WORLD TRADE
ORGANIZATIONWT/TPR/M/71
7 August 2000
(00-3212)
Trade Policy Review Body
3 and 5 July 2000
TRADE POLICY REVIEW
POLAND
Minutes of Meeting
Chairperson: H.E. Dr. Iftekhar Ahmed Chowdhury (Bangladesh)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF POLAND 4
III. STATEMENT BY THE DISCUSSANT 6IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY
REVIEW BODY 8
V. REPLIES BY THE REPRESENTATIVE OF POLAND AND
ADDITIONAL COMMENTS 11
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 14
ANNEX I ADVANCE WRITTEN QUESTIONS 17
ANNEX II RESPONSES PROVIDED BY POLAND TO ADVANCE WRITTEN 31
QUESTIONS AND TO OTHER QUESTIONS RAISED DURINGTHE MEETINGWT/TPR/M/71
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Poland was held on 3 and 5 July 2000.  The Chairperson,
Ambassador Iftekhar Ahmed Chowdhury of Bangladesh, welcomed the delegation from Poland, led
by Mrs. Anna Skowronska-Luczynska, Secretar y of State, Ministry of Economy, as well as
Mr. Tomasz Jodko, Minister and Permanent Representative to the WTO.  The discussant,Mr. Didier Chambovey (Switzerland), would speak in his own capacity and not as a representative of
his country.  In accordance with the established procedures, the discussant had circulated in advance
an outline of the main issues he in tended to raise (document WT/TPR/D/71).
2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures for the meeting.  The report by the Polish Government was contained in document
WT/TPR/G/71 and that of the WTO Secretariat in  document WT/TPR/S/71.  Copies of advanced
questions submitted by Thailand;  Switzerland;  Australia;  Hong Kong, China;  Japan;  Canada;  theEuropean Union;  the United States;  and the Republic of Korea had been transmitted to the delegation
of Poland (Annex I).  Annex II contains written responses provided by Poland.
3. The Chairperson noted the robust performance of the Polish economy;  its successful
transition to a market economy;  and the central role played in this by trade and investment
liberalization.  As these reforms were being driven mainly by Poland's priority for EU accession,which was also a member of several regional preferential agreements, the Chairperson indicated great
interest in hearing how Poland's regional trade initi atives worked together within the multilateral
trading system.WT/TPR/M/71
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF POLAND
4. The representative of Poland noted that the country had continued over the past decade to
resolutely transform to an open market economy regardless of normal democratic changes.
Consequently, Poland's ability to cope with international competitive pressures had increased.  A
consensus on the general directions of economic policy existed between the main political parties, andfundamental stable institutions guaranteed the rule of law.
5. Progressive trade and investment liberalization was occurring within a market oriented legal
system.  Only a few barriers to market entry and exit still existed, and foreign trade was increasingly
supported by a well-developed financial sector.  This had improved economic efficiency and helped
achieve macroeconomic stability.  Poland's membership of international organizations and association
with the EU had accelerated its transformation and ma de it irreversible.  Trade liberalization was the
key to building a market economy and to integrating Poland into the world economy.
6. In 1999, Poland's merchandise imports and exports were US$46 billion and US$27 billion,
respectively.  It accounted for more than 0.6% of world merchandise trade.  Although this share had
doubled during the 1990s following the opening of the economy, it remained well below Poland's
potential.
7. One main factor in the economy's transformation was the privatization of state-owned
enterprises.  The Government had used various comprehensive privatization paths and most of
Poland's GDP was now from the private sector.  To date, nearly 2,000 procedures for direct
privatization had been approved; with almost 2,000 enterprises privatized and 1,500 enterprises
commercialized.  Over 900 State Treasury companies had been listed on the stock exchange.
Privatization had increased exports — the share of private sector exports of total exports had risenover the past eight years from over 40% to more than 80%.
8. Poland's integration into the world economy had been based on a broad process of regional
and multilateral liberalization during the 1990s.  Its trade policy had been characterized by regional
liberalization with the establishment of several free-trade areas with vital neighbouring trading
partners, and vigorous implementation of the multilateral agreements of the Uruguay Round as aco-founder of the WTO.  The comprehensive rules on economic relations had created a benchmark for
policy-making in Poland and provided an external anchor for the systemic transformation of the
economy.
9. Poland's market-orientation was aimed at fostering its own restructuring to improve
competitiveness.  This was undertaken in times of extremely high inflation and shrinking GDP.  After
the suspension of most tariffs, Poland had introduced a new customs tariff in August 1991.  These
tariffs were subsequently negotiated downwards with many, including less developed, tradingpartners.  Poland offered GSP preferences to 45 developing countries with a lower GDP per capita
than itself, and to 49 countries considered as least developed. Tariff rates on imports from developing
countries were 80% of the MFN level, and duty free from least developed countries.  Certain products
were, however, excluded from these schemes.  The on-going WTO process of granting duty- and
quota-free market access for nearly all products originating from least developed countries wouldaccelerate market access to Poland.
10. Tariff suspensions and use of tariff quotas with lower or zero tariffs reflected domestic policy
considerations, including the aim of expanding Polish exports.  Tariff suspensions had been applied
occasionally on agricultural products in short supply and on certain industrial components.  Tariff
quotas resulted from Poland’s WTO commitments and free-trade agreements, but were alsointroduced autonomously for economic and social reasons.  Poland rarely used quantitative import
restrictions, mainly to protect human and animal health, the environment or genetic material.
Decreased border protection had increased foreign competition in Poland.  At the same time PolishWT/TPR/M/71
Page 5
exporters had faced market-access barriers in many countries, mainly in the form of anti-dumping
proceedings and duties.  Such negative experience had resulted in greater interest by Polish producers
to apply similar trade remedies against foreign competition.  Poland had therefore introduced new
laws from 1998 to similarly protect Poland against excessive and 'dumped' imports in compliance
with WTO principles and other international agreements signed by Poland.
11. Poland was one of the most dynamic developing economies and the services sector was
becoming the most important economic activity given its share in employment and contribution to
GDP.  Its commitments under the WTO General Agreement of Trade in Services (GATS) covered
54 sectors.  In the majority of cases its commitments bound existing levels of access to the Polish
market, but in some cases Poland's level of services liberalization exceeded its WTO obligations.
Poland was actively involved in subsequent negotiations on selected service sectors. It made
commitments under the Agreement on Basic Telecommunications covering such areas as telephony;telex, telegraph and fax transmissions;  lease of lines; television and radio broadcasting;  cellular
telephony;  and satellite telecommunication.
12. The Government is determined to ensure adequate intellectual property protection.  Poland
has strengthened protection since 1994 following adoption of the new Law on Copyright and Related
Rights.  In 1998, Poland implemented legislation on copyright and related rights as well as on theirenforcement.  Poland was reviewed within the WT O during the transitional period provided under the
TRIPS Agreement.  This review proved that Polish legislation was in conformity with WTO
requirements, except for some provisions.  Poland's protection of intellectual property rights will soon
go beyond the TRIPS Agreement due to its accession to the European Union.
13. Increased economic independence and greater integration into the global economy helped
Poland to overcome difficulties created by the Russian crisis in 1998.  While Poland's trade with
Russia declined, there were promising prospects for its revitalization.  For many years the main
trading partners of Poland were the EU Member States.  Between 1993 and 1999, the EU share in
Poland’s trade remained constant.
14. Attracting foreign direct investment had been  another success of Poland's economic policy.
In 1998, foreign direct investment was US$30 billion, with over 700 large foreign investors in Poland
from 34 countries.  The leading sources of foreign in vestment had been the United States, the EU and
the Republic of Korea.  Foreign-owned companies play ed an important role in Poland’s trade;  they
comprised nearly 50% and 55% of total exports and imports, respectively.
15. Poland's widening current account deficit required special attention.  The Government had
recently adopted measures to rectify the imbalance.
16. The successful transformation of Poland provided a good example for new WTO Members
on:
(a) transforming monetary and fiscal policy through shock therapy;
(b) promoting continuous economic development despite shrinking GDP at the outset of the
reform process;
(c) building consensus for reforms;
(d) restructuring of GDP towards services;
(e) sustaining the current account deficit;  and
(f) integration with regional trading partners combined with greater globalization.WT/TPR/M/71
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III. STATEMENT BY THE DISCUSSANT
17. The discussant (Mr. Didier Chambovey) commented on the remarkable achievements of
Poland;  since pursuing shock economic therapy some ten years ago it was now high among the most
successful transitional economies.  Robust economic growth, averaging some 5% annually, was due
to firm macroeconomic and structural policies.  The economy had already rebounded from slowergrowth in late 1999, due mainly to the Russian financial crisis, and prospects appeared promising.
External trade had played a vital role in Poland's economic transformation, with merchandise trade
equivalent to 44% of GDP.
18. The adverse impact of the widening current account deficit, approaching 8% in 1999,
although worrying, had been mitigated by private capital inflows.  Against this background, reliance
on monetary policy to maintain low inflation might be risky, as high real interest rates could prompt
volatile capital inflows that might on reversal aggravate the deficit.  He asked how the Polishauthorities assessed this risk, and whether alternative or complementary strategies for achieving
inflation targets had been considered.
19. Deregulation and privatization of state-owned enterprises had been at the core of Poland's
transformation.  By end 1999, 70% of state-owned enterprises had been privatized, and 71% of
employees worked in the private sector.  However, sensitive areas remained to be privatized,including hard-coal mining, steel, chemicals, sugar, and liquor.  The discussant enquired whether the
authorities saw any efficiency or welfare gains from maintaining such state ownership, and how the
2005 target of having 90% of GDP from the private sector would be achieved.
20. Poland's transformation had been associated with a re-direction in its geographical pattern of
trade.  The EU had replaced the former COMECON as Poland's main trading partner, accounting for68% of exports in 1998.  Nevertheless, Central and Eastern Europe and Russia remained important
export markets.  The discussant sought details of the Government's views on future trade patterns.
21. The objective of EU accession by 2003 was driving Poland's trade and economic reforms.  It
was already well aligned with Europe via several regional trade agreements and was increasingly
harmonizing its policies with EU requirements.  Given Poland's geographical and cultural proximityto the EU this was perfectly legitimate and understandable.  Nevertheless, he sought the Government's
views on how EU membership sat with Poland's commitment to the multilateral trading system.
22. Poland had bound almost 94% of its tariff, and applied rates averaged 15.9% (simple).
However, wide disparities and escalation existed in MFN rates, compounded by many different MFN
rates and numerous preferential duties.  The discussant noted that the applied average tariff rate
of 9.9% for imports from least developed countries was 50% higher than on imports from other
preferential sources.  He wondered whether the Polish authorities intended to mitigate thisdiscrepancy by providing additional market access to least developed countries.  He also sought
details on whether the complex tariff structure had generated efficiency losses.
23. Poland had introduced legislation, such as the Customs Code of 1997 and the Customs
Services Act of 1999, to improve customs administration, and was introducing a computerized
system.  These were aimed at reducing the long delays frequently involved in clearing imports.  Healso enquired as to the national treatment implications of Poland imposing excise taxes on imports
while exempting local products.  Polish standards also  differed from EU or international standards for
many products, and Poland intended to harmonize at least 80% of its standards by 2002.  The
discussant asked what impact these differences in standards were having on trade.
24. Poland had taken steps to improve protection of intellectual property, and more changes
would be implemented as part of its EU accession.  However, enforcement of property rights appeared
to be a problem since there was a high incidence of imported counterfeit products.  The discussantWT/TPR/M/71
Page 7
enquired about the likely impact of Poland's recent efforts to strengthen its legislative procedures
covering customs seizure of illegal goods.
25. The continued privatization of coal mining and steel would be crucial given their economic
importance, but would be difficult given the reductions involved in output and employment.  The
discussant therefore sought details of the authorities' plans to complete these privatization plans.Also, since EU accession would dramatically alter Poland's farm policies, he sought the Government's
views on the impact EU accession would have on its agricultural trade.  In manufacturing, he enquired
as to the impact EU accession would have on Poland's assistance policies, such as the provision of
investment-related tax concessions and high tariffs.WT/TPR/M/71
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IV. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
26. Members commended Poland for its successful transformation to a market economy, and the
key role played by trade reforms and prudent macroeconomic policies.  Poland had actively
participated in the multilateral trading system.
27. The representative of Switzerland noted the remarkable transformation of Poland to a market
economy involving wide-ranging macroeconomic and structural reforms since the previous Trade
Policy Review in 1992.  This included trade liberalization to reform prices and to encourage
competition to overcome the deficiencies of central planning.  Remarkable progress had also been
made in privatizing state-owned enterprises and in  attracting foreign investment.  He encouraged
Poland to continue with its liberalization policies.
28. The representative of Australia congratulated Poland for its impressive reforms, including
trade and investment liberalization.  She encouraged Poland to continue with its broad reforms across
all sectors.  While recognizing that further integration with the EU would accelerate Poland's
economic development and provide increased scope for its trading partners, she noted that less than
one quarter of Poland's trade was conducted on an MF N basis; most was conducted preferentially with
EU, EFTA and CEFTA members.  Poland was urged to maximize the gains from trade liberalization
by extending regional trade preferences on a non-discriminatory basis to other countries and securingthem within a multilateral framework.  The representative expressed concern with Poland's high and
increasing agricultural assistance, provided mainly through market price support mechanisms.  She
urged Poland to use only decoupled, targeted and transparent measures permitted in the green box
under the Agreement on Agriculture, pointing out that production and trade-distorting agricultural
policies were costly to Poland's consumers, taxpayers, and trading partners.  Australia believed thatPoland's preferential regional trade agreements should remain outward-looking and be complementary
to a strong rules-based multilateral trading system.  It also welcomed continued reforms in key service
sectors, including finance, telecommunications, and utilities.
29. The representative of Hong Kong, China commended Poland for its liberalization efforts,
including lowering the (simple) average tariff from 18.4% in 1993 to 15.9% in 1999 and binding 94%
of its tariff.  However, she encouraged Poland to simplify its tariff structure by reducing the high
number of different MFN and preferential rates.  She noted that Poland's trade liberalization was
largely concentrated at the regional level, and encouraged Poland to pursue multilateral liberalization,
including reducing the bound rates closer to applied MFN levels to enhance predictability.  She wasconcerned that domestic VAT and excise taxes on some products, such as pharmaceuticals and motor
vehicles, discriminated against imports, by as much as 25 percentage points on some products
excisable only if imported, such as clothes.  These arrangements were seen by Hong Kong, China to
be non-transparent, and Poland was urged to eliminate them, as well as additional customs clearance
fees.  She encouraged Poland to simplify customs clearance procedures, including documentationrequirements.
30. Poland was invited to align its standards with in ternational norms to facilitate trade.  Many
Polish standards were mandatory, such as the 'B-mark' certification, and differed from international
norms.  She also encouraged Poland to open its government procurement practices, including removal
of the 20% price preference for domestic suppliers, and to accede to the Government Procurement
Agreement.
31. The representative of Japan appreciated Poland's efforts to promote economic and trade
policy reforms in accordance with the spirit of WTO Agreements.  Poland had increased its bindings
from zero to 93.5% during the Uruguay Round, binding all agricultural tariffs and 92.2% of
manufacturing.  However, she expressed concerns that important products, such as motor vehicles,
were not bound, and requested that Poland consider increased bindings.  Japan was also deeply
concerned by the 30% gap between Polish tariff s on EU and non-EU imported motor vehicles.  TheWT/TPR/M/71
Page 9
representative noted that Poland had not adopted measures inconsistent with the Customs Valuation
Agreement, such as minimum import or reference prices.  She sought information on Poland's plans
for future privatization, including in difficult areas, such as hard-coal mining, steel, chemicals,
shipbuilding, and electricity generation.  Japan supported Poland's agricultural policies as a means of
fostering rural development and because of agriculture's significant multifunctional role.
32. The representative of Canada noted Poland's continued sound economic policies, including
trade and investment liberalization as well as pr udent stabilization measures.  Privatization would
modernize certain sectors, especially iron and steel, coal, chemicals, oil, gas and electricity.  Poland
was encouraged to also liberalize its agriculture sector to attract investment and raise productivity by
removing high tariffs, price support and direct outlays, including export subsidies and deficiency
payments on pigmeat, wheat, rye, and oilseeds.  Poland should reduce remaining investment
limitations, such as residency requirements.  She commended Poland for progress in servicesliberalization, especially in banking, and privatization.  Poland was encouraged to continueharmonizing its standards and certification procedures with international and/or EU norms.
33. The representative of the European Union commented on Poland's impressive economic and
political reforms and its full integration into Europe, the world economy and the multilateral trading
system.  Poland already had close trade and investme nt links with the EU, including within the EU-
Poland Europe Agreement, and these would increase.  EU accession negotiations with Poland were
making good progress.  All negotiating chapters had been opened with Poland, with eleven chapters
provisionally closed.  Poland's macroeconomic performance remained impressive, and the floating of
the zloty from April reinforced its commitment to world integration.  Poland's trade policy was largelyconverging with that of the EU.  Nevertheless, Poland faced challenges in industrial restructuring, and
in privatizing many loss-making state-owned enterprises, such as in coal and steel.
34. The European Union believed that the EU-Poland Europe Agreement and Poland's EU
accession would create, not divert, trade.  The EU representative stated that the EU's creation of a
customs union and single market and subsequent enlargement had resulted in multilateral reductionsin trade barriers.  He also recalled that EU enlargement had occurred in full respect of the EU's and
candidate countries' WTO commitments on agriculture.  The EU shared Poland's support for the
urgent launch of a new comprehensive round of multilateral negotiations to ensure furtherliberalization and to address the concerns of  developing countries and of civil society.
35. The representative of Korea commended Poland for its remarkable transformation in adopting
market principles.  He expressed concern that wide gaps between Poland's MFN and preferential
tariffs for continental neighbours might be more conducive to trade diversion, and hoped that Poland
would lower MFN tariffs.  Agriculture met important food security and multifunctional roles, and
Korea understood Poland's agricultural policies.
36. The representative of Uruguay noted the economic and trade reforms undertaken by Poland
which contributed to high growth and reduced inflation.  The external deficit was met mainly by
capital inflow.  The zloty was floated in April, and foreign investment had increased considerably.
Bound tariffs on agriculture products were well above applied levels such that EU accession wouldraise Poland's agricultural tariffs.  He asked what steps Poland would take so as not to harmthird-party trade patterns following EU accession.
37. The representative of the United States highlighted Poland's active participation in the WTO
and, since 1996, the OECD.  It was the leading European transitional economy due to its economic
and trade reforms.  Poland had participated in th e Information Technology Agreement, as well as the
GATS Basic Telecommunications Agreement, and the Financial Services Agreement, which was still
to be ratified by Poland.  The United States strongly supported Poland's EU accession, but had
concerns regarding various types of market-access barriers maintained by Poland.  These included the
trade diverting effects of preferential tariffs under the EU-Poland Association Agreement;development and application of standards and their preferential impact; and overly restrictive zeroWT/TPR/M/71
Page 10
tolerances for certain weed seeds in cereal and oilseeds exports that were not scientifically based, and
an express concern about the consistency of Poland's regional agreements with WTO requirements.
38. The representative encouraged Poland to sign the two WIPO treaties on copyright and
performances and phonograms, and to enact proposed amendments to its copyright legislation toovercome shortcomings, especially the lack of protection for pre-1974 sound recordings.  She
encouraged Poland to direct more resources towards enforcement of intellectual property rights.
Poland was also encouraged to begin negotiating accession to the Plurilateral Agreements on
Government Procurement and on Trade in Civil Aircraft.  The United States called on Poland to
continue opening its market to ensure that its preferential trading arrangements were outward-orientedand conformed fully with the WTO.
39. The representative of the Czech Republic noted the continued implementation by Poland of
radical economic reforms at a remarkable pace with clear objectives of establishing an open and
prosperous market economy.  The macro-econom y had performed well and privatization was
accelerating along with economic restructuring.  Trade liberalization, pursued at regional and
multilateral levels, was a key element of Poland's transformation strategy.  Nevertheless, the
Czech Republic was concerned with recent increases by Poland in agricultural tariffs, but believed
these were only temporary.  He thought claims that Poland's regional arrangements were trade
diverting were over-simplified and did not reflect Poland's active WTO role, including support forlaunching a new round of multilateral negotiatio ns.  EU accession by Poland and implementation of
the Common External Tariff would enable Poland to fu rther its trade reforms.  Poland's general tariffs
would fall thereby reducing third-party concerns of  possible trade diversion.  Harmonization of Polish
regulations and standards resulting from EU enlarg ement would also simplify trade by third countries.
40. The representative of Hungary congratulated Poland on the results achieved in the transition
process and on its economic success during the 1990s.  Its bold reforms covered macroeconomic
policies, as well as structural initiatives, including trade, investment, and currency liberalization.
Although financed by capital inflow, the widening trade deficit was worrying.  He sought details of
recent measures by Poland to rectify this problem, and commended Poland for supporting along withHungary a new multilateral round of trade negotiations.  Hungary shared Poland's approach that
multilateral, regional and bilateral liberalization initiatives could be mutually supportive, and its
desire to join the EU.  Hungary was of the view that concerns about possible trade diversion effects
were not founded.  The importance of Poland as a traditional trading partner for Hungary was
highlighted.  Both countries were parties to the Central European Free Trade Agreement (EFTA).
41. The representative of India noted Poland's robust economic performance due to trade and
other comprehensive reforms combined with strong private-sector development.  However,
unemployment had increased recently, and external deficits had widened.  India believed that regionalarrangements should supplement the multilateral trading system and not lead to trade diversion.
Poland was therefore encouraged to analyse the effects on trade of its regional trade arrangements,
and to multilateralize such preferences so as to benefit the multilateral trading system and Polish
consumers.  The representative encouraged Poland to rationalize its tariff structure by reducing the
number of different duty rates, and enquired about Poland's plans to increase trade with developingcountries.  He noted that most of Poland's health and safety standards were unrelated to international
norms, and requested details on the development and implementation of its mandatory standards.  He
hoped Poland's strict quarantine and other SPS regulations on food imports complied fully with theWTO Agreement on SPS Measures.
42. The representative of Norway noted Poland's on-going reform process since 1992 and
encouraged further trade and investment liberalization.  He requested details on the issuance of
permits for land acquisition by foreign investors.  The representative also hoped that Poland would
support the Baltic Sea Customs' Conference to accelerate customs clearances to below two hours.Information was sought on the products covered by Poland's tariff preferences for least developed
countries.  He also hoped Poland would join the Government Procurement Agreement.WT/TPR/M/71
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V. REPLIES BY THE REPRESENTATIVE OF POLAND AND ADDITIONAL 
COMMENTS
(i) Economic environment
43. Poland's economic performance has been one of the best in Europe due largely to sound
economic policies, including structural reforms, aimed at achieving an open market economy capableof meeting external competition.  The economy has been relatively resilient to external shocks.
Nevertheless, the external deficit had widened, partly due to rising imports induced by vigorous
domestic demand growth.  The deficit, which was fully financed by stable inflows of foreign direct
investment, was forecast to fall, as confirmed by  the latest figures from May 2000.  The Government
intended to take further steps to lower this deficit, as well as to cut inflation and to raise employment.
Fiscal stabilization would also increase savings, reduce interest rates, and take pressure off the
external deficit.
44. Large-scale privatization had been a key strategy of the economic transformation of Poland
since the beginning.  By end-1999, 70% of the state sector had been covered by privatization, and
71% of labour was employed in the private sector.  According to the longer term plan for 2002 to
2010, Poland would increase to 90% the share of GDP produced from the private sector, including
coal mining, steel, chemicals, shipbuilding, and sugar.
45. Poland had successfully attracted foreign investment by having a good policy climate.
Foreign investment, with increased technology, would raise Poland's competitiveness and boost
exports.  Its foreign credit rating had recently been increased.  EU accession would lower Polish
tariffs and improve GSP treatment of imports from developing countries.
46. The discussant referred to the Polish Central Bank strategy of maintaining high real interest
rates to control inflation as possibly risking a crisis  similar to that in Asia or Russia.  As Poland also
intended to use budgetary policy to control inflation and to reduce the external deficit, he asked how
such fiscal discipline would be achieved, particularly since the 1999 deficit turned out to be 3.8% of
GDP compared with a forecast deficit of 2.2%.
47. He also noted Poland's policy of granting additional tariff preferences for least developed
countries.  While EU accession would improve such treatment, he requested details on whether
Poland planned other initiatives to bring tariff preferences for these countries more into line with
those provided its European trading partners, such as extending to them the most favourable
preferential tariff treatment available.
48. The representative of Poland referred to the mix between monetary and fiscal policies for
controlling inflation and the external deficit.  A more restrictive fiscal policy was planned and this
would ensure a better mix of macroeconomic policies for achieving the inflation target of 4% by 2003and for lowering real interest rates.  Tighter fiscal policy was to be implemented by reducing and
rationalizing public expenditures to reach a balanced budget in 2003.  Recent measures taken to
promote exports would also contribute to a lowering of the external deficit.  However, although
significant, the external deficit was supported by relatively large international reserves and a flexible
exchange rate, which acted as a safety valve.  Moreover, it was financed by strong capital inflowswhich also demonstrated investor confidence in Poland.  The Polish Government was currently
analysing possibilities of providing supplementary tariff preferences for least developed countries
while at the same time moving its policies closer towards the EU system of GSP tariff preferences,
which it would adopt on accession.WT/TPR/M/71
Page 12
(ii) Trade policies by measure
49. The representative of Poland stated that excise taxes were applied on a non-discriminatory
bases with a few exceptions on luxury products, such as sea-going yachts and furs.  Moreover,
differences in VAT treatment reflected the application of separate nomenclatures;  such differences
were being removed and the arrangements made more transparent.  Poland applied no charges ortaxes on exports, which were also zero-rated for VAT.  Poland had introduced a simplified system for
customs clearance since January 1998.  About 1,000 permits to use these arrangements had been
issued.  Poland was also taking legislative steps and strengthening internal customs controls to
eliminate corruption and improve transparency.
50. Poland was commitment to improving the transparency of standards and certification
requirements.  The priority was to align Polish standards to EU norms and conformity assessment
procedures.  Recent legislation had been adopted to eliminate mandatory certification fromJanuary 2003 at the latest.  This would ensure that Poland's procedures were compatible with
international requirements.  Poland had taken safeguard action, mainly against textile products from
non-WTO countries, because of structural adjustment pressures in Poland.  No legislation yet existed
for applying countervailing duties, but this would change in 2001.  Poland did not intend at this time
to join the Government Procurement Agreement, but would continue as an observer.  Newgovernment procurement legislation from January 2001 would provide non-discriminatory treatment
for all foreign bidders.  Poland's subsidy legislation complied with WTO requirements, and the
Government's general policy was to limit subsidies. It had announced plans to shorten the period for
phasing out export subsidies.
51. Although there had been some problems with implementation and enforcement, Poland had
taken steps to meet its TRIPS and EU obligations on intellectual property.  Recent changes to
copyright and other legislation were expected to prevent the domestic production and importation of
pirated and counterfeit goods.  Enforcement measures at the border were also being strengthened.
52. The discussant asked for clarification that the excise taxes on luxury products, such as yachts
and furs, applied only to imports.  He also enquired whether there were any prospects that mandatory
certification would be eliminated before 1 January 2003, and why Poland was introducing
countervailing legislation in 2001.  While the discussant appreciated Poland's intention to meet its
WTO commitments on subsidies, such as eliminating them by end-2001, Poland applied a range of
other subsidy instruments.  He questioned whether these were transitional measures or were deeply
rooted in Poland's industrial policy.
53. The representative of Canada sought elaboration of the legislative changes on government
procurement planned in 2001, aimed at treating all foreign suppliers equally, as well as their likely
impact on WTO Members.
54. The representative of India requested details of Poland's plans to increase bilateral trade with
India and other developing countries.
55. The representative of Poland stated that, as at end April 2000, Poland had introduced about
30% of European standards, and that its standards' harmonization would accelerate in 2001 following
the approval of amendments to the standardization legislation.  Poland had also recently amended
legislation on accreditation.  Poland's system of conformity assessment was compliant with the EU.
Poland's planned introduction of countervailing legislation in 2001 was a continuation of its efforts to
put in place a range of permissible trade remedies and did not reflect special interests by Polish
industry in using such measures.WT/TPR/M/71
Page 13
(iii) Sectoral issues
56. The representative of Poland indicated that as agricultural negotiations had only started with
the EU in June 2000 it was too soon to comment on these.  Poland believed that its own policies were
fully consistent with the WTO.  Poland had never applied restrictive policies on tariff quotas;  low
utilization rates reflected the domestic market and not the administration of the quotas.
57. Services were important to the Polish economy and Poland saw dynamic opportunities from
liberalizing services trade.  The Government was involved in the GATS 2000 negotiations and would
broaden and deepen its services commitments, including enhanced coverage, provided the
negotiations respected the interests of all involved and achieved an overall balance in the rights and
obligations of Members.  Poland would ratify the Fifth Protocol by end 2000, but these commitments
had already been reflected in domestic legislation.  Poland did not maintain nationality requirements
on foreign lawyers provided they met qualification requirements.
58. The discussant commented on the sectoral objectives of privatizing outstanding sectors,
especially coal and steel, and the alignment of Poland's industrial policies with EU requirements.  EU
accession would transform or remove many measures currently in place, such as in agriculture, where
Poland intended to adopt the EU's complete agricu ltural policy.  The implications of this were
substantial given, for example, that the number of Po lish farmers exceeded that in both Germany and
France combined.  He asked how the authorities assessed the prospects of fully privatising coal and
steel given the considerable social impact, and whether alignment of sectoral measures with the EU
would reduce Poland's success in attracting foreign investment, since tariffs would be lowered and
subsidies would become subject to stricter EU directives.
59. The representative of Poland referred to the Government's reform programme on coal mining
from 1998 to 2002, whereby a complex pre-privatization evaluation would be completed in
June 2000.  A restructuring programme was also under way for the steel sector;  the aim was to
privatize eight fully state-owned steel works by end-2001.WT/TPR/M/71
Page 14
VI. CONCLUDING REMARKS BY THE CHAIRPERSON
60. We have had an open and informative discussion of Poland's trade policies.  TPRB Members
were clearly impressed by Poland's economic transformation to a market economy.  The economy is
performing robustly and future growth prospects are favourable.  This has been achieved by generally
prudent macroeconomic policies combined with structural reforms, particularly trade and investmentliberalization.  Members acknowledged the remarkable results of the Polish transition process,
including in the privatization of state-owned enterprises; this has undoubtedly played a significant role
in attracting foreign investment.  Members commented favourably on Poland's priority target of
accession to the EU, which would create the opportunity for further reform as Poland increasingly
harmonized its policies with EU requirements.  This  was to be expected given Poland's cultural and
political ties.
61. On trade-related policies, Members appreciated Poland's active efforts within the WTO and
noted its support for a broad-based round of multilateral negotiations.  Members also appreciated
Poland's overall commitment to liberal trade and investment policies.  Some Members expressed
divergent views on the net trade-creating effects of Poland's regional liberalization to date and of EU
accession.  While some Members justified Poland's high and increasing level of agricultural support
on the grounds of multifunctionality and food security, others questioned the adverse impact thesepolicies were having on Polish efficiency and consumers.  These Members encouraged Poland to
reduce market distortions on such commodities, including the use of high tariffs, price support and
direct outlays, such as export subsidies and deficiency payments.  Poland's application of strict SPS
measures were also questioned as being overly restrictive.
62. Members appreciated that Poland's tariffs were generally low.  Nevertheless, some Members
noted that Poland's preferential rates were well below MFN levels, thereby raising concerns of
possible trade diverting effects, for example, on motor vehicles.  Members invited Poland to reduce
the gap between preferential and MFN tariffs.  They also commented on the wide tariff disparities,
including high tariff peaks, and the advantages to Poland of also simplifying its tariff structure by
reducing the high number of different MFN and preferential rates.  Members also invited Poland tofacilitate imports from developing countries, and from LDCs in particular.
63. Members also sought additional details in a number of areas, including:
- the balance of Poland's regional trade objectives within its multilateral goals;
- effects of EU accession on other trading partners;
- recent increases in tariffs, especially on agricultural products;
- the absence of bindings on certain products, such as motor vehicles;- preferential tariffs, including product coverage, for developing trading partners;
- possible discriminatory impact on imports of domestic excise and other taxes;
- technical standards and conformity testing procedures;
- delays in customs clearances, including imposition of fees;
- privatization plans for difficult areas, such as hard-coal mining, steel and chemicals;- intellectual property protection, including enforcement;
- subsidies;
- liberalization of services under GATS, and progress on ratification of the Fifth 
Protocol;  and
- preference margins on government procurement, and Poland's intended membership 
of the WTO Agreement on Government Procurement.
64. Members appreciated the comprehensive written and oral responses provided by the Polish
delegation at the meeting and its undertaking to follow up with written responses as soon as possible.WT/TPR/M/71
Page 15
65. In conclusion, it is my view that Members were very appreciative of Poland's successful
economic transformation, and were greatly impressed by its economic performance since the last
Review in 1992.  Members now have a much greater understanding of Poland's trade and trade-related
policies, and encouraged Poland to continue with the reforms.  While Members accepted the
beneficial impact on Poland of its regional arrangements, they encouraged Poland to pursue avigorous multilateralization of regional preferences.  This would benefit not only Poland's long-term
economic interests but also the overall multilateral trading system.WT/TPR/M/71
Page 17
ANNEX I
ADVANCE WRITTEN QUESTIONS
THAILAND
1. Bilateral Free-Trade Agreement between Poland and Turkey
In paragraphs 24 and 25 of the Report by the Government of Poland and in paragraph 32 of
the Report by the Secretariat refer to Free-Trade Agreement between Poland and Turkey.  This
agreement involves tariffs reduction or elimination by the beginning of 2002.  Do these tariffs
reduction or elimination program include textile and garment?  If so, please provide details of the
tariffs reduction or elimination plan of these two products.
2. Tariffs/Generalized System of Preferences (GSP)
In paragraph 22 of the Report by the Secretariat, we understand that Poland is in the process
of joining the EU within 2002.  What is the imp lication of Poland's membership of the EU toward
Poland's tariff scheme including Poland's preferential treatment under the GSP schemes currently
extends to developing countries?
SWITZERLAND
III. TRADE POLICIES AND PRACTICES BY MEASURES
(4)(vi) Protection of intellectual property (TRIPS Agreement)
a) Art. 31 TRIPS Agreement (Other Use Without Authorisation of the Right Holder)
1. Does your law make compulsory licenses subject to the conditions enumerated in Article 31
TRIPS Agreement?  If exceptions are provided for, please describe what these exceptions are and howthey apply in Polish law and practice.
2. Please indicate what provisions of Polish law or regulations apply, other than Article 49 of the
Law of 19 October 1972 on Inventive Activity.
b) Art. 39 TRIPS Agreement (Protection of Undisclosed Information)
1. Please indicate the provisions of Polish law or regulations which ensure that undisclosed and
confidential test data or other data submitted by an applicant to the Polish Office for Registration of
Pharmaceutical and Medicinal Products in the procedure for market authorisation of a pharmaceutical
product is protected against disclosure and against unfair commercial use by a competitor.  Is there,
for example, a provision prohibiting a second applicant from relying on, or from referring to the
original data of the first applicant, when applying  subsequently for market authorisation for his own
product?
2. If exceptions are provided for, please describe how they apply in Polish law and practice.c) Enforcement of intellectual property rights
According to paragraph 142 of the Report by the Secretariat (WT/TPR/S/71) special attention
should be paid to the enforcement of intellectual property rights.  Could you please inform us about
your efforts undertaken by the Polish Government to prevent illegal production and importation of
pirated and counterfeit goods?WT/TPR/M/71
Page 18
AUSTRALIA
1. Poland currently waives the 30% tariff on imports of Australian coarse wool (24 micrograms
or coarser), but does not grant such an exemption for the import of wool noils or tops.  Does Poland
plan to bring the conditions applying to noils and tops into line with the practice which has developed
for coarse wool?
2. The Polish Government recently endorsed a draft legislative bill which aims to bring anti-
dumping procedures into line with WTO standards, and grant SMEs easier access to the procedures.
Does Poland foresee any significant change to the volume or type of anti-dumping procedures
instituted by the Polish Government and/or Polish producers?
3. Australia looks forward to being able to export wild meats, including kangaroo meat to
Poland.  We understand that legislative changes to facilitate wild meat imports into Poland are
underway.  Could Poland update us on progress in this area?
HONG KONG, CHINA
Subsidies
(WT/TPR/G/71, pp. 15-16, paras. 66-68)
1. It is noted that all the five types of notified export subsidies should be either abolished or
adjusted to comply with WTO rules by the end of 2001 in accordance with the Agreement on
Subsidies and Countervailing Measures (ASCM).  While we appreciate Poland's effort in eliminating
the first type on investment incentives on 1.1.2000, we should be grateful to know whether Poland has
any plans to abolish or adjust the other four types of  export subsidies with a view to bringing them to
be consistent with the ASCM.
Registration, Documentation, and Customs Administration(WT/TPR/S/71, p. 36, para. 12)
2. It is noted that a simplified procedure, implemented in 1998, enables certified traders to
declared imported goods for clearance without inspection.  However, it is mentioned that the share of
merchandise imports cleared through the system rema ins low.  We are interested to know the reasons
for the low utilization of the simplified procedures.
Protection of Intellectual Property Rights
(WT/TPR/S/71, pp. 68, 70, 71, paras. 127, 131, 134)
3. It is noted that Poland's legislation has been criticised as not providing enough protection on
intellectual property rights, particularly on copyright and patent protection.  As Poland is to
implement the TRIPS Agreement by the year 2000, we would like to know whether its new legislation
on industrial property protection introduced on 1 January 2000 would enable it to apply all the
provisions of the Agreement.  If the answer is negative, would the Polish authorities tell us what arethe problematic areas and the reasons for not bringing them in compliance with the TRIPS provisions?
We would also like to know what further steps will be taken by the Polish authorities to remedy the
situation.WT/TPR/M/71
Page 19
(WT/TPR/S/71, p. 72, para 142)
4. It is mentioned that Poland does not have a good record of enforcement of intellectual
property protection, particularly at the administrative and judicial level.  Importations of pirated and
counterfeited goods were said to be substantial and there were also reports of internal illegal
protection of these goods.  We would like to know what specific measures the Polish authorities will
undertake to ensure that intellectual property rights will be adequately enforced, particularly after
introduction of its new IP legislation on 1 January 2000.
Services in General
(WT/TPR/G/71, p. 14, para. 55)
5. It is mentioned that Poland will remove barriers to establishment with effect from
1 January 2001.  We would like to know if it means that all market access and national treatment
limitations currently listed in Poland's schedule regarding barriers to establishment will be removed in2001.
Financial Services
(WT/TPR/S/71, p. 106, para. 194)
6. It is noted that Poland's commitments on financia l services are yet to come into force pending
its acceptance of the Fifth Protocol.  We would li ke to know Poland's timetable for ratification.
(WT/TPR/S/71, p. 114, para. 224)
7. It is mentioned that Poland has taken progressive steps to privatize the banking and finance
sector.  We would like to know if Poland has any plans to further bring down the level of state
participation in the sector which is currently at about 44%.
(WT/TPR/S/71, p. 116, para. 232)8. It is stated that security deposit amounting to 50% of the minimum guarantee capital is
required for the operation of a foreign insurance branch in Poland.  We would like to know if similar
requirement is also applied for local services suppliers and whether Poland would consider the use of
alternative prudential requirements with less burdensome effect on the suppliers.
Postal Services(WT/TPR/S/71, pp. 110-111, para. 204)
9. It is noted that Poland is planning for both  relaxing monopoly on letters and restructuring of
the state enterprise Polish Post.  Would the Polish authorities share with us further information on the
restructuring programme?  We would also like to know whether foreign participation in letter delivery
services will be allowed upon the end of monopoly.
Transportation Services
(WT/TPR/S/71, pp. 111-112, paras. 210-211)10. It is mentioned that the Polish government intends to end the monopoly of the state-owned
railway company PKP in 2005 while licences have been granted in 1998 to independent operators forWT/TPR/M/71
Page 20
the provision of national railway services.  We woul d be interested to know about the progress of
private sector participation in the sector.
(WT/TPR/S/71, p. 112, para. 215)
11. Currently all Polish ports are owned by the state.   Foreign participation is also excluded in the
plan for privatization.  Would Poland have any further plan to open up the sector for foreignparticipation?
(WT/TPR/S/71, p. 113, para. 219 and Footnote 12)
12. It is mentioned that two private licences have been granted, but operations are yet to
commence.  It further stated that about 100 licences have granted but have not met operational
certification requirement.  We would also like know more information on the operational certification
requirement and whether these private operators are required to satisfy specific community services
obligations like the state operator.
JAPAN
1. Regional agreements (WT/ TPR/S/71, p. 24-25, para. 32)
When Poland concluded the European Agreement with EU, it raised the import tariffs on
automobiles from 15 to 35%.  After the entry into force of the agreement, Poland gradually lowered
the tariff rates on those automobiles made in the EU.  As a result, the tariff gap between automobilesmade within the EU area and those made ou tside is now at 30% as of the year 2000.
(1) Is this measure inconsistent with Article XXIV, paragraph 5(b) of the GATT?
(2) Is there any plan to reduce tariffs back down to the level applied prior to concluding the
European Agreement?
(3) Please explain how much investment from outside the EU area has been increased in the
automobile sector by this measure.
2. Investment
(1) WT/TPR/S/71, p. 31-32, paras. 51-53
Are investment incentives provided equally to companies from both inside and outside the EU
area?  If not, please explain in detail the differences applied.
(2) WT/TPR/S/71, p. 30, Table II-3)
Are all these restrictions applied equally to companies both inside and outside the EU area?
If not, please explain in detail the differences applied.
3. Customs valuation (WT/TPR/S/71, p. 49, para. 40)
It is stated that "Poland does not set any minimum import or reference prices for custom
valuation.  Its Customs Code prohibits the use of minimum import values for determining custom
value".  Can it be said that all the measures of custom valuation are consistent with the CustomsValuation Agreement?WT/TPR/M/71
Page 21
4. Tariff quotas (WT/TPR/S/71, p. 52, para. 48)
In the Report, it is pointed out that "the in-quota tariff rate on many products had been set too
high given market conditions" as a reason for underutilizing tariff quotas.  Japan considers that the
percentage of consuming tariff quotas depends on the balance of supply and demand in the domestic
market, as well as on the situation of the international market. Please explain Poland's view on thereason for underutilizing tariff quotas.
5. Safeguard actions
(1) WT/TPR/S/71, p. 55, para. 57
It is reported that "three safeguard actions were initiated in 1999 affecting: imports of textured
polyester yarn from Turkey;  synthetic fibres from the Republic of Korea and Chinese Taipei;  and
certain acrylic yarns from Lithuania".  In this regard,
(a) Please explain these three actions in detail(b) Are these actions based on the Agreement on Safeguards or rather on the transitional
safeguards provided for in the Agreement on Textiles and Clothing?
(c) If these actions are based on either of the two agreements, why have they not been notified to
either the Safeguards Committee or to the TMB?
(2) WT/TPR/S/71, p. 98, para. 136
It is reported that "Poland has special safeguard provisions for imports of textiles and
clothing".  Is our understanding correct that such provisions prescribe the domestic procedures to
apply safeguard measures pursuant to the GATT or to the Agreement on Textiles and Clothing?
6. TBT and SPS
(1) WT/TPR/S/71, p. 56, para. 59
The second line of the report states that "in the main they do not appear to be harmonized
with international norms".  Japan considers this sentence too vague and would like to request Poland
to change the sentence in more objective and concrete terms.
(2) WT/TPR/S/71, p. 58, paras. 67 and 68
Japan considers the word "phytosanitary" in the first and second line of paragraph 67, as well
as in the first line of paragraph 68, should be replaced by the word "sanitary".  Please make, as
necessary, the appropriate corrections.
7. Government procurement (WT/TPR/S/71, p. 58, para. 71)
Japan recognizes that the scope and transparency of Poland's government procurement has
been increasing over recent years.  Is Poland's government procurement managed in accordance with
the procurement rules, such as the EC directives?
8. Export prohibitions (WT/TPR/S/71, p. 61, para. 84)
It is reported that "exports of live ducks, geese and turkeys, wheat and meslin, rye, barley, and
oats are banned".  Please provide the reason for prohibiting exports on such products.WT/TPR/M/71
Page 22
9. Intellectual property
(1) WT/TPR/S/71, p. 70, para. 130
It is reported that "the new Industrial Property Law will extend protection to industrial
designs and geographical indications".  Please explain in detail the contents of this Law, as well as the
schedule for examination and the enactment.
(2) WT/TPR/S/71, p. 70, para. 131
Please explain how Poland's legislation concerning patent protection for pharmaceuticals is
consistent with the TRIPS Agreement.
10. Privatization
(1) WT/TPR/S/71, p. 35, para. 7, and p. 91, para. 99
Japan recognizes that, while the privatization of state-owned enterprises has been accelerated
in recent years according to Government plan, the privatization of such areas as defense, hard-coalmining, steel, chemicals, shipbuilding, electricity generation, sugar, liquor and railway transport have
yet to be launched.  Please explain the future perspectives for privatization in those areas.
(2) WT/TPR/S/71, p. 91, paras. 98 and 99
Throughout the privatization process, are foreig n direct investments, both inside and outside
the EU area, treated equally?  If not, please explain in detail the differences applied.
11. Services (WT/TPR/S/71, p. 106, para. 193
Is it possible, who have been qualified in third countries, to offer legal services concerning
their home country law, a third party law or international law in Poland?  If so, please explain in detail
the conditions under which a foreign lawyer can offer such services, the scope of such services and
any limitation concerning the practice of the activities.
CANADA
The following questions are based on the Report by the Secretariat (WT/TPR/S/71)
II. Trade Policy Regime:  Framework and Objectives, (4) Foreign Direct Investment
Policies, (i) Domestic Regime and Incentives, (a) Domestic Regulatory Regime,
Table II.3
Table II.3 outlines sectors subject to foreign direct investment restrictions.  Specifically, it is
indicated that a special permit is required for "trade in wholesale of imported consumer goods".  Other
countries have restrictions on distribution based on the nature of the good (ex. alcohol, tobacco),
however, this restriction appears to be based on the origin of the good.  Could the Polish government
elaborate on this restriction, i.e., what is the rationale for such a restriction and what is its effect? Does
Poland intend to remove or modify this restriction?  Could Poland outline the conditions and criteria
required for the issuance of the special permit?WT/TPR/M/71
Page 23
III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports,
(ii) Tariffs, (d) Tariff escalation and (f) Surcharges, fees, and taxes, paras. 25 and 32
The Secretariat's report notes that Poland's tariff structure exhibits significant tariff escalation
that favors domestic processors of mainly food, beverages and tobacco;  textile and leather;  and of
wood and wooden furniture.  Canada finds itself disadvantaged by Poland's use of tariff escalation andof VAT or excise rates favoring domestic products such as textiles and clothing.  Could Poland
provide an explanation for its tariff escalation and differential application of VAT and excise rates as
they pertain to these goods?  Are steps being taken to simplify the taxation system and renter it more
transparent?
III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports;
(xi) Government Procurement, para. 71
What is the intention of Poland with respect to accession to the WTO Agreement on
Government Procurement?
IV. Trade Policies by Sector, (5) Services, (i) Commitments under the General Agreement
on Trade in Services (GATS), para. 194
We note that commitments on financial services are yet to come into force pending Poland's
acceptance of the Fifth Protocol to the GATS.  When is ratification of the Fifth Protocol to the GATS.When is ratification of the Fifth Protocol to the GATS anticipated?
IV. Trade Policies by Sector, (5) Services, (ii) Telecommunications
What are the conditions of registration required of foreign telecommunications companies
operating in the domestic market?
The following questions are based on the Report by the Government (WT/TPR/G/71)
III. Trade Policy Regime, (4) Trade Policy Instruments, (ii) non-tariff measures, para.41
The Government Report states that "quotas in Po lish exports (of textiles and clothing) to the
United-States and Canada will be continued by the end of 2004".  Could Poland confirm if this should
read discontinued by the end of 2004, as called for by the Agreement on Textiles and Clothing?
III. Trade Policy Regime, (5) Notifications under the WTO Agreements, (b) General
Agreement on Trade in Services (GATS), para. 55
The Government Report states that foreign entities can now pursue economic activity in the
form of branches and representative offices and that remaining barriers to establishment will cease on
January 1, 2001.  Which services sectors does this liberalization currently apply to and which sectors
will it apply to as of January 1, 2001?
The following question is based on both the Report by the Secretariat (WT/TPR/S/71) and the
Government Report (WT/TPR/G/71)
(WT/TPR/S/71)
II. Trade Policy Regime:  Framework and Objectives, (3) Trade Agreements and
Arrangements, (v) Generalized System of Preferences (GSP), para. 42WT/TPR/M/71
Page 24
(WT/TPR/G/71)
III. Trade Policy Regime, (4) Trade Policy Instruments, (i) Tariffs, para. 32
The Secretariat Report notes that except for certain sensitive items, imports from developing
countries are dutiable at tariff rates equivalent to 70% of the MFN level.  The Government Report
notes that tariff rates on imports from developing countries amount to 80% of the MFN level.
Could Poland clarify this discrepancy?
EUROPEAN UNION
The following questions all relate to Secretariat report (WT/TPR/S/71):
SUMMARY OBSERVATIONS
Paragraph 27
Does Poland not consider that there is a possibility of trade diversion in the field of
government procurement, where Poland grants important preferences (20%) to its domestic suppliers,combined with a requirement for local suppliers to source at least 50% of raw materials or
construction costs locally? Is Poland considering to abolish this domestic suppliers preference?
Paragraph 28
Will Poland eliminate its export quotas on raw materials, and in the affirmative under which
timetable?
III. TRADE POLICIES AND PRACTICES BY MEASURE
(2) Measures directly affecting imports
(x) Standards and other technical requirements
(a) Standards, testing and certification
When does Poland intend to remove mandatory certification for all products?Which criteria have presided over the modification by Poland of the list of products requiring
mandatory certification?”
IV. TRADE POLICIES AND PRACTICES BY SECTOR
(2) Agriculture and other Primary Products
(ii) Sectoral Policies and Trade Developments(d) Textiles, Clothing and Leather Products
Paragraph 145
Could Poland clarify whether the 17.7% excise  tax that is applied to imported clothing
products is applied to imports from all sources?  Is the excise tax a temporary measure which has been
taken in response to conditions in Poland, and if so, when will it end?  If the excise tax is not a
temporary measure, what steps does Poland have planned to remove it, and by when?WT/TPR/M/71
Page 25
UNITED STATES
CHAPTER I
(3) Poland’s Economic Reforms
– Does the Pension Supervisory Office accept the academic credentials of managers and board
members of pension funds who earned their degrees outside of Poland?
(5) Outlook
– The Secretariat Report notes that frequently laws and regulations are amended with short
notice and in some cases with retroactive effect.  What procedures has the Government of
Poland put in place or plans to introduce to ensure that interested or affected parties -
businesses, consumers, worker s, NGOs, etc. - will receive advance notice and an opportunity
to comment on proposed regulations?
CHAPTER II
(3) Trade Agreements and Arrangements
(i) Poland and the EU
– What is the Government of Poland’s time frame for implementing Copenhagen criteria for
enlargement and becoming a full member of the European Union?
– The Secretariat Report identifies the problem of trade diversion caused by the significant
tariff differentials between Most Favored Nation rates and preferential rates, and it noted that
this diversion “could reduce the economic gains to Poland from trade liberalization.”  Does
Poland intend to ameliorate this problem during the period leading up to its accession to the
European Union?  If so, please describe.
– In Paragraph 22, the Secretariat Report states that agriculture is one of the areas still to be
addressed in the EU accession negotiations.   What are the "problematic areas" identified
during these negotiations?  Are Poland’s ongoing agricultural reforms delaying its
negotiations for EU accession?
– What is the Government of Poland requesting from the European Union in terms of direct
payments to Polish farmers?
– Does the Government of Poland view the double zero negotiations with the EU as a "step"
towards EU accession?
(iii) Regional agreements
– While we welcome Poland’s eventual membership in the EU, we are very concerned by the
interim tariff arrangements and its affect on U.S.  exports.  What percent of Polish trade by
value is conducted on a preferred level with the European Union?
– What proportion of trade by value is covered on a preferential basis by Poland’s preferential
agreements with other CEFTA parties and the EFTA?WT/TPR/M/71
Page 26
(iv) Bilateral agreements
– Does the Government of Poland intend to negotiate preferential trade agreements with Russia,
Ukraine or the other New Independent States?
(4) Foreign Direct Investment Policies
(i)(a) Domestic regulatory regime
– Please describe Poland’s plans to reduce the number of economic activities that require
special licenses.
CHAPTER III
(2) Measures Directly Affecting Imports
(ii) Tariffs
– The Secretariat Report notes that the Government of Poland has raised applied tariffs to
bound levels for a number of agricultural products.  Please describe the process theGovernment of Poland undertakes to determine such tariff increases.  Are these tariff
increases limited to a certain time frame?
– Please describe in detail the administration regime by which Poland's preferential and non-
preferential origin regimes operate consistent with the obligations under both Article 2(h), as
well as paragraph 3(d) of Annex II of the WTO Agreement on Rules of Origin (i.e., withregard to issuing binding assessments of origin, including prior to commencement of trade in
the particular goods of interest, within 150 days of requests by exporters and importers).
Specifically, as part of a description of the regime, please provide information as to whom
such requests from exporters or importers for binding assessments should be directed.
– With respect to the discriminatory VAT taxes indicated in Table III.3, how does the
Government of Poland justify these differing rates given its national treatment obligations
under Article III?  When does the Government of Poland intend to eliminate this
discriminatory treatment?
(i)(f) Surcharges, fees, and taxes
– The Report states that the Government of Poland plans to eliminate all remaining customs
clearance fees by 2001.  Please provide a schedule for the planned elimination of these fees.
(vi) Tariff Quotas
– As noted in paragraph 48 and the subsequent table, many of Poland’s quotas are significantly
underutilized.   Can the Government of Poland explain this situation?  Are there difficulties in
administering the tariff rate quotas? Are there structural barriers (e.g., small TRQ allocations,
delays in releasing TRQ allocations, etc.)?
– What measures can the Government of Poland undertake to improve utilization of quotas?
Specifically, what steps are being taken to ensure that importers and exporters have full
access to the quotas?WT/TPR/M/71
Page 27
(x) Standards and other technical requirements
– What are the criteria used by Polish authorities in determining whether a product falls within
the scope of the mandatory “B” safety certification which, we understand, is currently
applicable to about one-third of all goods marketed in Poland?
– According to the Secretariat’s report, as a result of the 1997 Agreement on Conformity
Assessment with the European Union, Poland removed mandatory certification requirements
for products free from certification in the EU, and automatically provided a B safety
certificate to EU products subject to mandatory certification.  Does Poland automatically
provide a B safety certificate to products from the United States and other WTO members,
which are certified to Polish standards?  If not, why not.
– We also understand that as a result of legislative amendments in July 1999, certain products
may be imported on the basis of producer’s statement of conformity provided Poland hassigned a mutual recognition agreement.  What are the criteria and terms of such agreements?
For example, on what basis does such an agreement provide Polish authorities greater
confidence in a supplier’s declaration?
– According to the Secretariat’s report, the Polish Center for Testing and Certification (PCBC)
performs testing and certification, and is the accreditor of test labs and certification bodies.  Isthis true?  If so, it appears that there would be a conflict of interest inconsistent with ISO
guides for conformity assessment bodies and WTO rules.
– According to the Secretariat’s report, Poland gives preference to EU standards, if they are
different from international standards.  Is this in reference to voluntary standards? Mandatory
technical regulations?  Which international standards?  How does this comport with theobligations in the WTO  TBT/SPS Agreements on international standards?
– We have received numerous complaints concerning the multiple testing and certification
requirements for building materials (e.g., certificate from the Polish Research & Development
Institute, plus certification required from the Institute of Hygiene, and in some cases, the “B”
mark as well).  Could Poland provide a justification for these requirements and/or provideinformation on any steps it is taking to review them with a view to removing unnecessary
obstacles to trade?
– The Government of Poland’s zero tolerance for certain weed seeds, such as ragweed, in
shipments of cereals and oil seeds has sharply restricted imports of these commodities.
Foreign exporters note that this measure is overly restrictive and cannot be supported on a
scientific basis.  When will the Government of Poland be willing to reestablish a meaningful
dialogue with interested parties with view to removing this highly restrictive policy?
(xi) Government procurement
– We welcome Poland’s observership status in the Committee on Government Procurement.
When does the Government of Poland intend to join fully the Agreement?
– We understand the Government of Poland is developing a new procurement law.  What
preferences will it provide for domestic and EU bidders?WT/TPR/M/71
Page 28
(4) Internal Measures
(ii) State-owned enterprises and privatization
– What are the Government of Poland’s plans for privatizing and restructuring the railway
sector?   Will foreign participation be allowed and, if so, to what extent?
(vi) Protection of Intellectual Property– We note that the industrial property law mentioned in the report has since been ratified.
When will the new law take effect?
– What is the status of the new copyright legislation and will it provide protection for pre-1974
sound recordings?
– Noting paragraph 142, what measures has the Government of Poland undertaken to improve
the enforcement of intellectual property rights protection?
CHAPTER IV
(1) Overview
– Please provide more details concerning the Government of Poland’s privatization targets for
the year 2001.  Having successfully implemented privatization packages in many key services
sectors, where does it expect the greatest remaining challenges to lie?  Are they more
pronounced in certain sectors?
(2) Agriculture
(i) Policy and assistance trends
(a) Policy developments
– Please describe the Government of Poland position regarding CAP integration and EU
accession.  Is Poland willing to accept less than full CAP integration when it accedes?
– The Government of Poland has acknowledged that increasing agricultural protection may be
detrimental to the Polish economy.  What initiatives has Poland undertaken to address this
issue?
(3) Mining and Quarrying
(ii) Energy
– We seek clarification of the regulatory framework for the production, storage, importation
and distribution of gas.  The Secretariat’s report [para. 87] indicates that the Polish Oil and
Gas Company has a monopoly on these activities but later [para. 90] states that the monopoly
on retailing and distribution has been terminated.  The report also indicates that oil and gas
production requires a license and goes on to depict restructuring and privatization in these
industry segments in a manner that suggests other state-owned and or partially privatized
entities are in fact involved in refinery operations, storage and distribution.  Please providespecific details as to which industry segments are in fact characterized by monopoly supply
and whether this conditions relates to licensing or other regulatory restrictions or market
conditions.  What other enterprises in the sector are planned for privatization?  Given that theWT/TPR/M/71
Page 29
sector requires substantial investment, will future privatization schemes be open on a non-
discriminatory basis to foreign investment?
– Please explain the rationale for forbidding merg ers between entities which would result in a
market share greater than 15% in the production, transmission and distribution of electricity.
Is this a general requirement of Poland’s competition laws applied to merger reviews in otherindustry sectors, or is it specific to this sector?  How will this requirement confirm with EU
practices?
(4) Manufacturing
(ii)(j) Transport Equipments (ISIC 384)
Motor Vehicles
– With tariffs on EU manufactured passenger and commercial motor vehicles being phased out
by 2002, does the Government of Poland intend to correspondingly reduce the high MFNtariff rate (35 percent) on those vehicles?
– Does the Government of Poland have a contractual obligations with automobile
manufacturers or an obligation in its Europe Agreement to maintain MFN tariff rates on
automobiles and parts at their current or some other level?  If so, at what level?
(5) Services
(i) Commitments under the GATS
– We look forward to the Government of Poland’s participation in the current round of GATS
negotiations and anticipate binding commitments to reflect ongoing liberalization.  Will the
Government of Poland have the necessary authority to broaden and deepen its GATS
commitments, particularly by expanding the coverage of its existing commitments wheremany sub-sectors are excluded?
– When does the Government of Poland intend to ratify its commitment on financial services?
(ii) Telecommunications
– Can the Government of Poland explain why, despite growing demand and a backlog of
connection orders, no licenses have been requested for the construction of alternative fixednetworks?  Are there non-market factors that hinder the economic feasibility of constructing
new networks?
– Please explain the rationale for applying a 49% equity limitation on foreign investment in the
markets for international, long-distance and mobile services but not for carriers providing
local call services.
– Please confirm that the new Telecommuni cations Law removing TPSA’s monopoly over
telex and telegraph services will be adopted this year.
– The Secretariat’s report indicates that the Government of Poland is seeking a strategic
investor to participate in the privatization of TPSA.  Will foreign investors be considered on a
non-discriminatory basis?WT/TPR/M/71
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– Under the new Telecommunications Law will TPSA be subject to the same licensing
requirements and fees as other domestic and foreign service providers?
– Please expand on the new legislation’s mechanisms for setting interconnection fees.
(iii) Transport
Maritime   
– Please provide further details concerning the privatization of the state-owned shipping lines.
When the Polish Ocean Line Group and the Polish Steamship Company be privatized?  Will
the process be open to foreign investors on a non-discriminatory basis? What is the rationale
for planning only a partial privatization of the Polish Baltic Shipping Company?
– Why do the Government of Poland’s plans to partially privatize the major state-owned ports
exclude the possibility of foreign participation?  Will this be consistent with EU practices?
Aviation– In reference to the above, please provide similar details on plans for the privatization of
Poland’s major airports.
REPUBLIC OF KOREA:
1. Regional Trading Arrangements  (Secretariat’s Report, p. 24)
It appears that Poland has adopted a region-oriented trade strategy through a number of
agreements it has signed with its continental neighbours. The Secretariat mentions that “preferential
tariffs differ substantially between trading partners, and in 1999 were, on average, less than half of
Poland’s MFN tariffs”. Korea is concerned that such wide gap between MFN and preferential tariffs
can be more conducive to trade diversion. As such, Korea hopes that Poland can bridge this gap by
lowering MFN tariffs in general.
2. Government Procurement  (Secretariat’s Report, p. 58, para. 71)
Korea understands that Poland is considering joining the WTO Agreement on Government
Procurement. Has the Polish authorities agreed on a schedule for its accession? If so, when can we
expect Poland to join the WTO Agreement on Government Procurement?
3. Excise and other Duties (Secretariat’s Report, p. ix, para 19, also p. 34, para. 4)
The Report mentions that “the imposition of excise and other duties, including customs fees,
also discriminate against certain imports, including textile”. In clothing,  “domestic products are
exempt from excise duties while imports are taxed at 20%”. Is the Polish government considering
addressing what appears to be discrimination against foreign products?
4. Customs Clearance  (Secretariat’s Report, p. 35, para 35)
The Secretariat lists a number of customs regulations problems related to delays, corruption
and lack of uniform implementation. Are there any measures that will be taken to remedy theseproblems to facilitate trade?WT/TPR/M/71
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ANNEX II
RESPONSES PROVIDED BY POLAND TO ADVANCE WRITTEN QUESTIONS
AND TO OTHER QUESTIONS RAISED DURING THE MEETING
I. ECONOMIC ENVIROMENT
- Macroeconomic situation, stabilization; structural adjustment
Answers for the questions included in the Statement of Mr Didier Chambovey  concerning current
account deficit;
How do the Polish authorities assess this risk in light of recent currency crisis?
Would it imply alternative or complementary strategies to reach the disinflation targets?
The Polish Government is conscious of the possible medium-term consequences of the large
current account deficit.  Nevertheless, the deficit is sustainable, because it is fully financed with a
stable inflow of foreign investments without shrinking the stock of Polish official reserves.  It is
projected that the deficit will steadily decline in  the future, which has been reflected in the latest
foreign trade figures from May 2000.
The way in which fiscal policy can contribute to reducing the current account deficit is by
reducing and rationalizing pubic expenditures.  To achieve this the Polish authorities are
concentrating on changing the structure of budget expenditures and gradually tightening the public
sector deficit in coming years and reaching the fiscal balance in the year 2003.
The National Bank of Poland, is legally responsible for price stability in Poland.  Monetary
policy is determined by direct inflationary target.  Its rather restrictive stance is not only perceived asa means of disinflation but also as a way of curbing domestic demand, which should support external
stability in the long run.  The National Bank of Poland is fully aware of the possible negative short-
term impact of high interest rates on the current account deficit and the structure of its financing.  The
fully floating exchange rate of the zloty might be considered as a safety valve.  There is also a
commonly accepted opinion that to maintain external stability and to restrain inflation the public
sector deficit must be under strict control.
More restrictive fiscal policy should ensure a better combination of macroeconomic policy
aimed at reducing inflation to 4% in 2003.  Tighter fiscal policy will also enable a reduction of the
high interest rates and lower the risks connected with speculative capital flows, which could aggravate
external stability and further disinflation.
DISCUSSANT:
Polish exports to Central and Eastern Europe and Russia still remain significant.  This the reason
why Poland was hit by the Russian crisis in mid-1998 (...).  It would be interesting to know how the
Government views the future geographic patterns of Poland’s trade.WT/TPR/M/71
Page 32
The geographic pattern of Polish trade in 1998-1999 (%)
Exports ImportsCountry/Group of countries
1998 1999 1998 1999
Developed countries 73.5 76.3 75.0 74.1
EU 68.3 70.5 65.9 64.9
Developing countries 5.3 6.7 11.8 11.7
Central and Eastern Europe and NIS 21.2 17.0 13.3 14.2
CEFTA 7.2 8.2 6.3 6.7
Russia 5.7 2.6 5.0 9.0
It has to be admitted that reduction of Polish export to Russia (by about 55% in 1999 in
comparison with the preceding year) was mainly connected with dramatically decreased exports of
foodstuffs.  It should be stressed that export of Polish foodstuffs to Russia has been limited by highly
subsidized export of goods and food aid coming from other WTO Members.
The main tendencies in the geographic structur e of Polish trade will be generally maintained.
They will reflect the existing and future framework of preferential agreements notwithstanding the
will of diversification of trade directions and trade partners.  Having in mind its trade balance deficit,
Poland is very interested in intensification of its exports.  Therefore the Government will intensify itsactivities towards restructuring its export commodity pattern as well as export promotion in order to
gain new markets and to intensify trade flows into the markets of Polish traditional partners.
Privatization, state-enterprises
DISCUSSANT:
Do the polish authorities see any reason in terms of efficiency and welfare gains for maintaining
direct State ownership in enterprises? How does the Government intend to reach the strategic
objective of raising the private sector contribution to 90% of GDP by 2005?
Privatization  has crucial meaning for the process of transformation of the Polish economy and
is a necessary condition for assuring the appropriate functioning of the market economy in Poland.
The direct objective of privatization is to increase adaptation of the state entities to the market rules
and improve competitiveness, resulting in the increase of efficiency of management.  The
Government is convinced that indirectly, privatization positively influences long-term and fast
economic growth, which improves of living standard for the citizens.
The final objective of the Polish Government in the medium term (end of 2001) is to privatize
70% of general value of State Treasury ownership as of 1998.  In the long-run – according to the
governmental strategy for public finances and economic development in the years 2000-2010 – the
share of the private sector in GDP will reach 90%.
By the end of 1999, Poland had introduced a number of changes in the existing law which,
due to consistent implementation, also led to the following:
(1) over 70%1 of state enterprises were included in the privatization process;
(2) 71% of all the employed labour force work in the private sector (compared with 46% in
1993), generating 61% of the gross added value (38% in 1993);
                                                     
1 All quoted numbers come from statistical data published by the Central Statistical Office (GUS) and
from the International Financial Statistics IMF.WT/TPR/M/71
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(3) in agriculture, 98% of the employed work in the private sector, generating almost 100% of the
total production;
(4) in industry, over 70% of the employed labour force work in the private sector (41% in 1993),
generating 70% of the total production (31% in 1993);
(5) foreign investors have played and still play an important role in the privatization process; in
1999 out of US$3.3 billion income coming fr om privatization, only US$120 million came
from domestic investors (no restrictions for foreign capital participation in privatization of
state companies are provided in Polish law.  This means that foreign capital can participate in
the privatization process unhampered and for the majority of privatization techniques the
conditions of participation for national and foreign investors are the same.  The existing
exceptions allow some preferences for Polish investors in the field of their participation in
privatization, such as a system of instalment payments for the purchase of stakes/shares byPolish citizens, the requirement of permanent residence for the shareholders of companies
leasing state company property and administrative control over the engagement of property of
state corporate bodies.
In order to reach the strategic objective of raising the private sector contribution to 90% in the
GDP, the Polish Government foresees:
− 
continuation of the indirect (capital) privatization performed in the form of selling the stakes
and shares of State Treasury companies in the procedure of Initial Public Offering (IPO),
public invitation for negotiations or public written tender;
− implementing the projects of direct privatization concerning the property of liquidated
companies by selling them, contributing their a ssets into other companies or turning over the
assets for non-gratuitous use (this way of privatization is dominating other methods);
− implementing further actions resulting from the NIFs  Programme (National Investment
Funds;
− continuation of the process of restructuring and privatization of agricultural property
implemented by the Agricultural Property Agency.  The task of the Agency is strengthened by
the law on re-privatization, providing for the use of the agricultural properties as one of the
ways of covering the re-privatisation claims;
− continuation of the process of privatization of the Treasury military property by the Military
Property Agency and the Military Housing Agency.  In particular restructuring and
privatization will be conducted by selling, giving to commercial law companies, giving foruse, leasing, and for administration, for a specified time.
DISCUSSANT:
Completing the privatization of the coal and steel sectors is regarded as crucial since these industries
present a large burden for the budget and the economy as a whole.  But this process will entail
reduction in production capacity and employment.  What are the perspectives for these on-going butuncompleted privatisation operations?
UNITED STATES:
Please provide more details concerning the Government of Poland’s privatization targets for the year
2001.  Having successfully implemented privatization packages in many key services sectors, where
does it expect the greatest remaining challenges to lie? Are they more pronounced in certain sectors?WT/TPR/M/71
Page 34
JAPAN:
While the privatization of state owned enterprises has been accelerated in recent years according to
Government plan, the privatisation of such areas like defence, hard-coal mining, steel, chemicals,
shipbuilding, electricity generation, sugar, liquor and railway transport have yet to be launched.
Please explain the future perspectives for privatization in those areas.
UNITED STATES:
What are the plans for privatizing and restructuring the railway sector? Will foreign participation be
allowed and, if so, to what extent?
Please provide further details concerning the privatization of the state-owned shipping lines.  When
will the Polish Ocean Line Group and the Polish Steamship Company be privatized? Will the process
be open to foreign investors on a non-discriminatory basis? What is the rationale for planning only a
partial privatization of the Polish Baltic Shipping Company?
Why does the Government of Poland plan to partially privatize the major state-owned ports exclude
the possibility of foreign participation? Will this be consistent with EU practices?
In reference to the above, please provide similar details on plans for the privatization of Poland’s
major airports.
Polish State-owned railways (Polskie Koleje Pa ństwowe)
In September 1999 the Government approved the programme for restructuring Polish State-
owned Railways - PKP (Polskie Koleje Pa ństwowe) and also adopted and transferred to Sejm the
amended draft law on commercialization, restructuring and privatization of the State Enterprise
Polskie Koleje Pa ństwowe.  The draft law assumes, among others, creation of companies, which shall
take over three basic areas of PKP activity: the railway infrastructure sector, passenger transport andfreight transport.  It allows for foreign capital participation.  The draft law is likely to be passed by the
end of 2000.
Independently of future legal solutions, in 1999 different restructuring tasks were carried out
on the basis of Art. 44 of the Law of 26 July 1995 on Polskie Koleje Pa ństwowe, including preparing
for separation from PKP of organized parts of property and making them independent.
Electric energy sector
The electric energy sector’s privatization intensified in the years 1999 and 2000.  Individual
privatization projects initiated in previous years continued and simultaneously the “Integrated
Schedule of the Electric Energy Sector’s Privatisation and the Electric Energy Market’s Introduction”
was prepared and approved by the Polish Government on 16 May 2000.  This schedule provides for:
(1) necessary legislative amendments in the Energy Law and in executive Acts;
(2) elaboration and introduction of a compensating charges system.
The sector’s privatization is in conformity with previously accepted strategic assumptions
i.e. sector’s consolidation through privatization, the grouping of entities according to their
differentiated potential and economic conditions, for the purpose of simultaneous privatization as well
as ensuring a balanced participation of individual investors in the electric energy market.WT/TPR/M/71
Page 35
Power plants sub-sector
In March 1999, the first stage of privatization of Zespó ł Elektrowni P ątnów-Adamow-Konin
ended: 20% of the company’s shares were sold to Elektrim.  As the agreed conditions stated, the
consortium obliged itself to raise capital equivalent to US$100 million to be used for investments.
Total 10-year investment program in ZE PA K amounts to the equivalent of US$1 billion.
A sale contract for 25% of a block of shares in Elektrownia T. Ko ściuszko S.A. in Po łaniec
was signed by the Ministry of the Treasury and the Belgian concern Tractebel in April 2000.  A
privatization agreement on the sale of 35% of shares in Elektrownia Rybnik S.A. to the consortium
consisting of NRG, Marubeni corporation and GE Capital was planned to be signed in June 2000.
Moreover, the privatization advisor prepared a privatization strategy for Elektrownia Be łchatów S.A.
According to this strategy, the company is to be privatized together with the kopalnia W ęgla
Brunatnego Belchatów S.A.  This project is to be implemented in 2001.  As regards Elektrownia
Skawina the selected advisor will soon begin to make pre-privatization analyses.  It is assumed that
privatization of this company will end in 2000.
Thermal electric power stations subsector
A sales contract for 55% of shares in Elektrociep łownie Warszawskie S.A.  to the Swedish
concern Vattenfall was signed in January 2000.  This transaction is valued US$230 billion and theinvestment obligations close to US$800 million.  On 26 May 2000 shares of Elektrociep łownia
Wroclaw S.A were listed for the first time on the Warsaw Stock Exchange.  The sale offer of the
Treasury’s shares covered 36% of shares of the A series.
As regards Elektrocieplownia Bialystok S.A., in April 2000, the Minister of the Treasury
published the second invitation for negotiations on the sale of this company’s shares.  Theprivatization agreement is to be signed by late 2000.  The consortium consisting of Electricité de
France and Gaz de France has been selected as a strategic investor for Zespó ł Elektrociep łowni
Wybrzeże S.A. in Gda ńsk.  The consortium will acquire 45% of shares in this company.  In May 2000
the terms of an agreement to sell 52.5% of shares in Elektrociep łownia Będzin S.A.  to the German
firm Meag were agreed.  This is the second stage of privatization of this company.  Moreover, aprivatization process continued in Elektrociep łownia Zielona Góra, Elektrociep łownia Toru ń, and
Elektrociep łownia Tychy (elaboration of pre-privatization analyses)
Energy distribution subsector
A privatization strategy for the energy distribution subsector in Poland was prepared in
August 1999.  The strategy provides for a group privatization of all 33 energy distribution companies
by the end of 2002, except Górno śląski Zakład Energetyczny in which due diligence  is being
observed by potential investors.  The Ministry of the Treasury is awaiting the binding offers by lateJune.
Arthur Andersen, the Ministry’s privatization advisor is making the pre-privatization analyses
for the following eight energy distribution companies belonging to the so-called Grupa Pó łnoc: ZE
Koszalin, ZE S łupsk, ZE Energia Gda ńsk, ZE Elbl ąg, ZE Olsztyn, ZE Toru ń, ZE Płock and
Energetyka Kaliska.  Moreover, the privatization of Sto łeczny Zak ład Energetyczny STOEN S.A.
started with a selection of the company’s privatization advisor.
Coal mines
At the present stage of Polish coal mining restructuring it is possible to privatize only such
coal mines for which a strategic investor can be found.  In 1999, a privatization process was initiated
in the case of the following two coal mines: KWK Budryk S.A. and KWK Bogdanka S.A. work onWT/TPR/M/71
Page 36
privatization of KWK Bogdanka is most advanced.  In June 2000, a public invitation for negotiations
was finally chosen as a privatization procedure for this coal mine.  The privatization process of the
Bogdanka coal mine is to be completed in the current year.  As regards KWK Budryk, work aimed at
signing an agreement with the chosen consortium, consisting of Deloitte & Touche/IMC Consulting,
selected in November 1999 by tender for making pre-privatization analyses, is coming to an end.According to changes in the Government Programm e, entitled The Reform of Hard Coal Mining in
Poland in the Years 1998-2002, work on preparation of a complex pre-privatization evaluation of the
hard coal mining sector is under way.  On its basis the consecutive pre-privatization analyses of
several selected coal companies will begin.  The contract for preparing this evaluation was signed by
the Minister of the Treasury last March and the final report was to be submitted in June 2000.
Iron and Steel Sector
According to the Programme of the Restructuring of Polish Steel Industry, adopted in
June 1998, Polish Government maintains the intention of completing the privatization procedures of
all the entities in the sector in which the State Treasury possesses any shares by the end of 2001.  The
Ministry of State Treasury aims to privatize eight steelworks in which it possesses 100% of shares,
among which the largest are:
Steelwork Katowice Ltd. (SK).   At the beginning of 1999, the Minister of State Treasury opened an
unlimited tender for the choice of advisor to perfor m the ownership transformation of the steelworks.
It was won by The Chase Manhattan Plc.  The process of working out the pre-privatization analysis
and the privatization strategies is being carried out at the moment.  The negotiations with potential
investors are also being continued.
Steelwork Sendzimir Ltd. (SS).   The negotiations carried out until the year 1999 with potential
investors intending to invest in modernizing the SS di d not bring results.  As a result a Co-ordinating
Task Force has been created on the initiative of the Ministry of State Treasury.  The result of the work
of this body was the signing of an agreement in February 1999, by the management of SK and SS, in
which the market strategy for the years 1999-2010 has been determined.  This strategy provides that
SS will concentrate in the future on marketing fl at cold-rolled products, withdrawing from marketing
flat hot-rolled steel products or steel-bands.  On the other hand, SK will concentrate on marketing flat
hot-rolled steel products and steel-bands.  The steelworks have accepted that after commencement of
production of flat hot-rolled steel products by SK, SS will limit its output capacity of the raw material
section as well as the production of raw steel to the level of 1.8 million tonnes.  The process of
ownership transformation of SS has been started, taking into account the agreements signed with SK.
A consortium of Business Management and Fi nance, Robert Flaming & Co. Ltd. and EWIP
International Ltd. has been chosen as the advisor of the Ministry of State Treasury for theprivatization of steelworks: SS, Cedler and Florian.  The schedule of privatization of SS assumes that
the privatization strategy will be elaborated in the first quarter of the year 2000 and the process of
choosing the strategy investors will be started.
Sugar holdings
In connection with the concept adopted at the end of 1998 on privatization of the sugar plant
(Privatization of the Silesian Sugar Company accord ing to the holding concept, whereas towards the
other three Sugar Companies - regional privatization ), in 1999 preparations were under way for
starting the realization of the process.  In October 1999 an invitation appeared for negotiations for
potential investors in the matter of sale of the sh ares of the Silesian Sugar Company S.A. whereas in
March this year, on the basis of a recommendation by the advisor, a decision was taken to on grantexclusiveness to negotiations to one investor: Saint Louis Sucre S.A.  Also a transaction was
concluded on the sale of a control block of shares of the sugar plant Glogow S.A to the German
investor Pfeifer & Langen.WT/TPR/M/71
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Beginning from mid-1999 the boards of directors of the other sugar companies continue work
aimed at preparing for the sale of shares of particular sugar plants composing the regional groups.  It
has to be noted that in the eight groups a strategic investor was chosen and at present detailed records
of agreements are being decided.
At the same time it should be emphasized that a concept is being considered for the formation
of a holding Polski Cukier, which will be created on the basis of 16 sugar plants grouped into three
companies: Lubelsko-Maloposkiej, Poznasko-Pomorskiej, and Mazowiecko-Kujawskiej.  At present
work on elaboration of the preparation analysis is going on.
Liqueur industry
By the end of 1999 the Ministry of State Treasury had commercialized most of the spirit
industry enterprises (16 out of 21).  In July 1999 a very essential problem was solved in connection
with division of trademarks (auction, as a result of which Polmos has bought the right to particulartrademarks), which had disabled the start of the privatization process of the entities in the spirit branch
of industry.  In September 1999 the Ministry of State Treasury adopted the strategy for privatization
of the sector elaborated by an advisor.  In the first quarter of 2000 by means of a tender, privatization
advisors were selected for 15 companies.  The Fermentation Industry enterprise Akwawit S.A from
Leszno was chosen for privatization by means of public offer till the end of 2000 (at present somework is going on aimed at choice of an advisor.)
The other five state enterprises will be privatized probably by means of direct privatization
(Art. 39.1 of the law on commercialization and privatization of state-owned enterprises) or by
winding up of the enterprise Art. 19 of the law on state-owned enterprises).  For four of them (the
Spirit Industry Plant Polmos in Sieradz, Warsaw Producer of Vodka Koneser, the Spirit IndustryWorks Polmos in Żyrardow, Łódź Plant of Spirit Industry) the Council of Ministers consented to
carrying out direct privatization.  In April 2000 privatization advisors were chosen for two plants, and
work is going on aimed at election of the advisor fo r the other two enterprises.  With respect to the
enterprise of the Spirit Industry Polmos in Warsaw an analysis of the application filed for carrying out
direct privatization is going on.
Heavy chemicals
The first privatization transactions in the heavy chemicals industry were carried out in the
period 1995-96 (Inowroclaw Chemical plants SODA M ĄTWY S.A., Janikowskie Soda Plant
JANIKSODA S.A., Inowroclaw Salt Mines S.A., and the Nitrogen Plant Wloclawek S.A.).  In 1999
the process of privatization began in the largest enterprises of this sector.  It concerns especially the
nitrogen plant in K ędzierzyn, Pulawy, Police, Tarnow-Mo ścice, which are, at present, sole
shareholder companies of the State Treasury.  In the second half of 1999 the Ministry of StateTreasury announced a tender on choice of an advisor for the process of privatization of these entities.
The consulting firm Business Management & Finance S.A, finally selected for four companies, is
preparing proposals for final paths of property transf ormations of the entities of the sector.  The
possibility to carry out consolidation within this sector is not excluded.  According to the schedule
adopted by the Polish Government the process of privatization of heavy chemicals will be completedby the end of 2001.
Maritime
There is only one exclusively State-owned shipping company in Poland:  Polska Żegluga
Morska (the Polish Steamship Company, seated in Szczecin).  The company is under a restructuring
programme, which is to lead to its privatization.  The other two big shipping companies, i.e. Grupa
Polskie Linie Oceaniczne (the Polish Ocean Line Group), seated in Gdynia; and Polska Żegluga
Bałtycka (the Polish Baltic Shipping Company), seated in Ko łobrzeg, are joint-stock companies withWT/TPR/M/71
Page 38
a State participation.  The current shareholders of the former are the State Treasury (25 %), the State
Agency for Industrial Development (38.5 %), and other entities (36.5 %).  The prerequisite for
privatization of the Polish Baltic Shipping Co mpany is a restructuring programme, following an
adequate capital raise.  In both cases further withdrawal of State participation is planned on a non-
discriminatory basis towards foreign investors.  However, due to the complicated nature of thisprocess, which has just begun, it is not possible to give its detailed time-schedule.
Poland’s major seaports privatisation programme excludes foreign capital participation for
essential national security reasons.
Aviation
There are 40 airports registered in Poland.  Three of them (Warszawa-Ok ęcie, Rzeszów, and
Zielona Góra) are owned by the Polskie Porty Lotnicze State Enterprise (PPL).  The remaining 37 are
owned by several companies established by PPL with other entities (in particular local governments).
A draft law on Poland’s airports envisages the liquidation of PPL and further privatization on a non-
discriminatory basis towards foreign investors.
Investment
NORWAY:
Could you indicate what type of interests are referred to in the Secretariat’s report formulation
(page 29, paragraph 47) that  the permits for land acquisition may be denied to protect Poland’s
interests.
Poland is vitally interested in foreign direct investment inflows, which contribute to
modernization and increase competitiveness of the Polish economy.  Taking into account these
expectations the law on immobilities, including land purchase by foreigners was changed in 1996.  Itallows the purchase of land for investment purposes on a small scale (up to 0.4 hectares within cities
or one hectare  within villages) without the necessity  of obtaining a government permit.  Applications
concerning bigger plots are examined, and replied to , by the Ministry of Interior and Administration
within two months.
It should be pointed out that the implementation of this law until now indicates, that there are
no difficulties for interested parties.  This is evident by the fact that there were 3,334 purchasing
applications by foreigners in 1998 (mostly from Germany, Sweden and Austria) and  only 4% were
denied by the Polish authorities.  There can be a variety of reasons why such negative decisions can
be taken on a case-by-case basis.  While there is no intent for this law to be restrictive, as evidenced
by practice, the regional and economic development plans created by local authorities might rule out
selling of land earmarked for other purposes.  Due to the restructuring process of the Polish economy
which has not been completed yet, lifting restrictions  in this area will be considered in the near future
by Polish authorities.
UNITED STATES:
Poland’s plans to reduce the number of economic activities that require special licences
CANADA:
Does Poland intend to remove or modify a specia l permit for “trade in wholesale of imported
consumer goods”?(Table II.3.page 30); Could Poland outline the conditions and criteria required for
the issuance of the special permit?WT/TPR/M/71
Page 39
In order to create advantageous surrounding for entrepreneurship and foreign investors Poland
prepared last year a legal framework, which is a kind of constitution for economic operators.  The Act
of 19 November 1999 on Business Activity replaced the Economic Activity Act and the Law on
Companies with Foreign Participation.  This Act will come into force on 1 January 2001 with the
exception of the articles referring to branches and re presentative offices of foreign entrepreneurs, and
articles referring to small and medium-sized enterprises, which came into force on 1 January 2000.
The Act provides for the establishment of branches of foreign economic entities subject to
registration in the National Court Register, with no financial guarantees or regulatory, material, or
personal requirements other than those applicable to domestic enterprises.  In proceedings concerning
an entry in the registry of entrepreneurs, the foreign entrepreneur shall submit to the court of
registration the certificate issued by the appropri ate body representing Poland abroad stating that
according to the principle of reciprocity Polish en trepreneurs are permitted to operate in the country
on whose territory the foreign entity has its seat.  This certificate is not required if an agreement is in
force between the Republic of Poland and this count ry incorporating the principle of reciprocity.
The number of sectors where licence would be required for the establishment of enterprises
has been reduced from 28 to eight (excluding highly regulated sectors such as the financial sector
where specific laws apply).  These eight sectors are:
(1) exploration, identification, excavation of minerals and mineral materials from deposits and
located in the waste left over after mining works and after the process of enriching minerals,
non-tank storage of substances in mounds, and storing waste in underground mines;
(2) manufacturing and trading in explosives, weapons and ammunition, and goods and
technology for military or police usage;
(3) manufacturing, processing, storing, transmitting, distributing and trading in fuels and energy;
(4) protecting persons and property;
(5) air transportation and other air services;
(6) building and operating toll roads;
(7) managing rail lines and providing rail transport;  and(8) broadcast of radio and television programmes.
UNITED STATES:
We seek clarification of the regulatory framework for the production, storage, importation and
distribution of gas.
The Polish Oil and Gas Company is being prepared for privatisation.  At present, it is to undergo a
structural adjustment.  It is initially intended to  split the company into five smaller companies, one
concerned with prospecting and production and four with distribution.  Detailed procedures are beingworked out.
UNITED STATES:
Please explain the rationale for forbidding mergers between entities which would result in market
share greater than 15 % in the production, transmission and distribution of electricity.  Is this aWT/TPR/M/71
Page 40
general requirement of Poland’s competition laws applied to merger reviews in other industry
sectors, or is it specific to this sector? How will this requirement confirm with EU practices?
The Permanent Co-ordination Group for Energy, headed by the President of the Competition
and Consumer Protection Office, established by the Economic Committee of the Council of Ministers,
presented an opinion that the sale of shares of privatisation groups to investors should not assure themmore than 12-15 % of the electricity market share.  This is to assure achieving privatization aims to
protect consumers through creating a free electricity market and preserving energy security of the
country.  The above requirement applied only to energy generation and distribution and does not
result from the Law on preventing monopolistic practices and protection of consumer interests of
24 February 1990.
UNITED STATES:
The Secretariat report notes that frequently laws and regulations are amended with short notice and
in some cases with retroactive effect.  What procedures has the Government of Poland put in place or
intend to introduce to insure that interested or affected parties – businesses, consumers, workers,
NGOs, etc. – will receive an advance notice and an opportunity to comment on proposed regulation.
It is an established practice that any draft law or regulation is distributed among all parties
concerned with a request for comments prior to pr esenting it to the Sejm (parliament) or to the
Council of Ministers for adoption.  In this way, they receive advance information on legal solutions
under preparation.
JAPAN:
Throughout the privatization process are foreign direct investments both from inside and outside the
EU area treated equally.  If not, please explain in detail differences applied.
Foreign direct investments from inside and outside the EU area are treated equally.
WTO and regional arrangements; notifications; EU accession, FTA's, bilateral agreements,
GSP
Questions raised by Mr Didier Chambovey and by Uruguay
It would useful to hear the impact of EU accession on Poland’s trade in agricultural products.
Could you explain what provisions Poland will take in order to avoid any damage to third countries’
trade flows of agricultural products after the adoption of the EU external tariff?
In the view of the EU Accession, Poland has pe rformed some studies to assess the impact of
EU trade regime implementation on trade with third countries.
Within the WTO/GATT, Poland has negotiated the admitted imports tariffs at the level not
lower, but frequently higher than that in the external  EU tariffs.  Higher rates are applicable for spirits
and processed tobacco products.  Upon accession, the customs charges will not go up, but quite thereverse, they are going to fall.  Part of duties will be increased.
All procedures are transparent and subject to GATT regulations.  Enlargement of the EU will
require an examination within GATT Article XXIV.  Article XXIV:5 involves an examination of the
overall change in border protection as a result of enlargement.  In respect of tariff protection  this
assessment will be based on an overall “before-and-after” comparison of weighted average tariff ratesestablished and customs duties collected.  Article XXIV:6 establishes the possibility for negotiatedWT/TPR/M/71
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compensation to any WTO trading partners where enlargement results in increases to bound rates on
products for which they are suppliers.  Such a procedure will be subject to future negotiations.
The studies indicate that Polish accession to the European Union would not negatively affect
the agri-food trade with third countries.  They are bound to gain because of the Polish accession to the
EU as higher standards will apply and the trade patterns are going to be more transparent, as is thecase now in the EU.
UNITED STATES:
In Paragraph 22, the Secretariat Report states that agriculture is one of the areas still to be
addressed in the EU accession negotiations.  What are the “problematic areas” identified during
these negotiations? Are Poland’s ongoing agricultural reforms delaying its negotiations for EU
accession?
Poland presented the Position Paper to the European Commission on 20 December 1999.  The
negotiation process was launched on 14 June 2000 after the European Commission reacted to the
Polish Position Paper.  Therefore it is difficult to foresee all the results of the Polish accession to the
EU before finalising the negotiation process.
Problem areas identified prior to the commencement of Polish accession negotiations with the
EU have been included in the Chapter on Agriculture of the Position Paper.  In this document it wasstated that:
(1) Poland declares the readiness to join the European Union as of 31 December 2002, which
means the adoption and implementation of the entire acquis communautaire  as well as setting
in place all of legal and institutional arrangements needed to apply the instruments of
Common Agricultural Policy in Poland.
(2) Poland requests that the whole sector of Polish agriculture is completely incorporated within
the CAP framework.  It requests setting production quota limits at the level ensuring
environmentally sustainable use of natural farming capacity in Poland as well as stable
income source for farming population.  Polish agri-food markets should become a part of the
European Single Market.
(3) Integration between Poland and the European Union will mean the enhanced dynamics of
transformations in the agricultural and rural sectors.
(4) As for Polish agriculture, the markets of crucial importance are the ones subject to strict EU
market regimes featuring significant interventions and direct support under the CAP, such as
milk, beef, cereals and sugar beets.  Poland has requested that Polish farmers have access to
the same price, income and structural meas ures.  Upon Polish accession to the EU, Polish
farmers would be entitled to direct payments, which results from the acquis .
(5) Major negotiation problems will include the setting of production quota limits for milk, white
sugar and isoglucose, potato starch, dried fodder, and raw tobacco.
(6) Poland has applied for aid from the EU budget allocated during a three year period following
the accession, to be earmarked for the development of the Integrated Administration and
Control System (IACS).
What is the Government of Poland requesting from  the European Union in terms of direct payments
to Polish farmers?WT/TPR/M/71
Page 42
As declared by the Government of Poland, the readiness to adopt all of the acquis  on the day
of accession with regard to the common market or ganisations regimes, quality controls, the European
Community’s trading system, and the incorporation of the agricultural sector within the Single Market
system of rules depend on the guaranteed availability of all of the Common Agricultural Policy
instruments, including direct payments.
Does Government of Poland view the double zero negotiations with the EU as a “step” towards EU
accession?
Upon accession, Poland is going to adopt the whole of the EU Customs Tariff.  No trade
limits will be in place in the trade between Poland as an EU Member State and the other Member
States, which means for Poland that, on the date of accession, a single act of reducing tariffs to the
zero level will take place.
The negotiations on the liberalization of trade in agri-food products between Poland and the
European Union are aimed at gradual adjustment of the Polish customs tariff to the level of the EU
tariff rates and other tariff measures effective in the EU.
The current negotiations between Poland and the EU on the agri-food trade liberalization have
not been completed.  Therefore it is difficult to guess the impact they would have on the accession
negotiations.
THAILAND:
Paragraphs 24 and 25 of the Report by the Governm ent of Poland and in paragraph 32 of the Report
of the Secretariat refer to Free Trade Agreement between Poland and Turkey.  This Agreement
involves tariffs reduction or elimination by the beginning of 2002.  Do these tariffs reduction or
elimination programmes include textiles and garments?  If so, please provide details of the tariffs
reduction or elimination plan of these two products.
Yes, tariffs reduction includes textiles and garments.  More sensitive products have been
covered by Annex A1 to Protocol 1 of the Agreem ent.  These include selected goods from Sections
35, 37, 61, 62, 63, 64.  Tariffs for 278 items (in 8-digit code) will be reduced gradually:
− at the date of entry into force of the Agreement – 70% of MFN
− from 1 January 2001 –   40% of MFN
− from 1 January 2002 - all duties will be abolished
Less sensitive products have been covered by Annex A2 to Protocol 1 of the Agreement.
They include selected textile and garment products from Sections 42, 51, 52, 54, 55, 57, 58, 61, 62,
63.  Tariffs for 543 items (in 8-digit code) will be reduced gradually:
− at the date of entry into force of the Agreement – 70% of MFN
− from 1 January 2001 –  all duties will be abolished
REPUBLIC OF KOREA:
It appears that Poland has adopted a region-orient ed trade strategy through a number of agreements
it has signed with its continental neighbors.  The Secretariat mentions that “preferential tariffs differsubstantially between trading partners, and in 1999, were, on average, less than half of Poland’s
MFN tariffs”.  Korea is concerned, that such wide gap between MFN and preferential tariffs can beWT/TPR/M/71
Page 43
more conducive to trade diversion.  As such Korea hopes that Poland can bridge this gap by lowering
MFN tariffs in general.
Concerns of India related to extension of regi onal trade preferences and securing them in the
multilateral framework, comments of USA on problems of trade diversion caused by tariff
differentials between MFN rates, preferential rates and measures indented by Poland in order toameliorate this problem during the period leading up to Poland’s’ accession to the EU and comments
of the Czech Republic.
Extension of regional trade preferences on a non-discriminatory basis go along with securing
a multilateral framework also for non-preferential partners and they supplement the multilateral
trading system and do not lead to any trade diversion.  This could be proved by data published on
page 11 of the Report (Table I.4) where total imports increased more than 2.5 times since 1992.  The
share of European trade fell slightly from 83.7% in 1992 to 82.1% in 1998 and the share of Americarose from 5% to 5.7% while the share of Asia increased from 10.1 to 11%.
Poland’s entry to the EU and, connected adoption of a common customs tariff and all
regulations related to imports, will cause changes in the customs status (at the same time, in the level
of customs burden) of imports from some groups of countries.  It is connected with the more complex
system of different trade preferences in the EU than in Poland.
Therefore Poland will apply other instruments of trade policy such as suspensions and tariff
quotas.
UNITED STATES:
What is the Government of Poland’s time frame for implementing Copenhagen criteria for
enlargement and becoming a full member of the European Union?
The acceleration of adjustment process in order to meet the obligations of future accession to
the European Union determined by the Copenhagen political and economic criteria of membership,
remains a priority of the Polish Government.  The declared date of Polish readiness for EU accession
at the end of 2002 is being confirmed.  Furthermore, a consensus has been reached amongst the major
political forces as to the importance of Poland’s preparation for membership in the EU.  Thisconsensus was reflected in the parliamentary debate held in autumn 1999 and spring 2000.
Because the political criteria and two economic criteria of membership (functioning market
economy and ability to cope with the competitive pr essure of the EU internal market) are – in the
EU’s evaluation – already fulfilled, Poland will concentrate its endeavours on law harmonization.
The Government has recently worked a new method of accelerating this process.  The method has
three aspects:
The first aspect concerns drafting the so-called European legislative acts for the purpose of
the horizontal approximation of Polish law simultaneously in several sectors.  Provisions
approximating particular "European" sectors to the acquis will be treated as a priority, while the
remaining provisions will be subject to a routine legislative procedure.  Moreover, some of these acts
will be classified as “systemic European” and passed to the Parliament in their entirety.
Secondly, the Office of the Committee for European Integration as a coordinating central
governmental institution will be responsible for proposing the European legislative acts and applying
for their classification as horizontal or systemic.WT/TPR/M/71
Page 44
Thirdly, the Parliament has proposed an amendment to its Rules of Conduct by establishing
the so-called Grand Commission for the consideration of the above-mentioned draft legislative acts
passed to it by the Government.
UNITED STATES:
While we welcome Poland’s eventual membership in the EU, we are very concerned by the interim
tariff arrangements and its affect on U.S. exports.  What percent of the Polish trade by value is
conducted on a preferred level with the European Union?
The share of trade with the EU in 1999 in total Polish trade turnover was 67.8%.  Poland will
adopt  the UE External Customs Tariff on accession to the EU.
We plan first to liberalize access to our market for raw materials, components, semi-processed
products and investment goods.  Consumption goods w ill be liberalized in a longer period – finally at
the time of EU membership.  These activities are determined by general economic policy.  They takeinto account the transformation process taking place in Poland, including restructuring of the
individual sectors, demand of the economy for imported goods and the production possibilities of the
Polish industry.  In the area of raw materials, components, semi-processed products and investment
goods, the Polish side sees the possibilities of further facilitation, and for a number of goods this has
already been done.
UNITED STATES:
What proportion of trade is covered on a preferential basis by Poland’s preferential agreements with
other CEFTA parties and the FTA?
The share of trade with CEFTA parties in 1999 in the total Polish trade turnover amounted at
7.23% and with EFTA 2.33%.
USA comment
We question the consistency of Poland’s re gional agreements with WTO requirements.
Polish FTAs have also been concluded as an important step towards the approximation of the
Polish legal system to the law of the European Union in terms of external relations, and corresponds
to the principles of the Polish treaty policy, which aim is the soonest EU membership.  All ouragreements create a free-trade area in conformity with the definition set out in Article XXIV: 8(b) of
GATT 1994 within a period ending at the latest on January 2001.  The full plans for reductions to zero
tariffs on substantially all the trade between the Parties  are contained in the relevant articles of the
Agreements and in the relevant annexes and protocols.  The Agreements cover all trade in industrial
products and substantially all trade in agricultural products.  Agreements also include provisions, inter
alia, on state monopolies, competition, state aid, government procurement, protection of intellectual
property.  Agreements also cover safeguards provisions consistent with WTO rules.  Polish regional
agreements are compatible with WTO rules.
Does the Government of Poland intend to negotiate preferential trade agreements with Russia,
Ukraine and the other New Independent States?
At the time being, no.WT/TPR/M/71
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Czech comment on safeguards applied within CEFTA .
Refer to p. 39  of the Report, where there have been quoted safeguard actions undertaken by
Poland mainly concerning agricultural products.  CEFTA includes provisions on specific safeguard in
agriculture, where “given the particular sensitivity of agricultural markets, imports of products
originating in a Party, which are the subject of concessions granted under the Agreement, causeserious disturbances in the market of the other Pa rty, the Party concerned may immediately enter into
consultations to find an appropriate solution.  Pending such a solution the Party concerned may take
measures it deems necessary”.
Tariffs/Generalized System of Preferences (GSP)
THAILAND:
In paragraph 22 of the Report by the Secretariat, we understand that Poland is in the process of
joining the EU within 2002.  What  is the implication of Poland’s membership of the EU toward
Poland’s tariff scheme including Poland’s preferential treatment under the GSP schemes currently
extended to developing countries.
Comment of Mr. Chambovey  on providing additional market access opportunities for LDCs with a
view to mitigate discrepancy between MFN and preferential tariffs.
With reference to question (no 2) from Thailand relating to tariffs/General System of
Preferences (GSP), we would like to inform that currently Poland has been analysing possibilities to
award supplementary tariffs preferences in Po lish tariffs for least developed countries.
At the same time, we would like to inform that currently Poland is transforming its GSP
system to increase its compatibility to the EU GSP scheme.
Upon Polish accession to the EU we will take  over the final version of the GSP system
applied by EU.  This process covers unification of goods according to the European system.
Norwegian question related to list of the products which are excluded from the concession scheme for
LDCs.
The goods covered are:
– Agricultural products:  HS codes: 0101 19; 0102; 0103; 0201; 0202; 0203; 0207; 0401-0409;
0808; 0808-0811; 0101-0105; 1107; 1108; 1210; 1514; 1601 00 – 1602; 1701 – 1702; 1806;
1901 – 1905; 2007-2009; 2203-2204; 2208; section 24
− Industrial products: HS codes 2710; 33 02-3307; 3401-3402; Section 36; 5208-5212; 5306;
5508-5516; 5701-5705; 5801-5811; Section 59 -63; 7202-7229; 7301-7324; 7407-7419; 8518;
8701-8707; 9302-9303.
CANADA:
The Secretariat Report notes that except for certain sensitive items, imports from developing countries
are dutiable at tariff rates equivalent to 70% of the MFN level.  The Government Report notes that
tariff rates on imports from developing countrie s amount to 80% of the MFN level.  Could Poland
clarify this discrepancy?
Discrepancies, which emerged in the two reports, are caused by the level of reduction of
tariffs for different groups of products.  Except for certain sensitive items, agricultural imports fromWT/TPR/M/71
Page 46
developing countries are dutiable at tariff rates equivalent to 70% of the MFN level.  Except for
certain sensitive items, industrial imports from DEVs  are dutiable at 80% of the MFN level.
II. TRADE POLICY BY MEASURE
Tariffs, high rates, binding, escalation, excise duties, VAT
TariffsUNITED STATES:
The Secretariat Report notes that the Government of Poland has raised applied tariffs to bound levels
for a number of agricultural products.  Please describe the process the Government of Poland
undertakes to determine such tariff increases.  Are these tariff increases limited to a certain time
frame?
As regards tariff rates applied by Poland we would like to stress that Poland meets all the
commitments resulting from the list of WTO concessions.  Since the Agreement on agriculture cameinto force, Poland, contrary to many other countries, has not applied any bound rates even though it
has had the right to do so.
In case of some agricultural products, Poland has increased the tariff rates to the bound rate
level.  Due to fact that the Polish agricultural sector has not yet completed its restructuring process the
Government of Poland explored its rights resulting from a possibility to make the duties in line withtheir bound level.
The Polish Government does not envisage a particular time framework for these increased
custom tariffs.  However, as soon as the situation is improved a return to the previously applied level
is possible.
Excise duties, VAT
Answer to the questions raised by the Government of Canada and the Government of the
United States of America.
CANADA:
Canada finds itself disadvantaged by Poland's use of tariff escalation and VAT or excise rates
favouring domestic products such as textiles and clothing.  Could Poland provide an explanation forits tariff escalation and differential application of VAT and excise rates as they pertain to these
goods? Are steps being taken to simplify the taxation system and render it more transparent?
UNITED STATES:
With respect to the discriminatory VAT taxes indicated in Table III.3 how does the Government of
Poland justify these differing rates given its national treatment obligations under Article III ? When
does the Government of Poland intend to eliminate this discriminatory treatment?
Differences in the excise duty rates for imported goods being sold in Poland come from
different tax-bases for these products.  For import of excise goods the tax-basis is the custom value
diminished by duty.  Regarding VAT there are two separate classifications of goods: the Systematic
List of Goods - for products in the domestic tu rnover and the Polish United Goods Terminology in
Foreign Trade - for imported products.  Because of this classification the differences in tax level for
imported and domestic products may occur.  Tax-payers can deduct the surcharge, which was paidWT/TPR/M/71
Page 47
while purchasing goods and services.  For imports the tax rate to be paid is defined in the customs
documentation.
If a tax-payer paid 22% VAT tax for imported goods and these goods were later sold on the
domestic market with a tax burden of 7% VAT -  the tax-payer may discount not only 7% VAT but all
VAT paid at the border.  However, these kinds of transactions occur rarely.  The tax-basis fordomestic products is the sales value less VAT.
With respect to VAT on textile products and clothing we would like to clarify that only some
childrens' clothing (up to seven years of age) are subject to 7% tax, and all other clothing is subject to
22% tax.  Apart from the above, the tax rates apply both to imported and domestic products.
Therefore, there is no discrimination between imported goods and domestic merchandise.  At the
same time we would like to inform that the process of harmonization of the VAT rates to the basic
level will have to proceed gradually, in connection with social issues.  Table III.3 contains thecurrently valid rates of excise duties;  the information on clothing articles needs further explanation.
In Poland excise duties are imposed only on fur clothing and other fur products.  For this kind of
import the rate of excise duty is 17.6% and for domestic products it is 15%.  The differences in the
above rates result only from the tax basis.
Table III.3
Rate of excise
Product description
Imported Domestic Difference
Chewing gum Cancelled Cancelled Cancelled
Fruits, nuts and other edible plant parts with alcohol 5790 PLN 5790 PLN 0
Bitter flavour bases, with sugar and spices 5790 PLN 5790 PLN 0
Certain fermented and non-alcoholic spices 112 PLN 112 PLN 0
Cigarettes* * * *
Salt 7.5 - 17.6% 7% - 15% 0.5% - 2.6%
Unleaded petrol 1217 PLN 1217 PLN 0
Diesel fuels 886 PLN 886 PLN 0
Perfumes, beauty preparations and cases 25% 20% 5
Glues for eyelashes and wigs 25% 20% 5
Tanned or finished fur hides 25% or  0% 20% or  0% 5% or 0%
Fur apparel 17.6 or 0% 15% or  0% 2.6 or 0%
Clothing articles 17.6 or 0% 15% or  0% 2.6 or 0%
Video cameras, recorders and TV’s 11.1% 10% 1.1%
Motor vehicles
- Engines above 2000 cc
-O t h e r17.6%
6.4%15%
6%2.6%
0.4%
Sea-going yachts- Priced above ECU 2400
-O t h e r25%
0%15%
0%10%
0%
Hunting guns and gas weapons 25% 20% 5%
Playing cards (excluding for children) 33.3% 25% 8.3%
Specialized equipment for gambling 17.6% 15% 2.6%
* Cigarettes – from 1 June 2000, a mixed system for cigarette taxation (according to EU regulations), entered into force.  The r ate
of the excise duty is given in a quote-percentage form.  The percentage rate on the retail price is 25% and the quote rate is 3 7.50
PLN/1,000 cigarettes and is the same for all types of cigarettes regardless of origin and the characteristics of the product.  There
is no difference in the excise duty rate between domestic and imported cigarettes.  Smoking tobacco is excised at the followinglevels:  domestic 60% and imported 150%.WT/TPR/M/71
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Customs clearance and valuation;
UNITED STATES:
Please describe in detail the administration regime by which Poland’s preferential and non-
preferential origin regimes operate consistent with the obligations under both Article 2(h), as well as
paragraph 3(d) of Annex II of the WTO Agreement on Rules of Origin (i.e. with regard to issuingbinding assessments of origin, including prior to commencement of trade in the particular goods of
interest, within 150 days of request by exporters and importers).  Specifically, as part of a description
of the regime, please provide information as to such requests from exporters or importers for biding
assessments should be directed.
Our regulations define the concept of the origin of goods for purposes of :
− the uniform application of the Customs Tariff, of quantitative restrictions and all other
measures adopted, in relation to the importation of the goods;
− the uniform application of all measures adopted in relation to the exportation of goods;  and
− the preparation and issue of certificates of origin.
The concept of the origin of goods as defined by Polish Regulations in force applies to non-
preferential and preferential trade.  The Polish customs system in force defines the concept of
preferential and non-preferential origin of the goods:
− the concept of non-preferential origin has been defined for the purposes of the application of
autonomous, conventional and suspended duty rates and all other measures of commercialpolicy adopted in relation to the importation of the goods (anti-dumping and countervailing
duties, safeguard measures)
− the concept of preferential origin has been defined for the purposes of the application of
reduced duty rates (suspended and under tariff quotas) resulting from free-trade agreementswith European Community, CEFTA, EFTA countries, Lithuania, Latvia, Israel, Estonia,
Turkey, Faeroe Islands.
The principles of the determination of non-preferential origin are defined in Articles 15 to 19
of Polish Customs Code and published in the Official Journal application provision on determinationof non-preferential origin of the goods and methods of its documentary evidence, issued by the
Council of Ministers on 15 October 1997 (Dz.U of 1997 No 130, item 851 and of 1998 No 138, item
890).  These principles are in accordance with the provisions of the Agreement on Rules of Origin.
Complete conformity of the rules of origin ap plied in non-preferential international trade will
be ensured after termination of the Harmonization Programme of rules of origin carried out underWTO Agreement.  The rules determining preferential origin of goods are defined in adequate
protocols to international free-trade agreements concluded by the Republic of Poland (basic is
Protocol 4 to the Europe Agreement concerning the definition of the concept of "originating products"
and methods of administrative co-operation).  The requirements for non-originating materials to
obtain originating status are identical between protocols and therefore the system of Europeancumulation of origin is applied.  Preferential principles are applied to developing and least developed
countries under the GSP.
Assessments of the origin (Binding Origin Information) according to the provisions of
Article 2.h of the Agreement on Rules of Origin has not so far been applied.  In this area our CustomsWT/TPR/M/71
Page 49
Code requires amendments.  Legislation procedures are continuing and it is supposed to be in force in
2001.
At present, at the request of an exporter, importer or any person with a justifiable cause, the
customs administration, which is in charge of origin evidence and origin determination, provides any
assistance and interpretation on determination of the country of origin.
The Report states that the Government of Poland plans to eliminate all remaining customs clearance
fees by 2001.  Please provide a schedule for the planned elimination of these fees.
Charging of administrative fees in Poland for performance of customs control were to
construct a budget for customs service (those fees covered a part of the salary of customs officers).
The law on customs service, which came into force in September 1999, has changed the system of
financial management of customs administration.  Th e State budget is taking over all costs borne by
customs administration.  As a result, administrative fees will be eliminated progressively.
On 1 April 2000 following customs fees were eliminated:
(1) for examination of documents required for customs declaration;
(2) for control of means of transportation;
(3) for imposing a customs bond;
(4) for confirmation of origin or customs status of goods;  and(5) for placing goods under transit procedure at the applicant’s request.
On 1 January 2001 the following administrative fees will be eliminated:
I. Fees for granting permits and concessions to:
- use a simplified procedure;
- use an economic customs procedure;- transfer rights and obligations of a person entitled to use economic customs procedure
to another person;  and
- exemption from an obligation to deposit a security when carrying goods under transit
procedure.
II. Handling fees for:
- carrying out customs control acts;   and
- annulment of a customs declaration
III. Additional handling fees for actions undertaken as a result of:
- infringement the deadline for granting customs designation to goods;  and
- removing goods from customs supervision.WT/TPR/M/71
Page 50
HONG KONG, CHINA:
It is noted that a simplified procedure implemen ted in 1998, enables certified traders to declare
imported goods for clearance without inspection.  However, it is mentioned that a share of
merchandise imports cleared through the system remain s low.  We are interested to know the reasons
for the low utilisation of the simplified procedure.
The simplified system of customs clearance was introduced into Polish customs law in
January 1998.
Reliable exporters and importers are able to use simplified procedures after applying to the
regional (local) customs office and receiving permission.  The conditions of granting permission are
defined by the Customs Code.
The decision to use simplified customs clearance is up to the interested economic entities.  In
Poland there is not too much interest in obtaining the right to use simplified procedures.  It is mainlycaused by unsatisfactory knowledge of customs regulations by economic operators.  They do not use
the system because they do not realize its advantages.
The economic entities to which permission for simplified procedures was granted are subject
to regular and detailed controls performed by customs offices.  Violation of customs law may have
consequences for the entities:  permission could also be revoked and the person may lose the trust ofthe customs office.  It could also limit the possibility of using another simplified procedure.
Currently, about 1,000 permissions for the simplified procedure in exportation and importation have
been issued in Poland.
REPUBLIC OF KOREA:
The Secretariat lists a number of the customs regu lations problems related to delays, corruption and
lack of uniform implementation.  Are there any measures that will be taken to remedy these problems
to facilitate trade?
The Polish Customs Administration regards officers' honesty and prevention against
corruption as its priority.  In spite of the fact that corruption is not a phenomenon typical only for
Polish customs, further improvement in this field has a great importance for the service's prestige aswell as for efficient working.  Efforts undertaken so far have brought beneficial results, and it can be
expected that forthcoming actions will be similarly fruitful.
The Act on Customs Service of 24 July 1999 covers regulations that are important for the
reduction of potential corruptive acts.  Protection ag ainst the possibility of such problem is looked at
as early as the selection of candidates for the customs service:  the Customs Service employs only
persons who enjoy full public rights, have not been punished and have an unimpeachable reputation.
A candidate who fulfils all criteria receives three years preliminary service, which eventuates withevaluation by a director of a customs office.  Additionally, officers during the preliminary service are
evaluated every six months.  Only advantageous evaluation of preliminary service enables nomination
for permanent service.  This procedure serves the purpose of verification not only of general
intellectual and psychological skills for duty, but also of a candidate's proneness for potential illegal
acts.  This form of selection allows the appointmen t of persons with the highest moral and intellectual
standards.  Officers in permanent service are ev aluated according to a similar mechanism - once a
year.  Moreover, the customs officer can be dismissed in any situation, when his service does not
assure proper behaviour.  Among control mechanisms covered in the Act there is an obligation to
declare individual property.  The declaration has to be made at the beginning of service and then at
least once a year, as well as at any time the director of the customs office requests it.  Simultaneously,legislation proscribed: performing functions in companies, co-operatives and foundations, holdingWT/TPR/M/71
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more then 2% shares in companies, conducting business activity.  Additionally, any vocations that
conflict with duties or can give an impression of partiality and self interest are prohibited.  Moreover
the legislation establishes a post of an Attorney of Discipline.  The Attorney of Discipline acts in
every customs office.  They are appointed from officers with at least five years of experience and
irreproachable service.  They have to conduct proceedings against customs officers who are suspectedof illegal acts.
The problem of implementation of efficient m echanisms limiting corruption is considered in
the Business Strategy of Polish Customs Administra tion, prepared by the Central Board of Customs.
According to postulations covered in the Strategy the Customs Ethics Code will be elaborated before
the end of year 2000.  The Code will contain rules and standards of behaviour for customs officers.
The result of implementation should be a decrease, before 2003, of the number of justified complaints
against customs officers' work by 50% compared with 1999.  Before 2001, a new recruitment systemhas to be implemented allowing verification of the candidates according to ethical and psychological
criteria.  The system of internal control will be improved to reduce abusive and illegal acts of customs
officers and improve the image of the customs service in public opinion.  These efforts will be
supported by re-designing of the organization and procedures, which will eliminate corruptive
behaviour and actions, scheduled for the end of year 2002.
Several Acts, regulations and provisions regulating international trade turnover, applied in
Poland as an instrument of protection of national interest, can be often changed.  This could cause
some differences  in interpretation of those regulations by different customs offices.  To ensure the
correct application of the regulations, the Polish Customs Administration undertakes a lot of activities
to improve exchange of information between the Central Board of Customs and the regional customsoffices, to inform about changes in provisions concerning international trade turnover immediately
before they come into force.  A lot of activities on this field are undertaken through training seminars
for customs officers, who are responsible for applying provisions of customs law.
In this connection in the new Polish Customs Code there are provisions regarding
introduction of an explanation as a single interpretation of rules.  All these activities will beundertaken in order to ensure single interpretation of the applied provisions.  The explanation
mentioned above will be introduced in official documents published in Poland to be available for
natural and legal persons as well as for customs authorities.
Moreover, the provisions concerning international trade turnover will be soon improved by
Electronic System of Integrated Tariff ISZTAR, which should be implemented by the end of the year
2000  The data base of ISZTAR will include all law regulating international trade turnover, and
should aid Customs to be more effective.
NORWAY:
In reference to the problem pointed out by the Norwegian delegate related to time of clearance.
From the point of view of the customs administration, the basic idea of border management,
today and in the past, is the assurance of fluent and effective control on all kinds of customs crossing
points.  The methods of this control cannot make the legal movement of goods and persons difficultbut, on the other hand, must guarantee the proper coll ection of customs charges, citizens’ protection,
and combating and prosecuting customs offences.
Customs clearance in as short a time as possi ble and no longer than two hours is the aim of
Polish border services and their partners, pledged during the Baltic Customs Conference.  Currently,
the time of customs clearance procedure on the border is much shorter (a couple of minutes),however, full clearance (crossing the border) may take several hours.  It depends on several factors:WT/TPR/M/71
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− functioning of phytosanitary services;
− functioning of veterinary services;
− functioning of border guards;  and
− effectiveness of neighbour countries’ customs administration, etc.
The basic targets of Polish customs administration in this area are:
− access to necessary control arrangements and border infrastructure as well as computerization
supporting the process of border control;
− harmonization of international border investments and coordination of these investments with
the intensity of border crossing;
− progress and improvement of cooperation and harmonization between national and
international border services;
− improvement of border subsequent control (after the release of the goods);
− supporting of border control upon risk analysis;
− assurance of necessary legal base for the control;  and
− assurance of suitable information on customs procedures and documents required during the
control.
Most of the aforementioned targets have been included in the Strategy of the Customs
Administration for the forthcoming months.
Standards, SPS
Standards, testing and certification
DISCUSSANT:
At present, many Polish standards are different from EU or international norms.  The authorities
intend to have at least 80% standards harmonized with EU requirements by 2002.  It would be useful
to know whether the existing differences between national and international technical regulations and
standards, have had any impact on trade.
INDIA:
Most of the health and safety standards in Poland are not related to international norms and roughly
one third of all goods marketed in Poland are subject to mandatory standards’ requirements.  We
would like to hear more from the Polish author ities on the development and implementation of these
mandatory standards?
The Polish Government, being aware of the influence of non-tariff barriers on trade as well as
the importance of transparency of standardisation system for foreign and domestic economic
operators, undertakes legal and institutional activities to reform this system as soon as possible.
Therefore amendments to the Standardisation Law of 3 April 1993 are foreseen in order to make the
system more compatible with the European Community and WTO requirements.WT/TPR/M/71
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The priority of the standardization activity in Poland is the adoption of European standards
harmonized with the EC new approach directives in order to become a member of the European
standardization organisations – CEN and CENELEC.  It  is necessary to stress that voluntary European
standards adopted by these organizations are in vast  majority adjusted to the international standards
(in the case of CENELEC above 70%, and as concerns CEN about 40%).  As a result, by adoptingEuropean standards Poland becomes more integrated with international standardization systems.
In 1999 alone, the Polish Committee for Standardization (PKN) established 1,607 Polish
Standards (PN) including 985 PN-ENs consisting of the implementation of European Standards
(ENs).  This constitutes considerable progress (about 12%) in relation to 1998.  As at the end of April
2000 the PKN introduced about 30% of European standards.  Acceleration in the process of standards
harmonization will take place in 2001 after the approval of the amendments to the law on
standardisation.  In the Work Programme for standardization for the period 2000-2002 all EuropeanStandards existing on 1 March 1999 were covered.
Together with the adjustment of the Polish legislation to the Community requirements the
number of mandatory standards is decreasing.  According to the Regulation of the Ministry of
Economy of 14 September 1999 on the introduction of the obligation to use certain Polish Standards
(Journal of Laws No. 80, item 911 of 8 October 1999), the number of mandatory Polish Standardswas decreased by further 40%.  As a result, at the end of April 2000, 6% of the whole set of Polish
Standards was introduced by virtue of regulations of the ministers for mandatory obligatory (from
5,234 mandatory standards applied in 1994, only 1,127 exist currently).  Further dramatic decrease in
the number of mandatory standards similar to the level existing in the EU Member States will be
possible thanks to the Law of 28 April 2000 on Conformity Assessment.  This Law provides forimplementation of New Approach Directives to the Polish legislation, which describe basic
requirements for products in certain sectors, and introduction of European Standards (EN) harmonized
with those Directives (see the answer below).
UNITED STATES:
(1) What are the criteria used by Polish authorities in determining whether product falls within
the scope of the mandatory “B” safety certification which, we understand, is currently applicable to
about one-third of all goods marketed in Poland?
(2) According to the Secretariat’s report as a result of the 1997 Agreement on Conformity
Assessment with the European Union, Poland removed mandatory certification requirements for
products free from certification in the EU, and auto matically provided a B safety certificate to EU
products subject to mandatory certification.  Does Po land automatically provide a B safety certificate
to products from the US and other WTO members, which are certified to products from the US andother WTO members, which are certified to Polish standards? If not why not?
(3) As a result of legislative amendments in July 1999, certain products may be imported on the
basis of producer’s statement of conformity provided Poland has signed a mutual recognition
agreement.  What are the criteria and terms of such agreements? For example, on what basis does
such agreement provide Polish authorities greater confidence in supplier’s declaration?
(4) According to the Secretariat’s report, the Polish Centre for Testing and Certification (PCNC)
performs testing and certification, and is the accreditor of test labs and certification bodies.  Is this
true? If, so, it appears that there would be a conflict of interest inconsistent with ISO guides for
conformity assessment bodies and WTO rules.
(5) According to the secretariat’s report Poland gives preference to EU standards, if they are
different from international standards.  Is this in reference to voluntary standards? MandatoryWT/TPR/M/71
Page 54
technical regulations? Which international standards? How does this conform with the obligations in
the WTO TBS/SPS Agreements on international standards?
(6) We have received numerous complaints concerning the multiple testing and certification
requirements for building materials (e.g. certificate from the Polish Research & Development
Institute, plus certification required from the Institute of Hygiene, and in some cases, the “B” mark aswell).  Could Poland provide justification for these requirements and/or provide information on any
steps it is taking to review them with a vi ew to removing unnecessary obstacles to trade?
EUROPEAN UNION:
(1) When does Poland intend to remove mandatory certification for all products?
(2) Which criteria have been presided over the modification by Poland of the list of products
requiring mandatory certification?
According to the Law of 22 July 1999 on the amendment of the Law on testing and
certification of 3 April 1993, which entered into force on 10 September 1999 (Journal of Laws No 70,
item 776 of 1999), the scope of mandatory certification has been substantially reduced and currently
covers not more than 10% of goods marketed in Poland.  It will be decisively removed on 1 January
2003 when the law on testing and certification will expire (according to the Law of 28 April 2000 on
the system of conformity assessment, accreditation and amendment to certain acts).
− The Executive Acts to the Law amending the Law on testing and certification entered into
force at the beginning of 2000.  These are primarily:
− Ordinance of the Council of Ministers of 9 November 1999 on the list of products produced
in Poland, and also products imported to Poland for the first time, which may be hazardous or
used for the protection or saving of life, health or environment, which are subject to
mandatory certification for safety mark and marking with this mark, and the goods subject to
the obligation to issue by the producer the declaration of conformity (Journal of Laws No 5,item 53),
− Regulation of the Minister of Economy of 13 January 2000 on the mode of issuing the
documents allowing the placing on the market of products that may be hazardous or may be
used for the protection or saving of life, health and environment, produced in Poland or
originating from a country with which Poland has signed an agreement on the recognition of
the conformity certificate or producers’ declaration of conformity, and on types of thesedocuments (Journal of Laws No 5, item 58 of 28 January 2000).
− Regulation of the Minister of Economy of 10 March 2000 on the mode of certification of
products (Journal of Laws No 17, item 219 of 16 March 2000).
The Law of 22 July 1999 on testing and certification allowed the shortening  of the list of
products liable to mandatory certification and recognition – in relation to certain groups of products –
manufacturer’s declaration of conformity for products produced in Poland or originating from thecountries with which Poland has concluded agreements on recognition of conformity certificates or
manufacturer’s conformity declarations.  For cases where manufacturer’s declaration of conformity is
envisaged in the EU, Poland introduced so-called verification certificates issued on the basis of
manufacturer’s declaration of conformity (following the Ordinance of the Council of Ministers of 9
November 1999).  For the time being, such simplified procedure relates only to the domestic and EUmanufacturers according to the Protocol on European Conformity Assessment Agreement (PECAA)
and Europe Agreement.  The latter provides, in Articles 68, 69 and 74 for approximation of law in the
field of standardization and certification and application of the Community procedures.  However,WT/TPR/M/71
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Poland is open for negotiation of similar agreements with other WTO Members, including the United
States.
On the basis of the Europe Agreement and PECAA, Poland recognizes manufacturer’s
declaration of conformity in relation to products from the EU.  The application of the manufacturer's
declaration of conformity is one of the elements of the Community procedure of conformityassessment including 8 modules from A to H.  Polish  confidence in an EU manufacturer’s conformity
declaration is applied in justified cases where the product's complexity and related risks are not so
high.
The Polish Centre for Testing and Certification (PCBC), which is striving for mutual
recognition of test results on an international level, obtained membership in IECEE-CB scheme and
CENELEC Certification Agreement (CCA) in the field of electrotechnical products.  Also, it signed a
range of bilateral and multilateral agreements on mutual recognition.  Such an agreement with UL(U.S.) is currently under negotiation.
For the time being, the Polish Centre for Testing and Certification comprises three main
activities, accreditation, certification and testing.  According to the Law of 28 April 2000 on
conformity assessment, accreditation, and amendments to certain laws (Journal of Laws No 43, item
489 of 25 May 2000) as from 1 January 2001 the new independent accreditation body – the PolishCentre for Accreditation (PCA) – will be established.  As a result a full separation of the certification
and accreditation activity will take place.  The Polish Accreditation Centre is to be a State institution
having the status of a legal person.  PCA will grant accreditation confirmed by a certificate of
accreditation with a possibility to apply to the Ap peal Committee in case of refusal to grant the
accreditation, restricting the scope of accreditation, suspension or withdrawal of accreditation.  ThePolish Centre for Testing and Certification will become a sole shareholder company of the State
Treasury, maintaining its name, one amongst other certifying bodies,.
It is worth stressing that on 6 June 2000 Art. 3-8 and Art. 48.2 of Conformity Assessment
Law entered into force, which contains delegation for the implementation of the EC’s New Approach
Directives and Old Approach Directives into the Polish legislation.  It allows for units andlaboratories to prepare themselves for accreditation, and further to apply for notification, and it will
allow domestic producers to get acquainted with the new rules as well as to adjust the production
processes to the new requirements.  These actions will lead to creation in Poland of a system of
conformity assessment fully compliant with that of the Community.
The current attestation system of construction products (envisaged in the Construction Law of
7 July 1994 and implementing ordinances to this Law) is considerably approximated to the provisions
of Council Directive 89/106/EEC.  The models of conf ormity assessment included in Annex III to this
Directive are currently implemented in the Polish legislation.  For products in relation to which there
is no standard, technical approvals are used, which cover a set of technical requirements concerning a
given product (at this stage, among others, hygienic evaluation of the products by the State Hygienic
Institute is necessary).  On the basis of the approval, the accredited certification body issues the
certificate, which confirms conformity of the product with the technical approval and conformity ofthe production with the certified product type.
AUSTRALIA:
Australia looks forward to being able to export wi ld meats, including kangaroo meat, to Poland.  We
understand that legislative changes to facilitate wild meat imports into Poland are underway.  Could
Poland update us on progress in this area?
The provisions of Polish Law on the control of infectious animal diseases, examination of
animals for slaughter, as well as on veterinary inspection (Notification G/SPS/POL/2) define slaughterWT/TPR/M/71
Page 56
animals as the those whose meat is intended for human consumption.  According to the currently
effective provisions, kangaroos are not included in the group of slaughter animals.  Consequently,
their meat cannot be intended for human consumption.
The work to amend this law is now under way, and the amended law will enable kangaroo
meat imports for human consumption in the future.  Polish veterinary authorities are in close contactwith the Australian Embassy in Warsaw.  Following the arrangements made so far, they have been
provided with a specimen health certificate form for this type of meat.  As envisaged, the amended
law is going to come into effect in 2001.
JAPAN:
Japan considers that the word  “phytosanitary” in the 1
st and 2nd line of paragraph 67, as well as in
the 1st line of paragraph 68, should be replaced by the word “sanitary”.  Please make, as necessary,
appropriate corrections.
As regards point 67: the proposed change is justified as the veterinary health certificates, and
not phyto-sanitary certificates, are applied in trade in live animals.
As regards point 68:
No veterinary agreements can be mentioned at this point as Poland does not have any
veterinary agreement with Brasil and the Republic of Belarus.  Therefore, the term phyto-sanitaryagreements must be left as it is.
Answers to India inquiries
In this regard, we would like to know the names of  the countries with whom bilateral agreements have
been signed.
(a) Bilateral Veterinary AgreementsBilateral Agreements between the Governments:
(1) Veterinary Convention between Poland and Estonia,  Tallinn, 26 September 1933;
(2) Agreement between the Government of the Polish Republic and the Government of the
Slovak Republic on Co-operation in the Field of Veterinary Medicine, Warsaw, 18 August
1994;
(3) Convention on Co-operation in the Field of Veterinary Medicine between the Government of
the Polish Republic and the Government of the Republic of Bulgaria, Warsaw 1994;
(4) Agreement between the Government of the Polish Republic and the Government of the
Republic of Croatia on Co-operation in the Field of Veterinary Medicine, Warsaw 1995;
(5) Convention between the Government of the Polish Republic and the Government of the
Republic of Romania on Co-operation in the Field of Veterinary Medicine,  Bucharest 1996;
(6) Agreement between the Government of the Polish Republic and the Government of the
Republic of Slovenia on Co-operation in the Field of Veterinary Medicine, Lubljana 1996;
(7) Agreement between the Government of the Polish Republic and the Macedonian Government
on Co-operation in the Field of Veterinary Medicine, Skopje 1996;WT/TPR/M/71
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(8) Agreement between the Government of the Polish Republic and the Federal Government of
the Federal Republic of Yugoslavia, Warsaw 1997;
(9) Agreement between the Government of the Polish Republic and the Government of the Czech
Republic on Co-operation in the Field of Veterinary Medicine, Warsaw 1997;
(10) Agreement between the Government of the Polish Republic and the Government of the
People’s Republic of China on Co-operation in respect of Quarantine and Animal Health
Protection, Peking 1997;  and
(11) Convention between the Government of the Polish Republic and the Government of the
Republic of Hungary on Animal Health Protection, Warsaw 1998.
Bilateral Agreements with the EU Member States:
(1) Veterinary Convention between Poland and France, 24 April 1929, Agreement between
Poland and France on Co-operation in the Field of Veterinary Medicine, Paris, 2 July 1993;
(2) Veterinary Convention between Poland and Belgium, Brussels, 18 December 1930;
(3) Protocol of the Heads of Veterinary Services on Co-operation in the Field of Veterinary
Medicine as the implementation of the Agreement on Economic, Industrial, Science and
Technological Co-operation between the People’s Republic of Poland and the Republic of
Finland of 30 January 1974,  Helsinki, 2 September 1975;
(4) Convention between the Government of the People’s Republic of Poland and the Government
of the Kingdom of Holland on Co-operation in the Field of Veterinary Medicine, the Hague,
March 1977;   Agreement on the rules of regionalization as regards infectious animal
diseases, Warsaw, 15 June 1994; and
(5) Convention between the Government of the People’s Republic of Poland and the Government
of the Republic of Italy on Co-operation in the Field of Veterinary Medicine, Rome, 16 May
1978 and the Government Declaration of 7 April 1982 on effective date of the Convention
between the Government of the People’s Republic of Poland and the Government of the
Republic of Italy on Co-operation in the Field of Veterinary Medicine, Rome, 16 May 1978;
Agreement between the Ministry of Agriculture of the People’s Republic of Poland and theMinistry of Health of the Republic of Italy on Veterinary and Health Requirements for
Import, Export and Transit of Living Animals and Animal Products, as well as Raw Products
and Feeding Stuffs,  Rome, 16 May 1978.
Bilateral Agreements between Departments:
(1) Agreement between the Minister of Agriculture and Food Economy of the People’s Republic
of Poland and the Minister of Agriculture and Agricultural Reform of Iran on Veterinary and
Health Requirements for Import, Export and Transit of Living Animals and Animal Products,including Feeding Stuffs, Baghdad, 1 July  1982;
(2) Agreement between the Minister of Agriculture and Food Economy of the People’s Republic
of Poland and the Department of Agriculture of  the Republic of Argentina on Veterinary and
Health Requirements for Import, Export and Transit of Living Animals and Plant Produce,
including Raw Products and Feeding Stuffs, Buenos Aires, 19 September 1983;WT/TPR/M/71
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(3) Agreement between the Ministry of Agriculture, Forestry and Food Economy of the People’s
Republic of Poland and the Ministry of Agriculture and Water Resources of the United States
of Mexico on Co-operation in the Field of Veterinary Medicine, Mexico, 15 April 1988;
(4) Agreement between the Ministry of Agriculture, Forestry and Food Economy of the People’s
Republic of Poland and the Department of Agricu lture of the United States of America on Co-
operation in the Field of Veterinary Medicine, Washington, 1988;
(5) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Ministry of Agriculture and Food Economy of the Republic of Byelorussia on Co-
operation in the Field of Veterinary Medicine, Minsk, 27 January 1993;
(6) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Ministry of Agriculture of the Federation of Russia on Co-operation in the Field of
Veterinary Medicine, Warsaw, 5 May 1994;
(7) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Veterinary Service of the Republic of Lithuania on Co-operation in the Field of
Veterinary Medicine, Warsaw, 29 June 1994;
(8) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Ministry of Agriculture and Food Economy of the Republic of Ukraine on Co-operation in the Field of Veterinary Medicine, Warsaw, 28 September 1994;
(9) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Ministry of Agriculture and Rural Affairs of the Republic of Turkey on Co-operation
in the Field of Veterinary Medicine, Warsaw, 22 March 1995;
(10) Agreement on Sanitary and Veterinary Issues between the Ministry of Agriculture and Food
Economy of the Republic of Poland and the Ministry of Farming, Agriculture and Fishery of
Uruguay on Co-operation in the Field of Veterinary Medicine, Warsaw, 16 September 1996;
and
(11) Agreement between the Ministry of Agriculture and Food Economy of the Republic of Poland
and the Quarantine and Inspection Service of Australia on Veterinary Protection of Humanand Animal Health, Warsaw, 21 May 1997;
Bilateral Agreements between the Heads of Veterinary Services:
(1) Agreement between the Veterinary Department of the Ministry of Agriculture, Forestry and
Food Economy of the People’s Republic of Poland and the Veterinary Service for Animal
Health of the Ministry of Agricu lture of Israel, Warsaw, 1989; and
(2) Agreement between the State Veterinary Service of the Republic of Poland and the State
Veterinary Service of the Kingdom of Norway, Oslo, 1993.WT/TPR/M/71
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List of bilateral Phytosanitary Agreements
Subject of Agreement Place signed Date signed
Agreement on co-operation in plant quarantine between Ministry of Agriculture and
Food Economy RP and Ministry of Agriculture and Feeding of Belarus RepublicWarsaw 28/09/1994
Convention on co-operation in plant quarantine and plant protection between
Government of Republic of Poland and Republic of Bulgaria.Warsaw 28/09/1994
Phytosanitary Agreement between Government of Republic of Poland and Government
of  Peoples Republic of China .Peking 22/09/1994
Agreement on co-operation in plant protection between Government of RP and
Government of Croatia.Warsaw 07/12/1995
Official Record on annulment of Convention on protedtion of crop plants against
harmful organisms and diseases, between Republic of Poland and Czech Republic on
date 22 of January 1949.Prague 03/12/1970
Agreement on co-operation in plant protection and quarantine between Government of
PRL and Government of CRS.Prague 03/12/1970
Agreement on cooperation in plant protection between Government of PRL and
Government of Czech Republic.Warsaw 23/06/1997
Agreement on co-operation in plant protection between Government of RP and
Government of Kingdom of Holland.Warsaw 31/05/1978
Agreement on statutes of inspectors, observers and members of transport team during
activity of control inspections between Government of RP and Government of
Kingdom of Holland.Warsaw 05/09/1990
Agreement on co-operation in plant protection between Government of RP and Federal
Government of Republic of Yugoslavia.Warsaw 12/06/1997
Agreement on co-operation in plant protection between Government RP and
Government of Macedonia.Skopje 01/08/1996
Convention on co-operation in plant protection and quarantine between Government of
PRL and Government of Socialistic Republic of Romania.Bucharest 10/02/1969
Agreement on co-operation in plant protection and quarantine between Government of
RP and Slovak Republic.Warsaw 18/08/1994
Agreement on co-operation in plant protection between Government of RP and
Government of Republic of Slovenia.Lublana 19/07/1996
Agreement on co-operation in plant protection and quarantine between Ministry of
Agriculture and Food Economy RP and Ministry of Agriculture and Food Economy
Ukraine.Warsaw 28/09/1994
Convention on protection of crop plants against harmful organisms and diseases
between RP and Peoples Republic of Hungary.Budapest 29/10/1949
UNITED STATES:
The Government of Poland’s zero tolerance for certain  weed seeds, such as ragweed, in shipment of
cereals and oil seeds has sharply restricted imports of these commodities.  Foreign exporters note
that this measure is overly restrictive and cannot be supported on a scientific basis.  When will the
Government of Poland be willing to re-establish a meaningful dialogue with interested parties with
view to removing this highly restrictive policy?
According to the Directive of the Minister of Agriculture and Food Economy of 6 February
1996, on the control of harmful organisms,  Ambrosia  spp. and the other weeds recognized as
especially dangerous for crop plants are included on the quarantine list and their import is prohibited.
There is scientific evidence supporting the Polish decision.  On the basis of this evidence the Pest
Risk Assessment (PRA) was evaluated, which was presented to the United States authorities.
Additionally, informal Polish-American consultations were organized in the WTO-SPS Committeeconcerning the problem of quarantine of weed seeds in imported cereals.  The United States
authorities did not bring up the subject for further discussion in that forum after a PRA was provided.
Poland maintains its position that it has substantial justification for the existing regulations.
Additionally, we would like to underline that many countries exporting cereals to Poland are able to
prepare the consignments according to Polish requ irements, i.e. remove completely quarantine weed
seeds.WT/TPR/M/71
Page 60
Government procurement
QUESTION BY THE UNITED STATES, THE REPUBLIC OF KOREA, JAPAN, NORWAY
AND CANADA:
Poland joining the Government Procurement Agreement
Poland has observer status and is participating in the work on transparency of procurement.
For the time being Poland does not intend to adhere to the GPA.  Foreign suppliers, among
themselves, are treated in a non-discriminatory way.  A new public procurement law will enter into
force on 1 January 2001 and will treat in the same way all foreign partners.
Export measures; subsidies, quotas, prohibitions
EUROPEAN UNION:
Will Poland eliminate its export quotas on raw materials, and in the affirmative under which
timetable?
Poland has already eliminated its internal export quotas on raw materials, which were applied
on an erga omnes  basis.  On 31 August 1998 it eliminated export quotas on raw hides and skins;  on
31 December 1998 export quotas on waste of cast iron and steel; and on 31 December 1999 on non-
ferrous waste and scrap.
ANSWER TO A QUESTION BY JAPAN (QUESTION NO 8):
It is reported that “export of live ducks, geese and turkeys, wheat and meslin, rye, barley, and oats
are banned”.  Please provide the reason for prohibiting exports of such products .
We would like to stress that only  export of live geese (0105.19.20.0, 0105.99.20.0) and goose
hatching eggs (ex 0407.00.11.0) are banned.  For other products listed in the Secretariat Report
Poland does not apply export prohibition.  The ban on the export of live geese and hatching eggs cameinto force as of 1 September 1992 and is still in force for the protection of animal genetic material.
Polish goose production has been export-oriented for over 30 years as 90% of total goose-
meat output is exported.  Being a top quality product, it has enjoyed an excellent reputation on the
international markets.  The ban on live geese and hatching egg exports has made it possible for Poland
to retain its traditionally strong position as a goose-meat exporter (high quality processed product withmore value added) as well as to protect the domestic genetic material.  The lifting of this ban would
lead to the interception of the results of many years of Polish breeders’ work, and the reproduction of
breeding material within two or three years in countries that would otherwise have imported the
above-mentioned material.  The lifting of the export ban would result in a competitive source of
supply, which in turn would reduce the domestic reproduction flock and lead to the closing down of
hatching facilities.  Therefore, in order to main tain the conditions conducive to the development of
this national economy sector, this measure of national economic policy must be maintained to allowPoland to retain its strong position as a goose-meat producer and exporter, and to prevent the situation
where our country could be downgraded to the marginal position of a mere raw material supplier, with
most value being added through processing by the recipient.
AUSTRALIA:
2. The Polish Government recently endorsed a draft legislative bill which aims to bring anti-
dumping procedures into line with 'WTO standards and grant SMEs easier access to the procedures.WT/TPR/M/71
Page 61
Does Poland foresee  any significant change to  the volume or type of anti-dumping procedures
instituted by the Polish Government and/or Polish producers?
There are no specific provisions in the draft anti-dumping legislation rendering access to the
A-D procedures easier for SMEs.  The draft does not make any distinction between producers based
on the scale of their business operations.  Eventual easier access to the procedures, which are, in factvery costly, may be the result of a governmental programme directed at SMEs under which SMEs are
eligible for public support of their consultancy expenditures.
HONG KONG, CHINA:
The Polish Government recently endorsed a draft legislative bill which aims to bring antidumping
procedures into line with 'WTO standards and grant SMEs easier access to the procedures.  Does
Poland foresee  any significant change to
 the volume or type of anti-dumping procedures instituted by
the Polish Government and/or Polish producers?
As far as the two first tax allowances associated with investment incentives are concerned
(WT/TPR/G/71, para. 66) they are no longer in operation as of 1 January 2000.  As to the Treasury-
based programme of financial support of credit guarantees, it does not have characteristics of an
export subsidy as eligibility criteria do not involve export activity in particular.  As far as export credit
insurance is concerned, it is provided by KUKE, which acts in full conformity with the SCMAgreement, and especially with exceptions therein.
CANADA:
The Government report states that "quotas in Poli sh exports (of textile and clothing) to the US and
Canada will be continued by the end of 2004".  Could Poland confirm if this should read discontinued
by the end of 2004, as called for by the Agreement on Textiles and Clothing?
Yes, Poland confirms that the quotas against Polish exports to the US and Canada have to be
discontinued by the end of 2004 according to the rules of WTO Agreement on Textile and Clothing
(ATC).  Poland applied quantitative limits on its exports of textile and clothing as a result of the so
called voluntary export restraints (VERs) provided by bilateral agreements signed with the
United States, Canada, the EC and Norway within th e MFA.  Since the MFA has been replaced by the
WTO Agreement of Textiles and Clothing the above-mentioned countries have notified the will of
applying restrictions against exports of certain textiles and clothing products exported by some
countries into their markets as long as those products will not be integrated with the general
GATT'94/WTO principles.  The deadline of gradual completion of this process is foreseen for 2005,
so Poland believes that US and Canada will abolish their quotas on this date at the latest.
Safeguard actions
JAPAN:(1) WT/TPR/S/71, p. 55, para. 57
It is reported that "three safeguard actions were initiated in 1999 affecting imports of textured
polyester yarn from Turkey, synthetic fibres from the Republic of Korea and Chinese Taipei, and
certain acrylic yarns from Lithuania".  In this regard,
(a) Please explain these three actions in detail.(b) Are  these actions based on the Agreement on  Safeguards or rather on the transitional
safeguards provided for in the Agreement  on Textiles and Clothing?WT/TPR/M/71
Page 62
(c) If these actions are based on either of the two  agreements, why have  they not been
notified to  either the Safeguards Committee  or to the  TMB?
As to the safeguard action aimed at excessive imports of textured polyester yarn (tpy), the
action involved imports from Chinese Taipei, and not from Turkey.  We apologise for the typing error
in our trade policy statement.
Re Q:  1(a)
The investigation of the tpy from Chinese Taipei was initiated by a petition filed by ELANA
joint-stock company, the only domestic producer of the product in question.  The petitioner has sought
the imposition of a safeguard measure on imports of the product.
Chinese Taipei is the biggest foreign supplier of tpy to Poland, with prices lower than those of
Polish producers and lower than the average import prices of the product.  In the period 1996-97, for
instance, there was a six-fold increase in imports of tpy from Chinese Taipei.  The share of importsfrom Chinese Taipei in the Polish domestic market was constantly growing, from 4.1% in 1996, 18%
in 1997, to 30.7% in 1998.  The ratio of imports from Chinese Taipei to domestic production has also
increased from approximately 2% in 1996, to 11% in 1997, to 43.5 % in 1998.  With respect to prices,
one can observe a 14% price undercutting of domestic yarn by Taiwanese imports.  As to the injury
suffered by the petitioner, two indices may be relevant:  the petitioner’s production level dropped by30% between 1997 and 1998, and by 50% if the comparison is based on first quarters of 1998 and
1999.  Utilization of capacity dropped from 98% in 1997 to 62.1% in 1999.  There was a drop in the
petitioner’s domestic market sales by 27% between 1997 and 1998.  The investigation is expected to
be concluded in due time.
The investigation concerning certain acrylic yarns from Lithuania was initiated on 23 August
1999 on the petition lodged by five textile plants representing approximately 70% of the domestic
production of the product in question.  Lithuania is the biggest foreign supplier of the product.  In the
period 1996-98 the imports from Lithuania were on the upward trend and their share of the domestic
market has grown from 6.3% in1996, through 17.6 % in 1997, to 31% in 1998.  The ratio of the
imports in question to the domestic production also went up from 5% in 1996 to 36.3% in 1998.There was a persistent undercutting of the petitioners' prices by imports throughout the investigation
period .  The injury caused by the imports is reflected in the following figures: the drop in production
levels – 20% ( 98/97);  the drop in domestic sales – 25%( 98/97);  the decrease of utilization of
capacity from 80% in 1996 to 57% in 1998;  and employment reduction – 23.5% ( 96/98).
At the request of the complainants, five textile plants, a safeguard procedure was initiated on
1 April 1999 against excessive imports of certain woven fabrics of synthetic filament yarn originating
in Korea and Chinese Taipei.  The share of imports of fabrics in question from Korea in relation tototal imports of these fabrics accounted for 45.7% in 1995, 70.5% in 1996, 60.7% in 1997 and
approximately 50% in 1998.  Notwithstanding that Korea is the biggest supplier, the volume of
imports from this country between 1997 and 1998 has declined and was 18.4 sq.m in 1997 and
17.3 sq.m in 1998.  In 1995-98, the volume of imports from Chinese Taipei (sq.m) was systematically
growing.  Simultaneously, the share of imports from Chinese Taipei in total Polish imports of fabricsrose from less than 4% in 1995 to 33% in 1998.  The import volume increased to 6.2 sq.m in 1997 and
11.4 sq.m in 1998.
The prices of imported dyed woven fabrics, which constitute up to 60-75 % of the import
volume of the fabrics under investigation, were undercutting domestic prices (1995-98).  In the case
of Chinese Taipei, the ratio of imports to domes tic production increased from 7.4% in 1997 to 12.8%
in 1998.  The excessive imports of the product in question, coupled with a serious injury to domestic
production, warranted a safeguard action.  It was decided to impose quantitative restrictions for a
period of three years.  An investigation on imports from Korea is about to be completed.WT/TPR/M/71
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Re Q: 1(b)
The actions in question are based on our domestic law, namely The Law on protection against
excessive imports into the Polish customs territory of certain textiles and clothing.  The law was
patterned upon the ATC.  Depending on whether a WTO-country or non-WTO-country is involved,
the ATC provisions are or are not simultaneously applied, the basic principle being that non-WTOcountries should not get better treatment than WTO countries.
Re Q: 5(1) c
A WTO Member was involved in only one of the three cases;  that is the case concerning
synthetic fibres, where imports from Korea were involved.  Poland has duly notified the initiation of
this investigation to the TMB.  Regarding other textile cases, it is our position that the ATC does not
require the Members to notify where imports from non-WTO countries are involved and where they
are dealt with under the domestic laws of the Member conducting the investigation.
It is reported that "Poland has special safeguard provisions  for imports of  textiles and clothing".  Is
our understanding  correct that such  provisions prescribe the domestic procedures to apply safeguard
measures pursuant to the GAIT or -to  the Agreement on Textiles and Clothing?
The understanding is correct.  Under the special safeguard provisions, imports of textiles and
clothing, in so far as they originate in one of the WTO-countries and are covered by the list of non-integrated products, are investigated  according to domestic law provisions as interpreted and applied
in light of the ATC.
Intellectual property rights
Comments to the Report in part, Protection of intellectual property
HONG KONG, CHINA:(WT/TPR/S/71, pp. 68, 70, 71, paras. 127, 131, 134)
3. It is noted that Poland’s legislation has been criticized as not providing enough protection on
intellectual property rights, particularly on copyright and patent protection.  As Poland is to
implement the TRIPS Agreement by the year 2000, we would like to know whether its new legislation
on industrial property protection introduced on 1 January 2000 would enable it to apply all theprovisions of the Agreement.  If the answer is nega tive, would the Polish authorities tell us what are
the problematic areas and the reasons for not bringing them in compliance with the TRIPS
provisions? We would also like to know what furt her steps will be taken by the Polish authorities to
remedy the situation.
The new Industrial Property Law is the first legal act of this kind in Poland, aimed at
establishing a modern, comprehensive and effective system of industrial property protection.  The
Law has been intended to comply with Poland’s obligations under the TRIPS Agreement,  It coversthe following subjects of protection: inventions, utility models, industrial designs, trade marks,
geographical indications, trade names, topographies of integrated circuits, as well as border control
and enforcement measures.  The wide range and complexity of this new codified Act required
involvement of various interested circles from industry, professional representatives, legal
professionals, scientists, etc., in the process of preparation and consultations at each stage of thelegislative procedure.
The draft was approved by the lower chamber of our Parliament – Sejm – on 17 March 2000
and on 30 June Sejm voted the amendments proposed by the upper chamber of the Parliament –WT/TPR/M/71
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Senat.  Although the Law failed to be adopted and become effective as from 1 January 2000,  as from
that date, the provisions of the TRIPS Agreement are being applied directly, by virtue of a decree of
the President of the Polish Patent Office, wherever the provisions of the industrial property laws
remain incompatible with the pr ovisions of the TRIPS Agreement.
(WT/TPR/S/71, p.72, para. 142)
4. It is mentioned that Poland does not have a good record of enforcement of intellectual
property protection, particularly at the administrative and judicial level.  Importations of pirated and
counterfeited goods were said to be substantial and there were also reports of internal illegal
protection of these goods.  We would like to know what specific measures the Polish authorities will
undertake to ensure that intellectual property rights will be adequately enforced, particularly after
introduction of its new IP legislation on 1 January 2000.
Enforcement of  copyright and neighbouring rights
The draft  law on the amendment of copyright and neighbouring rights introduced  very
important regulations.2  Some of the postulated amendments will – in the opinion of Polish
Government – prevent illegal production and importation  of pirated and counterfeit goods.  The
following significant changes have been made in specific matters:
(1) To the provision on protection of author's economic rights, there has been added a possibility
to use the measures of author's economic rights protection also in cases of:
(a) removal or by-passing of technical protections against access, reproduction or
dissemination of a work, and
(b) unauthorized removal or modification of any information that identifies the work, the
author, the subject of copyright to the work or information about the terms ofexploitation of the work.
(2) Article 77 has been added, which enables the entitled person to demand the user of a
computer program to destroy technical means used only to facilitate illegal removal or by-
passing of technical security protection.
(3) Amendments in penal provisions of the Copyright Act stem from several drawbacks of the
existing solutions, disclosed during the four years of application of the Act.  The main
drawback consists in an excessive application of prosecution on private charges.  That
solution has been replaced by a public claim procedure.  Prosecution on motion of the injured
person has been reserved for minor offences.
(4) It has also been ensured that the relevant organization for collective administration of
copyright and neighbouring rights may act as the injured person.  This will be especially
important in cases of mass infringement of copyright or neighbouring rights, concerningmany works or objects of neighbouring rights, when such infringements concern the sphere of
collective administration of rights to works or objects of neighbouring rights.
(5) In order to eliminate incoherence of the system, the existing sanctions have been rendered
more severe and correspond to those provided in the Penal Code for similar crimes.  On the
                                                     
2 The draft law on the amendment of the law on copyright and related rights was accepted by the
Parliament on 9 June 2000.WT/TPR/M/71
Page 65
whole, the proposed changes will facilitate hampering of infringements of copyright and will
provide a balanced protection of works, artistic performances, phonograms and videograms.
(6) The draft Act also provides a possibility of appointment by the President of the Council of
Ministers of a team to counteract infringements of copyright and neighbouring rights.  The
team is to be appointed on application of the Minister responsible for culture and protection ofnational heritage.  Appointment of such a team will enable synchronization of organizational
activities, especially to quickly react to the ever-changing situation on the market of copyright
and neighbouring rights.
Border enforcement of intellectual property rights
With reference to border measures, the Central Board of Customs undertook  efforts  in the last
year with the aim of  the improving efficiency.  The most important changes  and activities are
connected  with:
(1) The amendment of law  on the  procedure  and operating principles for customs authorities for
withholding goods in the case of suspected  violation of provisions on protection of
intellectual, commercial, and industrial property;
(2) The Central Board of Customs has agreed to comply with the resolutions of the World
Custom Organisation (WCO) and  signed the Memorandum of Understanding (MOU) at the
beginning of this year,
(3) To date the Central Board of Customs has reached arrangements with organizations for
collective administration (e.g. Association of Audio-Video Producers, Association of Authors
ZAiKS)  and product producers (e.g. Microsoft,  Adidas, Reebok, Levi’s, Puma, Hasbro, Ford,
Nike) concerning cooperation in the field of protection of intellectual property rights.
(4) The Central Board of Customs pays attention to the professional schooling of the customs
officials in the recognition of  trade marks and has undertaken organizational activities  with
local customs officials;
(5) The President of the Central Board of Cust oms has issued decisions approving applications
for protection of intellectual, commercial  or industrial property.
It should be noted that Poland has been appointed by WIPO and WCO to realize the so-called
“ROAD SHOW” action, which was concluded by the pos itive report.  In the opinion of WCO and
European Communities experts, the Polish Customs Authorities are prepared for the control of goods
involving infringement of intellectual property rights.
RESPONSES OF POLAND TO THE QUESTIONS POSED BY JAPAN:
(1) WT/TPR/S/71, p.70, para.130
It is reported that “the new Industrial Property Law will extend protection to industrial designs and
geographical indications”.  Please explain in detail the contents of this Law, as well as the schedule
for examination and the enactment.
The new Industrial Property Law is intended to comply with the Poland’s obligations under
the TRIPS Agreement.  The Law covers the follow ing subjects of protection:  inventions, utility
models, industrial designs, trade marks, geographical indications, trade names, topographies ofintegrated circuits.  It makes the following improvements, when compared with the present
regulations.WT/TPR/M/71
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Patents
The new law provides for patent protection granted for inventions which are new, involve an
inventive step and are susceptible to industrial appli cation, in all fields of technology.  Consequently,
exceptions to patentability no longer include products obtained by nuclear transformation, as was
provided under the former law on inventive activity.  The former institution of patent for secretinvention has been abandoned.  Now, inventions concerning national defence or the security of the
State may be considered secret inventions.
The principle was maintained in the new Law, that a patent granted for a process of
manufacture also covers products directly obtained by means of that process.  As regards the reversal
of burden of proof in respect of patented processes, the Polish Law contains provisions almost
identical with TRIPS Article 34.
There is also a new provision to the effect that a patent granted for an invention relating to the
use of a state-of-the-art substance for the purpose of obtaining a product eligible for a new use, also
covers products intentionally prepared for such use by means of that invention.  It is worth mentioning
here that the new use may involve any kind of use, not only for medical purposes as provided in the
European Patent Convention (new uses in any fields of technology [in meeting the TRIPS non-
discrimination clause in Article 27(1)].
The new Law explicitly allows for the alteration of patent claims resulting in the extension of
the scope of protection originally sought, however only up to the time of publication of the application
and provided that such alteration may not go beyond what has been disclosed in the description of the
application as filed.
The scope of the exclusive rights is determined in Article 66 of our new Law, in which the
provisions corresponding to Article 28 of the TRIPS were transposed.  Naturally, patent owners
continue to have the right to assign or transfer by succession the patent and to conclude licensing
contracts.
Another matter that called for a particular approach was compulsory licensing.  The
provisions to that effect in the new Law fully satisfy the requirements of Article 31 of the TRIPSAgreement.
Trade marks
The Law provides full protection for famous , well-known and having-reputation trademarks,
while including, at the same time, definitions of the well-known and counterfeit trade marks.  In
respect of counterfeit trade marks there are provisions providing for penal liability for acts of
counterfeiting, as well as the possibility for a product bearing a counterfeit trade mark to be seized at
the border.  Under the new Law a trade mark application is allowed to be divided in respect of a list ofgoods.  A concept of a joint right of protection for a trade mark has been introduced.  Non-use period
being a ground for declaring a trade mark registration lapsed has been extended from three to five
years.  In this context the term “use” has been clearly defined.  There is a series of provisions added
regulating interrelationships between the protection of trade marks and the protection of geographical
indications, including in respect of wine, beer and spirits.
Geographical indications
In addition to the provisions on combating unfair competition the new Law provides
protection for geographical indications by way of registration.  Registration of a geographical
indication may be sought by an organization representing interests of the producers from a given
territory or by a local or autonomous administration agency.  Foreign geographical indications areWT/TPR/M/71
Page 67
eligible for protection in Poland insofar as they are protected in their country of origin.  Generic
names are excluded from protection as geographical indications.  Additional protection is provided for
geographical indications for wines and spirits in accordance with Article 23 of the TRIPS Agreement.
Protection for a geographical indication is unlimited in time and starts from the date of registration.
Similarly as in case of trade marks, products bearing a deceptive geographical indication may beseized at the border.
Industrial designs
Under the new Industrial Property Law industrial designs, including textile designs, are
protected by way of registration.  The definition of the industrial design corresponds to the definition
given in Article 25(1) of the TRIPS Agreement.  The Law provides for a possibility of covering in one
application various individual forms of a subject having common essential features, i.e. varieties of a
design.  The duration of protection available amounts to 25 years.  After the termination of theprotection under the Industrial Property Law, the protection may be continued under the copyright
regime.
Topographies of integrated circuits
In the new Law, the detailed criteria of registrability of topographies of integrated circuits are
established, consistent with those provided for in TRIPS Article 35.  When compared with the former
Polish Law on the Legal Protection of Topographies of Integrated Circuits, the new Law provides
more detailed regulations in respect of the protection of topographies and makes them harmonized
with the TRIPS requirements.
Other issues
The new Law contains, in addition to the Customs regulations, rules and procedures for
border control in line with Section 4 (Special requirements related to border measures) of the TRIPS
Agreement.  Judicial review of Patent Office decisions, required under Article 41 of the TRIPS, is
exercised, upon a party’s complaint, by the Supreme Administration Court.  The draft of the new Law
was adopted by the Polish Parliament on 17 March 2000 and will enter into force by the end of this
year.
(2) WT/TPR/S/71, p.70, para.131
Please explain how Poland’s legislation conc erning patent protection for pharmaceuticals is
consistent with the TRIPS Agreement.
Under the Law of 19 October 1972 (as subsequently amended by the Law of 16 April 1993)
pharmaceutical inventions are provided the same level of protection as inventions from other field of
technology.
Protection is provided both for products and processes.  The term of protection is 20 years
starting from the filing date.  A patent granted for a process of manufacture also covers products
directly obtained by means of that process.  For the purpose of civil proceedings in respect of the
infringement of the rights of the owner, in cases  involving process patents the practice is applied by
Polish courts to the effect that it is for the defendant to prove that the process to obtain an identical
product is different from the patented process.
The fortuitous preparation of a medicine in a pharmacy on a physician’s prescription is not
considered an infringement of a patent relating to pharmaceuticals.  Also the use of an invention for
scientific purposes is not considered an infringement of a patent.WT/TPR/M/71
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Under the new Industrial Property Law, which will soon become effective, the principle was
maintained that a patent granted for a process of manufacture also covers products directly obtained
by means of that process.  As regards the reversal of burden of proof in respect of patented processes,
the Law contains provisions almost literally identical with TRIPS Article 34.
There is also a new provision to the effect that a patent granted for an invention relating to the
use of a state-of-the-art substance for the purpose of obtaining a product eligible for a new use, also
covers products intentionally prepared for such use by means of that invention.  It is worth mentioning
here that the new use may involve any kind of use, not only for medical purposes as provided in the
European Patent Convention (new uses in any fields of technology [in meeting the TRIPS non-
discrimination clause in Article 27(1)]).
The new Law explicitly allows for the alteration of patent claims resulting in the extension of
the scope of protection originally sought, however onl y up to the time of publication of the application
and provided that such alteration may not go beyond what has been disclosed in the description of the
application as filed.  In respect of pharmaceutical patents the following acts are not considered an
infringement of a patent:
(1) employing an invention for research and experimental purposes, for the evaluation thereof,
analysis or teaching;
(2) the exploitation of an invention for the purpose of generating data necessary for obtaining
regulatory approval and authorization for putting a product on the market;  and
(3) the fortuitous preparation of a medicine in a pharmacy on a physician’s prescription.
RESPONSES OF POLAND TO THE QUESTIONS POSED BY SWITZERLAND:
Article 31 TRIPS Agreement (Other use without authorization)
1. Does your law make compulsory licences subject to the conditions enumerated in Article 31
of the TRIPS Agreement?  If exceptions are provided for, please describe what these exceptions are
and how they apply in Polish law and practice.
In general, yes.  Under the present Law of 19 October 1972, on Inventive Activity,
compulsory licensing is regulated in Article 49, which provides for a possibility of granting acompulsory licence (in litigation proceedings), where:
− it is necessary to prevent or eliminate a state of national emergency, or
− the patentee, without justified reasons, does not offer or prevents the offering of the products
manufactured by means of the invention on terms meeting the social demand (three years
after the grant of the patent).
When using the expression ‘in general’ we refer to the present legal status under the Law of
1972 on Inventive Activity.  The provisions of that Law fail to cover the following conditions fromArticle 31:
− the requirement of making efforts to obtain a voluntary licence, referred to in Article 31(b);
− the authorization to use semi-conductor technology only for public non-commercial purposes
or to remedy an anti-competitive practice, referred to in paragraph (c);WT/TPR/M/71
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− the requirement from paragraph (l)(i) that the invention claimed in the second patent involves
an important technical advance of considerable economic significance in relation to theinvention claimed in the first patent, and
− the requirement from paragraph (l)(iii) that the use authorized in respect of the first patent be
non-assignable except with the assignment of the second patent.
Since the Law on Inventive Activity came into force only one case has been reported where a
compulsory licence was granted, in late 1970s (between Polish entities).  Since then, no compulsorylicence has been issued.  Therefore, it can be said that the provisions governing compulsory licensing
in Poland are not applied in practice.
The new Industrial Property Law, which will become effective soon, addresses all the
conditions laid down in Article 31;  the following provisions of the new Law correspond to the
individual paragraphs of that Article:
Article 31(a)
Article 84(2):
The Patent Office shall determine the scope and duration of a compulsory license, the detailed
terms and conditions of its exercise, as well as the amount, in proportion to the market value of the
license, of the royalty and the manner of and time limits for making payment.
Article 86:
When reasonable in specific circumstances, the decision on the grant of a compulsory license
may, at the request of the interested party, be changed in part relating to the scope and duration of the
license or to the amount of royalty, two years after it was taken.
Article 31(b):
Article 82(4):
A compulsory license may be granted, if a person applying for it is able to prove that it has
earlier made, in good faith, efforts to obtain a license.  This requirement may be waived where a
compulsory license is to be granted for the purpose of preventing or eliminating a state of national
emergency or where it has been announced that a compulsory license may be applied for.
Article 82(5):
Where it has been announced that a compulsory license may be applied for, waiver of the
requirement referred to in paragraph (4) shall not be applicable in respect of applications for the grant
of a license submitted after the expiration of a period of one year counted from the date of that
announcement.
Article 31(c):
Article 84(2):
The Patent Office shall determine the scope and duration of a compulsory license, the detailed
terms and conditions of its exercise, as well as the amount, in proportion to the market value of the
license, of the royalty and the manner of and time limits for making payment.WT/TPR/M/71
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Article 82(2):
The grant of a compulsory license for the exploi tation of an invention in the case referred to
in paragraph (1)(iii), shall be conditional upon asce rtainment that the exploitation of the invention that
is the subject matter of the dependent patent, where both inventions concern the same subject matter,
involves an important technical advance of considerable economic significance.  In case of aninvention concerning semi-conductor technology, a compulsory license may only be granted to
counteract unfair anti-competitive practices.
Paragraph (1)(iii) referred to above reads as follows:
1. The Patent Office may grant authorization to exploit a patented invention of another person (a
compulsory license), where:
(i) (…)
(ii) (…)(iii) it has been established that the patent holder enjoying the right of priority of an earlier
application (an earlier patent) prevents, by refusing to conclude a license contract, the meeting
of the home market demand through the exploitation of the patented invention (the dependent
patent), whose exploitation would encroach upon the earlier patent; in such case the holder of
the earlier patent may demand that an authorization be given to him for the exploitation of theinvention that is the subject matter of the dependent patent (cross-license).
Article 31(d):
Article 83:
The compulsory license shall be non-exclusive.
Article 31(e):
Article 85:
A compulsory license may only be transferred together with the enterprise or with that of its part, in
which it is worked.  A compulsory license relating to the earlier patent may only be transferred to a
third party together with the dependent patent.
Article 31(f):
Article 82(1)(iii):
1. The Patent Office may grant authorization to exploit a patented invention of another person (a
compulsory license), where:
(i) (…)
(ii) (…)
(iii) it has been established that the patent holder enjoying the right of priority of an earlier
application (an earlier patent) prevents, by refusing to conclude a license contract, the meetingof the home market demand through the exploitation of the patented invention (the dependent
patent), whose exploitation would encroach upon the earlier patent; in such case the holder ofWT/TPR/M/71
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the earlier patent may demand that an authorization be given to him for the exploitation of the
invention that is the subject matter of the dependent patent (cross-license).
Article 68(1):
The patent holder or the licensee may not abuse his rights, in particular by preventing the
invention from being exploited by a third party, if such exploitation is necessary for the purpose ofmeeting home market demands.
Article 31(g):
Article 86
When reasonable in specific circumstances, the decision on the grant of a compulsory license
may, at the request of the interested party, be changed in part relating to the scope and duration of the
license or to the amount of royalty, two years after it was taken.
Article 31(h):
Article 84:
1. The person exploiting the invention under a compulsory license shall be obliged to pay a
royalty to the patent holder.
2. The Patent Office shall determine the scope and duration of a compulsory license, the detailed
terms and conditions of its exercise, as well as the amount, in proportion to the market value of thelicense, of the royalty and the manner of and time limits for making payment.
Article 31(i) and (j):
Article 258:
Decisions taken and orders issued by the Patent Office shall be subject to complaint to the
Supreme Administration Court.
Article 31(k)
Article 82(2)
The grant of a compulsory license for the exploi tation of an invention in the case referred to
in paragraph (1)(iii), shall be conditional upon asce rtainment that the exploitation of the invention that
is the subject matter of the dependent patent, where both inventions concern the same subject matter,involves an important technical advance of considerable economic significance.  In case of an
invention concerning semi-conductor technology, a compulsory license may only be granted to
counteract unfair anti-competitive practices.
Article 68:
1. The patent holder or the licensee may not abuse his rights, in particular by preventing the
invention from being exploited by a third party, if such exploitation is necessary for the purpose of
meeting home market demands.
2. Preventing third parties from exploiting the invention within a period of three years from the
date of the grant of the patent shall not be considered the abuse of rights, referred to in paragraph (1).WT/TPR/M/71
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3. The Patent Office shall have the right to request a patent holder or a licensee to submit any
explanations as to the scope of the exploitation of the invention for the purpose of establishing
whether the patent is abused.
4. The provisions of paragraphs (1) and (2) shall not prejudice the provisions on counteracting
monopolistic practices.
Article 84 :
1. The person exploiting the invention under a compulsory license shall be obliged to pay a
royalty to the patent holder.
2. The Patent Office shall determine the scope and duration of a compulsory license, the detailed
terms and conditions of its exercise, as well as the amount, in proportion to the market value of the
license, of the royalty and the manner of and time limits for making payment.
Article 31(l)(i):
Article 82(2)
The grant of a compulsory license for the exploi tation of an invention in the case referred to
in paragraph (1)(iii), shall be conditional upon asce rtainment that the exploitation of the invention that
is the subject matter of the dependent patent, where the both inventions concern the same subject
matter, involves an important technical advance of considerable economic significance.  In case of aninvention concerning semi-conductor technology, a compulsory license may only be granted to
counteract unfair anti-competitive practices.
Article 31(l)(ii):
Article 82(1)(iii)
1. The Patent Office may grant authorization to exploit a patented invention of another person
(a compulsory license), where:
(i) (…)
(ii) (…)
(iii) it has been established that the patent holder enjoying the right of priority of an earlier
application (an earlier patent) prevents, by refusing to conclude a license contract, the meetingof the home market demand through the exploitation of the patented invention (the dependent
patent), whose exploitation would encroach upon the earlier patent; in such case the holder of
the earlier patent may demand that an authorization be given to him for the exploitation of the
invention that is the subject matter of the dependent patent (cross-license).
Article 31(l)(iii):
Article 85:
A compulsory license may only be transferred togeth er with the enterprise or with that of its
part, in which it is worked.  A compulsory license relating to the earlier patent may only be
transferred to a third party together with the dependent patent.WT/TPR/M/71
Page 73
2. Please indicate what provisions of Polish law or regulations apply, other than Article 49 of
the Law of 19 October 1972 on Inventive Activity.
Under the present Law on Inventive Activity the following provisions, other than Article 49,
are applicable in respect of compulsory licensing:
Article 42:
1. The patentee or the licensee may not abuse his rights, in particular by employing prohibited
monopolistic practices.
2. The Patent Office may request from the patentee or licensee explanations as to the extent of
working of the invention in order to de termine how the exclusive right is used.
Article 46(5) and (6):
5. Unless otherwise agreed in the license contract, the licensee shall have the right to exploit the
invention to the same extent as the licensor (full license).
6. The licensee authorized to exploit the invention may grant a sublicense only with the consent
of the owner of the patent; granting further sublicenses shall be unlawful.
Article 50:
In the cases referred to in Article 49(1), a compulsory license may also be granted for the
rights deriving from the license contracts (compulsory sublicense).  Article 49(6) shall applyaccordingly.
Article 51:
The provisions in a decision to grant a compulsory license or sublicense, which relate to the
terms of the license or sublicense or to the am ount of the royalty under the license (sublicense) may
be amended after two years, at the request of the interested party or ex officio, if this should provenecessary for reasons of equity owing to substantial changes in circumstances.
Article 39 TRIPS Agreement (Protection of undisclosed information)
1. (a) Please indicate the provisions of Polish law or regulations which ensure that
undisclosed and confidential test data or other data submitted by an applicant to the
Polish Office for Registration of Pharmaceutical and Medicinal Products in theprocedure for market authorization of a pharmaceutical product is, for a meaningful
number of years, protected against disclosure and against unfair commercial use by a
competitor, for example by prohibiting a second applicant from relying on, or from
referring to the original data of the first applicant, when applying subsequently for
market authorisation for his own product.
(b) If exceptions are provided for, please describe in detail how the apply in Polish law
and practice.
The following legal Acts govern the procedur e for market authorization of pharmaceutical
products in Poland: Pharmaceutical Act of 10 Oc tober 1991 on pharmaceuticals, medicinal products,
pharmacies, wholesalers and pharmaceutical administration (O.J. No 105, item 452 of 19 November
1991) and the Decree of the Ministry of Health and Social Welfare on the register of pharmaceuticalWT/TPR/M/71
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agents and medicinal devices (O.J. No 6, item 24 of 17 January 1994).  Neither of these Acts contain
any provisions addressing intellectual property rights.
Consequently, since 1 January 2000, Article 91(1) and (2) of the Polish Constitution apply, by
virtue of which the provisions of an international agreement ratified by Poland constitute part of the
national legal order, are directly applicable and prevail over other domestic regulations to the extent towhich they remain discordant with the TRIPS Agre ement.  Any parties to which this Agreement’s
provisions are addressed, are bound by them and obliged to observe them.
In meeting the requirements of Article 39(3) of the TRIPS Agreement, any documentation
and data submitted to the Office for Registration of Pharmaceutical and Medicinal Products for the
purposes of obtaining registration and regulatory approval are kept confidential, they are protected
against disclosure and are not made available to third parties.  The Registration Commission verifies
whether a given pharmaceutical or medicinal product satisfies the requirements of quality, efficiencyand safety.
According to the provisions of the Act of 16 April 1993, on combating unfair competition,
common civil courts in Poland are competent to hear and rule in cases involving test data protection.
When ruling in such cases, courts are supposed to apply, as from 1 January 2000, the TRIPS
provisions.  Consequently, a drug producer may, in a court proceeding, claim his exclusive right to hisproprietary information infringed by a producer of a generic pharmaceutical product  The Registration
Commission is bound by courts’ judgements in this respect.
At present a new Pharmaceutical Law is under preparation, which is supposed to take into
consideration the provisions of the TRIPS Agreement, including those of Article 39.  The Law is
anticipated to be accepted by the end of 2000.
Enforcement of intellectual property rights
According to para.142 of the Report by the Secretariat (WT/TPR/S/71) special attention should be
paid to the enforcement of intellectual property right s.  Could you please inform us about your efforts
undertaken by the Polish Government to prevent illegal production and importation of pirated and
counterfeit goods?
UNITED STATES:
We note that the industrial property law mentioned in the report has since been ratified.  When will
the new law take effect?
The draft of the new Law was adopted by the Polish Parliament on March 17, 2000 and will
enter into force by the end of this year.
What is the status of the new copyright legisl ation and will it provide protection for pre-1974 sound
recordings?
The draft law on the amendment of the law on copyright and related rights was accepted by
the Parliament on 9 June 2000.
The main objective of the amendments to the Act is harmonisation of the Polish legislation
with the laws of the European Communities in the sphere of copyright and neighbouring rights.  The
implementation covers all the Directives applicable in that field in the European Union.  Theintroduction of some of the postulated amendments will also fulfil obligations stemming from the
TRIPS Agreement.WT/TPR/M/71
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The new Act introduces the protection of phonograms and artistic performances realized
before 1974 but not more than 50 years ago (it concerns the period 1950-74).  Under the provisions of
the existing Act, such recordings or performances  are not accorded any protection.  Such a limitation
prevented protection of popular performances (and their recordings), distorted the market of
recordings and performances, and infringed interests of artists, whose recent popular achievementscould be used without their approval and financial compensation.  It has to be noted that the existing
provisions were adopted with the assumption of their temporary nature.  Adoption of those provisions
in 1994 was justified by the necessity to spread over time the economic effects of the protection  of
artistic performances and producers of phonograms and videograms, introduced in the present Act.
Noting paragraph 142, what measures has the Gover nment of Poland undertaken to improve the
enforcement of intellectual property rights protection?
See response to Questions by Hong Kong, China
III. SECTORAL MEASURES
Agriculture;  tariff quotas;  CAP
Tariff quotas
UNITED STATES:
As noted in paragraph 48 and the subsequent table, many of Poland’s quotas are significantly
underutilized.  Can the Government of Poland axplain this situation? Are there  difficulties in
administering the tariff rate quotas? Are there st ructural barriers (e.g., small TRQ allocations, delays
in releasing TRQ allocations, etc.)?
What measures can the Governme nt of Poland undertake to improve utilization of quotas?
Specifically, what steps are being taken to ensure that importers and exporters have full access to the
quotas?
JAPAN:
In the Report, it is pointed out “that the in-quota tariff rate on many products had been set too high
given market conditions” as a reason for underutilizing tariff quotas.  Japan consider that the
percentage of consuming tariff quotas depends on th e balance of supply and demand in the domestic
market, as well as on the situation of the international market.  Please explain Poland’s view on the
reason for underutilizing tariff quotas?
As regards the questions on the tariff quota administration and tariff quota utilisation, it needs
to be explained that Poland has never applied any restrictive policies in that respect.  Low utilisation
of tariff quotas for some commodity items is primarily the outcome of the current domestic market
situation, and does not result from the way the quotas are administered.  The basic factor affecting the
quota utilisation is the price on the domestic market, for example, the utilisation of 1999 tariff quotafor white sugar was at the zero level (notification: MA:2 G/AG/N/POL/32) because the domestic
market price was comparable with that of imports.  In the year 2000, when the domestic price for
white sugar is high, the tariff quota for this commod ity has been utilized to the full.  The tariff quota
administration system is the same for the year 1999 and 2000.WT/TPR/M/71
Page 76
CAP
UNITED STATES:
Please describe the Government of Poland's position regarding CAP integration and EU accession.
Is Poland willing to accept less than full CAP integration when it accedes?
The position of the Government of Poland on the integration between Poland and the
European Union (and the issue related to the inclusion of Polish agriculture in the CAP framework)
was presented in the document Polish Position Paper "Agriculture".  In this document was stated that
“Poland requests that the whole sector of Polish ag riculture is completely incorporated within the
CAP framework.  It requests setting production quota limits at the level ensuring environmentally
sustainable use of natural farming capacity in Poland as well as stable income source for farming
population.  Polish agri-food markets should become a pa rt of the European Single Market.”  It means
that the Government of Poland will incorporate a ll the principles and provisions of CAP into the
Polish legal order.  The Polish position is available on the internet.
The Government of Poland has acknowledged that increasing agricultural protection may be
detrimental to Polish economy.  What initiatives has Poland undertaken to address this issue?
Due to the lack of any other instruments of trade policy, Poland decided to apply the most
effective instrument of internal market protection, namely an increase in customs tariffs foragricultural products.  The increase of customs tariffs applies only to certain agricultural products.
Energy
Please refer to the answers in section on Privatization .
Manufacturing;  motor vehicle, textiles
JAPAN:
When Poland concluded the Europe Agreement with the EU it raised import tariffs for automobiles
from 15% to 35 %.  After the entry into force of the Agreement Poland gradually lowered the tariff
rates on those automobiles made in the EU.  As a result, the tariff gap between automobiles made
within the EU area and those made outsi de is now at 30% as of the year 2000.
(1) Is this measure inconsistent with Article XXIV:5b of the GATT?(2) Is there any plan to reduce tariffs back down to the level applied prior to concluding the
Europe Agreement?
(3) Please explain how much investment from outs ide the EU area has been increased in the
automobile sector by this measure.
During the early 1990s, the Polish automotive industry was subjected to a far-reaching
structural adjustment.  One of the elements of the industrial policy relating to this sector was to assure
government agencies and future investors stable and favourable conditions for privatization andmodernization of state enterprises in the sector that were close to bankruptcy and employing about
100,000 people.
An agreement concluded with strategic invest ors obliged the Treasury to maintain the
negotiated stimuli, including temporary market protection against excessive imports of used cars in
particular, which, during the early 1990s became even dangerous to traffic security and to the naturalWT/TPR/M/71
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environment in Poland due to their poor technical condition and their age, usually exceeding 10 years.
When the interim agreement between Poland and the EU came into force the duty rate on automobile
imports to Poland was 35%;  it was to be reduced according to an agreed programme.  It was
envisaged that the period of reduction of duties would last 10 years and will be completed in 2002.  In
2001, the rate will be 5%.  This year, the rate is 10%, therefore the gap is 25% and not 30% as statedin the Japanese question .
1. The Polish Government changes duty rates within the framework of the structural adjustment
of the automotive sector and not as a result of the agreement with the EU.
2. Low duty rates were introduced in the Polish tariff in 1999 for passenger cars with more than
2.5 litre diesel engines and with more than 3 litre gasoline engines.  For these cars the gap
between the EU and MFN rates amounts to 10%.  The applied rate is equal to the EU MFN
rate.  It is envisaged that this rate will 10% in 2002.  The Polish Government is contemplatingthe possibility of lowering other duty rates on automotive products taking into consideration
the fact that, on joining the EU, Poland will automatically apply rates from the common
external tariff.
3. During the last 10 years , the total value of foreign direct investments reached nearly
US$40 billion.  Investment in the automotive sector represent about 15% of the sum.  Due toa considerable diversification of origin of invested funds, it is difficult to determine exactly
the amount coming from non-European sources.  Among the non-European firms that
invested in Poland are: Toyota, Brigdestone/Firestone, Calsonic, Tokai Rubber Industries,
Daewoo, General Motors, Delphi Automotive Systems, Visteon, Eaton, and a number of
smaller and less known producers.
Services; GATS, financial services, telecommunications, transport
GATS
UNITED STATES:
“We look forward to the Government of Poland’s participation in the current round of GATS
negotiations and anticipate binding commitments to reflect ongoing liberalization.  Will theGovernment of Poland have the necessary authority to broaden and deepen its GATS commitments,
particularly by expanding the coverage of its existing commitments where many sub-sectors are
excluded?” (Report by Secretariat WT/TPR/S/71)
The Polish Government is deeply involved in the GATS negotiations, which started on
1 January 2000.  We notice the chance for the dynamic development of the services sector in Poland
as a result of the further liberalization of trade in services.  Poland's view is that the negotiations
should aim to limit or eliminate measures adversely affecting international trade in services, and to
achieve a higher level of liberalization in trade in  services.  Poland believes that in the course of
negotiations the level of economic development of  individual countries should be taken into
consideration.  Poland does not exclude from the scope of negotiations any modes of supply or
services sectors.  Poland will be ready to broaden and deepen its GATS commitments, particularly by
expanding the coverage of its existing commitments, provided that the negotiations are carried outwith respect to the interests of all participants of GATS and secure overall balance of rights and
obligations of GATS Parties.
HONG KONG, CHINA on para 55:
It is mentioned that Poland will remove barriers to establishment with effect from 1 January 2001.
We would like to know if it means that market access and national treatment limitations currentlyWT/TPR/M/71
Page 78
listed in Poland’s schedule regarding barriers to establishment will be removed in 2001.  (Report by
Government WT/TPR/G/71)
CANADA on para 55:
The Government Report states that foreign entities  can now pursue economic activity in the form of
branches and representative offices and that remaining barriers to establishment will cease onJanuary, 1 2001.  Which services sectors does this liberalization currently apply to and which sectors
will it apply to as of 1 January 2001?(Report by Government WT/TPR/G/71)
The dates contained in para. 55 of the Government Report refer to the date of entry into force
of the Articles of the Business Activity Law.  This Act, of 19 November 1999, specifies the principles
for undertaking and conducting business activities in Poland and is relevant in particular to provision
of services by foreign service suppliers.  The provisions of Business Activity Law are applicable to all
economic activities except: manufacturing activities in agriculture in terms of agricultural cultivation,breeding and raising animals, gardening, vegetable production, forestry and inland fishery, as well as
rental of rooms by farmers and camping sites for placing tents, sales of home made meals and the
provision of other services in agricultural holdings in connection with stay of tourists.  Furthermore a
person who provides legal assistance as well as notary public is not an entrepreneur as understood by
Business Activity Law.
The Business Activity Law regulates undertaking of business activity by foreign
entrepreneurs as follows.
As of 1 January 2000 foreign entrepreneurs may, subject to the principle of reciprocity,
provided that the international agreements ratified by Poland do not stipulate otherwise, set up
branches with their seat in Poland to conduct business activity in Poland.
As of 1 January 2000 foreign entrepreneurs may also set up representative offices with their
seat in Poland however the scope of action of a representative office may only encompass conducting
activity to advertise and promote the foreign entrepreneur.
As of 1 January 2001 foreign persons will be able to undertake and conduct business activity
in Poland according to the principle of reciprocity in sofar as the international agreements ratified by
Poland do not stipulate otherwise, just like an  entrepreneur who maintains his/her permanent
residence or seat in Poland.  Faced with a lack of reciprocity foreign persons will be able to establish
only limited partnerships, limited liability companies and joint stock companies in order to undertake
and conduct business activity in Poland and they may join such companies and purchase interest and
shares of stock therein.
The entry into force of these provisions of the Business Activity Act will provide a possibility
to improve Polish commitments undertaken under GATS.  Poland will be ready in the framework ofthe present round of mandated services negotiations to broaden and deepen its GATS commitments
particularly by removal of existing limitations on market access and national treatment limitations
provided that these negotiations are carried out with respect to the interests of all participants of
GATS and secure overall balance of rights and obligations of GATS Parties.WT/TPR/M/71
Page 79
JAPAN on para 193:
Is it possible for lawyers, who have been qualified in third countries, to offer legal services
concerning their home country law, a third country law or international law, in Poland? If so, please
explain in detail the conditions under which a foreign lawyer an offer such services, the scope of such
services and any limitation concerning the practice of the activities.  (Report by SecretariatWT/TPR/S/71)
According to the existing Polish Law on the Bar and Act on Legal Counsellor, foreign
lawyers may become attorney at law or legal counsellor in Poland and provide legal services in all
forms available for this kind of activity.  There is no nationality requirement and a foreigner may be
included in the list of attorneys at law (legal counsellors) if he/she has graduated from a law faculty at
a university in Poland or has graduated at a foreign university from a law faculty recognized in Poland
to be equivalent.  Such a person should be fluent in the Polish language both in speaking and writing.Furthermore the person has to undergo attorney's (legal counsellor's) apprenticeship and pass an
attorney's (legal counsellor's) examination.  Only  a citizen of the European Union can be relieved
from the latter requirement provided that the person has graduated from a university law faculty
recognized in Poland to be equivalent and practices the profession abroad.
There are no restrictions regarding the scope of legal assistance provided by a foreigner who
is included in the list of attorneys at law (legal counsellors) in Poland.  They can provide legal advice
on their home country, international law and Polish law.  Foreigners can provide legal services both in
the form of partnerships (registered partnership, civil partnership, limited partnership) and companies.
Companies with foreign participation can be established in Poland in order to provide legal services
provided that they meet the following conditions.
First,  all foreign partners must have the right obtained abroad to practice independently the
profession of an attorney at law (legal counsellor) or they form companies with the exclusive
participation of such persons, and all the Polish partners are attorneys at law or legal counsellors.
Second, foreign partners should prove reciprocity on the part of the countries in which they have the
right to practice independently the profession and in the case of companies- on the part of the
countries of their seat.
Companies with foreign participation, that meet these requirements, can provide legal
assistance on their home country law, international law and Polish law.
There are some limitations in respect to appear ing before courts.  Polish regulations allow
only an attorney at law or legal counsellor to appear before courts, i.e. natural persons.  If a foreign
entity does not meet this requirement, for exam ple a company with foreign partnership is not
considered as a natural person, it must authorise an attorney at law or legal counsellor to represent itbefore a court.  Such a procedural requirement is of a non-discriminatory nature as it affects both
national as well as foreign service suppliers.
Telecommunications
CANADA:
What are the conditions of registration required of foreign telecommunications companies operating
in the domestic market? (Report by Secretariat WT/TPR/S/71)
The basic provisions of the Polish law affecting the supply of services by foreign
telecommunications operators in Poland are as follows.WT/TPR/M/71
Page 80
A provision of telecommunications services is subject to a system of licences and permits.
No licences can be granted for the provision of international postal and telecommunications services
of a universal nature.
A foreign or domestic entity wishing to provide telecommunications services in Poland
should apply for a licence or permit.  The application should contain in particular the followinginformation:
− identification of the applicant and domicile;
− specification of the object of the activity;
− specification of the scope of the activity;  and
− expected date for beginning operation.
An applicant could be required to present information on its capital structure as well as
documents and information that prove the applicant can meet conditions specified in a licence or a
permit.  In addition, issuance of the licence could be subject to lodging a capital security deposit to
safeguard claims of third parties stemming from the applicant's business.
A foreign entity or a company with foreign equity participation can neither be granted a
licence for the provision of international telecommunications services nor a permit for the deployment
and use of international telecommunications networks.
A company in which participation of foreign equity in total share capital does not exceed
49%, and where the Memorandum of Association or Articles of Association provide that Polish
citizens residing in Poland shall have the majority in the Management Board and in the Supervisory
Board, and that the share of votes of the foreign organization and of organizations controlled byforeign equity at the General Shareholders’ Meeting shall not exceed 49%, can obtain:
− a licence for the provision of telecommunications services using telecommunications
networks intended for the diffusion or distribution of radio or TV programming provided that
such networks are not transmitting radio-communication equipment intended for the direct
and simultaneous diffusion or distribution of radio or TV programming.  No permits shall be
granted for the deployment or use of such networks;
− a licence for the provision of telecommunications services in public telephone networks
between different numbering zones;
− a licence for the provision of telecommunications services in mobile cellular telephone
networks;
− a licence for the provision of telecommunications services in other public telecommunications
network whose geographic range extends beyond one numbering zone;
− a licence for the provision of telecommunications services in private telecommunications
networks whose range extends the geographic area of one numbering zone;
− a licence for the provision of international telecommunications services;
− a permit for the deployment and use of radio-communications equipment used to assure radio-
communications beyond the borders of Poland;  andWT/TPR/M/71
Page 81
− a permit for the deployment and use of networks.
A company in which share of foreign equity in total company equity does not exceed 33%,
and where the Memorandum of Association or Articles of Association provide that: Polish citizens
residing in Poland shall have the majority in the Management Board and in the Supervisory Board and
the share of votes of the foreign organization and of organizations controlled by foreign equity at the
General Shareholders’ Meeting shall not exceed 33%, can obtain a licence for the provision oftelecommunication services using radio-telecommuni cation transmitting equipment intended for the
direct and simultaneous diffusion or distribution of radio or TV programming.  No permits shall be
granted for the deployment or use of such equipment.
There are no limitations in respect to provision of telecommunications services in public
telecommunications network whose geographic range does not extend beyond one numbering zone.
UNITED STATES:
Can the Government of Poland explain why, de spite growing demand and a backlog of connection
orders, no licences have been requested for the construction of alternative fixed networks? Are there
non-market factors that hinder the economic feasibility of constructing new networks?
The statement that no licences have been so far requested for the construction of alternative
fixed networks is unjustified.  On 17 May 2000, the Minister of Communications issued three licences
which authorize provision of long-distance telecommunications services in the whole country.  As aresult three telecommunications companies operating in Warsaw: TP S.A., EL-Net and NETIA have
been granted licences for the provision of telecommunications services.  The issuance of licences for
the construction of an alternative fixed network is in progress.  The Government of Poland is not
familiar with any non-market factors that could hinder the economic feasibility of constructing new
networks.
UNITED STATES :
Please explain the rationale for applying a 49% equity  limitation on foreign investment in the markets
for international, long-distance and mobile services but not for carriers providing local call services?
The equity limitation on foreign investment in th e markets for international, long-distance and
mobile services was justified by the fact that thes e markets have been subject to the ongoing process
of restructuring.  This limitation will be finally removed according to the timetable foreseen in the
Telecommunications Law, which will enter into force on 1 January 2001.
UNITED STATES :
Please confirm that the new Telecommunications Law removing TP S.A.’s monopoly over telex and
telegraph services will be adopted this year?
We confirm that according to the new Telecommunications Law, which will enter into force in 2001,
TP S.A.’s monopoly over telex and telegraph services will be eliminated.
UNITED STATES:
The Secretariat’s report indicates that the Government of Poland is seeking a strategic investor to
participate in the privatisation of TP S.A.  Will foreign investors be considered on a non-
discriminatory basis?WT/TPR/M/71
Page 82
In January 2000, the Minister of State Treasury asked all interested parties to participate in
negotiations on the acquisition of a strategic packet of TP S.A.’s shares in the form of a public tender
in the press, in the Polish and English languages.  Bidders that have been chosen were treated on a
non-discriminatory basis.
UNITED STATES :
‘Under the new Telecommunications Law will TP S.A. be subject to the same licensing requirements
and fees as other domestic and foreign service providers?
According to the new Telecommunications Law, TP S.A. will be subject to the same licensing
requirements and fees as other domestic and foreign service providers.
UNITED STATES:
Please expand on the new legislation’s mechanisms for setting interconnection fees.
The principles on setting interconnection fees are contained in Regulation of the Minister of
Communications of 9 September 1999.  According to this Act, an operator of a public
telecommunication network that has a dominant po sition must meet the following requirements:
− it cannot link accounting rates with its charges for the services provided;
− it can not demand a charge for any cost elements that are not directly connected with a service
requested by an operator of a connected network;
− it should calculate charges for the use of it s network with the purpose of providing a
connected network operator service exclusively on the basis of justified costs resulting from
adoption of additional telecommunications traffi c, including a proportional share of indirect
costs and general management
− where it is not possible to specify costs resulting from adoption of additional
telecommunications traffic it is obliged to take into consideration experience of other
European operators operating on competitive markets including the level of the development
of the Polish market;  and
− it is obliged to justify proposed accounting rates and their way of calculation.
It is worth mentioning that the companie s whose investment in the construction of
telecommunications networks on rural area exceeds 20% of total investment can expect compensation
for the lack of local access.  Modal interconnection rates to be applied by a dominant operator were
published by the Minister of Communications.
Postal services
HONG KONG, CHINA on paras. 110-111:
It is noted that Poland is planning for both relaxing he monopoly on letters and restructuring of the
state enterprise Polish Post.  Would the Polish authorities share with us further information on the
restructuring programme? We would like to know whether foreign participation in letter delivery
services will be allowed upon the end of monopoly.
New regulations envisaged for the year 2001 in the area of postal services provide for the
further liberalization of the postal market.  This aim will be achieved through a gradual elimination ofWT/TPR/M/71
Page 83
the monopoly of the public utility, Poczta Polska, in the area of letter post in domestic and
international traffic.  The objective is to restrict the monopoly after 2003 to items of correspondence
up to 350 g and direct mail up to 350 g sent for a postal fee lower than five times the lowest charge
specified for the provision of this service in the price-list of the public operator.  Additionally, the area
reserved for the public operator will also cover postal (money) orders.  National as well as foreignservice suppliers can operate outside the reserved area.  The public utility enterprise Poczta Polska is
presently working on the programme of its restructurin g.  At this stage no further detailed information
on the issue is available.
Transport
3
HONG KONG, CHINA on paras. 210-211:
It is mentioned that the Polish government intends  to end the monopoly of the state-owned railway
company PKP in 2005 while licences have been granted in 1998 to independent operators for theprovision of national railway services.  We would be interested to know about the progress of private
sector participation in the sector. (Report by Secretariat WT/TPR/S/71)
There have been 22 licences issued so far.  All for the provision of freight transportation
services.  The licensed operators are still without access to the PKP infrastructure network since PKP
has not fixed the access fares yet.  In consequence private sector participation in the freight market isno higher than 2%.  The access fares will be fixed as soon as the restructuring and commercialisation
process of PKP has been completed.  They will fall then under anti-monopoly legislation.
HONG KONG, CHINA on para. 215:
Currently all Polish ports are owned by the state.  Foreign participation is also excluded in the plan
for privatization.  Would Poland have any further plan to open up the sector for foreignparticipation? (Report by Secretariat WT/TPR/S/71)
None of Polish seaports is exclusively State-owned.  The State is only the majority
stakeholder of the top three seaports: Gda ńsk, Gdynia, and Szczecin-Swinouj ście.  The remaining
23 ports are owned by entities independent of the State Treasury (for example local governments).
For the time being foreign capital participation in the privatisation of Polish ports is excluded foressential national security reasons.  However, foreign investors are allowed in the so-called
operational companies, i.e. companies providing servi ces auxiliary to maritime transport (for example
cargo handling, storage and warehousing services).
HONG KONG, CHINA on para. 219 & footnote 17:
It is mentioned that two private [air services] licences have been granted, but operations are yet to
commence.  It further stated that about 100 licences have granted but have not met operational
certification requirement.  We would like to know more information on the operational certificationrequirement and whether these private operators are required to satisfy specific community services
obligations like the state operator. (Report by Secretariat WT/TPR/S/71)
Aircraft operational requirements and a respective certification procedure are laid down in a
regulation issued by the Minister of Communication (formerly responsible for transport) in 1986.
4
The certification procedure is to check if an applican t air operator is able to provide safe air transport
                                                     
3 The questions posed by USA regarding privatizatio n process in maritime transport sector and in air
transport sector are answered under other themes of the document i.e. in the Economic Environment theme.
4 Regulation of the Minister of Communication of 9 June 1986 concerning aircraft operational
requirements (published in Monitor Polski,  No. 20, 1987 item 178).WT/TPR/M/71
Page 84
services; the examination concerns, in particular, organization, equipment, and personnel
qualifications.  Under the Polish domestic civil aviation regulations all Polish air carriers are obliged
to provide public transportation services in emergency situations (war, natural disaster, etc.).
Financial services
CANADA on pa ra. 194:
We note that commitments on financial services are yet to come into force pending Poland’s
acceptance of the Fifth Protocol to the GATS.  When is ratification of the Fifth Protocol to the GATS
anticipated? (Report by Secretariat WT/TPR/S/71)
HONG KONG, CHINA on para. 194:
It is noted that commitments on financial services are yet to come into force pending Poland’s
acceptance of the Fifth Protocol to the GATS.  We would like to know Poland’s timetable for
ratification. (Report by Secretariat WT/TPR/S/71)
UNITED STATES:
When does the Government of Poland intend to ra tify its commitments on financial services?
It is assumed that the ratification by Poland of the Fifth Protocol to GATS will be completed by the
end of 2000.  Despite the lack of formal proceedings, the liberalization commitments of Poland under
this Protocol have been fully accommodated into the national legal framework.
HONG KONG, CHINA on para. 224:
It is mentioned that Poland has taken progressive steps to privatize the banking and finance sector.
We would like to know if Poland has any plans to fu rther bring down the level of state participation in
the sector which is currently at about 44%. (Report by Secretariat WT/TPR/S/71)
According to the information prepared by the national supervisory authority (available on the
central bank’s web page: http://www.nbp.pl/) the number of banks with majority public sector
participation fell from 13 at the end of 1998 to seven as of end-1999.  The number of banks directly
controlled by the State decreased from six to three.  At the end of 1999, the assets of banks with
majority public sector participation represented 23.9%, whereas privately owned banks accounted for
71.8%.  The remaining 4.2%  of assets were held by the co-operative banks (see Table 1).  As furtherdivestiture of state holdings in the banking sector proceeds, the figure on state participation in the
banking sector will be scaled down.WT/TPR/M/71
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Table 1
Number of banks and relative share of particular groups in total system
1993 1994 1995 1996 1997 1998 1999
Number of banks (excluding those declared bankrupt or under liquidation)
Commercial banks, of which: 87 82 81 81 83 83 77
Banks with majority public-sector interest5 of which: 29 29 27 24 15 13 7
 - directly owned by Treasury61 6 1 5 1 38663
 -  i n d i r e c t l y  o w n e d  b y  T r e a s u r y 1 1 1 1 1 1 1 3874
 -  o w n e d  b y  N B P 2333100
Banks with majority private-sector interest of which: 58 53 54 57 68 70 70
 - with majority Polish equity 48 42 36 32 39739 31
 - with majority foreign equity810 11 18 25 29931 39
Cooperative banks  1 653  1 612  1 510  1 394 1 295 1 189 781
Total banks 1 740 1 694 1 591  1 475 1 378 1 272 858
Total assets (%)
Commercial banks, of which: 93.4 94.7 95.2 95.4 95.5 95.7 95.8
Banks with majority public-sector interest of which: 80.4 76.1 68.3 66.5 49.3 45.9 23.9
 - directly owned by Treasury 76.1 70.8 63.0 51.1 38.2 36.7 22.2
Banks with majority private-sector interest of which: 13.0 18.6 26.9 28.9 46.2 49.8 71.8
 - with majority Polish equity 10.4 15.4 22.7 15.1 30.9 33.2 24.6
 - with majority foreign equity 2.6 3.2 4.2 13.7 15.3 16.6 47.2
Cooperative banks 6.6 5.3 4.8 4.6 4.5 4.3 4.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Net loans10 (%)
Commercial banks, of which: 92.9 93.3 94.5 93.9 94.5 95.0 94.9
Banks with majority public-sector interest of which 79.3 73.0 63.7 61.3 43.2 38.8 21.4
 - directly owned by Treasury 76.6 69.1 58.5 42.0 27.9 26.3 19.7
Banks with majority private-sector interest of which: 13.6 20.3 30.8 32.6 51.3 56.2 73.5
 - with majority Polish equity 10.9 15.9 25.0 16.6 33.1 34.3 22.6
 - with majority foreign equity  2.7  4.4  5.8 16.0 18.2 21.9 50.9
Cooperative banks 7.1 6.7 5.5 6.1 5.5 5.0 5.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Deposits taken from non-financial sector (%)
Commercial banks, of which: 92.4 94.1 94.5 94.5 94.8 94.8 95.0
Banks with majority public-sector interest
 of which81.1 77.3 71.3 70.1 58.0 53.6 29.2
 - directly owned by Treasury 75.6 71.6 65.6 57.2 49.5 46.4 27.9
Banks with majority private-sector interest
Of which:11.3 16.8 23.2 24.4 36.8 41.2 65.8
 -  w i t h  m a j o r i t y  P o l i s h  e q u i t y 9 . 21 4 . 12 0 . 21 2 . 22 4 . 12 7 . 52 0 . 1
 - with majority foreign equity  2.1  2.7  3.0 12.2 12.7 13.7 45.7
Cooperative banks 7.6 5.9 5.5 5.5 5.2 5.2 5.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 1 (cont'd)
                                                     
5 Banks where the Treasury, other State institutions or the NBP hold equity entitling them to exercise at
least 50% + 1 votes at a shareholders general meeting.
6 Banks where the Treasury directly holds equity entitling it to exercise at least 50% + 1 votes at a
shareholders general meeting.
7 Including Rzeszowski Bank Regionalny, which was a banking organisation and did not file reports.
8 Branches of foreign banks and joint-stock banks where foreign parties (natural or juridical persons)
jointly hold equity, directly or indirectly, entitling them to exercise at least 50% + 1 votes at a shareholders
general meeting.
9 Including Bank of America Polska SA, which was a banking organisation and did not file reports.
10 Loans and advances (excluding purchased debt and funds disbursed under guarantees and
endorsements, reported separately since 1996), less specific provisions.WT/TPR/M/71
Page 86
1993 1994 1995 1996 1997 1998 1999
Total capital base (total core and supplementary capital) (%)
Commercial banks, of which: 92.0 94.3 94.6 95.1 95.2 95.6 95.6
Banks with majority public-sector interest
Of which76.8 72.6 61.4 55.9 34.0 33.2 16.4
 - directly owned by Treasury 72.8 66.7 55.4 43.7 25.6 25.7 14.0
Banks with majority private-sector interest
Of which:15.2 21.7 33.2 39.2 61.2 62.4 79.2
 - with majority Polish equity 13.0 18.0 25.6 18.3 37.2 37.7 29.0
 - with majority foreign equity  2.2  3.7  7.6 20.9 24.0 24.7 50.2
Cooperative banks 8.0 5.7 5.4 4.9 4.8 4.4 4.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
HONG KONG, CHINA on para. 232:
It is stated that deposit amounting to 50% of the minimum guarantee capital is required for the
operation of a foreign insurance branch in Poland.  We would like to know if similar requirement is
also applied for local services suppliers and whether Poland would consider the use of alternative
prudential requirements with less burdensome effect on the suppliers. (Report by SecretariatWT/TPR/S/71)
The provisions on security deposit referred to in para. 232 of the Report play the role of an
essential prudential instrument to ensure a sufficient level of consumer protection.  They mirror
international insurance regulations of many deve loped countries and simultaneously comply with
Poland’s international liberalisation commitments.  A possibility to ease that burden would arise, forexample, if uniform supervision was put in place.  Similar requirements are applied to local suppliers.
UNITED STATES:
Does the Pension Supervisory Office accept the academic credentials of managers and board
members of pension funds who earned their degrees outside of Poland?
The problem of recognition of foreign diplomas is regulated by respective bilateral
agreements.  In cases when there is no such an agreement, it is necessary to apply the diploma
confirmation procedure.  However, it is not required when a foreign person is to be employed in a
foreign firm active in Poland or in a company with a foreign capital participation.
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