. /.WORLD TRADE
ORGANIZATIONG/STR/5
14 November 2003
(03-6114)
Working Party on
State Trading Enterprises
RECOMMENDATION ON THE FREQUENCY OF NOTIFICATIONS
On 11 November 2003 the Working Party adopted  the following recommendation for action by
the Council for Trade in Goods.
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1. Article XVII:4 of GATT 1994, and paragraph 1 of the Understanding on the Interpretation of
Article XVII of GATT 1994 (the Understanding) require Members to notify their state trading
enterprises to the Council for Trade in G oods.  GATT CONTRACTING PARTIES adopted on 9
November 1962 a decision establishing the periodicity of state trading notifications.1  This decision
provides that new and full notifications of state trading enterprises are to be submitted every three
years, with updating notifications to be submitted in  the intervening years.  Following the entry into
force of the Marrakesh Agreement Establishing the WTO and the adoption of the Understanding, the
Council for Trade in Goods decided to continue th e periodicity of notifications set forth in the 1962
decision. In accordance with the Understanding, state trading notifications are reviewed by the
Working Party on State Trading Enterprises on behalf of the Council for Trade in Goods.
2. During recent notification review exercises Members have observed that compliance with the
notification obligation is less than satisfactory.  In light of this unsatisfactory state of affairs the
Working Party has held discussions in order to find a solution to the problem of compliance with thestate trading notification obligation.  A similar situation had been observed by Members in the context
of subsidy notifications to the Committee on Subsidies and Countervailing Measures.  In that
instance, the Committee on Subsidies and Countervailing Measures focussed on the frequency of the
notifications in its efforts to improve compliance.  Members of the Working Party are of the view that
a modification of the frequency of the state trading notification is desirable in order to improvecompliance with the notification obligation.
3. In light of the above considerations the Wo rking Party recommends to the Council for Trade
in Goods that:
(a) The periodicity of state trading notifications be modified.
(b) The new and full notifications on state trading be due every two years instead of
every three years.
(c) The requirement of updating notifications in the intervening years be eliminated.
(d) This change in the periodicity of the notifications enter into force as of the year 2004,
with a full and new notification being due in that year.
                                                     
1 BISD 11S/58.G/STR/5
Page 2
(e) The guidelines for completing the questionnaire section of the Questionnaire on State
Trading2 be amended to bring it into conformity with the new frequency for state
trading notifications.  Accordingly, the text after the titles Sections I, II and III should
be amended to read: "to be submitted in full every two years."  Also, the text after the
title Section IV should read: "to be submitte d every two years on a calendar, fiscal or
marketing year basis…"
4. After a trial period of four years, commencing on 30 June 2004, the Working Party shall
review the situation, with regard to compliance with the notification obligation and the frequency of
notifications, with a view to determining whether to extend the application of this recommendation,
either as presently drafted or in a modified form for a further period.
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2 G/STR/3