RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPPS/W/22
27 November 1998
(98-4787)
Working Party on Professional Services
REPORT TO THE COUNCIL FOR TRADE IN SERVICES ON THE DEVELOPMENT OF
DISCIPLINES ON DOMESTIC REGULATION IN THE ACCOUNTANCY SECTOR
DRAFT
(a) Terms of Reference
1. The mandate of the Working Party on Professional Services (WPPS) for the development of
disciplines on domestic regulations in the accountancy sector is found in the Ministerial Decision on
Professional Services (WTO document S/L/3, 4 April 1995), as attached.
(b) Development of Multilateral Disciplines on Domestic Regulations in the Accountancy
Sector
2. Commencing work in July 1995, the WPPS held twenty-four formal and several informal
meetings.
3. The initial phase of work by the WPPS consisted of the collection and analysis of data and
studies of domestic regulation in the accountancy sector.  In this regard, several seminars were
organized.  A questionnaire on specific aspects of domestic regulation was circulated to Members,
and a synthesis of questionnaire responses was prepared by the Secretariat.  The WPPS also worked
on development of the non-binding Guidelines for Mutual Recognition Agreements or Arrangements
in the Accountancy Sector ;  these were completed and issued in May 1997 (WTO document S/L/38,
28 May 1997).
4. The next phase of work consisted of the submission of proposed disciplines by several
Members (WTO documents S/WPPS/W/15-19).  These proposals were consolidated by the
Secretariat into an informal note.
5. During a series of meetings, the minutes of which are contained in documents S/WPPS/M/11-
24, draft disciplines were discussed, clarified and revised by Members.  Ten revisions of thedisciplines were prepared by the Secretariat.  A consensus was achieved and the final version, entitled
Disciplines on Domestic Regulation in the Accountancy Sector, (S/WPPS/W/21) is attached.
Separately, on the basis of discussions, a Chairman's Note was developed on the relationship between
Article VI and Articles XVI and XVII.  This also is attached (Job No. 6496, 25 November 1998).
6. Members extensively discussed the question of potential legal forms for adoption of the
accountancy disciplines.  The outcome of the discussions is the attached draft Council Decision
(Job No. 6481), which the WPPS has recommended for adoption.S/WPPS/W/22
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ATTACHMENTS
* [Decision on Professional Services]
* [The Disciplines] [ not yet attached ]
* [Chairman's Note on discussion of Articles VI, XVI and XVII]* [Draft Council Decision] [ not yet attached ]S/WPPS/W/22
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ATTACHMENTS
DECISION ON PROFESSIONAL SERVICES
Adopted by the Council for Trade in Services on 1 March 1995
The Council for Trade in Services,
Recognizing  the impact of regulatory measures relating to professional qualifications,
technical standards and licensing on the expansion of trade in professional services;
Desiring  to establish multilateral disciplines with a view to ensuring that, when specific
commitments are undertaken, such regulatory measures do not constitute unnecessary barriers to the
supply of professional services;
Decides  as follows:
1. The work programme foreseen in paragraph 4 of Article VI on Domestic Regulation should
be put into effect immediately.  To this end, a Working Party on Professional Services shall be
established to examine and report, with recommendations, on the disciplines necessary to ensure thatmeasures relating to qualification requirements and procedures, technical standards and licensing
requirements in the field of professional services do not constitute unnecessary barriers to trade.
2. As a matter of priority, the Working Party shall make recommendations for the elaboration of
multilateral disciplines in the accountancy sector, so as to give operational effect to specificcommitments.  In making these recommendations, the Working Party shall concentrate on:
(a) developing multilateral disciplines relating to market access so as to ensure that
domestic regulatory requirements are:  ( i) based on objective and transparent criteria,
such as competence and the ability to supply the service;  ( ii) not more burdensome
than necessary to ensure the quality of the service, thereby facilitating the effective
liberalization of accountancy services;
(b) the use of international standards and, in doing so, it shall encourage the cooperation
with the relevant international organizations as defined under paragraph 5(b) of
Article VI, so as to give full effect to paragraph 5 of Article VII;
(c) facilitating the effective application of paragraph 6 of Article VI of the Agreement by
establishing guidelines for the recognition of qualifications.
In elaborating these disciplines, the Working Party shall take account of the importance of the
governmental and non-governmental bodies regulating professional services.S/WPPS/W/22
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DISCUSSION OF MATTERS RELATING TO ARTICLES XVI AND XVII OF THE GATS IN
CONNECTION WITH THE DISCIPLINES ON DOMESTIC REGULATION IN THE
ACCOUNTANCY SECTOR
Informal Note by the Chairman
For the purpose of transparency, this Note explains the method by which the Working Party
on Professional Services (WPPS) pursued its work with respect to the question of the types of
measures it would address in creating the disciplines in the accountancy sector.  For the avoidance of
any doubt, it is emphasised that this Note has no legal status.
In the course of work to develop multilateral disciplines on domestic regulation in the
accountancy sector, pursuant to paragraph 4 of Article VI of the GATS, the WPPS addressed a wide
range of regulatory measures which have an impact on trade in accountancy services. In discussing
the structure and content of the new disciplines, it became clear that some of these measures were
subject to other legal provisions in the GATS, most notably Articles XVI and XVII.  It was observedthat the new disciplines developed under Article VI:4 must not overlap with other provisions already
existing in the GATS, including Articles XVI and XVII, as this would create legal uncertainty.  For
this reason, a number of the suggestions for disciplines were excluded from the text.
Although it was not in the mandate of the WPPS to provide an interpretation of GATS
provisions, the important relationship between the new disciplines and Articles XVI and XVII was
noted.  While these two Articles relate to the scheduling of specific commitments on measures falling
within their scope, the disciplines developed under Article VI:4 aim at ensuring that other types of
regulatory measures do not create unnecessary barriers to trade.  It has been noted that Article XVI
(Market Access) covers the categories of measures referred to in paragraph 2 (a) to (f), whether or notany discrimination is made in their application between domestic and foreign suppliers.  Article XVII
(National Treatment) captures within its scope any measure that discriminates - whether de jure  or de
facto  - against foreign services or service suppliers in favour of like services or service suppliers of
national origin. A  Member scheduling commitments under Articles XVI and XVII has the right to
maintain limitations on market access and national treatment and inscribe them in its schedule.  On
the other hand, the disciplines to be developed under Article VI:4 cover domestic regulatory measures
which are not regarded as market access limitations as such, and which do not in principlediscriminate against foreign suppliers.  They are therefore not subject to scheduling under
Articles XVI and XVII.  However, it is also recognized that for some categories of measures the
determination as to whether an individual measure falls under Article VI:4 disciplines or is subject to
scheduling under Article XVII will require careful consideration.
The following types of measures affecting trade in accountancy services were raised by some
Members as examples of those which may be subject to negotiation and scheduling under
Articles XVI and XVII:
* Restrictions relating to the number of foreign accountants that can be employed, the number
of new licences to be issued, the legal form of establishment and the ownership of firms.
* Discriminatory requirements and procedures relating to the licensing of foreign individuals
and the establishment of natural persons and legal persons in the accountancy sector,
including the use of foreign and  international firm names.  Discriminatory elements which set
prior conditions unrelated to the ability of the supplier to provide the service when preparing,
adopting or applying licensing requirements.S/WPPS/W/22
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* Discriminatory residency requirements or requirements for citizenship, including those
required for sitting examinations related to obtaining a licence to practice. Discriminatory
requirements for membership of a particular professional body as a prior condition for
application.
* Discriminatory treatment of applications from foreign service suppliers vis-à-vis domestic
applications including:  criteria relating to education, experience, examinations and ethics;
the overall degree of difficulty when testing competence of applicants;  the need for in-
country experience before  sitting examinations.
The above mentioning of these types of measures does not prejudge future negotiations,
which are mandated under Article XIX of the GATS.
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