RESTRICTED
WORLD TRADE WT/ACC/SAU/21
26May1997
ORGANIZATION(97-2193)
Working Party onthe Original: English
Accession ofSaudi Arabia
ACCESSION OFTHE KINGDOM OFSAUDI ARABIA
Communication from Saudi Arabia
TheMinistry ofCommerce oftheKingdom ofSaudi Arabia hassubmitted thefollowing
document inresponse toadditional comments, proposals andquestions submitted bymembers ofthe
Working Party concerning thedraftICCP Comprehensive Procedures andGuidelines.
_______________
1. General
TheInternational Certification Conformity Programme (ICCP) isacombined conformity
assessment andpreshipment inspection scheme aimed atproviding assurance ofconformity totheSaudi
mandatory standards applied forlegitimate objectives:
ICCP conformity assessment procedures (CAP) accept theresults ofcredible CAP ofother
countries through recognition ofsuppliers 'declaration oftest,quality marks andcertifications,
insofarastheysatisfy Saudi requirements. Assuch, ICCP'sCAP'sarebound topersist in
thefuture inlinewithpredominant international practice followed byother countries.
Inspection andtesting, where required, arecarried outunder theICCP atthecountry ofexport
ofthegoods onapreshipment basis, inorder toverify conformity totheminimum specific
Saudi requirements notcovered byexisting certifications, duetoSaudi Arabia 'sinadequate
infrastructural andtechnical expertise capabilities toperform thesetasksin-county. Therecitals
tothePreshipment Inspection Agreement "recognize theneedofdeveloping countries todo
soforaslongandinsofarasitisnecessary toverify thequality ofgoods".
AsSaudi Arabia 'sinfrastructural capabilities areprogressively developed, itisenvisaged that
thePSIandPSTactivities under theprogramme willbereduced proportionately. Moreover,
asmoreproducts demonstrate fullandconsistent compliance through transition totypeapproval
status, routine PSIrequirements willbereduced accordingly untilasituation isreached where
asuppliers declaration coupled withrandom in-country sampling isadequate formostproduct
(excluding highhazard categories).
2. Type Approval
Comment:
ProposaltomakeinvestigationsintodiscrepanciesrelatingtoTypeApprovedproductsmoreflexible.WT/ACC/SAU/21
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Answer:
Saudi Arabia willsubmit arevised draftGuidelines reflecting theresults oftheinformal meeting
heldinGeneva on5May1997. Theparagraphs describing theactions tobetaken intheevent of
discrepancies orviolations havebeenreplaced forbothmanufacturers andexporters asfollows:
"Ifdiscrepancies orviolations arefound, theSASO Country Office (SCO) withholds CoCID
number, nullifies Certificate ofConformity, andnotifies theSaudi Arabian Standards
Organization (SASO) andthemanufacturer. Anexpedient investigation iscarried outand
appropriate action taken onthebasis ofthefindings. Depending ontheseverity, frequency,
andcause ofthediscrepancy, appropriate action mayinclude suspension orwithdrawal ofthe
Type Approval Licence".
Comment:
Proposal onprocedures affecting Type Approval Licence following evidence ofdiscrepancies.
Answer:
Therevised textinthedraftGuidelines provides more flexibility asfollows:
"Ifdiscrepancies orviolations arefound, SCOwithholds CoCIDnumber, CoC, andnotifies
SASO andother parties involved. Anexpedient investigation iscarried outandappropriate
action taken onthebasis ofthefindings. Depending ontheseverity, frequency andcause of
thediscrepancy, appropriate action mayinclude suspension ofwithdrawal oftheTypeApproval
Licence".
Comment:
Proposal toeliminate thedifference intreatment between manufacturers andexporters ofType
Approved products.
Answer:
Theconfidence astotheassurance ofconformity provided bymanufacturers ismuch higher
thanexporters whodealwithseveral manufacturers andmaynotvalue thegoodwill thatacompliant
manufacturer istrying tomaintain. Inaddition, alotofassembly, relabelling andrepackaging may
becarried outbyexporters which maychange theoriginal characteristics ofthetypeapproved product
andrender itnon-compliant. Also, exporters cannot provide factory quality assurance. Refer to
Section 4Conpage11oftheICCP Comprehensive Procedures andGuidelines.
Asexplained intheGuidelines, aproduct Type Approval Licence isonlyavailable tothe
manufacturer ofthatproduct. With themanufacturer 'scooperation, theexporter mayobtain aCoC
directly fromthemanufacturer priortoshipment. Asthemanufacturer isthesoleowner oftheLicence,
onlythemanufacturer isauthorized toissue aCoC.
3. Dispute Settlement
Comment:
Proposal toguarantee thedispute settlement provisions ofthePreshipment Inspection Agreement.WT/ACC/SAU/21
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Answer:
Recourse todispute settlement procedures inaccordance withthePreshipment Inspection
Agreement hasbeenguaranteed byinclusion ofthefollowing paragraph inAppendix Dofthedraft
Guidelines:
"Intheevent thatagreement between theabove parties cannot bereached, anyparty tothe
dispute mayinitiate independent review procedures according tothose described inArticle 4
ofthePreshipment Inspection Agreement under theWorld Trade Organization regulations".
4. FeeStructure
Asurvey ofPSIfeesapplied world-wide showed thatthese feesvaried between 0.75percent
and1.25percentoff.o.b. value, compared toamaximum of0.5percentunder theICCP. Saudi
Arabia 'sICCP PSIfeesarenotbased onafixedpercentage off.o.b. value, butarerather moreequitably
graduated toreflect greater economies ofsaleachieved athigher volumes, reaching aslowas
0.15percent. Inaddition, theICCP facilitates substantial feesavings forfrequent shipment exporters
through"shipmentaggregation".Overall,ICCPfeesrepresenttheapproximatecostofservicesrendered
tothefairest degree possible.
Theinternational practice forPSIfeesistheadvalorem feescheme, predominantly followed
bycountries implementing PSIprogrammes, most ofwhom areWTO Members. WTO/GATT
Agreementsadoptthefundamentalprincipleofnon-discriminationintreatmentamongMembercountries.
Accordingly, Saudi Arabia questions andrequests justification forthegrounds uponwhich determination
ofthelegitimacy wasmade withrespect toapplication oftheadvalorem feescheme byother WTO
Members, versus reluctance toaccept Saudi Arabia 'smore equitable ICCP feescheme.
Comment:
Proposal toreduce thenumber ofmonthly shipments eligible foraggregation from eight tothree,
based onconsecutive 30dayperiod.
Answer:
Shipment aggregation isagoodwill gesture initiated voluntarily bytheICCP formaximizing
thebenefits available toexporters inaddition toexisting feereduction achievable toexporters inaddition
toexisting feereduction achieved through thegraduated feescheme.
SASOProgrammeManagementhasestablishedthateightshipmentspermonthistheappropriate
threshold number forfrequency ofshipments thatqualify forshipment aggregation, based onanalysis
ofcurrent actual statistical average value ofshipments inrelation tocostsavings realised through various
frequencies. Assuch, thethreshold number isbased onthecommercial viability rather thanthe
exporter'sownassessmentofwhatconstitutesfrequentshipments.Thethresholdnumbermayberevised
inthefutureshouldtheanalysisindicateadifferentcommerciallyviablefrequencyofshipmentparameter.
5. Conformity Assessment Procedures
ICCP'sType Approval andLicensing procedures arenotexcessive inanywaywhatsoever,
astheyareinaccordance withinternational practice, particularly ISO/IEC Guide 28-General Rules
foraModel Third Party Certification System forproducts. ICCP CAPaccept theresults ofcredible
CAP ofother countries through recognition ofasupplier 'sdeclaration ofconformity, withrespect
toexisting testresults, quality marks ofcertifications issued byapproved internationally accreditedWT/ACC/SAU/21
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conformity andtypetesting laboratories, including thirdparty certification andnotified bodies, inso
farastheysatisfy therelevant elements oftheRegistration andType Approval criteria. Type testing
islimited tothoseelements oftheSaudi standards notsatisfied bytheexisting certification. Unnecessary
duplication isthereby avoided, andtheneedforroutine PSIiseliminated.
Forregistered products where fullcompliance isnotinitially demonstrated, routine inspection
isapplied inorder toverify conformity totheminimum specific Saudi requirements notcovered by
existing certifications under thesuppliers declaration. Routine inspection iscarried outonapreshipment
basisatthecountry ofexport ofthegoods duetoSaudi Arabia 'sinadequate infrastructural andtechnical
expertise capability toperform these tasks in-country.
Therecitals tothePSIAgreement "recognize theneedofdeveloping countries todosofor
aslongandinsofarasitisnecessary toverify thequality ofthegoods": Although thePSIAgreement
allows forapplication ofPSIover andabove anyother CAP, PSIunder ICCP isonlyapplied
proportionately toprovide confidence astotheassurance ofconformity. Itfollows thatSaudi Arabia 's
CAP areinmany cases lessstrict thanallowed under WTO provisions toachieve thelegitimate
objectives.
6. NonDiscrimination andNational Treatment
Paragraph 4ofGATT Article IIIlaysdown thegeneral fundamental WTO principle which
requires thatimported products beaccorded nolessfavourable treatment thanaccorded tolikeproducts
ofnational origin. However, PSIandTBTAgreements override anygeneral GATT provisions by
prescribing more precise qualifications fortheapplication ofGATT 'snational treatment principle.
PSIArticle 2.2specifies thattheprovisions ofparagraph 4ofGATT Article IIIaretobe
"respected totheextent thatanylawsregulations, andrequirements arerelevant".
TBTArticle 6.1qualifies therelevance ofthenational treatment principle withrespect toCAP
byaccounting fordifferent conditions thatmayprevail invarious countries: itintroduces theconcept
of"equivalency" ofCAP rather thancongruity, allowing forapparent differences between CAP as
longastheyoffer equivalent assurance ofconformity toapplicable standards.
Furthermore, TBTArticle 5.1.2 prescribes theultimate testtobeapplied toinsure thataCAP
isnotconsidered asanobstacle tointernational trade; itrequires thattheextent ofapplication ofCAP
shouldbeproportionatetotheadequacyofconfidenceregardingtheproduct'sconformitywithapplicable
standards.
Accordingly, domestic products bearing theSASO Quality Mark arecomparable toimported
productsbearingtheSASOTypeApprovalLicense,bothsatisfyingtheconditionofmaximumconfidence,
andthuscomparable CAP areapplicable toboth.
Imported Registered products aremanufactured tovarious international ornational standards
tofacilitate marketing indifferent parts oftheworld, andthusthesupplier 'sdeclaration process can
onlyconvey confidence astotheir conformity withlimited requirements oftheSaudi Standards.
Accordingly preshipment inspection ofevery consignment isaproportionate measure necessary inthis
casetoprovideverificationofconformitywiththeadditionalrequirementsofSaudiStandardsnotcovered
bythestandardstowhichcomplianceisdeclared.Onthecontrary,domesticmanufacturersonlyproduce
products toSaudi standards asacondition forthegranting andcontinued validity oftheirmanufacturing
licence; there arenoadditional requirements towhich toverify conformity, andanyimposition of
ashipmentbyshipmentinspectionondomesticproductswouldbeamorestrictthannecessaryprocedure.
Moreover, during theearlystages ofRegistration, exporters ofimported products areallowed toobtainWT/ACC/SAU/21
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aCoC andshiptheir products despite existence ofminor deviations identified intheinspection
discrepancy reports; nocomparable privilege isafforded todomestic products.
7. Transparency
(a) Objectives
TBT Articles 2.5and5.4prescribe thatstandards andconformity assessment procedures
prepared, adopted andapplied foroneofthelegitimate objectives explicitly mentioned inparagraph 2
ofArticle 2oftheTBTAgreement, andareinaccordance withtherelevant international standards,
arerebuttably presumed nottocreate anunnecessary obstacle totrade.
Therecitals totheTBTandPSIAgreements specify thatnocountry should beprevented from
taking measures foraslongandinsofarasarenecessary toensure andverify thequality ofproducts
atthelevels itconsiders appropriate.
Noother specific criteria areprescribed byWTO Agreements andtheintroduction ofnew
regulated products remains atthediscretion ofSaudi Arabia subject tothelegitimacy oftheobjectives
andsatisfaction oftheapplicable notification procedures.
(b) Approval oflaboratories andnotification
TheICCP Comprehensive Procedures andGuidelines 'definition ofApproved Laboratories
clearly identifies thecriteria foreligibility ofLaboratories forapproval. ICCP'scriteria forevaluation
andapproval oflaboratories arealong ISOGuide 25.Laboratories which havebeenaccredited by
Nationally Recognized Accreditation Bodies which follow ISOGuide 25asanaccreditation criteria
areapproved instantly subject toverification oftheaccreditation.
Theprocedure ofnotification ofnewstandards (draft aswellasfinalstandards) hasbeenclearly
explained inSaudi Arabia 'sreplies toprevious WTO questions andisinfullaccordance withWTO
consultation comment, andnotification provisions.
(c) Processed foodstuff
Saudi Arabia reiterates thattheregulation offoodproducts under ICCP isoptional. Thechoice
ofinspection andtesting atcountry ofexport wasfacilitated byICCP forthebenefit ofexporters who
might prefer tosecure theirshipments against riskofpostarrival rejection.
(d) Applicable standards
SASO hasalready published thelistofstandards applicable totheregulated product categories
andacopyhaspreviously beenprovided totheWTO Secretariat (document WT/ACC/SAU/15). Saudi
Arabia 'sstandards areinternationally harmonized totheextent possible. Certain Saudi standards have
acorresponding ISOorIECequivalent which isindicated inthepublished listofSASO standards.
Other Saudi standards useinternational standards ofother recognized national standards asreference
andapredetermination oftheequivalency ofsuchstandards isnotfeasible, duetotheirmultiplicity,
diversity andincorporation ofthenational requirements anddeviations ofvarious countries. The
registration process under ICCP provides themechanism forthecasebycaseevaluation and
determination ofequivalency ofthestandards towhich compliance isdeclared byexporters, or
recognition oftherelevant elements inthestandards thatpartially satisfy therequirements oftheSaudi
standards. Asadditional standards areevaluated progressively, adatabaseisestablished andreferred
toinanysuccessive assessment ifequivalency.WT/ACC/SAU/21
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Acategory likegoldandsilver jewellery which doesnothaveaspecified standard, isassessed
forconformity tothequality criteria declared bytheparticular exporter inorder tocontrol anydeceptive
practices (legitimate TBTobjective).
(e) Structure ofprogramme
ThedraftGuidelines statethat"exporters maychoose theroutemostappropriate totheirproduct
range andfrequency ofexports. These options aredescribed indetail ...". Itfollows thatthese
procedures arenotnecessarily graduated, butaresubject toexporters 'choice. Infact,manufacturers
ofunregistered products maychoose toapply directly fortypeapproval.
Type approval licensing isanannual process thatcharacterizes theproduct ingeneral while
theCoCisassociated withindividual consignments. TheCoCprovides specific information unique
totheproducts included intheconsignment. Itisnotpossible todesign thetypeapproval certificate
insuchawaythatbyitself itcanbeaccepted. TheGuidelines explain indetail thattheSCOhasto
provide theCoCidentification number andacopyofalldocuments mustbeprovided totheSCOfor
monitoring andintervention incaseofdiscrepancies orviolations. Furthermore, aCoCisrequired
inastandard format forallshipments whether typeapproved ornot.
(f) Advance notice
Thedecision astotheaddition ofanynewregulated product categories willbenotified in
accordance withthesamenotification procedures applicable tostandards. Areasonable period oftime
willbeallowed forproducers inexporting countries toadapt theirproducts ormethods ofproduction
accordingly.
Decisions regarding approval oflaboratories willnotbenotified forcomment, asthisprocess
isopenforallmanufacturers andcountries topresent theirnominations atalltimes andforexporters
choice ofpreference ofthelaboratory from theapproved list.Thelistofapproved laboratories has
already beenannexed totheICCP Comprehensive Procedures andGuidelines. Anupdate willbe
published fromtimetotimeinaddition toitsbeing available forexporters upon request atalltimes.