WORLD TRADE
ORGANIZATIONG/STR/N/7/JOR
G/STR/N/8/JOR
19 November 2002
(02-6405)
Working Party on State Trading Enterprises Original:  English
STATE TRADING
New and Full and Updating Notifications Pursuant to Article XVII:4(a)
of the GATT 1994 and Paragraph 1 of the Understanding on
the Interpretation of Article XVII
JORDAN
The following communication, dated 11 November 2002, has been received from the
Permanent Mission of the Hashemite Kingdom of Jordan.
_______________
Pursuant to Article XVII:4(a) of the GATT 1994 and paragraph 1 of the Understanding on the
Interpretation of Article XVII, Jordan wishes to info rm the Secretariat of the changes in the situation
since Jordan’s full notification made in 2000.
I. JORDAN PETROLEUM REFINERY CO. LTD. (JPRCL)
1. Description of Enterprise
(a) Describe item by item, the functioning of such enterprise and state in particular whether the
enterprise deals with exports or with imports or with both?
JPRCL was established in 1956 as a public shareholding company. Currently 52 per cent of
the issued share capital is owned by individuals, 11 per cent by companies, 12 per cent by banks,17.5 per cent by government, 7 per cent by Savings and Provident Funds, and 0.5 per cent  by others.
JPRCL is registered in Amman Financial Market (AFM) and its shares are traded publicly to local and
foreign investors subject to the laws and regulations of AFM.
JPRCL’s main activities and functions include:
• Refining and processing crude oil to meet local demand for the following hydrocarbon products:
Liquid Propane Gas (LPG), Gasoline, Avtur, Kerosene, Light Gas Oil, Fuel Oil, and Asphalt.
• Producing lubricating oil under the brand name of JOPETROL.
• Bottling of LPG and maintaining LPG cylinders.
• Servicing airport station to provide national and international carriers with fuel.
Law No. (19) was issued to approve the concession agreement signed between the
Government of Jordan and JPRCL.  The concession agreement, which is valid for fifty years, grants
JPRCL the exclusive rights to establish and invest in facilities for refining and processing petroleum
and hydrocarbon products and derivatives; to store and distribute these products; and to own and leaseG/STR/N/7/JOR
G/STR/N/8/JOR
Page 2
land.  The company also has exclusive rights to import oil and hydrocarbon products necessary for
local use.  Concession agreement is valid through year 2008.
JPRCL was also granted an exemption from all fees and customs duties charged on goods and
materials imported for the company's operations in addition to raw material imported for its refining
use.
Import activities :
Crude Oil: JPRCL imports crude oil under protocol agreement in coordination with the
government.
Hydrocarbon products: JPRCL imports hydroc arbon products under protocol agreement in
coordination with the government.
LPG and base oil: JPRCL imports base oil under protocol agreement in coordination with the
government.
Additives and other materials: JPRCL purchases additives and other materials through
tenders.
LPG Cylinders: JPRCL manufactures and imports LPG cylinders to meet local market
demand through tenders.  JPRCL is the sole importer.
Exports activities :
JPRCL does not export any of the refined or other related material mentioned above.  No
export activities are conducted.
(b) Whether private traders are allowed to import or export and, if so, on what conditions?
Private traders are not allowed to import crude oil, hydrocarbon products (LPG, gasoline, fuel
oil and light gas oil), base oils and additives and LPG cylinders.
Private traders are allowed to import lubricating oils, but they are not allowed to set up
manufacturing operations of such oils.
Export activities do not take place.
(c) Whether there is free competition between private traders and the State trading enterprises?
There is not free competition between private traders and the State traders except in the sale
of lubricating oils.  JOPETROL (brand name) lubricating oil, produced by JPRCL, competes withother imported products in the local market and is estimated to have over 80 per cent of the local
market share.
(d) Criteria used for determining the quantities to be exported or imported.
Quantity of imports is based on the country’s demand. JPRCL, in coordination with the
government, determines a yearly import plan which specifies the quantities of raw materials and
finished products to be imported taking into consideration the production requirements and capacitiesG/STR/N/7/JOR
G/STR/N/8/JOR
Page 3
of the refinery.  All other trading activities are the sole concern of JPRCL and are tendered in the local
and international markets.
No export activities take place.
(e) How export prices are determined; how the ma rk-up on imported products is determined; how
export prices and the re-sale prices of import compare with domestic prices?
According to the terms of the concession agreem ent, the Government of Jordan has the right
to determine and control prices of oil, crude oil and products supplied for local consumption. JPRCL
should submit to the government a detailed statement of the production costs and on that basis salesprices and mark-ups are determined.
The cost price of crude oil supplied by the government is determined using the following
equation: Cost of Crude Oil = Revenues - (Costs + Net Income).
The consumer prices equal the production cost  plus fees plus company commissions plus
transportation costs plus distributors' commissions. Consumer prices differ from one product to
another.
The government sets prices. In setting prices  the government takes into consideration the
economic situation that is prevailing in the country and the purchasing power of the citizens of Jordan.
Prices are not changed frequently.
There are no export prices.
(f) Whether long-term contracts are negotiated by the State trading enterprise; whether States
trading methods are used to fulfil contractual obligations entered into by the government.
State trading methods are used to fulfil contractual obligations for certain materials and
products. The following illustrates which of these products this applies to:
Crude Oil : JPRCL imports crude oil under protocol agreement in coordination with the
government.
Hydrocarbon products : JPRCL hydrocarbon products under protocol agreement in
coordination with the government.
LPG and base oil : JPRCL imports base oil under protocol agreement in coordination with
the government.  If the amounts required by JPRCL are greater than the protocol quota, JPRCL
purchases the additional quantities of LPG and base oil through international tenders.
Additives and other materials : JPRCL purchases additives and other materials through
tenders.
LPG Cylinders : JPRCL manufactures and imports LPG cylinders to meet local market
demand through tenders.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 4
Statistical Information
Jordan Petroleum Refinery Company
Product/ Year 2001 2000 1999 1998 1997 1996
Hydrocarbon Products/ Tons 3,596,862 3,578,085 3,265,985 3,236,873 3,257,268 3,154,247
Lubricating Oils/ Tons 16,390 16,340 18,387 19,423 20,166 22,292
LPG Cylinders (12.5 kg) 27,247 57,203 50,900 56,550 80,000 96,250
Total Production/ Tons 3,613,252 3,594,425 3,284,372 3,256,296 3,277,434 3,176,539
Drums/ Numbers 0 0 1,000 1,050 1,377 2,796
Drums with Asphalt/ Numbers 8,347 7,433 12,000 12,149 12,424 15,231
Imports 2001 2000 1999 1998 1997 1996
Imports/ Tons N/A N/A N/A N/A N/A N/A
Crude Oil/ Tons 3,875,111 3,763,383 3,499,105 3,557,778 3,442,658 3,274,296
Hydrocarbon Products 961,262 997,712 1,101,543 1,152,660 932,437 1,192,207
Base Oils 14,951 22,047 14,585 14,268 16,476 23,915
Additives 1,615 774 2,446 2,153 2,714
Cylinders (12.5kg) 160,669 200,000 0 200,000 150,000 150,000
Value of production/Imports 2001 2000 1999 1998 1997 1996
Company production/ JD 491,982,792 413,394,961 406,691,733 413,903,112 391,371,711 351,854,432
Company production/ USD 692,933,510 582,246,424 572,805,258 582,962,130 551,227,762 495,569,623
Company imports/ JD 579,106,727 520,284,142 486,190,129 463,491,583 449,921,520 452,269,443
Company imports/ USD 815,643,277 732,794,566 684,774,830 652,805,046 633,692,281 636,999,215
Source: Jordan Petroleum Refinery Company annual reportsG/STR/N/7/JOR
G/STR/N/8/JOR
Page 5
II. JORDAN PHOSPHATE MINES CO. LTD. (JPMC)
1. Description of Enterprise
(a) Describe item by item, the functioning of such enterprise and state in particular whether the
enterprise deals with exports or with imports or with both?
JPMC was established in 1935 as a private company, and was later registered as a public
shareholding company in 1953. The government a nd the private sector jointly own JPMC.  JPMC
shareholders presently are:  Jordan Investme nt Corporation (42.2 per cent), Social Security
Corporation (28.4 per cent), Government of Kuwait (16.3 per cent), Others (7.5 per cent),  The
Housing Bank (2.5 per cent),  Arab Petroleum In vestment Corporation (1.3 per cent), Arab Mining
Company (1.3 per cent), and Islamic Development Bank – Jeddah (0.5 per cent).   JPMC is registeredon the Amman Financial market and its shares are traded publicly to local and foreign investors
subject to the laws and regulations of Amman Financial Market.
JPMC extracts phosphate from four different mines in Jordan.  JPMC has “Mining Rights” for
these locations, which were granted by the Government of Jordan based on Law No. 12 of NaturalResources 1968 (mining rights No. 1 and 2) for thirty years.  Mining rights are subject to re-
negotiation and renewal once they expire.
The mining rights for Hasa, Rusaifa and Wadi Al Albiad locations are valid from
17 December 1968 to 16 December 1998.    Mining rights for El-Shaidiah location are valid fromNovember 1987 to November 2017.
According to JPMC’s company law, the company has the right to export directly or sell
through intermediaries if and only if intermediaries adhere to the marketing policies of the company.
For this activity, the enterprise deals with exports.
JPMC’s industrial complex in Aqaba produces different types of fertilizers and fertilizer raw
materials, and markets them in the local and international market.  Presently, the fertilizer complex
produces: DAP fertilizers (DI-Ammonium Phosphate), sulphuric acid, phosphoric acid and aluminum
fluoride.  JPMC has the right to export directly or through intermediaries if intermediaries adhere tothe marketing policies of the company.  Other fertilizer companies operate in Jordan and compete
freely.
Currently, JPMC is a partner with Indo Jordan Chemicals Co., Nippon Jordan Fertilizer Co.,
FFC-Jordan Fertilizer Co., and Hydro Agri, Jordan.  These companies are totally independent entities
registered in accordance to Companies Law in Jordan.  These companies have sales agreements with
JPMC to buy phosphate and other raw materials from JPMC.  Sales agreements are usually valid forten years and thereafter re-negotiated.
JPMC also is the sole importer of explosive materials used for mining and quarrying purposes
in accordance with the Prime Minister's instruction dated 29 May 1979.  The instructions give JPMC
the exclusive responsibility for importing, storin g and selling explosive raw materials in Jordan.
Currently, instructions to import and store explosive materials are indefinite. For this activity,
enterprise deals with imports.
The main reason for granting this exclusivity is security, given the fact that JPMC is the prime
user of these raw materials.  Currently JPMC imports the following:  ammonium nitrate (used forexplosive purposes), detonating fuses, safety fuses, ordinary aluminum detonators, electrical
detonators, igniters, and sodium nitrate.  Special gelatin is presently bought from the local market,
however, other local enterprises have to still buy gelatine through JPMC.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 6
(b) Whether private traders are allowed to import or export and, if so, on what conditions?
Phosphate rocks:  To date, JPMC has been the sole exporter of phosphate in Jordan. Local
private traders are not allowed to export.  Internationa l private traders are allowed to export if they are
opening new markets and they are not undercutting the prices of JPMC in international markets.
There is no restriction on import of phosphate rocks; however, no imports have been made due to the
fact that Jordan has large deposits of phosphate.
Fertilizers and other raw materials currently being produced by JPMC’s industrial complex:
to date, JPMC is the sole exporter of its fertilizer and raw materials production.  Other private traders
can import and export the different types of fertilizers and raw materials.
Explosive raw materials:  Private traders are not allowed to import or export the above-
mentioned explosive materials.  Users can only purch ase same from JPMC subject to the approval and
direct supervision of the Police Department.
(c) Whether there is free competition between private traders and the State trading enterprise?
With regard to phosphate there is no free competition between the State trading enterprise and
private traders as JPMC has the exclusive right to mine and the ability to designate who may export.
With regard to fertilizers and other raw materials, JPMC directly imports its needed raw
material and directly exports to international market.  Private traders can export finished products if
they do not undercut JPMC prices and penetrate the markets where JPMC sells.  Other fertilizer
companies operate in Jordan and are free to conduc t their commercial activities as they see fit.
With regard to explosive materials, there is no competition between private traders and the
State trader, as private traders are not allowed to import or sell these materials.
(d) Criteria used for determining the quantities to be exported or imported.
Phosphate:  the main criteria used for determining quantities to be exported are tenders,
estimated level of international demand and anticipated market penetration rate, production capacities
of the different mines, sales agreements that have  already been concluded with local Joint Ventures
and spot trade for trial purposes.
DAP Fertilizers (DI-Ammonium Phosphate) and other related raw materials: the main criteria
are production capacities and spot tenders.  Production capacities are limited.
Explosive Materials:  Quantities purchased depend on JPMC needs, local market demand and
the availability of storage space.  JPMC consumes 80 per cent of total imports.  Given the fact that
these raw materials require significant space for safety measures, the responsible department usually
imports a supply of two months to minimize explos ion risks, especially ammonium nitrate (explosive
grade).
(e) How export prices are determined; how the ma rk-up on imported products is determined; how
export prices and the re-sale prices of imports compare with domestic prices.
Phosphate: export prices currently are determined by international commodity prices.  Prices
are set in accordance with prevailing phosphate prices in the international market, which are highly
related to demand.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 7
Fertilizers DAP, (DI-Ammonium Phosphate):   prices are determined by international prices,
which change on a weekly basis.  The main price indicators are the North Africa (Morocco and
Tunis), Russia and US fertilizer market prices.
Explosive Materials:  currently, the re-sale price of imports is determined as follows: Cost +
transportation + customs + direct and indirect expenses + profit margin of 20 per cent.  Handling
expenses are very high due to high security measures that the Police and Department of Security
require.
(f) Whether long-term contracts are negotiated by the State trading enterprise; whether State
trading methods are used to fulfil contractual obligations entered into by the government.
Contracts are negotiated on a commercial basi s.  JPMC has not fulfilled contractual
obligations entered into by the government.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 8
Statistical Information
Jordan Phosphate Mines Co.
Product / Year 2001 2000 1999 1998 1997 1996
Phosphate
National Production-ton 5,764,933 5,413,532 6,013,610 5,925,000 5,895,000 5,355,000
Production of enterprise-ton 5,764,933 5,413,532 6,013,610 5,925,000 5,895,000 5,355,000
National Production-USD N.A . N.A. N.A. N.A. N.A. N.A.
Production of enterprise-USD N.A. N.A. N.A. N.A. N.A. N.A.
National exports in tons 4,308,587 3,945,717 4,447,119 4,560,000 4,718,000 4,352,000
Company exports in tons 4,308,587 3,945,717 4,447,119 4,560,000 4,718,000 4,352,000
National exports in USD N.A. N.A. 187,752,900 194,360,000 202,744,000 178,421,000
Company exports in USD N.A. N.A. 187,752,900 194,360,000 202,744,000 178,421,000
JPMC – Explosive materials
Product / Year 2001 2000 1999 1998 1997 1996
Ammonium Nitrate/ Explosive grade
National Imports volume/tons 28,000 17,745 22,869 20,000 17,000 12,000
National Imports value/USD 5,768,000 3,673,215 - - -
Co. imports in Volume/ton 9,200 16,217 22,869 20,000 17,000 12,000
Co. imports in value/USD 1,895,200 3,356,919 4,733,883 5,120,745 3,875,652 2,851,799
Water Gell / Explosive Material
National imports Vol./ton 100 475 N.A. N.A. N.A. N.A.
National imports Value/USD 59,500 282,625 N.A. N.A. N.A. N.A.
Detonating Fuse/ Cortex
National Imports volume/meters 0 0 2.7m  6.0 m  6.0 m  4.0 m
National Imports value/USD 0 0 - - - -
Co. imports in Volume/meters 0 0 2.7m  6.0 m  6.0 m  4.0 m
Co. imports in value/USD 0 0 272,230 682,611 704,225 421,070
Safety Fuse/regular
National Imports volume/meters 0 0 1.0 m 250,000 250,000
National Imports value/USD 0 0
Co. imports in Volume/meters 0 0 0 1.0 m 250,000 250,000
Co. imports in value/USD 0 0 0 81,986 19,014 15,549G/STR/N/7/JOR
G/STR/N/8/JOR
Page 9Product / Year 2001 2000 1999 1998 1997 1996
Ordinary Aluminum Detonator
National Imports volume/piece 0 0 0 0 0.5m 0
National Imports value/USD
Co. imports in Volume/piece 0 0 0 0 0.5m 0
Co. imports in value/USD           22,723
Electric Detonator
National Imports volume/piece 0 20,000 0 0 1.0m 0
National Imports value/USD 0 39,960
Co. imports in Volume/piece 0 0 0 0 1.0m 0
Co. imports in value/USD 0 0          132,207
Igniters
National Imports volume/piece 0 0 0 0 15,000 0
National Imports value/USD 0 0
Co. imports in Volume/piece 0 0 0  0 15,000 0
Co. imports in value/USD 0 0 10,845
Sodium Nitrate
National Imports volume/ton 0 0 0 50 0 0
National Imports value/USD 0 0
Co. imports in Volume/ton 0 0 0 50 0 0
Co. imports in value/USD 0 0 0 24,627
Source: Jordan Phosphate Mines Co.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 10
III. MINISTRY OF INDUSTRY AND TRADE
1. Description of Enterprise
(a) Describe, item by item, the functioning of such enterprise and state in particular whether the
enterprise deals with exports or with imports or with both?
The Ministry of Industry and Trade (“Ministry”) is the major importer of wheat bran for
animal feed. The Ministry only imports the country’s needs in times of drought.  The Ministry does
not engage in any export activities.
(b) Whether private traders are allowed to import or export and, if so, on what conditions?
Private traders are allowed to import.  No export activities have taken place during the past
three years.  There is no restriction on exports.
(c) Whether there is free competition between private traders and the State trading enterprises?
There is free competition.
(d) Criteria used for determining the quantities to be exported or imported.
The main criteria used for determining quantities to be imported is demand of feeding needs
of the livestock owners, particularly in drought conditions, as well as price.
No export activity.
(e) How export prices are determined; how the ma rk-up on imported products is determined; how
export prices and the re-sale prices of import compare with domestic prices?
The Ministry only imports in emergencies and in times of drought, therefore, it sells imported
wheat bran at a loss.
(f) Whether long-term contracts are negotiated by the State-trading enterprise; whether States
Trading methods are used to fulfil contractual obligations entered into by the government.
No long-term contracts are negotiated.  The Mi nistry puts a tender for purchasing wheat bran
for animal feed.  The Ministry makes purchases from the source(s) that offer(s) the best bid.
2. Statistical Information
During the year 1999, the government imported 11,434 tons of Wheat Bran.
3. Reasons why no foreign trade has taken place (if this is the case) in products effected
Foreign trade has not taken place during the period 1990-1998 because there was no drought
during this period.
4. Additional information
None.G/STR/N/7/JOR
G/STR/N/8/JOR
Page 11
IV. JORDAN CEMENT FACTORIES
The concession agreement between Jordan Cement Factories and the Government of Jordan
in which the Jordan Cement Factories had the exclusive right to search, extract and produce cement
and by-cement products in any area or land of the Hashemite Kingdom of Jordan for the purpose of
supplying the local market with all its demand for cement has ended at the end of the year 2001.
V. JORDAN VEGETABLE OIL INDUSTRY CO. LTD.
The concession agreement between the Government of Jordan and the Jordan vegetable oil
industry company has ended at the end of the year 2001.
VI. JORDAN TANNING CO. LTD.
The concession agreement between the Government of Jordan and the Jordan tanning
company has ended in March 2002.
__________