. /.WORLD TRADE
ORGANIZATIONG/STR/W/40/Rev.1
27 October 2003
(03-5675)
Working Party on
State Trading Enterprises
DRAFT RECOMMENDATION ON THE FREQUENCY OF NOTIFICATIONS
Proposal by the Chairperson
Revision
1. Article XVII:4 of GATT 1994, and paragraph 1 of the Understanding on the Interpretation of
Article XVII of GATT 1994 (the Understanding) require Members to notify their state trading
enterprises to the Council for Trade in Goods.  GATT Contracting Parties adopted on 9 November
1962 a decision establishing the periodicity of state trading notifications.1  This decision provides that
new and full notifications of state trading enterprises are to be submitted every three years, withupdating notifications to be submitted in the interven ing years.  Following the entry into force of the
Marrakesh Agreement Establishing the WTO and the adoption of the Understanding on the
Interpretation of Article XVII of the GATT 1994, the Council for Trade in Goods decided to continue
the periodicity of notifications set forth in the 1962 decision. In accordance with the Understanding,
state trading notifications are reviewed by the Working Party on State Trading Enterprises on behalfof the Council for Trade in Goods.
2. During recent notification review exercises Members have observed that compliance with the
notification obligation is less than satisfactory.  In light of this unsatisfactory state of affairs the
Working Party has held discussions in order to find a solution to the problem of compliance with the
state trading notification obligation.  A similar situation had been observed by Members in the context
of subsidy notifications to the Committee on Subsidies and Countervailing Measures.  In that
instance, the Committee on Subsidies and Countervailing Measures focussed on the frequency of thenotifications in its efforts to improve compliance.  Members of the Working Party are of the view that
a modification of the frequency of the state trading notification is desirable in order to improve
compliance with the notification obligation.
3. In light of the above considerations the Wo rking Party recommends to the Council for Trade
in Goods that:
(a) The periodicity of state trading notifications be modified.
(b) The new and full notifications on state trading be due every [two] [three] years
instead of every three years.
(c) The requirement of updating notifications in the intervening years be eliminated.
(d) This change in the periodicity of the notifications enter into force as of the year 2004,
with a full and new notification being due in that year.
                                                     
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Page 2
(e) The guidelines for completing the questionnaire section of the Questionnaire on State
Trading be amended to bring it into conf ormity with the new frequency for state
trading notifications.  Accordingly, the text after the titles Sections I, II and III should
be amended to read: "to be submitted in full every [two] [three] years."  Also, the text
after the title Section IV should read: "to be submitted every [two] [three] years on a
calendar, fiscal or marketing year basis…"
4. [After a trial period of four years, commencing on 30 June 2004, the Working Party shall
review the situation, with regard to compliance with the notification obligation and the frequency of
notifications, with a view to determining whether to extend the application of this recommendation,
either as presently drafted or in a modified form for a further period.]
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