WORLD TRADE S/L/38
28May 1997
ORGANIZATION
(97-2295)
Council forTrade inServices
GUIDELINES FOR MUTUAL RECOGNITION AGREEMENTS
ORARRANGEMENTS INTHE ACCOUNTANCY SECTOR
Introduction
Thisdocument provides practical guidance forgovernments, negotiating entities orotherentities
entering intomutual recognition negotiations onaccountancy services. These guidelines arenon-binding
andareintended tobeusedbyMembers onavoluntary basis, andcannot modify therights orobligations
oftheMembers oftheWTO.
Theobjective ofthese guidelines istomake iteasier forparties tonegotiate recognition
agreementsandforthirdpartiestonegotiatetheiraccessiontosuchagreementsortonegotiatecomparable
ones. Themostcommon waytoachieve recognition hasbeenthrough bilateral agreements. Article VII
oftheGATSrecognisesthisaspermissible.Therearedifferencesineducationandexaminationstandards,
experiencerequirements,regulatoryinfluenceandvariousothermatters,allofwhichmakeimplementing
recognition onamultilateral basisextremely difficult. Bilateral negotiations willenable those involved
tofocus onthekeyissues related totheirtwoenvironments. Once bilateral agreements havebeen
achieved, however, thiscanleadtoother bilateral agreements, which willultimately extend mutual
recognition more broadly.
Where autonomous recognition isgranted, itissuggested thattheWTO beinformed ofthe
relevant elements inthese guidelines fortransparency purposes. Such elements could include, for
example, those covered insections B.3,B.4(a) and(b),B.5andB.6.
Theexamples listed under thevarious sections ofthese guidelines areprovided bywayof
illustration. Thelisting ofthese examples isindicative andisintended neither tobeexhaustive nor
asanendorsement oftheapplication ofsuchmeasures byWTO Members.S/L/38
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A. Conduct ofnegotiations andrelevant obligations under theGATS
Withreference totheobligations ofWTO Members under Article VIIoftheGATS, thissection sets
outpoints considered useful inthedischarge ofthese obligations. AcopyofArticle VIIisannexed
tothese guidelines.
1. Opening ofnegotiations
Theinformation supplied totheWTO should include thefollowing:
- theintent toenter intonegotiations;
- theentities involved indiscussions (e.g.governments, national organisations inthe
accountancy sector orinstitutes which haveauthority -statutory orotherwise -toenter
intosuchnegotiations);
- acontact point toobtain further information;
- subject ofnegotiations (specific activity covered);
- theexpected timeofthestartofnegotiations andanindicative datefortheexpression
ofinterest bythirdparties.
2. Results
Onconclusion ofanMRA, theinformation supplied should include thefollowing:
- thecontent oftheagreement (ifanewagreement);
- significant modifications totheagreement (ifanagreement already exists).
3. Follow-up actions
ForWTO Members supplying information under paragraph (1)above, follow-up actions include
ensuring that:
- theconductofnegotiationsandtheagreementitselfcomplywiththeprovisionsofGATS
-inparticular Article VII;
- theyadoptanymeasuresandundertakeanyactionrequiredtoensuretheimplementation
andmonitoring oftheagreement, ontheir ownaccount, andbythecompetent
authorities, or,inpursuance ofArticle IoftheGATS, encourage adoption ofsuch
measures andaction byrelevant sub-national authorities andbyother organisations;
- theyrespond promptly torequests from other WTO Members seeking toenter into
MRA negotiations.
4. Single negotiating entity
Where nosingle negotiating entity exists, Members areencouraged toestablish one.S/L/38
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B. Form andcontent ofagreement
Thissection setsoutvarious issues thatmaybeaddressed inanynegotiations and,ifsoagreed, included
inthefinalagreement. Itincludes some basic ideas onwhat aMember might require offoreign
professionals seeking totakeadvantage ofanMRA.
1. Participants
TheMRA should identify clearly:
- theparties totheagreement (forexample, governments, national accountancy
organisations orinstitutes);
- competent authorities ororganisations other thantheparties totheagreement, ifany,
andtheirposition inrelation totheagreement;
- thestatus andareaofcompetence ofeachparty totheagreement.
2. Purpose ofagreement
Thepurpose oftheMRA should beclearly stated.
3. Scope ofagreement
TheMRA should setoutclearly:
- thescope oftheagreement interms ofthespecific accountancy professions ortitles
andprofessional activities itcovers intheterritories oftheparties;
- whoisentitled tousetheprofessional titles concerned;
- whether therecognition mechanism isbased onqualifications, oronthelicence obtained
inthecountry oforigin, orsome other requirement;
- whether theagreement covers temporary and/or permanent access totheprofession
concerned.
4. Mutual recognition provisions
TheMRA should clearly specify theconditions tobemetforrecognition intheterritories of
eachparty andthelevelofequivalence agreed between theparties. Theprecise terms oftheagreement
willdepend onthebasisonwhich theMRA isfounded, asdiscussed above. Incasetherequirements
ofthevarious sub-central jurisdictions ofaparty toanMRA arenotidentical, thedifference should
beclearly presented. Theagreement should address theapplicability oftherecognition granted byone
sub-central jurisdiction intheother sub-central jurisdictions oftheparty.S/L/38
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(a) Eligibility forrecognition
(i) Qualifications
IftheMRA isbased onrecognition ofqualifications, thenitshould, where applicable, state:
- theminimum levelofeducation required (entry requirements, length ofstudy, subjects
studied);
- theminimum levelofexperience required (location, length andconditions ofpractical
training orsupervised professional practice prior tolicensing, framework ofethical
anddisciplinary standards);
- examinations passed (esp. examinations ofprofessional competence);
- theextent towhich home country qualifications arerecognised inthehostcountry;
- thequalifications which theparties areprepared torecognise, forinstance, bylisting
particular diplomas orcertificates issued bycertain institutions, orbyreference to
particular minimum requirements tobecertified bytheauthorities ofthecountry of
origin, including whether thepossession ofacertain levelofqualification would allow
recognition forsome activities butnotothers.
(ii) Registration
IftheMRA isbased onrecognition ofthelicensing orregistration decision made byregulators
inthecountry oforigin, itshould specify themechanism bywhich eligibility forsuchrecognition may
beestablished.
(b) Additional requirements forrecognition inthehoststate("compensatory measures")
Where itisconsidered necessary toprovide foradditional requirements, inorder toensure
thequality oftheservice, theMRA should setouttheconditions under which those requirements may
apply, e.g.incaseofshortcomings inrelation toqualification requirements inthehostcountry or
knowledge oflocallaw,practice, standards andregulations. Thisknowledge should beessential for
practice inthehostjurisdiction orrequired because therearedifferences inthescope oflicensed practice.
Where additional requirements aredeemed necessary, theMRA should setoutindetail what
theyentail (forexample, examination, aptitude test,additional practice inthehostcountry orinthe
country oforigin, practical training, language usedforexamination).
5. Mechanisms forimplementation
TheMRA should state:
- therules andprocedures tobeusedtomonitor andenforce theprovisions ofthe
agreement;
- themechanisms fordialogue andadministrative co-operation between theparties;
- themeans ofarbitration fordisputes under theMRA.S/L/38
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Asaguide tothetreatment ofindividual applicants, theMRA should include details on:
- thefocal point ofcontact ineachparty forinformation onallissues relevant tothe
application(nameandaddressofcompetentauthorities,licensingformalities,information
onadditional requirements which needtobemetinthehostcountry etc.);
- thelength ofprocedures fortheprocessing ofapplications bytherelevant authorities
ofthehostcountry;
- thedocumentation required ofapplicants andtheforminwhich itshould bepresented
andanytimelimits forapplications;
- acceptance ofdocuments andcertificates issued inthecountry oforigin inrelation to
qualifications andlicensing;
- theprocedures ofappeal toorreview bytherelevant authorities;
- anyfeesthatmight bereasonably required.
TheMRA should alsoinclude thefollowing commitments:
- thatrequests about themeasures willbepromptly dealtwith;
- thatadequate preparation timewillbeprovided where necessary;
- thatanyexams ortestswillbearranged withreasonable periodicity;
- thatfeestoapplicants seeking totakeadvantage oftheterms oftheMRA willbein
proportion tothecosttothehostcountry ororganisation;
- thatinformation onanyassistance programmes inthehostcountry forpractical training,
andanycommitments ofthehostcountry inthatcontext besupplied.
6. Licensing andother provisions inthehostcountry
Where applicable:
- theMRA should alsosetoutthemeans bywhich, andtheconditions under which,
alicence isactually obtained following theestablishment ofeligibility, andwhatthis
licence entails (alicence anditscontent, membership ofaprofessional body, useof
professional and/or academic titles etc.). Anylicensing requirements other than
qualifications should beexplained, e.g.:
-- anoffice address, anestablishment requirement oraresidency requirement;
-- alanguage requirement;
-- proof ofgood conduct andfinancial standing;
-- professional indemnity insurance;
-- compliance withhostcountry 'srequirements foruseoftrade/firm names;S/L/38
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-- compliance with host country ethics (forinstance independence and
incompatibility).
- inorder toensure thetransparency ofthesystem, theMRA should include thefollowing
details foreachparty:
-- therelevant lawsandregulations tobeapplied (disciplinary action, financial
responsibility, liability, etc.);
-- theprinciples ofdiscipline andenforcement ofprofessional standards, including
disciplinary jurisdiction andanyconsequential limitations ontheprofessionals;
-- themeans forongoing verification ofcompetence;
-- thecriteria forandprocedures relating torevocation oftheregistration of
professionals;
-- regulations relating toanynationality andresidency requirements needed for
thepurposes oftheMRA.
7. Revision oftheagreement
IftheMRA includes terms under which itcanbereviewed orrevoked, thedetails should be
clearly stated.S/L/38
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ANNEX
Article VII
Recognition
1. Forthepurposes ofthefulfilment, inwhole orinpart, ofitsstandards orcriteria forthe
authorization, licensing orcertification ofservices suppliers, andsubject totherequirements of
paragraph 3,aMember mayrecognize theeducation orexperience obtained, requirements met,or
licenses orcertifications granted inaparticular country. Such recognition, which maybeachieved
through harmonization orotherwise, maybebased uponanagreement orarrangement withthecountry
concerned ormaybeaccorded autonomously.
2. AMember thatisapartytoanagreement orarrangement ofthetypereferred toinparagraph 1,
whether existing orfuture, shallafford adequate opportunity forother interested Members tonegotiate
theiraccession tosuchanagreement orarrangement ortonegotiate comparable oneswithit.Where
aMember accords recognition autonomously, itshallafford adequate opportunity foranyotherMember
todemonstrate thateducation, experience, licenses, orcertifications obtained orrequirements metin
thatother Member 'sterritory should berecognized.
3. AMember shall notaccord recognition inamanner which would constitute ameans of
discrimination between countries intheapplication ofitsstandards orcriteria fortheauthorization,
licensing orcertification ofservices suppliers, oradisguised restriction ontrade inservices.
4. Each Member shall:
(a) within 12months fromthedateonwhich theWTO Agreement takeseffect forit,inform
theCouncil forTrade inServices ofitsexisting recognition measures andstatewhether
suchmeasures arebased onagreements orarrangements ofthetypereferred toin
paragraph 1;
(b) promptly inform theCouncil forTrade inServices asfarinadvance aspossible of
theopening ofnegotiations onanagreement orarrangement ofthetypereferred to
inparagraph 1inorder toprovide adequate opportunity toanyotherMember toindicate
theirinterest inparticipating inthenegotiations before theyenterasubstantive phase;
(c) promptly inform theCouncil forTrade inServices when itadopts newrecognition
measures orsignificantly modifies existing onesandstatewhether themeasures are
based onanagreement orarrangement ofthetypereferred toinparagraph 1.
5. Wherever appropriate, recognition should bebased onmultilaterally agreed criteria. In
appropriate cases, Members shall work incooperation withrelevant intergovernmental andnon-
governmental organizations towards theestablishment andadoption ofcommon international standards
andcriteria forrecognition andcommon international standards forthepractice ofrelevant services
trades andprofessions.