dispute Settlement Understanding 1999/240rules of Conduct 1996/243rules of Procedure 1996/242Terms of office of appellate Body Members 1997/42Third-party participation in gaTT article XXii consultations in relation to the case on “United States – Section 306 of the Trade act of 1974 and amendments thereto” 2000/421Time-periods for appeal expiring in the month of august 1999/239Timing of notification of third-party interest in panel proceedings 2001/461United States – anti-dumping measures on certain hot-rolled steel products from Japan – Joint request by Japan and the United States 2005/372United States – Continued dumping and Subsidy offset act of 2000 recourse to article 22.7 of the dSU by Brazil, the european Communities, india, Japan, Korea, Canada and Mexico 2004/30 - Joint request by australia and the United States; by Thailand and the United States; by indonesia and the United States 2005/370United States - Measures affecting trade in large civil aircraft – initiation of the procedures for developing information concerning serious prejudice under annex V of the SCM and designation of the representative referred to in para. 4 of that annex 2005/375United States – Section 211 omnibus appropriations act of 1998 - Joint request by the european Communities and the United States 2005/372

476 WTo BiSd 2005

index

Environment See Committee on Trade and environment

Establishment of the WtO Transfer of assets, liabilities, records, Staff and Functions from the interim Commission for the international Trade organization and the gaTT to the World Trade organization 1995/57

general Council See under Uruguay round - Preparatory Committee for the World Trade organization - report to the WTo See also relations with international intergovernmental organizations, relations with non-governmental organizationsaccession of least-developed Countries 2002/265accreditation of permanent representatives to the WTo 2000/404agreement on the transfer of pension rights of participants in the WTo Pension Plan 2000/414amendment of the TriPS agreement – see also Council for Trade- related aspects of intellectual Property rights 2005/353amicus Curiae Briefs 2000/402annual overview of WTo activities 1995/99appointment of Chairman of the TMB 2000/413appointment of officers - guidelines 1995/95appointment of the next director-general 1999/234Committee on Trade and environment establishment 1995/90Committee on regional Trade agreement establishment 1996/183 Terms of reference 1996/183Compensation negotiations under articles XXiV:6 and XXViii of gaTT 1994, Proposed Modification to Schedule CXl – european Communities: Prolongation of rights under article XXViii of gaTT 1994 2005/365decision-Making Procedures under articles iX and Xii of the WTo agreement 1995/90doha Work Programme 2004/6enlargement of the european Union – Communication from the european Communities 2005/366extension of the deadline for the review of the dispute Settlement Understanding 1998/153Finalization of negotiations on Schedules on goods and Services decision 1995/91

477WTo BiSd 2005

index

grenada 1995/92 Papua new guinea 1995/93 Qatar 1995/94 St Kitts and nevis 1995/95 Follow-up of the Cancún Ministerial Conference – report by the Chairman and the director-general 2003/236guidelines for appointment of officers to WTo Bodies 2002/270implementation of Paragraph 6 of the doha declaration on the TriPS agreement and Public Health 2003/229implementation-related issues and Concerns 2000/398implementation review mechanism 2000/396negotiations on agriculture and services 2000/395negotiations on improvements and clarification of the dSU – extension of time frame 2003/235observership at the Fourth Session of the Ministerial Conference 2001/443Participation of acceding Countries as observers in the Mandated negotiations on agriculture, on Services and on other elements of the Build-in agenda 2000/401Procedures for the circulation and derestriction of WTo documents 1996/237, 2002/268Procedure for the introduction of the Harmonized System 2002 Changes to Schedules of Concessions 2001/445, 2005/340review of the dispute Settlement Understanding 1999/231rules of Procedure for Sessions of the Ministerial Conference and Meetings of the general Council 1996/219Supply of information to the integrated data Base for Personal Computers 1997/37Termination of the decision of the Contracting Parties to the gaTT 1947 relating to import licensing Procedures 1998/155Terms of reference of Subsidiary Bodies - decisions Committee on agriculture 1995/101 Committee on Balance-of-Payments restrictions 1995/101 Committee on Budget, Finance and administration 1995/102 Committee on Market access 1995/103 Committee on Trade and development 1995/104Textiles Monitoring Body - Composition 1995/105, 1997/37TriMs transition period issues 2000/397Work of the Working group on the interaction between Trade and Competition Policy 1998/154Work of the Working group on the interaction between Trade and investment 1998/154Work Programme on electronic Commerce 1998/151

478 WTo BiSd 2005

index

Work Programme on Small economies 2002/276Working Party on Preshipment inspection See under Preshipment inspection

goods See Council for Trade in goods

government procurement See Plurilateral Trade agreements

Harmonized Commodity Description and Coding System See under Council for Trade in goods and also Waivers

Import Licensing See Committee on import licensing

Information technology products See Ministerial Conferences - First Session - Singapore

Intellectual property See Council for Trade-related aspects of intellectual Property rights

International Dairy Council See Plurilateral Trade agreements

International meat Council See Plurilateral Trade agreements

Investment See Committee on Trade-related investment Measures

Least-Developed Countries See under Committee on Trade and development and also under Ministerial Conferences

Legal InstrumentsCertifications of Commitments under the general agreement on Trade in Services 2005/10Certifications of Modifications and rectifications of Schedules of Concessions to gaTT 1994 1996/20, 1997/5, 1998/11, 1999/12, 2000/11, 2001/124, 2002/6, 2003/9, 2004/3 , 2005/9

479WTo BiSd 2005

index

Certifications of Modifications and rectifications to appendices i-iV of the agreement on government Procurement (1994) 2000/14, 2001/127, 2002/6, 2003/9, 2004/4, 2005/10Harmonized Commodity description and Coding System See under Council for Trade in goodsMarrakesh agreement establishing the WTo Marrakesh Protocol to gaTT 1994 1996/9notification of acceptance – agreement on Trade in Civil aircraft – georgia 2000/13Procès-Verbal - Marrakesh Protocol to the gaTT 1994 1996/7Procès-Verbal of rectification 1996/3Procès-Verbal of rectification - agreement on implementation of article Vii of the gaTT 1997/3 Procès-Verbal of rectification – agreement on Subsidies and Countervailing Measures 2001/122Procès-Verbal of rectification – agreement on Subsidies and Countervailing Measures – annex Vii – Honduras 2000/12Procès-Verbal of rectification - agreement on Textiles and Clothing 1996/4Procès-Verbal of rectification of Certified Copies 1996/5Procès-Verbal of rectification relating to the Protocol of accession of georgia 1999/9Procès-Verbal of rectification - Trade in Pharmaceutical Products 1996/12Procès-Verbal relating to gaTS 1996/10Protocol (2001) amending the annex to the agreement on Trade in Civil aircraft 2001/125Protocols of accession See accessions - Protocols of accessionProtocols to the gaTS See under Council for Trade in Services

market access See Committee on Market access and also general Council

members 1995 1995/xv 1996 1996/xv 1997 1997/xiii 1998 1998/xi 1999 1999/xi 2000 2000/xi 2001 2001/xi 2002 2002/xi

480 WTo BiSd 2005

index

2003 2003/xi 2004 2004/xi 2005 2005/xi

ministerial ConferencesFirst Session - SingaporeComprehensive and integrated WTo Plan of action for the least-developed Countries 1996/32Ministerial declaration on Trade in information Technology Products 1996/35Singapore Ministerial declaration 1996/23

Second Session - Genevadeclaration on electronic Commerce 1998/16geneva Ministerial declaration 1998/13

Fourth Session – Dohadeclaration on the TriPS agreement and Public Health 2001/141implementation-related issues and concerns 2001/142doha Ministerial declaration 2001/128

Fifth Session – CancúnMinisterial Statement 2003/10

Sixth Session – Hong Kong, Chinadoha Work Programme – Ministerial declaration 2005/287

modifications and Rectifications See legal instruments - Certifications on Modifications and rectifications

notification Obligations and procedures See also under each WTo bodyWorking group on notification obligations and Procedures - report 1996/334

Officers of WtO Bodies 1995 1995/1 1996 1996/2 1997 1997/1 1998 1998/1 1999 1999/2 2000 2000/1

481WTo BiSd 2005

index

2001 2001/2 2002 2002/1 2003 2003/2 2004 2004/1 2005 2005/2

panels3

See footnote

plurilateral trade agreementsCommittee on Government Procurement accessions accession to the agreement on government Procurement (1994) 1996/432 accession of - Hong Kong 1996/469 - the Kingdom of the netherlands with respect to aruba 1996/448 - liechtenstein 1996/452 - Singapore 1996/461 Checklist of issues for Provision of information relating to the accession to the agreement 2000/473 decision pursuant to article XXiV:6(a) of the agreement on government Procurement 2004/61,62, 2005/453 interim Procedure on the Circulation of documents 1996/435 interim Procedure on the derestriction of documents 1996/435 Modalities for notifying Threshold Figures in national Currencies 1996/434 Modalities for the negotiations on extension of Coverage and elimination of discriminatory Measures and Practices 2004/63, 2005/453 Participation of observers in the Committee on government Procurement (1994) 1996/432 Procedures for the Circulation and derestriction of documents of the Committee 2002/309 Procedures for the notification of national implementing legislation 1996/436 report 1996 1996/426 Uniform Classification Systems 1996/438Committee on Trade in Civil Aircraft annual report (1996) 1996/478

3 WTO panels and Appellate �ody reports, as well as arbitration awards, can be found in the �ispute Settlement Reports �SR series co-published by the WTO and Cambridge University Press

482 WTo BiSd 2005

index

Interim Committee on Government Procurement Report 1995/202International Dairy Council annual report (1996) 1996/480 deletion of the international dairy agreement from annex 4 of the WTo agreement 1997/36 Suspension of the application of the annex on certain Mill Products and the functioning of the Committee on Certain Milk Products 1995/201 Termination of the international dairy agreement decision 1997/223International Meat Council annual report (1996) 1996/481 deletion of the international Bovine Meat agreement from annex 4 of the WTo agreement 1997/36 Termination of the international Bovine Meat agreement decision 1997/224

preshipment Inspection report of the independent entity established under article 4 of the agreement on Preshipment inspection to the Council for Trade in goods 1996/393 Working Party on Preshipment inspection - report on Preshipment inspection 1997/175

Relations with international intergovernmental organizations agreement between the World intellectual Property organization and the World Trade organization 1995/78 agreement between the WTo and the iMF 1996/184 agreement between the WTo and iTU 2000/404 agreement between the WTo and the World Bank 1996/184 relations Between the WTo and the United nations 1995/82

Relations with non-governmental organizations guidelines for arrangements 1996/240

Rules of Origin See Committee on rules of origin

Safeguards See Committee on Safeguards

483WTo BiSd 2005

index

Scales of contributions to the budget See Committee on Budget, Finance and administration - Financial arrangements for the scales of contributions to the budget

Services See Council for Trade in Services and also Uruguay round

Sub-Committee on Least-Developed Countries See under Committee on Trade and development

Subsidies See Committee on Subsidies and Countervailing Measures

textiles monitoring BodyComposition - see general CouncilComprehensive report on the TMB to the Council for Trade in goods on implementation of the agreement on Textiles and Clothing 1997/68Working Procedures 1996/329

trade and Development See Committee on Trade and development and also general Council

trade and Environment See Committee on Trade and environment

trade in goods See Council for Trade in goods

trade negotiations Committee Statement by the Chairman of the general Council at the Trade negotiations Committee Meeting on 1 February 2002 2002/311 Committee on agriculture in Special Session establishment of the Sub-Committee on Cotton 2004/60

trade policy Review Body appraisal of the operation of the Trade Policy review Mechanism - report to Ministers 1999/243 rules of Procedure 1996/252

484 WTo BiSd 2005

index

trade in Services See Council for Trade in Services

trade-Related aspects of Intellectual property Rights See Council for Trade-related aspects of intellectual Property rights

trade-Related Investment measures See Committee on Trade-related investment Measures

uruguay Round documents relevant to the application of certain provisions of the general agreement on Trade in Services applicability of gaTS to Tax Measures 1995/248 issues relating to the Scope of the gaTS 1995/245,248 Scheduling of initial Commitments in Trade in Services 1995/229 Scheduling of Subsidies and Taxes at the Sub-Central level 1995/254 Statement by the Chairman of the group of negotiations on Services 1995/249 Status of Branches as Services Suppliers - article XXXiV of gaTS 1995/243 Taxation issues relating to article XiV(d) of gaTS 1995/245Preparatory Committee for the World Trade organization report to the WTo 1995/208

WaiversHarmonized Commodity System description and Coding System implementation 1995/199, 1996/423,1997/221, 1998/252, 1999/339, 2000/471, 2001/538, 2002/307, 2003/312introduction of Harmonized System 1996 Changes into WTo Schedules of Tariff Concessions 1995/200, 1996/423, 1997/222, 1998/252, 1999/339, 2000/471, 2001/538, 2002/307, 2003/312, 2004/58, 2005/451introduction of Harmonized System Changes into WTo Schedules of Tariff Concessions on 1 January 2002 2002/308, 2004/58 2005/452renegotiation of Schedules 1996/423, 1997/221, 1998/252, 1999/339, 2000/471, 2001/538, 2002/307other waivers: albania implementation of Specific Commitments in Telecommunications Services 2004/59 implementation of Specific Commitments – extension of the staging period of implementation for a number of products 2005/451

485WTo BiSd 2005

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Canada CariBCan - extension of Time-limit 1996/423 Cameroon agreement on implementation of article Vii 2001/538 Colombia article 5.2 of the agreement on Trade-related investment Measures 2001/539 Côte d’ivoire agreement on implementation of article Vii of gaTT 1994 2002/308 Cuba article XV:6 of gaTT 1994 - extension of Time-limit 1996/423, 2001/539 developing Countries Preferential Tariff Treatment for least-developed Countries 1999/340 dominican republic Minimum values under the agreement on implementation of article Vii of gaTT 1994 2001/539 el Salvador agreement on implementation of article Vii of gaTT 1994 2002/309 eC/France – Trading arrangements with Morocco – extension of waiver 2000/472 european Communities autonomous preferential treatment to the countries of the Western Balkans 2000/472 Fourth aCP-eeC Convention of lomé - extension of Time-limit 1996/423 The aCP-eC Partnership agreement 2001/539 Transitional regime for the eC autonomous Tariff rate Quotas on imports of Bananas 2001/539 France Trading arrangements with Morocco - extensions of Time-limit 1996/423, 1997/222 - extension of waiver 1998/253 Haiti agreement on implementation of article Vii 2001/539 Hungary agreement on agriculture 1997/222 Kimberley Process Certification Scheme for rough diamonds 2003/313 least-developed Country Members article 70.9 of the TriPS agreement with respect to pharmaceutical products 2002/309

486 WTo BiSd 2005

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Madagascar agreement on implementation of article Vii 2001/538 Peru agreement on implementation of article Vii 1999/340 Senegal Minimum values in regard to the agreement on the implementation of article Vii of gaTT 1994 2004/59 South africa Base dates under article i:4 - extension of Time-limit 1996/423 Switzerland Preferences for albania and Bosnia-Herzegovina 2001/539 Thailand agreement on Trade-related investment Measures 2001/539 Turkey – Preferential treatment for Bosnia-Herzegovina 2000/472 United States andean Trade Preference act - extension of Time-limit 1996/423 Caribbean Basin recovery act - renewal of Waiver 1995/200 Former Trust Territory of the Pacific islands - extension of Time-limit 1996/423 import of automotive Products - extension of Time-limit 1996/423 Uruguay – Minimum Values 2000/472 zimbabwe Base dates under article i:4 - extension of Time-limit 1996/423Waivers in force as of 1 January 1995 1995/196Waivers in force as of 1 January 1996 1996/423Waivers in force as of 1 January 1997 1997/221Waivers in force as of 1 January 1998 1998/252Waivers in force as of 1 January 1999 1999/339Waivers in force as of 1 January 2000 2000/471Waivers in force as of 1 January 2001 2001/538Waivers in force as of 1 January 2002 2002/307Waivers in force as of 1 January 2003 2003/312Waivers in force as of 1 January 2004 2004/58Waivers in force as of 1 January 2005 2005/451

Working party on State trading Enterprisesrecommendation on the Frequency of notifications 2003/280

487WTo BiSd 2005

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