RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSC/W/19
5 March 1999
(99-0863)
Committee on Specific Commitments
REVISION OF SCHEDULING GUIDELINES
Note by the Secretariat
MTN.GNS/W/164 and 164/Add.1
1. The Committee on Specific Commitments agreed on 16 June 1997 that it would be necessary
to revise the scheduling guidelines in advance of the new round of negotiations.  Delegations were
invited to submit questions and problems they had encountered in the scheduling of commitments,
and on 5 November 1998, the Secretariat was requested  to prepare a Note on scheduling problems in
relation to the existing guidelines.  This Note is based on the structure of the guidelines as they nowexist, in MTN.GNS/W/164 and its Addendum 1.  It draws attention to problems which have been
encountered in relation to the various provisions of the guidelines and where possible suggests ways
of dealing with them.
2. It is necessary at the outset to recall the origin and status of the guidelines.  In the process of
drafting the initial commitments, which began in October 1990, Members realized that the GATSalone, though it was still under negotiation, would not offer sufficiently detailed guidance to answer
all problems arising in the formulation of the entries.  They therefore requested the Secretariat to
compile typical scheduling problems and to suggest possible solutions to them.  This was done during
1991-93 in the form of successive and revised informal notes by the Secretariat.
3. These informal notes could of course have no legal status as interpretations of the GATS or
the intentions of negotiators, but since all Members had in general followed the guidance contained in
the notes, they felt it desirable to give to the final version a more official status.  It was therefore
circulated on 3 September 1993 as a formal Uruguay Round document (MTN.GNS/W/164).
Nevertheless in spite of that official status the last sentence of paragraph 1 of GNS/W/164 states that
"the answers should not be considered as an auth oritative legal interpretation of the GATS".  This
paragraph also says "the note cannot answer every question that might occur to persons responsible
for scheduling commitments;  it does attempt to answer those questions which are most likely to
arise".  It is therefore made clear that the guidelines cannot be regarded as exhaustive.  Indeed, further
questions were posed during consultations held in October/November 1993 and answers by the
Secretariat were put forward in MTN.GNS/W/164/Add.1, which was circulated on
30 November 1993.
4. Through a similar process guidelines were also developed for the scheduling of MFN
exemptions, and on 15 September 1993 an informal Secretariat paper entitled "Listing of Article II
Exemptions" (Job No. 2061) was circulated.  This document has not been circulated as an official
document because of disagreement among Members on the last sentence of its fourth paragraph.  (The
sentence refers to the possibility of listing MFN exemptions concerning measures to be applied in the
future.)  Nevertheless, the Secretariat will prepare a further Note on problems encountered inscheduling exemptions.
5. In the paper which follows, the text of the scheduling guidelines (W/164 and Add.1) is
presented in bold type, and each paragraph is followed by a commentary on problems arising and
where appropriate by suggestions for revision of the text or other action.  The original paragraph
numbers in W/164 and Add.1 (bold type) are retained.  In general, the problems which have beenS/CSC/W/19
Page 2
encountered are of three types.  The first stems from the content of the guidelines themselves, which
is sometimes ambiguous and sometimes, with the benefit of hindsight, unrealistic or eccentric.  The
second stems from what appear to be common misunderstandings or from neglect of the guidelines inthe drafting of national schedules – which itself may be the result of faults in the guidelines.  The third
type of problem is rooted in the requirements or drafting of the GATS itself, and is therefore perhaps
outside the scope of this paper, but such problems are nevertheless noted.
6. It should be made clear that if Members were to agree on revised scheduling guidelines,
according to the basic principles of international law these revised guidelines would not have any
retroactive effects on the interpretation of existing commitments.  The value of revised guidelines
would be to improve the clarity and legal security of commitments undertaken in the new round.  That
value would of course be greatly enhanced if Members decided to revise their existing commitments
in line with the new guidelines, but that is not presumed.
7. In terms of the format of these potential revised guidelines, Members may wish to reflect on
the following questions:
- the possible need for an alphabetical index;
- the possibility of attaching to the guidelines the specific guidance which has
been negotiated for the scheduling of commitments in sectors such astelecoms and maritime (the model schedules);
- the possible merger of document GNS/W/164 and 164/Add.1 (taking it as a
working assumption that such a merger would be desirable, the drafting
suggestions made by the Secretariat below frequently combine the content of
the two documents);
- possible attachment of the scheduling guidelines for the drafting of MFN
exemptions (Job No 2061).
COMMENTS AND DRAFTING SUGGESTIONS ON DOCUMENT GNS/W/164
8. In the remainder of this paper, the text of the scheduling guidelines as they were agreed
in 1993 appears in bold type.  On some paragr aphs no comments are made.  Where comments are
made, they appear in normal font, after the paragraph in question.  Drafting suggestions appear initalics.  
GNS/W/164
1. This note
1 is intended to assist in the preparation of offers, requests and national
schedules of initial commitments.  Its objective is to explain, in a concise manner, how
commitments should be set out in schedules in order to achieve precision and clarity.  It is based
on the view that a common format for schedules as well as standardization of the terms used in
schedules are necessary to ensure comparable and unambiguous commitments.  The note
cannot answer every question that might occu r to persons responsible for scheduling
                                                     
1 This note is circulated by the Secretariat in response to requests by participants.  It is a revised version of
a draft entitled Scheduling of Commitments in Trade in Services:  Explanatory Note, 22 December 1992.  Ref erences
to the General Agreement on Trade in Services (GATS) are based on the text contained in MTN.TNC/W/FA of
20 December 1991, as adjusted by the Legal Drafting Group and distributed as an Informal Note by the Secretariat
(Review of Individual Texts in the Draft Final Act, No.  1161, 25 June 1992).S/CSC/W/19
Page 3
commitments;  it does attempt to answer those questions which are most likely to arise.  The
answers should not be considered as an auth oritative legal interpretation of the GATS.
2. The GATS contains two sorts of provisions.  The first are general obligations, some of
which apply to all service sectors (e.g. m.f.n., transparency) and some only to scheduled
commitments (e.g. Article XI:  Payments and Transfers).  The second are specific commitments
which are negotiated undertakings particular to each GATS signatory.  Specific commitments,
upon the conclusion of negotiations, are to be recorded in national schedules which will be
attached to, and form an integral part of, the GATS.  By virtue of Article XXVIII:1, everysignatory must attach to the GATS its national schedule.  This note addresses two main
questions:  what items should be entered on a schedule, and how
 should they be entered.
PART I
WHAT ITEMS SHOULD BE SCHEDULED?
3. A schedule contains the following main types of information:  a clear description of the
sector or sub-sector committed, limitations2 to market access, limitations to national treatment,
and additional commitments other than market access and national treatment.  If a Member
undertakes a commitment in a sector then it must indicate for each mode of supply that it binds
in that sector:
what limitations, if any, it maintains on market access;
what limitations, if any, it main tains on national treatment;  and
what additional commitments, relating to measures affecting trade in services
not subject to scheduling under Articl es XVI and XVII, it may decide to
undertake under Article XVIII.
9. The content of the schedules as set out in paragraph 3 of the guidelines is correct;  since
schedules are a record of legal commitments, nothing should appear in them which is not legally
binding.  Since the purpose of schedules is to register legally binding commitments underArticles XVI, XVII and XVIII, a schedule should contain only measures which fall within the scope
of those Articles.  However, many schedules in fact contain material of an explanatory nature,
intended to facilitate understanding rather than to have legal force.  Such material often appears in
footnotes, and sometimes in attachments.  The legal status of these entries is not clear, and they are
likely to lead to legal uncertainty.  For example, a reference to a measure inconsistent with one of the
general obligations and disciplines in Part II of the Agreement would be an indication that the
Member concerned intended to maintain the measure.  This would of course be inconsistent with the
GATS.  Schedules cannot be used to subtract from Members' obligations under the Agreement:  their
purpose is to add specific commitments to the general obligations which all Members share.
References are also frequently made in schedules, for transparency purposes, to measures which arenot inconsistent with the GATS but which are outside the scope of Articles XVI, XVII and XVIII.
This too is undesirable, because while such references  are intended to have no legal force, their entry
in the schedule in principle makes them binding, so that questions could arise as to the right of the
Member concerned to amend the measures inscribed in the schedule.
                                                     
2 The term "limitations" will be used throughout this note to refer to the "terms", "conditions", "limitations", and
"qualifications" used in Articles XVI and XVII of the GATS.S/CSC/W/19
Page 4
10. Footnotes are frequently included in schedules, usually for transparency purposes.  Since
schedules should refer only to measures falling within Articles XVI, XVII and XVIII, all such
references should find their place within the 4 columns of the schedule.  There should therefore be noneed for footnotes.  Even where information is n ecessarily provided to clarify a commitment, the
information should be inscribed as part of the entr y in the relevant column.  Since there have in the
past been disputes about the legal status of footnotes in GATT schedules, for the sake of legal
security, above all that of the Member concerned, any entry intended to define the scope or extent of a
commitment should be inscribed in the body of the schedule.  Footnotes should in principle beavoided.
11. There is no doubt that headnotes and cover notes included in schedules are legally binding.
They have been frequently used in the Financial Services sector, for example, and often contain
measures having the effect of market access and national treatment restrictions.  Members should give
consideration to the drafting of these entries:  to ensure clarity and legal security, they should beexpressed in modal terms and in the four-column format.
12. There are instances where it has been collectively agreed to append attachments to the
schedules.  In the case of the telecoms reference paper this attachment has the value of an additional
commitment through the reference to the attachment in  the relevant column.  The same is true for the
definition of harbour services in the attachment which defines the scope of access to and use of theseservices.  The other definitions contained in the maritime attachment have the same legal value as the
first column (definition of sector) as they are developments of the sectoral definitions contained in this
first column and are related to them through a reference.
13. Article XX stipulates that "with respect to sectors where such commitments are undertaken
each schedule shall specify:
a) terms, limitations and conditions on market access;
b) conditions and qualification on national treatment;c) undertakings relating to additional commitments;
d) where appropriate the time-frame for implementation of such commitments;
e) the date of entry into force of the commitments".
Notwithstanding point e) above, the schedules do not indicate the date of entry into force of
commitments.  There are a number of cases in which the timeframe for implementation is indicated,
mostly where deferred commitments are made, relating to liberalization due to be effected on a future
date.  Most such cases are to be found in the basic telecoms and financial services sectors.  However,
this relates to d) above rather than to e).  The Committee may wish to consider whether the scheduling
guidelines should include guidance on point e), which is a rather odd requirement, since unlike theother points in this paragraph the date of entry into force is often not within the control of individual
Members.  (By way of illustration, the date of entry into force of the Protocols negotiated since the
Uruguay Round has been decided by the accepting countries, not by Members individually.)  In the
case of Uruguay Round commitments, all of which entered into force on 1 January 1995, to indicate
the date of each commitment would have been superfluous.  In regard to commitments undertakenmore recently, outside the context of Protocols, dates have not been indicated. The date of entry into
force of a commitment is relevant to rights under Article XXI and to possible non-violation cases.
Discussions in the Committee on the question of electronic schedules have highlighted the difficulty
of ascribing dates to commitments (see S/CSC/W/14 of 26 March 1998).  The question needs further
study.
14. MTN.GNS/W/164/Add.1, paragraph 5 provides additional guidance on the scheduling of
geographical limitations  in commitments. This material could be merged with the basic guidelines at
this point.S/CSC/W/19
Page 5
Suggested drafting for revised guidelines:
"With regard to the scheduling of the geographical scope of limitations the entry should describe the
geographical scope of measures – for example by sp ecifying the state or region to which they apply -
where they do not cover the entire national territory"
A.  Limitations on Market Access (Article XVI)
4. A Member grants full market access in a given sector and mode of supply when it does
not maintain in that sector and mode any of th e types of measures listed in Article XVI.  The
measures listed comprise four types of quantitative restrictions (sub-paragraphs a-d), as well as
limitations on forms of legal entity (sub-par agraph e) and on foreign equity participation
(sub-paragraph f).  The list is exhaustive  and includes measures which may also be
discriminatory according to the national treatment standard (Article XVII).  The quantitative
restrictions can be expressed numerically, or through the criteria specified in
sub-paragraphs (a) to (d);  these criteria do not relate to the quality of the service supplied, or to
the ability of the supplier to supply the service (i.e.  technical standards or qualification of thesupplier).
15. It is sometimes mistakenly believed that "market access" limitations include only measures
which operate prior to entry into the market, whil e national treatment limitations cover only post-entry
limitations.  This is not so.  Several categories of measures under Article XVI (e.g. limitations on the
value of services transactions, on the number of operations or on the quantity of output) operate
post-entry, and Article XVII covers any discriminatory measures whether they apply pre- or
post-entry.  In scheduling terms no distinction is made between measures applying pre-entry andpost-entry.
Suggested drafting for revised guidelines :
Market access restrictions should not be confused with pre-entry restrictions.  Among the six
exhaustive categories of market access restrictions there are some restrictions with post-entry effect,
such as limitations on the total value of services  transactions (XVI-2-b), limitations on the total
number of services operations or limitations on the total quantity of services output (XVI-2-c).  In
order to identify if a measure falls within the scope of Article XVI and should be listed under market
access, the only valid criterion is whether the measure falls within one of the six categories (XVI-2a)
to XVI-2-f)).
16. Another confusion that sometimes arises is the idea that only discriminatory measures should
be scheduled under Article XVI.  This is not the case.  Article XVI covers all measures that fall within
the six categories listed, whether they are discriminatory or not.  For instance if a limitation on the
types of legal entity permitted in a given sector is applied both to nationals and to foreigners it has to
be scheduled.   Similarly if a limitation on the total value of assets is applied both to nationals and to
foreigners it should also be scheduled.S/CSC/W/19
Page 6
Suggested drafting for revised guidelines :
Article XVI covers all measures falling within the six categories listed in XVI:2 whether or not they
discriminate between national and foreign services or suppliers.  For instance if a limitation on thetypes of legal entity permitted in a given sector is applied both to nationals and to foreigners it has to
be scheduled.
17. The additional precision given by paragraph 3 of document GNS/W/164/Add.1 on the
numerical expression of quotas should be integrated here – if it is agreed to consolidate the two
documents.
Suggested drafting for revised guidelines :
With regard to market access limitations, such as numerical ceilings or economic needs tests, the
entry should describe each measure concisely indicating the elements which make it inconsistent with
Article XVI.  Numerical ceilings should be expressed in defined quantities in either absolute numbers
or percentages;  regarding economic needs tests the entry should indicate the main criteria on whichthe test is based, e.g.  if the authority to establish a facility is based on a population criterion, the
criterion should be described concisely.
18. Guidance should also be provided as to the n eed to schedule requirements such as "financial
soundness" or membership in professional organizati ons which are contained in many schedules.  The
problem here is that requirements of this kind are in most cases neither limitations on market access
nor discriminatory in terms of national treatment.  They are usually conditions for obtaining a licence
or for practising a profession which apply both to foreigners and nationals, and they belong in the
realm of domestic regulation, under Article VI.  Where no access limitation or discrimination is
involved they should not be scheduled.
 Suggested addition to guidelines :
Licensing and qualification requirements such as financial soundness or membership in professional
organization, which are frequently stipulated as a condition to obtain a licence, are assumed to be of
a non-discriminatory nature and therefore to be applied equally to nationals and foreigners.  Unless
such requirements apply in a discriminatory manner  to foreigners, they should not be scheduled
under Article XVII.  Nor should they be scheduled under Article XVI.  However, if they arediscriminatory they should be scheduled as national treatment limitations, not under market access.
5. It should be noted that the quantitative restrictions specified in sub-paragraphs (a) to
(d) refer to maximum limitations.  Minimum requirements such as those common to licensing
criteria (e.g. minimum capital requirements for the establishment of a corporate entity) do not
fall within the scope of Article XVI.  If such a measure is dis criminatory within the meaning of
Article XVII and, if it cannot be justified as an exception, it should be scheduled as a limitation
on national treatment.  If such a measure is non-discriminatory, it is subject to the disciplines of
Article VI:5.  Where such a measure does not conform to these disciplines, and if it cannot be
justified as an exception, it must be brought into conformity with Article VI:5 and cannot bescheduled.
19. In spite of this paragraph many members have scheduled minimum requirements, notably in
financial services, and this is very understandable.  It is clear that minimum requirements on the value
of services transactions, assets, operations or foreign share-holdings could certainly operate as market
access restrictions, particularly on small firms, if they require a scale of operation beyond the meansof such suppliers.  This calls into question the logic of the second sentence in paragraph 5 above,
although the sentence does reflect the intentions of negotiators in 1993.  By the same token, it is
difficult to understand the use of the word "total" in sub-paragraphs (b), (c) and (d) of Article VI:2.S/CSC/W/19
Page 7
We are aware of no cases in which Members have scheduled limitations on the total value of service
transactions, number of operations, number of pers ons employed etc., and it is very difficult to
envisage circumstances in which any country would wish to do so.  It is unclear whether the word"total" in this context means anything at all.  The quantitative limitations which exist are almost
always imposed on sub-sets of the total quantities, often referring to that proportion of the total which
is open to foreign suppliers.  The Committee may wish to consider whether at least the second
sentence of the above paragraph should be deleted, if only because it is so widely disregarded.
6. The following are examples of limitations on market access drawn from the conditional
offers.  In this regard, paragraph 21 on the scheduling of limitations is also relevant.
Limitations on the number of service suppliers:
Licence for a new restaurant based on an economic needs test.
Annually established quotas for foreign medical practitioners.
Government or privately owned monopoly for labour exchange agency services. Nationality requirements for suppliers of services (equivalent to zero quota)
20. It is true that a requirement that service suppliers in a given area should be nationals is in
effect a zero quota – no foreign suppliers are admitted.  In some cases, however, the situation is less
clear:  restrictions scheduled as nationality requirements are often limitations on national treatment
rather than on market access, and they have often been scheduled accordingly. A restriction on thecomposition of management of a commercial presence cannot be construed as a direct restriction on
market access for a foreign services supplier.  Although Article XVI:2(d) refers to "limitations on the
total number of natural persons", it also states that these natural persons are those who "are necessary,
and directly related to the supply of a specific service".  Therefore so long as the restriction is on the
composition of management, i.e a restriction on the attributes of commercial presence, it is
appropriate to schedule in the national treatment colu mn.  This also implies that if the requirement is
on natural persons actually supplying the service, including employees directly related to the supplyof the service then it is appropriate to schedule it under market access.
Suggested drafting for revised guidelines :
footnote: It should however be noted that nationality requirements are to be scheduled under market
access (and under mode 4) only insofar as the requirement applies directly to the persons supplying a
service.  When the requirement is on the composition of management, i.e a restriction on theattributes of commercial presence, or on the ability to purchase land or other facilities it is
appropriate to schedule it in the nationa l treatment column (and under mode 3).
b) Limitations on the total value of transaction or assets :
Foreign bank subsidiaries limited to x percent of total domestic assets of all
banks.
21. This example – and the drafting of Article XVI:2(b) itself – may be misleading in that it is of
course possible to impose limitations on particular types of  transactions or assets, not merely on their
totality.  It would perhaps be helpful to include fu rther examples under this heading of limitations of
this kind.  It would be worthwhile to discuss the significance of the word "total" in XVI:2(b), (c) and
(d).S/CSC/W/19
Page 8
c) Limitations on the total number of service operations or quantity of service output:
Restrictions on broadcasting time available for foreign films.
d) Limitations on the total number of natural persons:
Foreign labour should not exceed x perc ent and/or wages xy percent of total.
e) Restrictions or requirements regarding type of legal entity or joint venture:
Commercial presence excludes representative offices.
Foreign companies required to establish subsidiaries.
In sector x, commercial presence must take the form of a partnership.
f) Limitations on the participation of foreign capital:
Foreign equity ceiling of x percent for a particular form of commercial presence.
22. It may be useful to provide a more explicit example for item (f), relating to both individual
and aggregate foreign investment limitations.  The existing example might be replaced by the
following:
"Foreign ownership restricted to 25 % in total and 10 % for any individual holdings"
23. On the assumption that W/164 and Addendum 1 will be merged, it would be appropriate to
add the content of paragraph 1 of the Addendum to the guidelines as indicated below. Additional
language is indicated in bold.)
It should be noted that the requirement to obtain an approval or a licence is not in itself a trade
restriction and therefore does not need to be scheduled.  However if the criteria for granting licences
or approval contains a market access restriction (e.g an economic needs test  or a quota on the
number of licences permitted) or discriminatory treatment, the relevant measures would need to be
scheduled if a Member wishes to maintain them as limitations under Article XVI or XVII.  It has been
pointed out that in some instances the granting of licences is subject to review, meaning they are
granted on a discretionary basis.  In such a case the right to supply the services is unbound.
B.  Limitations on National Treatment (Article XVII)
7. A Member grants full national treatment in a given sector and mode of supply when it
accords in that sector and mode conditions of  competition no less favourable to services or
service suppliers of other Members than those accorded to its own like services and service
suppliers.  The national treatment standard does not require formally identical treatment of
domestic and foreign suppliers:  formally different measures can result in effective equality of
treatment;  conversely, formally identical measures can in some cases result in less favourabletreatment of foreign suppliers ( de facto  discrimination).  Thus, it should be borne in mind that
limitations on national trea tment cover cases of both de facto  and de jure  discrimination as
shown in the following examples.
Examples of limitations on national treatment
(a) Domestic suppliers of audiovisual services are given preference in the allocation of
frequencies for transmission within the national territory.  (Such a measureS/CSC/W/19
Page 9
discriminates explicitly on the basis of the origin of the service supplier and thus
constitutes formal or de jure  denial of national treatment.)
(b) A measure stipulates that prior residenc y is required for the issuing of a licence to
supply a service.  (Although the measure does not formally distinguish service suppliers
on the basis of national origin, it de facto  offers less favourable treatment to foreign
service suppliers because they are less likely to be able to meet a prior residency
requirement than like service suppliers of national origin.)
It is useful to keep in mind that, unlike Article XVI, Article XVII does not contain an exhaustive
listing of the types of measure which would constitute limitations on national treatment.
24. The advice given in this paragraph is useful so far as it goes, but it may be that a more
extensive list of national treatment limitations would be helpful to those drafting commitments.  A list
of examples such as that below, exemplifying some of the most common forms of national treatmentrestrictions, could perhaps be added to the guidelines.
- tax measures, subsidies and grants:
"eligibility for subsidies reserved to nationals"
- nationality and residency requirements
" at least two directors of a public company must be ordinarily resident in the country "
 - licensing, standards and qualifications"Non –nationals are required to have their qualifications reviewed by the council of legal education
and also to undergo a six- month period of training at the national law school ".
- performance requirements"obligation on all insurers other than offshore insurance and offshore reinsurance companies to
optimize national retention capacity before any outward reinsurance."
- technology transfer requirement:"skilled foreign employees required to provide training to locals"
8. Regarding the need to schedule residency requirements, it should be decided on a
case-by-case basis, and in relation to the ac tivity concerned, which requirements (e.g.  the need
to live in the country as opposed to having a mailing address in the country) constitute a de facto
national treatment restriction and therefore must be scheduled under Article XVII unlessjustifiable as an exception.  If the residenc y requirement is not discriminatory, it would be
subject to the disciplines of Article VI:5.  If it is not consistent with these disciplines and if it
cannot be justified as an exception, it must be  brought into conformity with Article VI:5.
9. Article XVII applies to subsidy-type measures in the same way that it applies to all other
measures.  Article XV (Subsidies) merely obliges Members to "enter into negotiations with aview to developing the necessary multilateral disciplines" to counter the distortive effects caused
by subsidies.  Therefore, any subsidy which is a discriminatory measure within the meaning of
Article XVII would have to be either scheduled as a limitation on national treatment or brought
into conformity with that Article.  Subsidy-type measures are also not excluded from the scopeS/CSC/W/19
Page 10
of Article II (M.f.n.).  An exclusion of such measures would require a legal definition of
subsidies which is currently not provided for under the GATS.
25. The precision given by paragraph 11 of MTN.GNS 164add1 on the scheduling of real estate
restrictions under market access should be incorporated here with an additional clarification to the
effect that restrictions may be either de facto or de jure :
Suggested drafting :
"Restrictions on the purchase, lease or use of real estate, connected with the supply of a service
inscribed in a schedule, are national treatment limitations to the extent that different conditions apply
to foreign services suppliers whether de jure or de facto  which alter the conditions of competition in
favour of service suppliers of the Member compared to like service suppliers of any other Member."
10. There is no obligation in the GATS which requires a Member to take measures outside
its territorial jurisdiction.  It therefore fo llows that the national treatment obligation in
Article XVII does not require a Member to extend such treatment to a service supplier located
in the territory of another Member.
26. The advice given in paragraph 10 above means that a subsidy granted to service suppliers
within the national territory would not have to be extended to suppliers selling into the territory fromoutside.  However, if a domestic subsidy were to prejudice the conditions of competition against
services provided from outside, a national treatment violation might arise, with a consequent demand
for corrective action.
Suggested addition to revised guidelines :
"However, if a subsidy modifies th e conditions of competition against an imported service it is liable
to constitute a violation of national treatment and needs to be scheduled for the relevant modes."
11. A Member may wish to maintain measures which are inconsistent with both
Articles XVI and XVII.  Article XX:2 stipulates that such measures shall be inscribed in the
column relating to Article XVI on market ac cess.  Thus, while there may be no limitation
entered in the national treatmen t column, there may exist a discriminatory measure inconsistent
with national treatment inscribed in the market  access column.  However, in accordance with
the footnotes to Article XVI:2 and Article XX:2, any discriminatory measure scheduled in themarket access column is also to be regarded as scheduled under Article XVII and subject to the
provisions of that Article.
27. This paragraph correctly describes the requirements of Article XX:2, but this has the
unfortunate and extraordinary consequence that in many cases where "none" appears in column 3 of
the schedules, it is difficult or impossible to know whether this means that  there are no nationaltreatment limitations or that a limitation appearing in column 2 should be understood as appearing
also in column 3.  It should be evident from the nature of the market access limitation -  if it is clearly
discriminatory - that it is also inconsistent with  national treatment, but this is not always so and
readers of the schedules who are not familiar with the more arcane secrets of the GATS cannot be
expected to understand that there are cases where "none" does not mean none.  This would seem to bea mistake in the drafting of the GATS itself;   it wo uld have been more simple to repeat in column 3
the relevant entries in column 2.   Can it be corrected by use of the scheduling guidelines or should the
Committee suggest amending Article XX.2?S/CSC/W/19
Page 11
C.  Additional Commitments (Article XVIII)
12. A Member may, in a given sector, make commitments with respect to measures affecting
trade in services not subject to scheduling under Articles XVI and XVII.  Such commitments
can include, but are not limited to, undertakings with respect to qualifications, technical
standards, licensing requirements or procedures, and other domestic regulations that are
consistent with Article VI.  Additional commit ments are expressed in the form of undertakings,
not limitations.  In the schedule, the Additional Commitments column would only includeentries where specific commitments are being undertaken, and need not include those modes of
supply where there are no commitments undertaken or any entries at all where no
Article XVIII undertakings are made.
28. The text does not make absolutely clear that  an additional commitment limited to only one or
some of the modes is feasible:
Suggested drafting for revised guidelines:
It should be noted that additional commitments may be undertaken with respect to only one or some of
the modes of delivery.
D.  Exceptions
13. All measures falling under Article XIV (General Exceptions) are excepted from all
obligations and commitments under the Agreement, and therefore need not be scheduled.
Clearly, such exceptions cannot be negotiated under Part III of the Agreement.  Likewise, any
prudential measure justifiable under paragraph 2:1 of the Annex on Financial Services
constitutes an exception to the Agreement a nd should not be scheduled.  The prudential
measure exception applies only to financial servic es as listed in the Annex, and not to other
service sectors.  Measures falling under Article XII (Restrictions to Safeguard the Balance of
Payments) are also exceptions and should not be scheduled.  Article XII provides for separate
disciplines for such measures, including notification and consultation.
29. The drafting does not make clear that while prudential measures should not be scheduled as
market access and national treatment limitations they can be the object of additional commitments:
Suggested drafting for revised guidelines:
Replace the third sentence of the paragraph by the following:
"Likewise, any prudential measure justifiable under paragraph 2:1 of the Annex on Financial
Services constitutes an exception to the Agreement and should not be scheduled as a limitation on
market access or national treatment. It would however be feasible for Members to undertake
Additional Commitments in this area."
E.  Specific Commitments and MFN  Exemptions
14. A Member taking a national treatment or a market access commitment in a sector must
accord the stated minimum standa rd of treatment specified in its schedule to all other Members.
The m.f.n. obligation requires that the most favourable treatment actually accorded in all
sectors, whether the subject of a commitment or  not, must also be accorded to all other
Members.  Where an m.f.n.  exemption has been granted for a measure, a Member is free to
deviate from its Article II obligations, but not from its Article XVI and Article XVIIS/CSC/W/19
Page 12
commitments.  Therefore, in such cases, a Me mber may accord treatment in that sector more
favourable than the minimum standard to some Members, as long as all other Members receive
at least that minimum standard of market a ccess and national treatment appearing in its
schedule.  In such cases, it is not possible for a Member to accord less favourable treatment to
certain Members than that specified in its sche dule (for example, on grounds of reciprocity or
the lack of it).
30. Guidelines on the scheduling of MFN Exemptions are contained in Job No. 2061, dated
15 September 1993.S/CSC/W/19
Page 13
PART II
HOW SHOULD ITEMS BE SCHEDULED?
15. Schedules record, for each sector, the legally enforceable commitments of each Member.
It is therefore vital that schedules be clear, precise and based on a common format and
terminology.  This section describes how commitments should be entered in schedules.  Themain steps involved are:
A. H
OW TO DESCRIBE COMMITTED SECTORS AND SUB -SECTORS ;
B. HOW TO TREAT THE MODES OF SUPPLY ;
C. HOW TO RECORD COMMITMENTS :
(i) Horizontal commitments;(ii) Sector-specific commitments;
(iii) Levels of commitment.
A.  How to describe committed sectors and sub-sectors
16. The legal nature of a schedule as well as the need to evaluate commitments, require the
greatest possible degree of clarity in the description of each sector or sub-sector scheduled.  In
general the classification of sectors and sub-sect ors should be based on the Secretariat's revised
Services Sectoral Classification List.3 Each sector contained in the Secretariat list is identified
by the corresponding Central Product Classification (CPC) number.  Where it is necessary torefine further a sectoral classification, this should be done on the basis of the CPC or other
internationally recognised classification (e.g. Financial Services Annex).  The most recent
breakdown of the CPC, including explanatory notes for each sub-sector, is contained in the UN
Provisional Central Product Classification.
4
1. This paragraph has become outdated with the publication of CPC rev1 and the development of
new ad hoc classifications in telecom and maritime transport:
Suggested drafting for revised guidelines :
Replace the last two sentences by.  "Where it is necessary to refine further a sectoral classification
this should be done on the basis of the CPC (either the  provisional version or rev.1) or other
internationally recognized classification (Financial Services annex, Maritime Model Schedule, the
"Note by the Chairman" on Scheduling Basic Telecoms commitments (S/GBT/W/2/Rev.1),Air
Transport Annex).  The most recent breakdown of  the CPC, including explanatory notes for each
subsector and tables of correspondence with the previous version (CPC provisional), is contained in
the UN Central Product Classification, version 1.0.5  Although no Member has yet used CPC rev1, its
use is clearly possible.
                                                     
3Document MTN.GNS/W/120, dated 10 July 1991.
4Statistical Papers Series M No. 77, Provisional Central Product Classification, Department of International
Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991.
5Document ST/ESA/SER:M/77/ver.1.0,United Nations, New York, 1998.S/CSC/W/19
Page 14
Example: A Member wishes to indicate an offer or commitment in the sub-sector of
map-making services.  In the Secretariat list, this service would fall under the
general heading "Other Business Services" under "Related scientific andtechnical consulting services" (see item l.F.m).  By consulting the CPC,
map-making can be found under the corresponding CPC classification
number 86754.  In its offer/schedule, the Member would then enter the
sub-sector under the "Other Business Services" section of its schedule as
follows:
Map-making services (86754)
If a Member wishes to use its own sub-sectoral cl assification or definitions it should provide
concordance with the CPC in the manner indicated in  the above example.  If this is not possible,
it should give a sufficiently detailed definition  to avoid any ambiguity as to the scope of the
commitment.
31. It is necessary to stress the importance of providing detailed definitions when a Member
decides not to use a CPC reference number. There can be risk for the scheduling Member anduncertainty for trading partners if the definition provided leaves doubt as to the coverage of the
commitment.
17. It is understood that market access and national treatment commitments apply only to
the sectors or sub-sectors inscribed in the schedule.  They do not imply a right for the supplier
of a committed service to supply uncommitted services which are inputs to the committed
service.
B.  How to treat the modes of supply
18. The four modes of supply listed in the schedules correspond to the scope of the GATS as
set out in Article I:2.  The modes are essentially defined on the basis of the origin of the service
supplier and consumer, and the degree and type of territorial presence which they have at the
moment the service is delivered.
32. The distinctions between the four modes of supp ly are clarified in the following paragraphs of
the guidelines.  Is it necessary, however, to provide more guidance in the light of the difficulties
which may arise in distinguishing between modes 1 and 2 (as discussed in the electronic commerce
and financial services contexts) and between modes 3 and 4 (as noted in the information exchangeexercise?).S/CSC/W/19
Page 15
MODES OF SUPPLY
Supplier Presence Other Criteria Mode
Service supplier not present
within the territory of the
MemberService delivered within the
territory of the Member, from
the territory of anotherMemberCROSS-BORDER SUPPLY
Service delivered outside the
territory of the Member, in
the territory of another
Member, to a service
consumer of the MemberCONSUMPTION ABROAD
Service supplier present
within the territory of the
MemberService delivered within the
territory of the Member,
through the commercialpresence of the supplierCOMMERCIAL PRESENCE
Service delivered within the
territory of the Member, with
supplier present as a natural
personPRESENCE OF NATURAL
PERSON
19. It is important to have a common understanding of what each mode covers.  To this end,
further examples and explanations are given below.
(a) Cross-border supply
International transport, the supply of a service through telecommunications or mail,
and services embodied in exported goods (e.g .  a computer diskette, or drawings) are all
examples of cross-border supply, since the service supplier is not present within the territory of
the Member where the service is delivered.
(b) Consumption abroad
This mode of supply is often referred to as "movement of the consumer".  The
essential feature of this mode is that th e service is delivered outside the territory
of the Member making the commitment.  Often the actual movement of the
consumer is necessary as in tourism services.  However, activities such as shiprepair abroad, where only the property of the consumer "moves", or is situated
abroad, are also covered.
Whatever the mode of supply, obligations and commitments under the
Agreement relate directly to the treatment of services and service suppliers.
They only relate to service consumers insofar as services or service suppliers of
other Members are affected.  It should be  noted that a Member may only be able
to impose restrictive measures affecting its own consumers, not those of other
Members, on activities taking place outside its jurisdiction.S/CSC/W/19
Page 16
(c) Commercial Presence
This mode covers not only the presence of ju ridical persons in the strict legal sense, but
also that of legal entities which share some of the same characteristics.  It thus includes,  inter
alia, corporations, joint ventures, partnerships, representative offices and branches (see
Definitions:  Article XXXIV).
(d) Presence of natural persons
This mode covers natural persons who are themselves service suppliers, as well as
natural persons who are employees of service suppliers.
(e) Relationship between modes of supply
Where a service transaction requires in practi cal terms the use of more than one mode
of supply, coverage of the transaction is on ly ensured when there are commitments in each
relevant mode of supply.
Example: A Member has made a commitment in the cross-border supply of architectural
services (e.g.  by telecommunications or by mail).  This commitment alone does
not extend to the presence of natural persons (e.g.  visits by architects).  A
separate commitment would have to be taken under "Presence of naturalpersons" to cover this case.
33. If it is decided to combine the scheduling guidelines and the addendum, the precision given
by paragraph 7 of document MTN.GNS/W/164 Add.1 on the scheduling of residency requirements,
nationality conditions or commercial presence requirements under mode 1 could be incorporated here:
Suggested drafting for revised guidelines :  incorporation of paragraph 7 of W/164/Add.1:
"It could be argued that a reservation for a residence requirement, a nationality condition or a
commercial presence requirement under cross border trade amounts to an "unbound".  However in
some cases there is clearly an advantage in inscribing those instead of the term "unbound" in that
trading partners have the certainty that there are no other limitations with respect to the cross border
mode (see also paragraph 8 on residency requirements and paragraph 6 on nationality
requirements)."
C.  How to record commitments
(i) Horizontal commitments
20. A horizontal commitment applies to trade in services in a number of service sectors.  It
is in effect a binding, either of a measure which constitutes a limitation on market access or
national treatment or of a situation in which there are no such limitations.  Where measures
constituting limitations are referred to, the comm itment should describe the measure concisely,
indicating the elements which make it inconsistent with Articles XVI or XVII.  In order to avoidrepetition, it is desirable to enter these commitme nts in a separate section at the beginning of the
schedule according to the four modes of supply.  Such a section could be entitled:  "Horizontal
commitments applicable to sectors listed in the sectoral part of the schedule".  Some horizontal
measures may be specific to only one mode of supply:
Example: Legislation may refer to foreign inve stment, formation of corporate structures
or land acquisition regulations.  Such measures affect above all commercial
presence.S/CSC/W/19
Page 17
Example: Legislation may stipulate require ments regarding entry, temporary stay and
right to work of natural persons;  the categories of natural persons covered by a
particular offer may also be specified.  Such measures affect above all the
presence of natural persons.
Other horizontal measures may affect more than one mode of supply:
Example: Legislation may provide for tax me asures which are contrary to national
treatment and not covered by Article XIV(d).  Such measures would normally
affect the supply of services in several modes.
34. The relationship between the horizontal restrictions and the various kinds of sectoral entries is
not spelled out in detail:
Suggested drafting for revised guidelines :
Add a new sentence:
"The aim of the horizontal commitments concept is to avoid repetition.  That is why commitments or
limitations applying to all services are to be scheduled in the horizontal section.  It must be
understood that such general commitments condit ion all other entries in the schedule.  Hence:
− A "none" in the sectoral section must be read as meaning "none except the conditions set out
in the horizontal section".
− To indicate in a given sector that no restrictions whatever are imposed a Member must make
clear that the horizontal restrictions do not apply in the sector in question.
− In the case of a sector-specific restriction the entry must be read as the combination of the
horizontal restrictions and of the sector specific restriction unless explicitly provided
otherwise in the sector-specific entry.
35. The clarification given in paragraph 8 of MTN.GNS/W/164/Add.1 on the scheduling of laws
of general application should be incorporated here:
Suggested drafting for revised guidelines:
"It should be noted that a commitment in the "all sectors" or horizontal part of the schedule is a
binding of the presence or absence of limitations to market access or national treatment.  To theextent that domestic laws of general application contain measures which constitute limitations, and if
the Member wishes to maintain them, the comm itment should describe the measures concisely.
According to the agreed scheduling procedures, sc hedules should not contain general references to
laws and regulations as it is understood that such references would not have legal implications under
the GATS."S/CSC/W/19
Page 18
(ii) Sector-specific commitments
21. A sector-specific commitment applies to trade in services in a particular sector.  If in the
context of such a commitment, a measure is main tained which is contrary to Articles XVI or
XVII, it must be entered as a limitation in the appropriate column (either market access or
national treatment) for the relevant sector and modes of supply;  the entry should describe the
measure concisely, indicating the elements which make it inconsistent with Articles XVI or
XVII.
22. Given the legal nature of a schedule, it should contain only descriptions of bound
commitments.  Any additional information for transparency purposes should not be entered in
the schedule.  A reference to the legal basis of  a scheduled measure (i.e.  the relevant law or
regulation) may be entered if thought necessary.  In any event, such info rmation will be subject
to the obligations of Article III.
(iii) Levels of commitment
23. Since the terms used in a Member's schedule create legally binding commitments, it is
important that those expressing presence or absence of limitations to market access and
national treatment be uniform and precise.  Depending on the extent to which a Member haslimited market access and national treatment, fo r each commitment with respect to each mode
of supply, four cases can be foreseen:
(a) Full commitment
24. In this case the Member does not seek in  any way to limit market access or national
treatment in a given sector and mode of supply through measures inconsistent with
Articles XVI and XVII.  The Member in this si tuation should mark in the appropriate column:
NONE.  However, any relevant limitations listed  in the horizontal section of the schedule will
still apply.
(b) Commitment with limitations
25. Where market access or national treatm ent limitations are inscribed, two main
possibilities can be envisaged in this case.  Th e first is the binding of an existing regulatory
situation ("standstill").  The second is the binding of a more liberal situation where some, but
not all, of the measures inconsistent with Articl es XVI or XVII will be removed ("rollback").  In
either case the Member must describe in the appropriate column the measures maintained
which are inconsistent with Articles XVI or XVII.  The entry should describe each measureconcisely, indicating the elements which make it  inconsistent with Articles XVI or XVII.  It
would not be correct merely to enter in a column words such as "bound", "freeze" or
"standstill".
26. In some cases a Member may choose to partially bind measures affecting a given
category of suppliers.  For example, a Member may bind measures affecting the entry andtemporary stay only of some categories of natural persons while leaving all other categories
unbound.  This may be achieved through an indication in the horizontal section of a schedule
such as "Unbound except for measures affecting the entry and temporary stay of natural
persons in the following categories.  ..".  In such cases, the corresponding sectoral entry under
the fourth mode of supply should be "Unbound except as indicated in the horizontal section".
 (c) No commitmentS/CSC/W/19
Page 19
27. In this case, the Member remains free in a given sector and mode of supply to introduce
or maintain measures inconsistent with market a ccess or national treatment.  In this situation,
the Member must record in the appropriate column the word:  UNBOUND.  This case is onlyrelevant where a commitment has been made in a sector with respect to at least one mode of
supply.  Where all modes of supply are "unbound", and no additional commitments have been
undertaken in the sector, the sector should not appear on the schedule.
(d) No commitment technically feasible
28. In some situations, a particular mode of supply may not be technically feasible.  An
example might be the cross-border supply of hair -dressing services.  In these cases the term
UNBOUND* should be used.  The asterisk should refer to a footnote which states "Unbound
due to lack of technical feasibility".  Where the mode of supply thought to be inapplicable is in
fact applicable, or becomes so in the future, the entry means "unbound".
36. It is for consideration whether the notion of technical unfeasibility and the use of unbound* to
indicate it serve any useful purpose.  Studies have shown that there are very large discrepancies
between Members in their estimation of what is or is not technically feasible, and there are no criteria
to which appeal can be made.  Since in any case the entry is automatically converted to "unbound" if
supply through the mode in question becomes technically feasible, it would seem that no usefulinformation is conveyed by "unbound*".
Suggested drafting  for  revised guidelines:
Suppress paragraph 28 of MTN.GNS/W/164 and paragraph 12 of MTN.GNS/W/164.Add.1S/CSC/W/19
Page 20
SCHEDULE OF SPECIFIC COMMITMENTS OF COUNTRY X
Sector or Sub-Sector Limitations on Market AccessLimitations on National
TreatmentAdditional Commitments
(1) (1)
(2) (2)
(3) (3)
(4) (4)
(1) (1)
(2) (2)
(3) (3)
(4) (4)
Key: (1) Cross-border supply (3) Commercial presence
(2) Consumption abroad (4) P resence of natural persons
NOTE: The schedule shall also indicate the date of entry into force of the commitments and where appropriate the time-frame for their
implementation.  The date of entry into force of the commitment s undertaken in the Uruguay Round would normally be the date of
entry into force of the Agreement establishing the Multilateral Trade Organization.  For all future commitments the relevant da te
of entry into force should be inscribed.
The requirement that the date of commitments should be inscribed has not been observed by Members and would be difficult to imp lement in the absence
of an agreed definitions of what constitutes a commitment, as explained in document S/CSC/W/11.  It is for consideration whethe r this requirement should
be suppressed.S/CSC/W/19
Page 21
MTN.GNS/W/164 /Add.1
37. This addendum to the guidelines adds information which is useful in a number of respects.  It
is suggested that the two documents should be comb ined, as has been suggested above in relation to a
number of the specific points in the addendum.  The addendum as a whole is reproduced here for
completeness and in order to draw attention to certain issues which the Committee may wish to
consider.
29. At the informal GNS meeting on 29 Octob er 1993, the Chairman invited delegations to
submit to the secretariat questions identifying common scheduling problems which, in their
view, affect the clarity and legal certainty of commitments.  This secretariat note, which has
been prepared at the request of delegations, provides answers to the questions which were
received by 15 November and which were discussed at the informal GNS meeting of
18 November 1993.  References in this addendum to  the scheduling guide are based on the latest
version of the text entitled Scheduling of Initial Commitments in Trade in Services:
Explanatory Note contained in docume nt MTN.GNS/W/164 (scheduling guide).
1. Is it necessary to schedule approval procedures or licensing requirements which have to
be met in order to supply a service?
The requirement to obtain an approval or a licen ce is not in itself a trade restriction and
therefore does not need to be scheduled.  Ho wever, if the criteria for granting licenses or
approval contain a market access restriction (e.g.  economic needs test) or discriminatory
treatment, the relevant measures would need to  be scheduled if a Member wishes to maintain
them as limitations under Article XVI or XVII.  It has been pointed out that in some offers the
granting of licences is subject to review, meaning they are granted on a discretionary basis.  Insuch a case the right to supply the service is unbound.
2. With respect to national treatment, does  a "no limitations" entry in the National
Treatment column refer to the whole mode of supply or only to what may be bound in the
Market Access column?
When a Member undertakes a commitment in a sector or sub-sector then it must
indicate for each mode of supply that it binds in that sector what limitations, if any, it maintains
on market access, and what limitations, if any, it  maintains on national treatment.  Regardless
of what is inscribed in the market access co lumn, a "no limitations" entry in the National
Treatment column (expressed as "None") would mean that national treatment is bound for the
entire mode;  it is not limited to what may be bound in a market access commitment with
limitations.  Thus, if a Member makes a commitment under Article XVI in a sector, where
commercial presence is limited to partnerships, an entry "None" or any other entry in the
national treatment column would refer to the whole mode of supply and not only to
partnerships.  (See also paragraphs 3 and 7 of the scheduling guide.) Measures which are
inconsistent with both Articles XVI and XVII should be inscribed, according to Article XX:2, in
the market access column;  in such cases the entry will be considered to provide a national
treatment limitation as well.
38. In principle the rule stated in this paragraph is clear.  Commitments under Articles XVI and
XVII are legally independent, unless clearly stated otherwise in a Member's schedule.  A problem
arises, however, in relation to the last sentence of this paragraph.  Article XX:2 clearly assumes,
rightly, that a given measure can fall within the scope of both Articles XVI and XVII, but it gives
insufficient guidance as to how this overlap should be treated legally. As suggested above, this
provision seems to require review.S/CSC/W/19
Page 22
3. With regard to market access limitations, su ch as numerical ceilings or economic needs
tests, how detailed should the entries in schedules be?
The entry should describe each measure conc isely indicating the elements which make it
inconsistent with Article XVI.  Numerical ceilings  should be expressed in defined quantities in
either absolute numbers or percentages;  reg arding economic needs tests the entry should
indicate the main criteria on which the test is base d, e.g.  if the authority to establish a facility is
based on a population criterion, the criterion should be described concisely.
39. These points might be incorporated in paragraph 4 of the consolidated guidelines.
4. What are the implications if a schedule, in the horizontal entry relating to the presence
of natural persons, does not specify the duration of that presence?
With respect to the fourth mode of supply, many participants have chosen to inscribe
their bound commitments in the form of undertakings rather than in the form of market access
limitations.  In such cases the bound measures affecting the entry and temporary stay of natural
persons are explicitly stated.  Thus, in the absence of a reference to a specific duration for the
temporary stay of a foreign service supplier, no binding is being undertaken in this respect.However, in such cases a Member's regulatory measures would still be subject to the general
requirement, in paragraph 4 of the Annex on the Movement of Natural Persons, that they do
not nullify or impair the benefits accruing to any other Member under the terms of a specific
commitment.
40. With the retrospective experience of the schedules and of the negotiations the thesis contained
in this paragraph, according to which an unspecified duration of stay amounts to no commitment,appears decidedly odd.  In more than two-thirds of horizontal commitments undertaken the duration is
not specified, but it would be absurd to consider those commitments as null and void for this reason.
It would appear that this paragraph should be deleted.  Members might consider the value of mode 4
commitments with no specified duration.
5. Is it necessary in a schedule to describe the geographical scope of limitations to market
access and national treatment where they exist at regional or sub-federal level?
In a committed sector if a Member wishes to maintain a measure which is inconsistent
with Article XVI or XVII, it must be entered as a limitation in the appropriate column.  As
measures, for the purpose of this Agreement a ccording to Article I:3(a)(i), include measures
taken by central, regional or local government, th e entry should describe the geographical scope
of measures where they do not cover the entire national territory.
41. This might be incorporated in paragraph 5 of the consolidated guidelines.
6. Is it necessary to reserve the right to impose customs duties and regulations on
movement of goods in relation to the supply of a service?
There is no requirement in the GATS to schedu le a limitation to the effect that the cross-
border movement of goods associated with the provision of a service may be subject to customs
duties or other administrative charges.  Such measures are subject to the disciplines of theGATT.
42. While it is clear that the GATS does not require the scheduling of regulations concerning the
movement of goods across borders, it should be noted that the Agreement covers any measure which
affects the supply of a service.  The Panel on the dispute concerning the EU regime for theS/CSC/W/19
Page 23
importation, sale and distribution of bananas stated that "… no measures are excluded a priori  from
the scope of the GATS as defined by its provisions.  The scope of the GATS encompasses any
measure of a Member to the extent it effects the supply of a service regardless of whether suchmeasure directly covers the supply of a service or whether it regulates other matters but nevertheless
affects trade in services".  This does not of course mean that all regulations which might conceivably
affect trade in services should be scheduled;  it would in any case be impossible to foresee all the
possible consequences of all existing regulations.  But it does mean that if it is desired to maintain a
measure which has the effect of limiting market access or national treatment for a service, evenindirectly, it should be scheduled.
7. How relevant is a reservation for a residence requirement, nationality condition or
commercial presence requirement under cross-border  trade:  does that not rather imply that
cross-border trade is not allowed and therefore the correct entry should be "unbound"?
It is correct to use the term "unbound" for a mode of supply in a given sector where a
Member wishes to remain free to introduce or maintain measures inconsistent with market
access or national treatment.  However, it has been pointed out by participants that in some
cases there is advantage in inscribing a particular limitation (e.g.  a residency requirement or a
commercial presence requirement) instead of the term "unbound" in that trading partners havethe certainty that there are no other limitations wi th respect to the cross-border mode.  (See also
paragraph 8 of the scheduling guide on residenc y requirements, and paragraph 6 on nationality
requirements.)
43. These points could be incorporated in paragraph 19 of the consolidated guidelines.
8. What is the meaning in the "all sectors" part of the offers of indications that the
commitments are subject to different laws of general application such as the constitution,investment regimes/laws, company laws and labour laws?
As is stated in paragraph 20 of the schedulin g guide, a commitment in the "all sectors"
or horizontal part of the schedule is a binding of the presence or absence of limitations to
market access or national treatment.  To the extent that domestic laws of general applicationcontain measures which constitute limitations, and if the Member wishes to maintain them, the
commitment should describe the measures co ncisely.  According to the agreed scheduling
procedures, schedules should not contain general references to laws and regulations as it is
understood that such references would not have legal implications under the GATS.
44. These points could be incorporated in paragraph 20 of the consolidated guidelines.
9. Should foreign exchange control restrictions be scheduled?
Exchange control restrictions are subject to the general disciplines of Articles XI
(Payments and Transfers) and XII (Restrictions to Safeguard the Balance of Payments) of the
GATS.  Foreign exchange control restrictions which fall under Article XII are exceptions from
the obligations and commitments of the GATS and therefore should not be scheduled.  As
explained in paragraph 13 of the guide, Article XII provides for separate disciplines for suchmeasures including notification and consultation procedures.
45. As a matter of principle, Article XI:1 prohibits a Member from applying restrictions on
international transfers and payments for current tr ansactions relating to its specific commitments,
except under Article XII (balance-of-payments safeguard) or in accordance with the IMF's Articles of
Agreement.  Article XI:2 also stipulates that a Member shall not impose restrictions on any capital
transactions inconsistently with its specific co mmitments regarding such transactions, except underS/CSC/W/19
Page 24
Article XII or at the request of the Fund.  The above statement in the guidelines is therefore correct in
pointing out that foreign exchange control restri ctions are subject to the general disciplines of
Article XI and XII, and that those restrictions which fall under Article XII should not be scheduled.But it’s incomplete, as the treatment of other foreign exchange control restrictions is not made clear.
There is also a question of how a Member should schedule foreign exchange control restrictions
which constitute limitations on market access or national treatment on the supply of services.  There
are many cases in which exchange control restrictions and procedures have been scheduled, either as
market access or national treatment limitations, or as transparency items.  Although in a number of
cases, the scheduling of such items appears unnecessary or erroneous, there is a need to clarify the
basic rules applicable to the scheduling of foreign exchange control restrictions in general.
Suggested text for the guidelines on this question :
Exchange control restrictions are subject to the general disciplines of Articles XI (Payments and
Transfers) and XII (Restrictions to Safeguard the Balance of Payments) of the GATS.  Restrictions
which are inconsistent with a Member's obligations under those Articles cannot be maintained, and
therefore should not be scheduled.  Any restrictions allowed under those Articles as exceptions should
not be scheduled, either.  Separate disciplines apply to such exceptional restrictions, as under Article
XII.  Footnotes referring to the existence of foreign exchange control restrictions do not have legalvalue.  An exception to this general rule should be cases in which measures taken under laws and
regulations applying to foreign exchange transactions constitute restrictions on the supply of a
service.  For example, if a Member prohibits a non-resident to provide cross-border loans in foreign
currency to residents or restricts the acquisition of domestic securities by non-residents, such
measures may constitute market access and/or national treatment limitations on the supply of banking
and other financial services.  Restrictions on the conversion of currencies may also constitute market
access limitations on the supply of foreign exchange services.  An approval requirement for foreigninvestment by non-residents in a country, stipulated in a law on foreign exchange control, may
constitute a horizontal market access limitation in mode 3.  Such restrictions would need to be
scheduled as limitations on the supply of the services involved in the relevant column of the schedule .
10. Where a national schedule refers to foreig n companies and national companies, is it
necessary that the schedule also defines what is to be understood by a national or foreign
company?
It is necessary to offer a definition for those cases where a Member uses terms which are
not covered by the common definitions contained in Article XXXIV of the GATS.
11. Are limitations on purchase, lease or use of  real estate, connected with the supply of a
service inscribed in a schedule, a restriction on trade in services?  If such restrictions do
constitute barriers to trade in services, are they restrictions on market access or national
treatment?
Restrictions on the purchase, lease or use of  real estate, connected with the supply of a
service inscribed in a schedule, are national tr eatment limitations to the extent that different
conditions apply to foreign service suppliers which alter the conditions of competition in favour
of service suppliers of the Member compared to  like service suppliers of any other Member.
46. To be combined with paragraph 9 of the consolidated guidelines.S/CSC/W/19
Page 25
12. How should situations where a particular mode of supply is technically not feasible be
addressed in schedules?
In cases where a particular mode of supply is technically not feasible e.g.  the cross-
border supply of construction services, as explained in paragraph 28 of the scheduling guide,
the term UNBOUND* should be inscribed under the mode where the supply of the service is
technically not feasible.  The term may not be used as an entry in the national treatment column
for modes 1 and 2 when, for the same service, there is a market access commitment.
47. It is suggested above (paragraph 28) that the entry "Unbound*" serves no useful purpose and
that the concept of technical unfeasibility is itself subject to widely different interpretations by
different Members.
13. What types of measures should be entered in schedules under mode 2, consumption
abroad?
According to paragraphs 18 and 19 of the sc heduling guide, limitations in the schedule
of a Member - if any - with respect to mode 2 on market access and/or on national treatment
should only relate to measures affecting the consumers of that Member, and not to measuresaffecting consumers of another Member, in the territory of that Member.
48. To be combined with paragraph 19b of the consolidated guidelines.
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