RESTRICTED WORLD TRADE
ORGANIZATIONWT/ACC/AND/5
15 September 1999
(99-3780)
Working Party on the Accession of Andorra Original:  English/
French
ACCESSION OF THE PRINCIPALITY OF ANDORRA
Additional Questions and Replies to the Memorandum
on the Foreign Trade Regime
(WT/ACC/AND/3)
The Permanent Mission of the Principality of Andorra has communicated the replies to
questions raised by Members.  The questions and replies are reproduced below.
_______________
Table of Contents
Question Page
II. ECONOMY, ECONOMIC POLICIES AND
FOREIGN TRADE
2. Economic policies
(a) Main direction of existing economic policies and
their tactical and strategic objectives1-2 1
(b) Monetary and fiscal policies 3 3
(c) Foreign exchange and payments system 4 3(d) Foreign and domestic investment policies 5-9 3
(e) Competition policies 10 5
3. Foreign trade in goods and services 11 5
III. FRAMEWORK FOR MAKING AND
ENFORCING POLICIES AFFECTING FOREIGN
TRADE
3. Division of authority between the central
government and local authorities12 6
4. Any legislative programmes 13 6IV. POLICIES AFFECTING TRADE IN GOODS
1. Import regulation
(a) Registration requirements for engaging in importing 14-15 7
(b) Characteristics of national tariff 16-20 9(c) Tariff exemptions 21 10
(e) Quantitative import restrictions, including
prohibitions, quotas and licensing systems22-27 11
(f) Import licensing procedures 28 14
(h) Customs valuation 29-33 14(k) Application of internal taxes on imports 34 17WT/ACC/AND/5
Page ii
Question Page
(l) Rules of origin 35 17
(m) Anti-dumping regime 36 18
(n) Countervailing duty regime 37 19
(o) Safeguard regime 38 192. Export regulation
(a) Registration requirements for engaging in exporting 39 20
3. Internal policies affecting trade in goods
(b) Technical regulations and standards, including
measures taken at the border with respect to imports40 20
(c) Sanitary and phytosanitary measures, including
measures taken with respect to imports41 20
(e) State trading practices 42 21
(l) Government procurement practices 43-44 22
4. Policies affecting trade in agricultural products 45 22
(a) Imports – i.e. comprehensive description of the
types of border protection maintained46-47 23
(b) Exports – i.e. description of the budgetary
expenditure and any revenue foregone involved in
each of the export subsidy measures in place48 23
(d) Export credits, export credit guarantees or insurance
programmes49-50 23
(e) Internal policies – i.e. description of, and the
budgetary expenditure and any revenue foregone
involved in each of the domestic support measures
in place51-52 24
V. TRADE–RELATED INTELLECTUAL
PROPERTY REGIME
1. General and description of the global structure of
the market53-60 24
VI. TRADE-RELATED SERVICES REGIME
1. General and description of the global structure of
the market61-62 26
2. Policies affecting trade in services
(a) Regulatory structure of most prominent services
sectors63-69 28
(b) Judicial, arbitral or administrative tribunals or
procedures providing for the review of
administrative decisions affecting trade in services70 32
(c) Provisions concerning qualification requirements
and procedures, technical standards and licensing71 32
(f) Provisions relating to international transfers and
payments for current transactions of services72 32
(h) Provisions governing the procurement by
governmental agencies of services73 33
3. Market access and national treatment
(a) Limitations on the number of service suppliers 74 33(e) Restrictions on, or requirements of, specific types
of legal entity through which a service may be
supplied75 39WT/ACC/AND/5
Page iii
Question Page
VII. INSTITUTIONAL BASE FOR TRADE AND
ECONOMIC RELATIONS WITH THIRD
COUNTRIES
1. Bilateral or plurilateral agreements relating to
foreign trade in goods and trade in services76 39
2. Economic integration, customs union and free-trade
area agreements77-79 39WT/ACC/AND/5
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II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic policies
(a) Main direction of existing economic policies and their tactical and strategic objectives
Question 1
Please provide information on the draft agriculture law, including the provisional
timetable for its introduction.
Reply
The main aims of the agricultural law are as follows:
- To develop high-quality production in agriculture and livestock farming in Andorra;
- to improve agricultural structures so as to increase profitability;
- to conserve the countryside;- to control erosion and pollution;
- to minimize natural hazards;
- biodiversity.
The main features are:- Establishment of a new regulatory framework in the agricultural sector:
- Register of farms;
- register of animals ( Padral );
- manual of farming customs and practices, which will restrict some activities
so as to ensure the conservation of the environment;
- arrestos  or tabes  of the communes, which set out the customs on the use of
communal pastures.
- Establishment of forms of support:
- For livestock farming
Livestock registered in the Padral  will receive this kind of support, which
will depend on the amount of local grass consumed.  The purpose of this
support is to make more rational use of pastures and fields and also to
conserve the countryside.
- On initial establishment
This support, in the form of a single payment, is dependent on a certain
professional capacity, the creation of employment and the viability of the
farm improvement plan.  It seeks to encourage the entry of young farmers
into the sector.
- Improvement plans
Subsidies are provided for investment upon presentation of a viable project.
Such aid seeks to improve the structures of existing farms, as well as product
marketing and processing.
- Environmental protectionWT/ACC/AND/5
Page 2
- Quality- Improvement of agricultural structures
In the final analysis, the main concern is to encourage synergies between agriculture and the
tourism sector through the conservation of the countryside, occupation of the land, respect for theenvironment and the attempt to achieve limited, but high-quality agricultural production.  It is
certainly not the aim to encourage intensive farming in competition with neighbouring countries, but
rather to attain a reasonable balance between profitability, respect for the environment and the
occupation of the land.  For Andorra, these are objectives of strategic importance if it is to maintain its
identity.
With regard to subsidies, the most important of them - assistance for livestock farming - is
directly linked to the amount of grass consumed and thereby meets the objective of contributing to the
maintenance and proper use of pastureland.
As far as the other forms of assistance are concerned, the aim is to maintain the tradition of
farming in Andorra through a number of persons devoted entirely to stock-raising and agriculture.The total amount envisaged for such assistance is relatively low (Ptas 300-350 million or €1.80 to
2.10 million) and would not in any event involve any distortion of the market.
The agricultural law is due to come into force in June 2000.
Question 2
Please describe the pricing policies that are applied to bread and fuel.  Please describe
any differences in pricing policies as between imported and domestically-produced goods.
Reply
Prices of the following products are fixed by the Government by Decree:
- Bread;
- electricity;
- fuel and oil;-t a x i s ;
- public transport;
- telephone.
Generally speaking, the public enterprise or professional association concerned submits a
proposal for an increase to the Government.  Any change is then decided on the basis of this proposal
and other information such as the report drawn up by the research department of the Ministry of
Finance regarding the impact of an increase in controlled prices on the retail price index.
Maximum prices for fuel are based on the benchmark prices and are then automatically
updated.  There is nothing to prevent petrol distributors from competing amongst themselves by
offering discounts on the retail price.
With regard to bread, price fixing is justified by the fact that it is a staple commodity.  The
prices of only three products are controlled:  loaves of 1.7 kg, 0.75 kg and 0.35 kg.  These productsmust be available for sale and bakers must request the Government to approve a price increase on the
basis of the production costs for bread.  The increase accepted by the Government is published in the
Official Journal of the Principality of Andorra.WT/ACC/AND/5
Page 3
Electricity and telephone services are supplied by State enterprises and price controls take
into account the investment that they must make.  Productivity, import costs (which are very
important in the case of electricity, most of which is imported) and the impact on economic policies,
notably inflation, also play a role.
Fares for domestic public transport must be approved by the Government.Regarding price policy, there is no difference between imported and locally manufactured
products.
(b) Monetary and fiscal policies
Question 3
Please explain Andorra's intention to introduce measures to generalize indirect taxation
on production, processing activities and services, and the dates when they are due to come into
force.
Reply
The Constitution of the Principality of Andorr a lays down the basic principles of Andorra's
taxation system, and the General Fiscal Law of 1996 establishes the fiscal structure.
As was stated in the Memorandum, 80 per cent of  Andorra's budget is financed from indirect
taxes on goods and the tax on consumption.
In order to pursue the development of this fiscal system and extend taxation to the other
productive sectors, in the autumn of 1999 the Government will be introducing a reform that willinclude the extension of indirect taxation to the production of goods, as laid down in the Law on
Indirect Taxation of Goods, and will extend indirect taxation to the financial sector.
In 2000, the Government will extend indirect taxation to the remaining sectors, namely,
tourist and professional services.
(c) Foreign exchange and payments system
Question 4
Please update the Working Party on Andorra's plans to join the IMF, and outline a
timetable for securing IMF membership
Reply
Considering that Andorra does not have any na tional currency, before being able to proceed
further on membership, it has first to so lve the framework of euro application.
(d) Foreign and domestic investment policies
Question 5
Please clarify the term "public interest" and its application in the case of limits on
foreign equity participation being granted in the case of "banking institutions  and companies
deemed to be of public interest".WT/ACC/AND/5
Page 4
Reply
Article 3 of the Law on Business Firms limits foreign participation to 33 per cent of the total
equity of companies registered under Andorran law.  However, under this same Article 3, foreign
equity may rise to 100 per cent in the case of companies holding concessions and companies declared
to be of public or social interest.
The former are companies that have been granted a concession by the authorities to run a
public service in accordance with the Administrative Code and the Government Procurement Law of
30 December 1985.  This Law stipulates that such concessions may not last longer than five years.
The designation of public or social interest is made in a special law in response to the
proposed benefits that it may bring the country.  Up till now, no company has taken advantage of thisArticle allowing foreign equity to rise above 33 per cent.
As from 30 September 1999, banking institutions may set the limit of foreign equity at 51 per
cent of the total.  This is not in application of Article 3 of the Law on Business Firms nor a declaration
of public interest.  It is allowed under special legislation on the banking sector of 30 June 1998, whichhas led to liberalization of this sector.  In order to make the sector competitive, it has been opened up
to foreign equity in parallel with liberalization.  Nevertheless, the laws on opening up this sector may
not be considered application of Article 3 of th e Law on Business Firms but as special opening up of
this sector.
Question 6
Please report to the Working Party on Andorra's intentions to liberalize its investment
regime.
Reply
With regard to Andorra's intentions to liberaliz e its investment regime, they will be submitted
in the market access schedules.
Question 7
Please provide details to the Working Party on Andorra's policy to promote foreign
investment in R&D, new technologies, communicati ons, and in the financial system.  Will there
be any restrictions to foreign investment in these areas ?
Reply
The Government of Andorra is considering the possibility of abolishing the limit on foreign
capital in all sectors of the economy.  The liberalization of these sectors, however, involves a degree
of regularization.  This has already been done for the banking sector and has liberalized the equity
limit at 51 per cent of capital.  Liberalization in the other sectors will come into effect once thenecessary controls have been established.
Question 8
Please provide details on the restriction of foreign investment and ownership in the
telecommunications sector.  Are there any furthe r restrictions in the communications sector?WT/ACC/AND/5
Page 5
Reply
The telecommunications sector is of strategic importance and all investment in this sector is
public.  In the audiovisual sector, administrative concessions may be granted when the law regulating
them has been approved.
Question 9
Please inform the working group regarding the intention of the Principality of Andorra
to abolish the limit on ownership.
The Government of Andorra is considering the possibility of liberalizing the limit on
ownership of immovable property in accordance with the directives adopted by industrializedcountries.  Nevertheless, Andorra will adopt a prudent and controlled approach in order to prevent any
unlawful activity through this channel.
(e) Competition policies
Question 10
What are Andorra's intentions regarding the introduction of legislation on competition
policy?  Please clarify the role of the Administrative Code with regard to competition policy.
Reply
Andorra has no current plans to introduce a competition policy.
The Administrative Code establishes the main principles on which the Administration must
base all its actions;  transparency, competition and publicity.  Within this context, competition applies
to all the procedures for Government procurement so as to enable all legal and natural persons having
the requisite capacity to compete.
The Administrative Code does not establish an y competition policy in the Andorran market
and does not affect the private sector.
3. Foreign trade in goods and services
Volume and value of trade
Question 11
Please explain why there was a sharp drop in imports of tobacco from 1997 to 1998, with
1998 volumes equal to only one third of 1997 values.
Reply
In 1997, there was a large increase in imports of manufactured tobacco and an expansion of
illegal trade.
Strict legislative provisions have been adopted in order to prevent illegal exports and
consequently imports of manufactured tobacco fell sharply in 1998.WT/ACC/AND/5
Page 6
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES AFFECTING
FOREIGN TRADE
3. Division of authority between the central Government and local authorities
Question 12
Please clarify the legislative functions of the local authorities ( comuns ) and, in
particular, their powers in the field of foreign trade and taxation.
Reply
Executive power in Andorra is divided between the Government and the local authorities
(comuns ).  However, legislative power lies solely in the hands of the Andorran Parliament.
Taxes must be approved by legislation and, consequently, may only be established by
Parliament.
However, local authorities have the power to administer the traditional taxes and other
specific taxes, which has been granted to them by the Law on the transfer of powers to the local
authorities.  They have no competence in the field of foreign trade and only administer transferred
taxes.
4. Any legislative programmes
Foreign trade controls
Question 13
Please identify all products from third countries, including HS numbers, that are
subject to control measures, pursuant to the EC-Andorra Agreement.  For each such product,
please describe the measure that is being applied.
Reply
Further details concerning the measures mentioned in Section III.IV (c), "Foreign trade
controls", in document WT/ACC/AND/3 are given in sections IV.1(e)(ii) and IV.2(c)(ii) of the same
document.
The Principality of Andorra has taken measures in application of Decision 2/96, amended by
Decision 1/98 of the EC-Andorra Joint Committee.  Products subject to prior controls are all treated inthe same way irrespective of their tariff number or their origin.
The following are the control measures:- Presentation of an import document systematically countersigned by the Andorran
customs authorities;
- monthly communication of the volume and value of imports to the European
Commission;
- imports of products under Chapters 50 - 63 of the Combined Nomenclature (CN) are
broken down by textile category and country of origin according to the descriptions
found in Annex IA to Council Regulati on (EEC) No. 3030/93 of 12 October 1993,
Official Journal L 275 of 8 November 1993, p.1.WT/ACC/AND/5
Page 7
Products listed in the following are subject to control:
- Annex 5 to Council Regulation (EEC) No. 3030/93 of 12 October 1993, on common
rules for imports of certain textile products from third countries, amended by
Commission Regulation (EC) No 1053/98 (Official Journal L 151 of 21 May 1998,
p. 10);
- Annexes IIIB, IV and V to Council Regulation (EC) No. 517/94 of 7 March 1994
(Official Journal L 67 of 10 March 1994, p. 1), on common rules for imports of textile
products from certain third countries not covered by bilateral agreements, protocols or
other arrangements, or by other specific Community import rules (amended by
Regulation (EC) No. 1457/97, (Official Journal L 199 of 26 July 1997, p. 6));
- Annex II to Council Regulation (EC) No. 3060/95 of 22 December 1995 (Official
Journal L 326 of 30 December 1995, p. 25) on the arrangements for imports of certain
textile products originating in Taiwan;
- Annex II to Council Regulation (EC) No. 519/94 of 7 March 1994 (Official Journal
L 67 of 10 March 1994, p. 89), on common rules for certain imports originating in the
People's Republic of China (amended by Regulation (EEC) No. 1138/98, (Official
Journal L 159 of 3 June 1998, p. 1).
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(a) Registration requirements for engaging in importing
Question 14
Please list the goods that are subject to import regulation.
Please explain how the Decree on the cont rol of commercial imports examines and
evaluates the "mutual compatibility of each of the commercial activities requested under the
same authorization, on the one hand, and the actu al activities carried out, on the other".  How
may customs procedures on entry "consequently [a lso] be directed towards enforcement of this
obligation"?
Please specify the registration requirement s for engaging in exporting and importing.
Reply
Goods imported into the Principality of Andorra are not subject to any form of regulation.
The provisions of the Decree of 10 October 1981 stipulate that:
- In order to carry on any commercial or indu strial activity on the territory of Andorra,
authorization must be requested from the Government (Article 1) and thus only
natural or legal persons listed on the Register as credited business persons or
industrialists can engage in a commercial or industrial activity (Article 2);
- activities subject to inclusion on the Register are understood to mean:  importing,
exporting, representation, agencies, the despatch or delivery of goods to a private
residence, itinerant trading, commission agents or bailees of goods, wholesale selling,
etc. (Article 3).WT/ACC/AND/5
Page 8
The provisions of the Decree of 15 October 1981 do not in any way seek to subject imported
goods to any form of regulation, but only to specif y, within the meaning of the above obligations, that
any consignee of commercial imports must be properly listed in the national Register of Commerce.
Checks carried out by the customs services should be seen as part of the normal work of
processing customs declarations.  In any particular case, by directing attention towards the existenceand status of the actual consignee, it is possible not only to check the truth of the information declared
but also to combat any possible attempt to carry on commercial activities illegally on the territory of
the Principality of Andorra.
Similarly, the actual import operations carried out must correspond to the nature of the
activity or activities declared in the Register of Commerce or be complementary to them.  If these
rules are observed, import-export activities may be undertaken without additional conditions orobligations.
Question 15
According to information provided in the Memorandum, only natural or legal persons
previously registered in the commercial register of the Principality of Andorra are entitled to
engage in the importation of goods on a commercial basis.
Please describe in detail the procedures that must be followed to register in the
commercial register of Andorra and all conditions that must be satisfied for registration.
Reply
Before engaging in any commercial activities, a person must be listed in the Register of
Commerce and Industry, which is administered by the Ministry of the Economy.  The personconcerned must submit to the Government an application to open and exploit commercial premises
for commercial activities related to both goods and services.
The application must specify inter alia  the activity or activities to be carried on.  Where the
application relates to several activities, the Government authorizes the same commercial
establishment to carry on activities that are compatible or complementary to the main activity.
The following are the requirements to be met in order to obtain an authorization:
- Possess the right to engage in business in the Principality of Andorra.  This right is
granted to Andorran adults (natural or le gal persons) and foreigners who have resided
continuously and uninterruptedly in the Principality for at least 20 years.  The lattermay only obtain one authorization per household.
- Prior approval by the local authorities (Comú) in the area where the business is
located.
Some businesses are subject to health and/or industrial checks on their facilities according to
the regulations applicable to the activity to be ca rried on.  These are intended to ensure the safety of
the facilities.
After the Government has granted the authorization, registration is automatic.WT/ACC/AND/5
Page 9
(b) Characteristics of national tariff
Question 16
At least four weeks prior to the first meeting of the Working Party, please provide an
initial market access offer for goods and a schedule of currently applied tariff rates.
The framework of Title II of the EC-Andorra Agreement and Article 12.2, in particular,
provides that the Principality of Andorra grants  a preferential rate corresponding to 60 per
cent of the normal customs duty applicable to tobacco products under headings 24.02 and 24.03
of the HS tariff system.
What is the GATT rationale for this bett er-than-MFN treatment to tobacco imports
from the EC?
Reply
The Principality of Andorra was not a member of the WTO at the time it signed the
EC-Andorra Agreement (1990).  Manufactured products from France and Spain had been given
certain rights before the 1990 trade agreement was signed;  these acquired rights were maintained.  A
solution is being scheduled by the WTO's Regional Committee.
Question 17
Please identify any other items in HS Chap ters 1-24, including HS numbers, that receive
preferential treatment.
Reply
No other products in Chapters 1-24 of the HS receive preferential treatment.
Question 18
We note that the Customs Union Agreement covers only industrial products under
Chapters 25-97 of the HS.
Why have only two agricultural (tobacco) products been singled out for preferential
treatment?
Reply
Prior to signature of the EC-Andorra Agreement, there was an Agreement between SEITA
SA and TABACALERA SA, under which preferential tariffs were applied to cigarettes and tobacco
manufactured by these two companies.  Under the "acquired rights" theory, the provisions of
Article 12.2 of the EC-Andorra Agreement maintained the preferences previously applied.
Question 19
In accordance with Article XXIV.9 of th e GATT, please outline Andorra's plan of
implementation to bring "substantially all trade" under the Agreement.
Reply
This issue is being discussed in the Committee on Regional Trade Agreements.WT/ACC/AND/5
Page 10
Question 20
Andorra has introduced the Common Customs tariff (CCT) of the European
Communities as its current applied rate.  Does Andorra intend to submit its offer based on the
same level as that of the EC, or will Andorra submit its original offer?
Reply
Under the customs union established with the EU in 1991, Andorra has the same CCT for
industrial products as the EU, therefore, for its accession to the WTO, the industrial goods offer
submitted will be the one of the EU with its current CCT.
(c) Tariff exemptions
Question 21
Please provide a detailed list of all tariff exemptions, including the exemptions relating
to certain persons or operations, based on the national legislation on the consumption tax.
Reply
The national legislation on the consumption tax was approved by the General Council on
30 December 1985.  Since the provisions of the EC-Andorra Customs Union Agreement came intoforce, that law has been applied exclusively to agricultural products covered by Chapters 1-24 of the
HS (amendment to the initial law introduced by the exemption clauses of the Law on the indirect
taxation of goods (IMI), approved by the General Council on 26 June 1991).
The following tax exemptions are envisaged by this law:- Two products under heading HS 09.01 are subject to a tax rate of 0 per cent
(amendment to the rate of the consumption tax, adopted by Parliament on
4 June 1998).  This situation, which has the same effect as a tariff exemption,
concerns "coffee, not roasted, not decaffeinated" of the Combined
Nomenclature 09.01.11.00 and "coffee, not roasted, decaffeinated" of
CN 09.01.12.00.
- With regard to exemptions from customs duties for certain persons or operations,
Article 2 of the Law on the consumption tax states that the General Council, acting on
a proposal by the Government, shall determine the exemptions and exonerations from
that tax.  These are set forth in provisional measures that supplement the terms of thelaw (provisions amended by the Law of 30 December 1985 of the General Council).
The following are legally exempt from this tax:- Bread flour;- merchandise and goods intended for the personal use of travellers, as well as
provisions for their journey;
- the used property and goods of persons coming to settle in the Principality of Andorra
or leaving the Principality of Andorra to settle abroad;
- animals coming from abroad to pasture in Andorran valleys;- imported newspapers and periodicals;WT/ACC/AND/5
Page 11
- non-commercial imports of a value less than Ptas 100,000 by private individuals;- merchandise and goods imported by the services of the Coprínceps  (Co-princes) and
intended for their use or for the use of their families while resident in the Principality
of Andorra;
- books, archives, documents, furniture of all kinds and, in general, merchandise and
goods of all sorts intended for the service of the Coprínceps;
- in the case of diplomatic and consular agents, objects intended for the official use of
the mission and for their personal use or for the use of family members forming part
of their household.  The same applies to articles imported when they first set up
home.  The members of the administrative and technical staff of the mission and themembers of their immediate family enjoy the same exemptions for the objects
imported when they first settle in the Principality of Andorra.
It should be noted that the above tariff exem ptions apply without distinction to products
covered by HS Chapters 1-97.  However, as stated in the Memorandum submitted with a view to theaccession of the Principality of Andorra to the WTO (paragraph IV.1(c)(2) "Tariff exemptions"), they
are shortly to be amended and brought into line with the relevant provisions laid down by the
European Community.
However, in addition to these customs exemptions, there are others contained in specific
texts, such as the international agreements or undertakings entered into by the Principality of Andorra,
some of which affect the tariff treatment of products coming under HS Chapters 1-24.  They include:
- Travellers' exemptions, applicable to the goods contained in the personal luggage of
travellers, provided that such goods are not imported for commercial purposes(Article 13 of the EC-Andorra Agreement);
- goods imported for the purpose of carrying out market surveys.  They may include
samples of goods of minimal value, printed matter and objects used for purposes of
publicity, and also products for use at an exhibition or similar event (ATA and
Istanbul Conventions);
- goods imported for examination, analysis or tests (ATA and Istanbul Conventions).
(e) Quantitative import restrictions, including prohibitions, quotas and licensing systems
Question 22
Please describe the requirements relating to the enforcement of administrative
regulations, as in the case of tobacco under Chapter 24.01 of the HS.
Reply
The procedure on compulsory presentation of an administrative document for products under
Chapter 24.01 of the HS was recently abolished in its entirety.
Question 23
Please explain the ban on the import of second-hand vehicles.  Would it be possible to
establish a less restrictive regime for the import, export and sale of second-hand vehicles?WT/ACC/AND/5
Page 12
Reply
The ban on the import and registration in the Vehicle Register of all motor vehicles
manufactured more than three years prior to the date of their import into the Principality of Andorra
dates from 1967.  The purpose of this measure is to extend the life of automobiles as far as possible in
order to limit the volume of scrap metal transported to neighbouring States for recycling.  It is also
intended to reduce as much as possible atmosphe ric pollution caused by emissions from vehicles.
As regards the possibility of establishing a less restrictive regime for second-hand vehicles,
this will be presented to the Working Party in the market access lists.
Question 24
According to the Memorandum, a number of prohibitions or other restrictions for
reasons of health, safety, public order or public morality are applied in respect of certain
products or operations of a general or specific nature.
Please identify each product subject to such  restriction, including HS number, describe
the nature of the restriction and the GATT rationale for the restriction.
Reply
The relevant provisions under the EC-Andorra Agreement are explained in the reply to
question III.4 above (provisions under Decision 2/ 96, amended by Decision 1/98 of the Joint
Committee).
At the national level, the following products are subject to prohibitions or other import
restrictions:
- Under Article 161 et seq. of the Criminal Code, narcotic substances may not be
imported, exported, manufactured, traded or sold (BOPA (Official Journal) No. 21,
year 2, of 21 July 1990);
- the Decree of 12 April 1990 bans the import of machines for leisure activities that
involve direct or indirect pecuniary reward  ("slot machines") (BOPA, No. 11, year 2,
of 20 April 1990);
- under the Decree of 14 August 1996, rockets containing explosives under CN
No. 36.04.90.00 may not be imported (BOPA, No. 60, year 8, of 28 August 1996);
- Article 2 of the Decree of 3 July 1989 bans the import of weapons in HS
heading 93.01, as well as arms exclusively for police use, sawn-off shotguns,
substantially modified weapons, non-liste d weapons, infra-red viewfinders, and
armour-piercing ammunition (BOPA, No. 17, of 10 August 1989).  Under the same
Decree, the import of firearms and ammunition listed in categories 1a and 2a ofArticle 1 is subject to a special authorization issued by the police upon request;
- products subject to authorization:  the import of firearms and ammunition in
categories 1a and 2a of Article 1 of the Decree of 3 July 1989 (BOPA, No. 17 of
10 August 1989) is subject to authorization by the Ministry of the Interior.
An authorization is also required for narcotic substances in Table B of the international list
established under the Vienna Convention on psychotropic substances.  These products may only be
imported by the Government, which then distributes them to pharmacies.WT/ACC/AND/5
Page 13
Question 25
Please identify all special vehicles, including HS numbers, that require prior
authorization from the Ministry of Industry for temporary importation.  Is the "stock" of such
vehicles limited solely to the inventory of the Ministry of Industry, or does it also include such
vehicles owned privately?
Reply
The special vehicles listed in Chapters 84.26 to 84.30 of the HS require an authorization from
the Ministry of Industry and the stock of these vehicles is limited solely to the inventory of the
Ministry.
Question 26
Please identify all motor vehicles, trailers and semi-trailers, including HS numbers, for
which the importation and registration is banned, if manufactured more than three years prior
to their date of import.  How does this regulat ion apply to such vehicles that were originally
imported new, but have been in service for more than three years within Andorra?  What is the
rationale for this import prohibition, if the vehicles are capable of satisfying safety requirements
other than the three-year limitation?  Please desc ribe any special rules that apply to agricultural
vehicles.
Reply
Motor vehicles manufactured more than three year s prior to the date of their import into the
Principality of Andorra, Chapter 87 of the HS, may not be imported.  This restriction dates from 1967
and its purpose is to extend the life of automobiles as far as possible in order to limit the volume ofscrap metal transported to neighbouring States for recycling.  It is also intended to reduce as much as
possible atmospheric pollution caused by emissions from vehicles.
There are two exemptions to this ban:- The import of vintage cars more than 25 years old is authorized;
- the age limit on the vehicle is extended to five years in the case of foreigners who
come to settle in Andorra, provided that the vehicle has been registered in their name
for at least six months prior to being imported.
Question 27
We note there is a ban on the importation of "demountable tower cranes" that have
been in service more than three years from the date of their manufacture.
Are domestically-produced tower cranes (if an y) subject to this regulation?  How does
this regulation apply to demountable tower cranes  that were originally imported new, but have
been in service for more than th ree years within Andorra?  What is the rationale for this import
prohibition, if the demountable tower cranes are capable of satisfying safety requirements other
than the three-year limitation?
Reply
The ban on the import of demountable tower cranes in service for over three years from the
date of their manufacture will shortly be replaced by an import authorization subject to strict safety
checks similar to those applied to cranes in service for over three years in Andorra.WT/ACC/AND/5
Page 14
(f) Import licensing procedures
Question 28
Please provide the information requested in Annex 3 of WT/ACC/1, Information on the
Implementation of the WTO Agreement on Import Licensing Procedures.
Reply
As indicated in section IV.1(f) of document WT/ACC/AND/3, there are no other import
licensing procedures or similar administrative import formalities.
(h) Customs valuation
Question 29
According to footnote 8 of the Memorandum, Andorra maintains regulations applicable
to certain goods, insofar as these are not at  variance with the provisions of the EC-Andorra
Agreement.
Please identify the product, including HS numbers, of these goods, and describe the
nature and rationale for the variance from the EC customs practice.
Reply
According to Article 8.2 of the Agreement on Implementation of Article VII of the General
Agreement on Tariffs and Trade 1994, when framing its legislation, each Member shall provide for
the inclusion in or the exclusion from the customs value of certain elements up "to the port or place ofimportation" (these elements include the cost of transport of the imported goods, loading, unloading
and handling charges associated with the imported goods, insurance costs).
The information given in section 6 of Annex 3 to document WT/ACC/AND/3 is intended to
show that, for the purpose of applying the fore going provisions, the place of importation for the
Principality of Andorra is:
- Either the place where the goods enter the customs territory of the Principality of
Andorra, for agricultural products in Chapters 1-24 of the HS, to which Andorran
national customs tariffs apply;
- or the place of entry of the goods into the EC-Andorra customs union, for industrial
products in Chapters 25-97 of the HS, to which the customs tariffs of the European
Community apply.
The indications in footnote 8, at the bottom of page 22 of document of WT/ACC/AND/3,
simply refer to the following:
- On the one hand, to the same indications as those set out above; and- on the other, to the period allowed to repay customs duty in accordance with
Articles 22 et seq . of the Customs Code law (repayment may be allowed before the
expiry of three years from the date of communication of the duties to the payee
according to Article 221.2.  The period may be shortened to six months for all the
agricultural products in Chapters 1-24 of the HS, taking into account the provisions in
Article 19.4 of the Law on the consumption tax.WT/ACC/AND/5
Page 15
Question 30
In Annex 3, point 6, of WT/ACC/AND/3, concerning the elective additions to the price
actually paid or payable, Andorra notes that, wi th regard to the remarks in paragraph IV.1(h)
of the Memorandum, reservations and amendments need to be made to certain definitions in
order to cover the situation of the Principali ty of Andorra (European Community ("EC") -
Andorra Agreement), and to be more precise the two distinct definitions of the expression
"country of importation" in Article 15.1(b) of the Agreement need to be taken into account.
We require a more detailed explanation of how this affects Andorra's implementation of
the elective additions to the price actually pa id or payable in Article 8.2 of the World Trade
Organization ("WTO") Valuation Agreement.
Reply
See the reply to the preceding question.
Question 31
In Annex 3, point 11, of WT/ACC/AND/3, Andorra mentions that "additional
explanations have been given on the treatment of  declarations indicating a provisional value".
Are these additional explanations co ntained in Andorra's Customs Code or
Regulations?  If they are found elsewhere, please provide a detailed narration of the
explanations.  What appraisal information must be presented in the declaration?
Reply
Generally speaking, the purpose of Article 74 of the Customs Code is to facilitate as far as
possible completion of formalities and procedures, while at the same time respecting the regulations
(first sentence of point 1).
The substance of Article 74.1.a is that the customs authorities allow the customs declaration
mentioned in Article 60 to omit some of the details listed in paragraph 1 of this Article.  These
indications are those needed to apply the provisions governing the relevant customs regime.
Customs valuation is one of these indications.  The fact of postponing communication of the
definitive customs value under certain circumstances does not therefore prevent the customs
authorities from accepting the customs declaration and consequently allowing the goods in question to
be released (Articles 71, 72 and 179 et seq . of the Customs Code Law complete the legislative
obligations laid down in Article 13 of the Agreem ent on Implementation of Article VII of the General
Agreement on Tariffs and Trade 1994).
Article 59 of the fourth part of the implementing regulations for the Customs Code Law
simply sets out the practical procedures for dealing with declarations showing a provisional valuation,in relation to various Articles of the Customs Code Law (for a declaration showing a provisional
value, the amount of the duties calculated on the basis of this indication is directly taken into account
in accordance with paragraph 2, first indent.  Likewise, the deposit of a sufficient guarantee may be
required to cover any difference in comparison with the duty finally payable, in accordance with
Article 59.2).
Pursuant to the provisions of Article 60.2 of the Customs Code Law, an importer must attach
to his declaration all documents required to allow application of the provisions governing the customs
regime under which the goods are declared.  The same applies to the cases mentioned above.WT/ACC/AND/5
Page 16
Question 32
In Annex 3, point 11(b) of WT/ACC/AND/3, Andorra states that it will require a deposit
of a sufficient guarantee to cover the difference  between the provisional value amount and the
amount that might finally be payable on the imported goods.
Please provide an explanation on how A ndorra determines the amount that might
finally be payable on the imported goods.
Is this calculation based on reference pricing or minimum values?
Reply
The customs authority applies the legislative provisions contained in the Customs Code.  In
particular, it applies Articles 26-34 regarding customs valuation and 179 et seq. concerning a
guarantee for the amount owed to the customs, where applicable.
The procedures followed by the customs authority depend on the reasons for which the
importer requests acceptance of a provisional value, including the following cases:
- Use of transaction value when all the elements of the transaction are not known;  or- in the absence of a transaction value, when sufficient elements to determine the value
to be declared do not exist at the time of customs clearance.
The deposit of a guarantee is not an obligation but a possibility.  When the customs authority
considers that payment of the amount owed as cust oms duty or likely to be owed is not guaranteed
within the time-limit, a guarantee will be required.  In addition, where it is not required, the customsauthority may request the importer to make a comm itment covering the obligations to which he is
legally subject (Article 180.1 of the Customs Code).
Where it is decided to require deposit of a guarantee, the customs authority fixes the amount
at the highest level of the customs duty payable or likely to be paid if the amount cannot be fixed
precisely.  In fixing the amount of the guarantee, Articles 28-34 may be applied.
Question 33
We thank Andorra for the detailed answer s to the valuation questionnaire which are
found in Annex 3 of WT/ACC/AND/3.  To confirm our assessment that Andorra has
substantially implemented the WTO Agreement on Customs Valuation, we need to review theCustoms Code and Regulations as set out in Annex 2, §1 of WT/ACC/AND/3.  Please provide
copies of the following:
- Customs Code adopted on 20 June 1996 (BOPA, supplement five, year 3,
14 June 1991);
- implementing regulations of the Law on the Customs Code under the Agreement
between the Principality of Andorra and the EC (BOPA No. 13, year 9,
5 February 1998);
- internal regulations of the Andorran customs service, adopted on 7 August 1991
(BOPA No. 33, year 3, 14 August 1991);WT/ACC/AND/5
Page 17
- Law on customs fraud, adopted on 11 April 1996, (BOPA No. 32, year 8,
8 May 1996), as amended by the Law of 11 March 1998 (BOPA  No. 16, year 10,
3 April 1998);  and
- regulations on contentious proceedings in customs matters (BOPA No. 54,
year 10, 28 October 1998).
(k) Application of internal taxes on imports
Question 34
According to the Memorandum, the Principa lity plans eventually to apply all the
provisions contained in the indirect tax on goods (IMI) Law, in order to establish identical taxrates, within the meaning of the Law, for imported goods and like products produced or
prepared on the national territory
Please identify all products, including HS  numbers, for which there are different tax
rates being applied to imported goods and like pr oducts produced or prepared on the national
territory.  Please provide a schedule for the harmonization of these tax rates.
Reply
The national provisions relating to the application of internal taxes on imports are set out in
section IV.1 (k) of document WT/ACC/AND/3.
The indirect tax imposed under the national law of 26 June 1991 is the Indirect Tax on
Goods (IMI).
Agricultural products in Chapters 1-24 of the HS are subject to an ad valorem  IMI of 1 per
cent.
Industrial products are subject to the IMI at ad valorem  rates of 0 per cent, 4 per cent, 7 per
cent or 12 per cent according to the product, with special rates applicable to mineral oils in Chapter 27
of the HS.  Details of the tax according to the category of goods are attached.
The IMI law came into effect recently in July 1991.  As yet, it is only partly applied and at
present only products imported into Andorra are taxed.
The law will soon be applied generally and both imported goods and similar domestic goods
will be subject to the same tax (combined provisions of Articles 13.2 and 7.a of the IMI law, inconformity with the basic provisions of Article III of the GATT.
(l) Rules of origin
Question 35
According to Article 25 of the Customs Code Law, the rules of preferential origin are
based on the implementation of the Community Customs Code for industrial products.
Does the Principality of Andorra grant orig inating status to imports from any countries
other than those who are member s of the European Community?  If yes, please identify such
countries and the rationale for such treatment.WT/ACC/AND/5
Page 18
Reply
The preferential origin provisions applicable to industrial products in Chapters 25-97 of the
HS covered by the EC-Andorra customs union are set out in section IV.1(b)(ii) of
document WT/ACC/AND/3.
The import formality requirements applied by the EC to third countries are also applied by the
Principality of Andorra under the terms of Articl e 7.1 of the EC-Andorra Agreement.  The same also
applies to separate agreements or conventions signed by the EC such as tariff concessions granted
unilaterally.
Consequently, the tariff preferences granted by the European Community in the context of
preferential relations in respect of origin have also been adopted by the Principality of Andorra.
These apply to imports from the following:- Countries associated with the EC in the European Economic Area, Switzerland;
- Eastern and Central European countries (Hungary, Poland, Czech Republic, Slovakia,
Bulgaria and Romania);
- developing countries in Africa, the Caribbean and the Pacific (signatories to the Lomé
cooperation conventions) and associated overseas countries and territories;
- Maghreb countries (Algeria, Morocco, Tunisia);- Mashreq countries (Egypt, Jordan, Lebanon, Syria);
- Baltic states (Estonia, Latvia and Lithuania);
- Faeroe Islands, Cyprus, Malta, Turkey, Isr ael, Territories on the West Bank of the
Jordan and the Gaza strip, republics in the former Yugoslav federation:  Bosnia and
Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, and Slovenia;
- developing countries to which generalized tariff preferences are applied.
(m) Anti-dumping regime
Question 36
Within the framework of the EC-Andorra Agreement, the Principality of Andorra is
required to adopt the Community provisions on imports of industrial goods vis-à-vis  third
countries, as well as the trade policy measures applied by the EC to third countries.
Does Andorra have its own law or regulations for the imposition of anti-dumping
measures?  If yes, please describe in detail.
Reply
Pursuant to the provisions of Article 7.1 of the EC-Andorra Agreement, the Principality of
Andorra applies any anti-dumping rules applied by  Community institutions on the terms defined by
them to industrial products in Chapters 25-97 of the HS from third countries.
The Principality of Andorra has not drawn up any special anti-dumping legislation or
regulations.WT/ACC/AND/5
Page 19
(n) Countervailing duty regime
Question 37
As in the case of anti-dumping rules, the Principality of Andorra is required by the
EC-Andorra Agreement to take into account the trade protection instruments adopted by theEC pursuant to the Community's "anti-subsidy" regulation.
Does Andorra have its own law or regula tions for the imposition of countervailing
measures?  If yes, please describe in detail.
Reply
With regard to the countervailing duty regime, as indicated in the comparative table of
Andorran and Community legislation, Andorra app lies the Community import formalities to third
countries (Article 7 of the EC-Andorra Agreement complemented by Article 77 of the Customs
Code), including any countervailing duties.
(o) Safeguard regime
Question 38
Does the Principality of Andorra h ave a safeguard law or regulation?
According to the Memorandum, Article 10 of  the EC-Andorra Agreement provides for
the possibility of safeguard clauses in the application of trade policy provisions vis-à-vis  third
countries, where deflections of trade occur or econ omic difficulties arise on the territory of one
of the contracting parties.
Does the EC-Andorra Agreement proscribe safeguard measures from being applied
between the Principality of Andorra and the EC or its individual member States?
Please explain what is meant by "deflections of trade occur or economic difficulties arise
on the territory of one of the contracting partie s?"  Does this mean that the Principality of
Andorra may apply, in certain circumstances, safeguard measures to imports from third
countries without complying with the procedures and rules of the WTO Agreement on
Safeguards?  Please explain.  Does this provision apply to both agricultural and industrial
goods?
Reply
Any safeguard measures imposed on imports from third countries into the EC-Andorra
customs union can only be taken by the European Community.  If such measures are adopted, they are
immediately applied by the Principality of Andorra pursuant to the provisions of Article 7 of the
EC-Andorra Agreement.
With regard to trade between the contracting parties to the EC-Andorra customs union, if one
contracting party considers that customs duties, quantitative restrictions, or any measure having an
equivalent effect on imports from third countries, or any trade policy measure imposed by the other
contracting party, threaten to distort trade or cause economic difficulties on its territory, it may bringthe matter before the Joint Committee set up under Article 17 of the Agreement.  The Joint
Committee will then recommend ways of preventing any damage that might ensue.
Article 10 only applies to the customs union and is therefore only relevant for trade in
industrial products in Chapters 25-97 of the HS.WT/ACC/AND/5
Page 20
2. Export regulation
(a) Registration requirements for engaging in exporting
Question 39
According to information provided in the Memorandum, only natural or legal persons
previously registered in the commercial register of the Principality of Andorra are entitled to
engage in the exportation of goods.
Please describe in detail the procedures that must be followed to register in the
commercial register of Andorra and all conditions that must be satisfied for registration.
Reply
The procedure and the conditions to be met are set out in section IV.1 above.
3. Internal policies affecting trade in goods
(b) Technical regulations and standards, including measures taken at the border with respect to
imports.
Question 40
Please provide further details on Article 6 of the Regulations on Low-Voltage Electrical
Installations of 2 November 1994, as amended on 16 November 1994.
Reply
Article 6 of the Regulations on low-voltage electrical installations prohibits the manufacture,
importation, sale and installation of equipment and devices that have not received approval or
certification in accordance with the measures in force in the European Union.
With a view to the standardization of electrical equipment and in accordance with this Article,
electrical equipment and devices bearing the certificate "EC" are authorized.  Any device or
equipment bearing this symbol is in principle authorized (except, for example, in the case of
equipment or goods that are suspected of being imitations).
Equipment and devices that conform to the natio nal standards in force in the EU countries
(UNE for Spain or NF for France) are also authorized.
With regard to devices and equipment from the United Kingdom, technical adaptations are
required on account of the different voltages in use (250V for the United Kingdom, 220V for Andorra
and other EU countries).
(c) Sanitary and phytosanitary measures, including measures taken with respect to imports
Question 41
Please complete the Secretariat matrix, to  describe Andorra's conformity with the
requirements of the WTO Agreement on Technical Barriers to Trade, in advance of the first
meeting of the Working Party.WT/ACC/AND/5
Page 21
Please complete the Secretariat matrix, to  describe Andorra's conformity with the
requirements of the WTO Agreement on Sanita ry and Phytosanitary Measures, in advance of
the first meeting of the WTO Working Party.
Please ensure that the information sought in Annex 5 of WT/ACC/1 on implementation
of the Agreement on Technical Barriers to Trade and on Sanitary and Phytosanitary Measures,including information on current institutional impl ementation of their provisions, is covered in
the responses.
Please specify the plans for Andorra's creation of inquiry points under the SPS
Agreement.
Reply
Andorra will try its best to implement the SPS Agreement and therefore create inquiry points
during its accession process;  all the information concerning the sanitary and phytosanitary regime
will be provided.
(e) State trading practices
Question 42
According to the Memorandum, the Principality of Andorra has no State monopoly in
the field of foreign trade.  However, the workin g definition of state trading enterprises provided
in the Understanding on the Interpretation of Ar ticle XVII of the General Agreement on Tariffs
and Trade 1994 is considerably broader than "Sta te monopoly in the field of foreign trade".
Does the Principality of Andorra have any governmental or non-governmental
enterprises, including marketing boards, which have been granted exclusive or special rights orprivileges, including statutory or constitutional powers, in the exercise of which they influence
through their purchases or sales the level or direction of imports or exports?
Are there any enterprises in Andorra, either private or State-owned or invested, that
produce or make purchases or sales on behalf of the Andorran Government?  If so, please
describe their economic activities.
Reply
Andorra's 1989 Administrative Code reaffirms the principle of subsidiarity for public
activities in comparison with private initiative.  The only State monopoly existing therefore is for
electricity and telephone services.  Electrical power is the only reserved import.  On 14 January 1988,the General Council declared that the production and import of electrical power were essential public
services and could only be carried out by a State company given exclusive rights.  This company,
FEDA ( Forces Electriques d'Andorre ) will shortly become a public limited company with private
capital.
For the other sectors, no public or private enterprise may carry on production or
buying/selling on behalf of the Andorran Government.WT/ACC/AND/5
Page 22
(l) Government procurement practices
Question 43
Does the law on Government procurement in Andorra (Llei de contractació Pública)
cover purchases by all Government bodies?  Are there exceptions to the ap plication of this law?
If so, what situations are excepted?
Please provide information on the means used in Andorra to publish information on
Government procurement.
Does Andorra intend to accede  to the Agreement on Government Procurement?
Reply
The Government Procurement Law applies to the Government, public law entities and local
authorities.  It does not apply to public companies, which come under private law.
The Law applies to all the contracts specified therein, but not in cases of extreme urgency,
that is to say, in disasters or situations that may represent a grave danger for the public interest.
Information on Government procurement is published in the Official Journal of the
Principality of Andorra and includes information on invitations to tender and the award of contracts to
the beneficiaries.
With regard to Andorra's intention to accede to the Agreement on Government Procurement,
the impact on the domestic market will need to be assessed, but it would seem that the domestic rules
are compatible with the Agreement.
Question 44
Does the Principality of Andorra intend to become a member of the WTO Agreement on
Government Procurement?  If not, why not?
Reply
Andorra will decide whether or not to accede to the Multilateral Agreement on Government
Procurement after having assessed its impact on the domestic market.  At first view, it would appear
that Andorra's internal regulations are consistent with the Agreement.
4. Policies affecting trade in agricultural products
Question 45
Please provide the information requested in WT/ACC/4 on domestic support to
agriculture and export subsidies at least four weeks prior to the first meeting of the Working
Party.
(a) Imports – i.e. comprehensive description of the types of border protection maintained.WT/ACC/AND/5
Page 23
Question 46
Does the Principality of Andorra have an y trade restrictions with respect to the
importation of meat from animals treated with growth hormones?  If yes, please identify the
products, including HS numbers, the applicable  trade restriction, and the GATT rationale for
such trade restriction.
Reply
Concerning imports of meat from animals tr eated with hormones, the veterinary protocol
signed between Andorra and the European Community  prescribes that Andorra should apply the same
health regulations as the Community.  Consequently, if imports from third countries are banned for
health reasons in the Community, they are also banned in the Principality of Andorra.
Question 47
Please describe any trade policy measures that are being applied with respect to the
importation of bananas.
Reply
The import regime for bananas has been liberalized as agricultural products are not included
in the Agreement on the customs union and Andorra does not apply any special restrictions.
(b) Exports - i.e. description of the budgetary expenditure and any revenue foregone involved in
each of the export subsidy measures in place
Question 48
According to the information provided in the Memorandum, the Principality of
Andorra subsidizes the export of live cattle a nd equine animals.  Export subsidies are highly
trade-distorting.
Will Andorra confirm that it will eliminate this export subsidy as of the date of accession
to the World Trade Organization?
Reply
Andorra undertakes to eliminate all export subsidies in September 2000, the expected date of
approval of the Agriculture La w by the Andorran Parliament.
(d) Export credits, export credit guarantees or insurance programmes
Question 49
Please describe the insurance programmes for tobacco and stock breeding, that
guarantee income security for farmers.
Reply
For tobacco, the private contract between growers and manufacturers fixes a price for the
crop.  Sixty-six per cent of the insurance premium taken out by tobacco growers against natural
disasters such as hail or frost is paid by the Ministry of Agriculture.WT/ACC/AND/5
Page 24
Current legislation provides for special aid by the government for livestock.  The Ministry of
Agriculture pays 66 per cent of the insurance premium.  It is expected that this aid will be eliminated
when the new agricultural law is adopted in autumn 2000.
Question 50
Please provide a draft copy of the future la w on Agriculture to the Secretariat, for
review by the Working Party.
Reply
The draft of the law is being translated and will be submitted to the Secretariat in the near
future.  See explanations given under part II (2) for a summary of its content.
(e) Internal policies - i.e. description of, and the budgetary expenditure and any revenue foregone
involved in each of the domestic support measures
Question 51
According to the information provided, A ndorra provides domestic support measures
for:  breeding stock, agricultural machiner y, preferential treatment for social security
contributions, contributions to the payment of insurance premiums, and grants for marketing
and export of cattle.
Reply
All this aid will be abolished when the new agricultural law is adopted in autumn 2000.
Question 52
Please provide a table showing annual expenditures for each of these measures.
Reply
See WT/ACC/AND/4, domestic support in the agricultural sector.
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME
1. General
Question 53
We note that the Government of Andorra enacted a Trademark Law in 1996 and has
prepared a draft Law on Copyright and Related Rights and a Draft Patent Law.  Andorra is
also preparing a draft law on the protection of geographical indications, industrial designs and
unfair competition.  Andorra should be complimented on its efforts to update its regime for theprotection of intellectual property.
What is the current legislative status of the copyright and patent legislation?  Please
provide copies of these draft laws, prior to the first meeting of the Working Party, to the
Secretariat for review by Working Party members.WT/ACC/AND/5
Page 25
Reply
The copyright and patent legislation have been presented and approved by Parliament, their
publication in the Official Journal of Andorra (BOPA) is under way.  A copy of the laws will be
submitted to the Secretariat in the near future.
Question 54
What is the current legislative status of the draft geographical indications, industrial
designs and unfair competition legislation?
Reply
Andorra does not have any draft legislation on geographical indications, industrial designs
and unfair competition.
Question 55
Please provide copies of the draft geographical indications, industrial designs and unfair
competition legislation, when available, to the Secretariat for review by Working Party
members.
Reply
Andorra is not ready to provide to the Secretariat draft legislation on geographical indications,
industrial designs and unfair competition.  It will  be provided, however, before joining the WTO.
Question 56
Does Andorra expect to prepare draft legislation on plant variety protection?
Reply
Andorra intends to prepare draft legislation on plant variety protection before its accession to
the WTO.
Question 57
Does Andorra expect to be able to fully implement the Agreement on Trade-Related
Intellectual Property Rights prior to WTO accession?
Reply
Andorra intends to have TRIPS legislation implemented before its accession to the WTO.
Question 58
Currently, the only legislation in force in Andorra is the Trademark Law, and the only
legislation being discussed is that concerning "other categories of industrial property rights".
Please outline Andorra's intention to extend legislation in intellectual property in these or anyother areas, and establish the dates when these laws may be approved.
Reply
Currently Andorra has the following legislation in force:WT/ACC/AND/5
Page 26
- Trademark Law of May 1995:
Once Andorra becomes a member of the Paris Convention, it will be able to request
accession to both the Madrid Arrangement and the Madrid Protocol.  There is no
date set for such a request.
- Patents Law, June 1999:
The new Patent Law has been approved by the Consell General .  Upon its entry into
force, Andorra will request accession to the Paris Convention and the PCT.  Andorra
will also request the treatment of territorial extension with the EPC.
- Copyright and Related Rights, June 1999:
The new copyright and neighbouring rights law was approved by the Consell General
(Parliament) in June 1999.
- Andorra is a member of the Universal Copyright Convention.
Question 59
Please report the intentions of Andorra to join the Paris Convention, and to accede to
other international agreements on intellectual property, specifically the Madrid Protocol, the
Patent Co-operation Treaty and the European Patent Convention.
Reply
Upon entry into force of the two new laws, Andorra will request accession to the Berne
Convention, Rome Convention, and both 1996 WIPO treaties, the WCT and the WPPT.
Question 60
Please report on the state of draft legislat ion on geographical indications/appellations.
Reply
The draft legislation on geographical indications/appellations is at its very initial stages.
VI. TRADE-RELATED SERVICES REGIME
1. General and description of the global structure of the market
Question 61
Please provide the information requested in WT/ACC/5, description of the services
sector, and submit Andorra's initial services market access offer at least four weeks in advance
of the first meeting of the Working Party.
We note that the Decree of 10 October 1981 on Business Permits and the regulations of
19 May 1983 on Business Firms, provide for several horizontal restrictions on foreign market
access to the services markets in Andorra.  These laws would appear to undercut the value of
any market access commitments to be made by Andorra to other Members of the World Trade
Organization.
Please provide, in advance of the first me eting of the Working Party, copies of the
Decree of 10 October 1981 on Business Permits and the regulations of 19 May 1983 on Business
Firms, to the Secretariat, for review by the Working Party.WT/ACC/AND/5
Page 27
Please provide, in advance of the first meet ing of the Working Party, a copy of the three
1998 texts on the banking sector, to the Secretariat, for review by the Working Party.
Foreign capital is restricted to 33 per cent of  total capital in general;  in banks foreign
capital is allowed up to 51 per cent.  Why is foreign ownership only possible for banks?  Are
there plans to increase the limitations regarding foreign capital?
Reply
Foreign majority ownership is currently only possible for banks.  The rationale is to be found
in the particular structure of the Andorran economy.  Andorra has experienced important economic
growth since 1960 and the Government did not at that time have effective prudential measures to
avoid the uncontrolled development of the country.  It therefore opted for a limitation on foreigncapital ownership.  Nowadays, Andorra can be proud of its banking system, which has been operating
through the years and proved to be efficient and reliable.  The Law on the Organization of the
Financial System (LOSF) of 27 November 1993 served  as the basic framework for the liberalization
of the sector.  It allowed for the creation and empowerment of specialist bodies dependent on the
"INAF" (Andorran Institute of Finance), complementing the statutory self-regulation function offinancial institutions established in Andorra.  These bodies were set up with an advisory role to
control compliance with regulations preventing the laundering of funds.  As transparency and
prudential measures to control investment in the banking system performed well, the Government has
allowed controlled and gradual opening by extendin g the limit for foreign capital ownership to 51 per
cent and the establishment of new banking institutions.  (See WT/ACC/AND/3 p.51).
There are no plans from the Andorran Government to increase the limitations regarding
foreign capital.
Question 62
The law on Business Firms sets down restrictions for setting up a business in Andorra,
i.e. in the form of a public limited company, a private limited company or a partnership.
What kind of services is each comp any allowed to provide in Andorra?
In regard to the limitation of 33 per cen t foreign capital in a company, for which
services does the exception regarding "companies declared to be of public interest and
companies that have a State concession" currently apply?  In such cases, what percentage of
foreign capital is permitted?
Does a law exist providing detailed provisions on the services sector and the limitations
thereto regarding the exception applying to foreign capital?
Reply
Commercial activities may be carried on in Andorra either through a business opened by an
individual (natural person) or through the establis hment of a company (legal person).  Services may
be supplied in any legal form and a legal obligation only exists for the financial system and insurance
companies, which are more strictly regulated, i.e. higher equity capital with the only authorized form
being a public limited company under Andorran law.  These particular arrangements are defined in
the special regulations that govern these services.  Article 3 of the Law on Business Firms limitsforeign participation to 33 per cent of the total capital of companies registered under Andorran law.
However, under the same Article, foreign equity capital may rise up to 100 per cent in the case of
companies holding concessions and companies declared to be of public or social interest.WT/ACC/AND/5
Page 28
The former are companies that have been granted a concession by the Administration to run a
public service in accordance with the Administrative Code and the Government Procurement Law of
30 December 1985.
On the other hand, a declaration of public or social interest is made by Government decree
and so far no exemption has been granted.  No text regulates this Article of the Law on BusinessFirms with a view to identifying projects declared of public or social interest.
The services sector is governed by the same terms of the Law on Business Firms. Under the
Law of 30 June 1998, only banking services are allowed up to 51 per cent of foreign capital, but only
a maximum of three new banking institutions will be authorized to establish themselves in Andorra
before 2002, as stated in the Memorandum.  This increased foreign capital for banking institutions is
not governed by Article 3 of the Law on Business Firms but by special legislation on banking.
2. Policies affecting trade in services
(a) Regulatory structure of the most prominent services sectors
Telecommunications services
Question 63
Can you describe the telecommunication ma rket in a more detailed manner?  What
exactly is covered by the State monopoly?  Do there exist any plans to liberalize the
telecommunications sector?
Reply
All the telecommunications services are currently covered by the State monopoly.  However,
the national telecom company can hire its wire-based services.  The distribution of cell phones and
direct access to the internet is liberalized.
Plans to liberalize telecommunications services will be submitted in the market access offer
on services (WT/ACC/SPEC/AND/3).
Banking and other financial services
Question 64
Is it correct that banks are not allowed to establish in the form of a branch or a
representative office in Andorra?  What is the rationale for restricting establishment of banks
to the form of public limited companies ?
Reply
Foreign banks cannot be represented in Andorra through a branch. Such a situation cannot be
envisaged while there are no reciprocal arrangements for the benefit of Andorran banks.  Andorra is
studying the possibility of cooperation agreements among the supervisory bodies of the Andorran
financial system and those of the countries where the parent companies are located in order to allow
the establishment of branches of foreign banks in Andorra.
However, the regulations governing the bankin g system allow banking institutions, provided
they have obtained governmental authorization, to become established in Andorra in the form of
companies under Andorran law.  A company under Andorran law, which may be a branch of a foreign
banking establishment, must observe the limitation on foreign capital participation of 51 per cent.WT/ACC/AND/5
Page 29
The regulations governing the banking sector require Andorran banks to be established in the
form of public limited companies under Andorran law in view of the fact that the minimum capital
required for their establishment is set at a higher level (for the establishment of a limited liability
company, the minimum capital required is Ptas 2,000,000 or €12,020).
The obligation to become a public limited company is required of all establishments forming
part of the financial sector:  both banking and non-banking financial institutions.
Question 65
Does the reservation applying to the exerc ise of professions by "persons resident in
Andorra for over 20 years possessing the necessary qualifications "include foreign nationals?"
In addition, the description of "necessary qualifications" should be clarified.
Reply
"Necessary qualifications" should be understood to mean diplomas providing evidence of
studies undertaken in relation to the profession that the person concerned wishes to exercise.
In addition, it should be noted that, for purposes of authorization, the Administration
recognizes French and Spanish diplomas and accepts diplomas obtained in a country other than
Andorra, France and Spain, on the basis of a list  of diplomas accepted by France and Spain.
Question 66
Regarding the deposit of a sum of money, we wish to have further explanations as to
why foreign persons are required to do so.  Does this apply to Andorran nationals?
Reply
The General Council  established the requirement to provide a deposit in order to ensure that
the establishment of such persons in Andorra is on a long-term basis.  This rule does not apply to
Andorran nationals. These deposits are held and administered by the INAF, earn interest annually at
the market rate minus one point, and when the application to exercise a profession is cancelled, they
are returned.
Sectoral regulation of professions
Question 67
Does the Andorran current regime permit foreign solicitors or equivalent possessing
solicitor's qualifications or equivalent issued in  a foreign country to provide legal services in
Andorra?
If  so, what are the requirements and procedures for such foreign nationals?  What is
the coverage of the permitted services and the limi tation on the activities of foreign solicitors?
In addition, comprehensive details of the requirements and procedures necessary to be
qualified as a solicitor should be provided.
Can a foreign national become a barrister?WT/ACC/AND/5
Page 30
Reply
Exercise of the profession of solicitor ( notaire ).
A solicitor ( notaire ) is a public official who is empowered to authenticate contracts and other
extrajudicial documents, file them in his official archives and provide copies.
To become a solicitor, the following conditions must be met:- Possess Andorran nationality (foreigners, even those residing in Andorra, cannot
exercise this profession);
- be at least 25 years of age;- have no criminal record;- have a law degree;
- have passed the examinations.
The profession of solicitor is incompatible with any other public office and any business
activity, in particular the exercise of the profession of lawyer.
Solicitors are recruited on the basis of public competitive examinations.
Exercise of the profession of lawyer ( avocat )
The conditions required to exercise the profession of lawyer in Andorra are the same as those
for all the professions.
As for all professions, an exception is made in the case of foreigners married to Andorran
nationals and whose permanent residence is in Andor ra.  In such circumstances, the professional may
obtain authorization from the Government if he fulfils all the conditions required other than the
requirement to have been resident for 20 years.
Question 68
Detailed information on the relevant qualifications for being a translator or interpreter
and for being a private detective need to be provided.
Reply
Translators and interpreters
The law of 20 June 1996 governs the exercise of this profession for officially-recognized
("sworn") translators and/or interpreters from Catalan to other foreign languages and vice versa.
Being "sworn" means that they can be called in to  translate, interpret or make a declaration that
official documents or deeds are a faithful copy of the original.
Those wishing to become "sworn" translators or interpreters must first of all obtain
authorization from the Government, as is the case for all the professions, and pass competitive
examinations.
The candidates who pass the examinations and who swear an oath to the Andorran
Government are automatically listed in the Register of translators and interpreters and are awarded aWT/ACC/AND/5
Page 31
certificate authorizing them to act as translator and/or interpreter, as the case may be, from the
languages indicated to Catalan and vice versa.
Private detectives
In order to exercise the profession of private detective, authorization must be obtained from
the Government.  This is valid for a period of three years.
The conditions are:- To have reached the age of majority;- to possess Andorran nationality or in the case of foreigners to have been resident for
over 20 years;
- have no criminal record;- be of good repute and morality;- not have been dismissed from the Administration;- not be subject to any incompatibility;
- to have completed secondary education;  and
- to have passed the corresponding examinations:  Catalan, Andorran history and
institutions, elementary principles of law, particularly criminal law, psychological
and physical fitness.
The profession of detective is incompatible with a post in the civil service.  Detectives are
bound by professional secrecy, but that does apply vis-à-vis  the police or the judicial authorities.
At the present time, two persons are listed in the Register of Commerce under this activity.
Transport, passenger transportation and taxi services
Question 69
What are the standards used in the public bidding process for allocating or not a taxi
licence?  The explanation by Andorra with the re ference to the Government only allocating one
transport permit per licence is unclear.  Please clarify.
Reply
The standards used for granting a licence are based on professional requirements (possession
of a driving licence and professional capacity). If there is considerable demand, a competitive
examination may be held.
On the basis of the experience acquired since the first licences were granted and in view of
the fact that when the licence is issued the person concerned is only obliged to pay an amount thatcovers the administrative cost (about Ptas 25,000 or €150), the Government currently grants a licence
on the condition that it is used directly and personally by the holder himself.
A transport permit corresponds to a single vehicle and ensures that it meets the safety
standards for public transport.WT/ACC/AND/5
Page 32
Each vehicle may be driven by three persons:  the holder of the licence and two other drivers
(employees), who must be listed in the General Register of Transporters.
(b) Judicial, arbitral or administrative tribunals or procedures providing for the review of
administrative decisions affecting trade in services
Question 70
Is it possible for private individuals to appeal to arbitration bodies to settle commercial
or industrial disputes?
Reply
At present, there are no arbitration bodies in Andorra where commercial or industrial disputes
can be settled.  All disputes, including those in th e commercial or industrial fields, go through the
normal legal channels.
The Chamber of Commerce, Industry and Services (CCIS) was established in order to
represent, promote and defend the general interests of business, industry and services.  Its functions
include disseminating information, administering a register of business and industrial activities and
services, promoting market transparency, ensuring and promoting fair competition, and establishing,
organizing and administering arbitration bodies and services.
The Law establishing the Chamber of Commerce, Industry and Services of September 1993
gives the CCIS the authority to establish, organize and administer such arbitration bodies, but in fact
no such body has yet been established.
(c) Provisions concerning qualification requirements and procedures, technical standards and
licensing
Question 71
Please compare the procedures listed in WT/ACC/AND/3 with the existing requirements
of Article VI.  Is Andorra able to meet the requirements of Article VI?
Reply
Concerning anti-dumping duties Andorra, applies the same regime as the European Union
because of the application of the CET.  Anti-dumping duties applied by Andorra are determined andcontrolled by the EU.
(f) Provisions relating to international transfers and payments for current transactions of services
Question 72
Does the information provided mean that Andorra places no restrictions on
international transfers and on capital transactions?
Reply
This is the case.  There are no restrictions on  international transfers nor capital transactions.
It should be recalled, nevertheless, that banking institutions are subject to the Law of 11 May 1995 on
money laundering (Law on the protection of banking secrecy and the prevention of the laundering ofWT/ACC/AND/5
Page 33
money or securities derived from crime).  Banks and other financial entities must inform judges of
any suspicious transaction or request for a transaction and it may be halted by the judicial authorities.
(h) Provisions governing the procurement by governmental agencies of services
Question 73
We don't understand the distinction regarding services supplied to the Government.
Wouldn't these be public contracts?
Reply
According to the Government Procurement Law of 30 December 1985, Government contracts
may be public or private.  Public or administrative contracts are signed for the purpose of carrying out
public works, the management of public services or the supply of goods and the acquisition of related
goods or rights.
Services contracts are not covered by the Government Procurement Law of
30 December 1985, but they will be dealt with in a new law to be submitted to Parliament in autumn
1999.
3. Market access and national treatment
(a) Limitations on the number of services suppliers
Banking institutions
Question 74
Is our understanding correct that authorization for establishment of new banks is not
only based on prudential criteria but limited based on quota?  Do there exist plans to lift this
numerical restriction in the banking sector?  In particular, can you explain the meaning of "the
creation of new banking institutions will be gradual"?
Can you elaborate on possibilities of the fo reign banks participating in the first and
second stages of liberalization in the banking sector?
Reply
The establishment of new banking institutions  will be authorized by the Government, in
accordance with the law, on the basis of the capacity of Andorra's economy to assimilate new entries.
The criteria applied in establishing the process for opening up the banking sector are
essentially prudential.  The limit on the number of authorizations reflects the need to achieve a
gradual and controlled opening up so as to prot ect the Andorran economy from the harmful effects
that might result from a total opening up.
The main aims of opening up the banking sector are to stimulate competition, improve the
quality of banking services, broaden the range of institutions and also strengthen their international
image, without however weak ening the existing system.
The Government will await the results of the first phase of the opening up before deciding on
the next phase.  Given the uncertainty and lack of clear pointers for predicting the impact of the
opening up on the Andorran economy, it is the Government's intention to define the second stageWT/ACC/AND/5
Page 34
before the end of 2001, as laid down in the second transitional provision, paragraph (c), of the Law
regulating the establishment of new banking institutions under Andorran law of 30 June 1998.
The sentence referred to (on page 51 of document WT/ACC/AND/3) – "the creation of new
banking institutions will be gradual" – may give rise to confusion.  The speed at which the banking
sector is opened up depends on the number of authorizations available.  In any event, there will be nogreater restrictions on the activities of the new institutions than those laid down in the general
provisions regulating the banking sector (cf. document WT/ACC/AND/3, page 43, first paragraph).
During the first phase, which will itself be divided into two sub-stages, three authorizations
will be available for new institutions:  two during the first sub-stage (which finishes on
31 December 1999) and one for the second sub-stage (which finishes on 31 December 2000). If the
authorizations for the first sub-stage are not allocated, they may be carried over to the second sub-stage
After completion of the first phase, the Government will decide on the continuation of the
opening up.  On the basis of the experience gained during this first phase, the Government will decide
on the future process of opening up.
To obtain an authorization, foreign banks must fulfil the conditions laid down in the Law of
30 June 1998, which governs the establishment of new banking institutions in Andorra, together with
all the other relevant provisions (equity capital, administrative regime, etc.).  This applies to both
phases.
Procedure for obtaining official approval for new banking establishments
Before submitting an application to the Ministry of Finance, a banking institution must first
set up a promotion group whose sole aim will be to set up the banking institution;  the name of thisgroup must include the company name of the future banking institution.  Before the submission of the
dossier, the promoters must lodge with the INAF a non-interest bearing deposit of Ptas 500,000,000
(approximately €3,005,060).  The Government has fi ve months, beginning from the date of the
submission of the application, to give a provisional ruling.  Within the following five months, this
preliminary authorization must be superseded by a definitive authorization or a refusal.  In the case of
refusal, the deposit will be refunded to the promoters within a period of 20 days following the
decision.  If the application is accepted, the deposit will be refunded within a period of 20 daysfollowing the commencement of banking activities.
The application must be accompanied by the following documents:
1. Regarding the particular activities of the institution to be established:
- The draft statutes of the banking institution to be established;- The basic programme of activities, including specific reference to the type of
operations envisaged;
The commercial banking activities that it is planned to carry out must be indicated,
together with all the relevant informatio n showing the relative importance of the
commercial banking activities within the to tality of the banking activities envisaged.
It must also be stated whether it is planned to carry out management activitiesinvolving UCITS;
- Specific information on any future plans for activities relating to economic
development at the national level;WT/ACC/AND/5
Page 35
- Specific information on any future plans involving sponsorship and support for
educational and cultural activities, assistance for research, the conservation and
dissemination of the cultural and natural heritage, cultural action and sponsorship of
sporting activities;
2. Relating to the shareholders of the banking institution to be established:
- A provisional list of the shareholders making up the company, indicating their
nationality and their equity participation;
- in the case of legal persons, the composition of their boards of directors should be
indicated and financial statements provided, including the annual reports and the
audits for the last three financial years;
- if the legal persons are part of a group of companies, the composition of the group
should be indicated and the information referred to in the previous paragraph for the
main elements and the overall value of the group should be provided;
- sworn statement that the funds invested by  the shareholders in the company meet the
requirements laid down by the legislation on the prevention of the laundering of
money or securities resulting from drug trafficking and other criminal activities;
- information on the background, professional activities and assets of shareholders
whose holdings in the company to be established are 5 per cent or more.  In the case
of legal persons, such information applies to the members of their boards of directors;
- information on the measures planned to complete the shareholding of the company
and the procedure to be followed if the promoters have not already raised all theequity capital for the institution to be established;
- in particular, it should be stated whether the promoters intend to offer shares for
public subscription so as to encourage a broader shareholding base;
- a provisional list of the persons who will form the initial board of directors, with
information on their background and professional activities;
3. Relating to structural, technical and economic plans:
- A description of the technical and human resources available to the institution to
carry on its activities, together with a detailed description of the activities andservices to be offered in Andorra;
- A general description of the measures planned to ensure proper internal supervision
of procedures and maximum security for its activities;
- A brief description of the general measures intended to meet the requirements of the
legislation on the protection of banking secrecy and the prevention of the laundering
of money or securities resulting from crime;
- Any links envisaged with other credit institutions providing banking and
technological knowledge or management skills, or undertaking to provide economic
support in the event of possible financial difficulties;
- The planned location of the head office;WT/ACC/AND/5
Page 36
- The number of branches that it is planned to open during the first three financial
years;
- Recruitment plans for the first three financial years, indicating the level of
qualifications required;
- Provisional balance sheets and accounts for the first three financial years, together
with any relevant comments, for the purposes of providing a quantitative assessment
of objectives, specifying in particular the volumes of activity and the anticipated
income and expenditure for the commercial banking activities and other activities;
- Policy for sharing any profits or losses that may ensue;
4. Relating to the fulfilment of the prior conditions:
- Proof that the deposit required has in fact been lodged with the INAF;Promotion groups that obtain preliminary authorization must submit the following additional
documents:
- The definitive statutes of the company;- Information on the measures taken to set up the head office and the branches that it is
planned to open in the short term;
- Updating - or confirmation if no changes have been made - of the provisional
information attached to applications pursuant to paragraphs (c), (d), (e), (f), (g), (h)
and (i) above, so as to obtain definitive answers;
- A list of the persons who are to fill the senior management posts, with information on
their background and professional activities;
- An explicit declaration by the person chosen to become the chairman of the company
stating that he is aware of the obligations set forth in the existing legislation on the
financial system and, in particular, the provisions of the legislation relating to theprotection of banking secrecy and the prevention of the laundering of money or
securities resulting from crime;
In addition to these documents, the promoters must provide any other additional information
requested by the INAF, the CSF (Higher Finance Commission) or the Government.
The applications are assessed on the basis of the following criteria:
General criteria
Applications will be judged on the basis of the soundness of the plans to set up the company
and on the basis of its likely contribution to the Andorran economy in general and the financial system
in particular.
Specific criteria1. Technical guarantees
- The coherence of the plan to establish the enterprise;WT/ACC/AND/5
Page 37
- the knowledge and experience of the promoters and the shareholders and their
potential capacity to attain the objectives of developing the banking institution to be
established;
- the links with one or more credit institutions providing the future institution with
banking and technological skills;
- the commitments undertaken by the credit institutions with regard to the management
of the future institution.
2. Economic guarantees
- Transparency regarding the origin of the funds and the identity of those persons who
will form the nucleus of the shareholders of the future institution;
- the financial solvency of those applying to hold over 5 per cent of the share capital of
the institution to be established;
- the possible participation of one or more credit institutions in the capital of the
institution to be established;
- the ranking, rating and solvency of the credit institutions linked to the project;
- the commitments made by the credit institutions linked to the project to provide
economic support to the institution to be established in the event of financial
difficulties.
3. The likely corporative impact on the financial system
- Participation in strengthening and enhancing a positive image of the sector;
- potential for innovation in the provision of financial services;- contribution to stimulating internal competi tion and raising the technical levels in the
sector for the benefit of customers;
- contribution to improving the productivity of the financial system;
- possible diversification of the particular characteristics or business policies of
companies making up the Andorran banking system.
4. The likely economic and social impact for the country
- The broadening of share ownership through the participation of Andorrans and of
foreigners legally resident for more than 20 years;
- entry of Andorrans or of foreigners legally resident for more than 20 years on to the
boards of directors and management of the establishment
- the creation of new jobs and skills;
- the expected occupation of jobs by Andorrans or foreigners holding a residence
permit for at least five years;WT/ACC/AND/5
Page 38
- policies designed to develop the national economy, in particular those involving the
development of new activities and the encouragement of productive investment ;
- the growth rate for the banking sector in line with the overall growth of the Andorran
economy;
- policies to support educational, cultural and sporting activities and to promote
research and the conservation and dissemination of the cultural and natural heritage.
5. Institutional effects
- Contribution to the strengthening of a positive international image.
Once approval to set up a banking institution has been granted, the promotion group is
obliged to establish the banking institution plan ned, which must commence its activities within a
maximum period of 12 months, beginning from the date of notification of the authorization to the
promotion group.  If the institution does not initiate its activities during the period indicated, the
Government, on the basis of the prior report from the INAF and the prior opinion of the CSF, willcancel the authorization, and the INAF will canc el the deposit and pay it into the Government's
account as a penalty for the non-fulfilment of obligations.
In addition, all banking institutions must respect the provisions of the various texts that
govern the banking sector; solvency and liquidity criteria, compulsory investment coefficients,administrative structure, auditing, etc., (cf. document annexed to the Memorandum, available in the
Accessions Division – office 1126).
These provisions include the following:
- Banking institutions must take the form  of a public limited company under Andorran
law;
- the minimum equity capital is Ptas 5 billion;- foreign participation in the equity capital of banking institutions is limited to 51 per
cent;
- the board of directors of a banking institution must have at least five members:  a
minimum of two and at least one third of these members must be of Andorran
nationality or resident in Andorra for more than 20 years;
- the board of management must consist of at least two persons:  a minimum of one of
these persons and at least half the total number of members must be of Andorran
nationality or residents with full economic rights;
- new banking institutions must open at least one branch in a parish (internal
geographical unit) other than the one where the central office is located;
- at least half the staff recruited must be Andorran or resident for at least five years.
(e) Restrictions on, or requirements of, specific types of legal entity through which a service may
be suppliedWT/ACC/AND/5
Page 39
Question 75
Foreign insurance companies are allowed to  establish in the form of a branch in
Andorra under certain conditions.  Can you explain the second condition, i.e. branches must be
legal in their countries of origin?
Reply
The Law regulating insurance companies establishes that the foreign companies must be
incorporated in conformity with the stipulations prevailing in the country of origin.  The lines of
business or activities that they want to develop in Andorra must be legally admitted in the country of
origin, therefore, they have to operate in the same fields in which they are active in their country of
origin.
VII. INSTITUTIONAL BASE FOR TRADE AND ECONOMIC RELATIONS WITH
THIRD COUNTRIES
1. Bilateral or plurilateral agreements relating to foreign trade in goods and trade in
services
Question 76
Does the Principality of Andorra intend to become a Member of the Plurilateral
Agreement on Civil Aircraft?
Reply
As indicated in the Memorandum, a national civil aviation law is being prepared in parallel
with consideration of Andorra's possible membership of the International Civil Aviation Organization(ICAO).
Regarding whether or not Andorra intends to accede to the Plurilateral Agreement on Civil
Aircraft (Agreement on Trade in Civil Aircraft), more time is needed to study all its provisions, but at
first view, nothing of substance appears to prevent accession.
2. Economic integration, customs union and free-trade area agreements
Question 77
Does Andorra's agreement with the EC include  trade in services (commercial presence;
cross-border services;  movement of natural persons)?
Reply
The services sector is not included in the 1990 trade agreement between Andorra and the
European Union.
Question 78
Please describe the preferential agreement with the European Community covering
Chapters 1-24 of the HS system.  What percen tage of imports in these Chapters from the
European Community in 1997 and 1998 were subject to zero duties?WT/ACC/AND/5
Page 40
Reply
Chapters 1-24 HS products of Andorran origin are subject to zero duty when imported into
the Community.
Chapters 1-24 HS products of EC origin are subject to MFN rates when imported into
Andorra, except for a preferential rate for manufactured tobacco (24.02;  24.03), according to
Article 12.2 of the 1950 EC-Andorra Agreement.
Percentage of imports of Community products subject to a zero rate in comparison with
imports from third countries:
Coffee, not roasted (0901.11 and 0901.12)Year 1997 (Value)
EU imports Ptas 25,817,000 – 31.5%
Third country imports Ptas 61,962,000 – 68.5%
Year 1997 (kg.)
EU imports 46,946 kg – 26.3%
Third country imports 132,017 kg – 73.7%
Year 1998 (Value)
EU imports Ptas 38,775,000 – 42%
Third country imports Ptas 53,683,000 – 58%
Year 1998 (Kg.)
EU imports 95,367 kg – 41.8%Third country imports 132,815 kg – 58.2%
The only agricultural goods imported into Ando rra at zero rate are products 09.01.11 and 12
of the HS.  This rate is not preferential but MFN.
Question 79
In order to assess the value of Andorra's in itial market access offer for goods, please
identify all products, including HS numbers, fo r which imports from the EC are exempt from
duty or subject to preferential rates.  For those items subject to preferential duty rates, please
provide the rates applied to EC imports.
Reply
See table on market access in goods provid ed to the Secretariat (WT/ACC/SPEC/AND/1).
__________