WORLD TRADE WT/TC/NOTIF/GATS/1
15October 1996
ORGANIZATION(96-4346)
Original: English
TECHNICAL COOPERATION HANDBOOK ONNOTIFICATION REQUIREMENTS
General Agreement onTrade inServices
1. Thissection oftheHandbook onNotification Requirements covers thenotification obligations
under theGeneral Agreement onTrade inServices (GATS). Itconsists ofthefollowing fiveparts:
PartI: Overview ofnotification requirements
PartII: Listing ofthenotification obligations
PartIII: Documents concerning guidelines andformats
PartIV: "Mock" examples ofnotifications
PartV: TextoftheAgreement
2. Foracceding countries, notification requirements andthedeadlines forthesubmission oftheir
notifications maybeaffected bytheterms oftheirrespective Protocols ofAccession.
Note: TheHandbook onNotification Requirements doesnotconstitute alegalinterpretation of
thenotification obligations under theAgreement. Ithasbeen prepared bytheSecretariat to
assist Members incomplying withtheirnotification obligations.GATS-I -Page1
GATS-I
GENERAL AGREEMENT ONTRADE INSERVICES
OVERVIEW OFNOTIFICATION REQUIREMENTSGATS-I -Page2
OVERVIEW OFNOTIFICATION REQUIREMENTS UNDER THE GENERAL
AGREEMENT ONTRADE INSERVICES
1. What Should beNotified?
General notification requirements aredefined inArticle III:
Itprovides thateachMember shallpromptly inform theCouncil forTrade inServices
oftheintroduction ofanynew, oranychanges toexisting, laws, regulations or
administrative guidelines which significantly affect tradeinservices andwhich concern
services covered bythespecific commitments oftheMember (there isalsoapossibility
ofcounter-notification foreseen inArticle III:5);
Specific measures havetobenotified according totherequirements ofthevarious Articles
oftheGATS:
- Establishment ofenquiry/contact points (Article III.4and/or IV.2)
- Economic integration Agreements andtheirenlargement orsignificant modifications
(Article V:7);
- Labour markets integration Agreements (Article Vbis);
- Existing recognition measures (Article VII:4(a));
- Opening ofnegotiations onrecognition (Article VII:4(b));
- Adoption ofnewrecognition measures orsignificant modification ofexisting ones
(Article VII:4(c));
- Granting ofnewmonopoly rights (Article VIII:4);
- Exclusive service suppliers (Article VIII:5);
- Emergency safeguard measures (Article X:2);
- Restrictions tosafeguard thebalance ofpayments (Article XII:4);
- Security exceptions (Article XIVbis:2);
- Modification ofschedules (Article XXI:1(b));
- MFN exemptions 'termination (Annex onArticle IIExemptions).
- Modificationofrulesaffectingtheuseofpublictelecom.transportnetworksandservices
(paragraph 5(c)Annex onTelecommunications)
2. When toNotify?
Forservices, allnotifications areadhoc,withonlythree exceptions:
- forenquiry/contact points (Article III.4/IV.2), notification should takeplace by
31December 96forexisting Members (notdefined intheGATS formembers acceding
afterwards);GATS-I -Page3
- forrecognition Agreements (Article VII:4(a)) notification should takeplace within
12months from thedateonwhich theWTO Agreement takes effect foraMember;
- forthetreatment ofpermanent residents asnationals forGATS purposes
(Article XXVIII(k)(ii)(2)) notification should takeplace upon accession.
Inprinciple, notifications should bedonepromptly (Articles III.3, V,VII(b), VII(c), VIII,
XII,XXI). Theactual meaning ofthistermhasbeendefined byGATT practice, asthisterminology
originates inArticle XoftheGATT. Insome cases, however, aspecific timelimitisprovided:
- annually (Article III.3);
- 3months before implementation oftheprovisions thathavetobenotified (Articles
VIII, XXI).
3. How tonotify?
Notifications should bedoneusing theformprovided onthefourth pageofdocument S/L/5.
Thecompleted form hastobesenttotheCouncil forTrade inServices, except forrestrictions to
safeguard thebalance ofpayments (Article XII:4) which havetobesenttotheGeneral Council. The
form must becompleted inoneofthethree official languages oftheWTO. Itsmain partisthe
explanations thatshould begiven onthemeasures notified, which should provide aconcise description
ofthemeasures notified andtheireffects. Thetextofthemeasure should bemade available atthe
enquiry point (Article III:4) orWTO Secretariat, except foreconomic integration Agreements
(Article V:7)andlabour market integration Agreements (Article Vbis(b)) whose fulltexthastobe
notified totheCouncil forTrade inServices.
Forefficiency reasons, eachmeasure needs tobenotified onlyonce, evenifitconcerns several
Articles oftheGATS, provided theform specifies allthearticles concerned.
Unlike other notifications, theestablishment ofenquiry points (Art.III.4) and/or contact points
(Art. IV.2) neednotbenotified through thestandardized form.GATS-II -Page1
GATS-II
GENERAL AGREEMENT ONTRADE INSERVICES
NOTIFICATION OBLIGATIONSGATS-II -Page2
GENERAL AGREEMENT ONTRADE INSERVICES
NOTIFICATION OBLIGATIONS
Item Notification requirements Type ofmeasure Periodicity Format Members
notifyingTowhom
1. GATS, Art.III:3 Change inregulation
affecting trade in
scheduled sectorsAdhoc;atleast
annually when
thecondition is
metS/L/5 WTO Members Council forTrade in
Services
2. GATS, Art.III.4 References ofenquiry
pointBefore 31.12.96
forexisting
MembersFree WTO Members Council forTrade in
Services
3. GATS, Art.IV.2 References ofcontact
pointBefore 31.12.96
forexisting
MembersFree Developed WTO
MembersCouncil forTrade in
Services
4. GATS, Art.V:7 Economic integration
Agreements andtheir
enlargement or
modificationAdhoc S/L/5 WTO Members Council forTrade in
Services
5. GATS, Art.V bis(b) Labour market
integration AgreementsAdhoc S/L/5 WTO Members Council forTrade in
ServicesGATS-II -Page3
Item Notification requirements Type ofmeasure Periodicity Format Members
notifyingTowhom
6. GATS, Art.VII:4 Existing ornew
recognition measures
andtheir
modifications.
Opening ofnegotiation
onrecognitionWithin 12
months of
accession to
WTO for
existing
recognition
measures.
AdhocotherwiseS/L/5 WTO Members Council forTrade in
Services
7. GATS, Art.VIII:4 Granting ofnew
monopoly rightsAdhoc S/L/5 WTO Members Council forTrade in
Services
8. GATS, Art.VIII:5 Exclusive service
suppliersAdhoc S/L/5 WTO Members Council forTrade in
Services
9. GATS, Art.X:2 Emergency safeguard
measuresAdhoc S/L/5 WTO Members Council forTrade in
Services
10. GATS, Art.XII:4 Restrictions to
safeguard thebalance
ofpaymentsAdhoc S/L/5 WTO Members General Council
11. GATS, Art.XIVbis:2 Security exceptions Adhoc S/L/5 WTO Members Council forTrade in
Services
12. GATS, Art.XXI:1(b) Intention tomodify the
schedule ofspecific
commitmentsAdhoc S/L/5 WTO Members Council forTrade in
ServicesGATS-II -Page4
Item Notification requirements Type ofmeasure Periodicity Format Members
notifyingTowhom
13. GATS, Art.XXVIII
(k):(ii):2Treatment of
permanent residents as
nationals forGATS
purposesOneoff,on
accession to
WTO forthe
Members
concernedS/L/5 WTO Members WTO Secretariat
14. GATS, Annex onArticle II
exemptions:7MFN exemption
terminationOnce upon
termination of
theMFN
exemption for
theMembers
concernedS/L/5 WTO Members Council forTrade in
Services
15. GATS, Annex on
Telecommunications para. 5
(c)Modification ofrules
affecting theuseof
public
telecommunications
transport networks and
servicesAdhoc S/L/5 WTO Members Council forTrade in
ServicesGATS-III -Page 1
GATS-III
GENERAL AGREEMENT ONTRADE INSERVICES
DOCUMENT(S)
S/L/5
S/L/23WORLD TRADE S/L/5
4April 1995
ORGANIZATION(95-0802)
Trade inServices
GUIDELINES FOR NOTIFICATIONS UNDER THE
GENERAL AGREEMENT ONTRADE INSERVICES
Adopted bytheCouncil forTrade inServices on1March 1995
1. These Guidelines identify theprovisions oftheGeneral Agreement onTrade inServices (GATS)
thatcontain notification requirements andtheelements tobeincluded insuchnotifications, andpropose
acommon format tobeusedbyMembers inmaking notifications.
2. Therelevant partsoftheGATS containing specific notification requirements arethefollowing:
- ArticleIII:(paragraph3)-Transparency;"EachMembershallpromptlyandatleastannually
inform theCouncil forTrade inServices oftheintroduction ofanynew,oranychanges to
existing,laws,regulationsoradministrativeguidelineswhichsignificantlyaffecttradeinservices
covered byitsspecific commitments under thisAgreement".
- Article V(paragraph 7)-Economic Integration ;"Members which areparties toany
agreement referred toinparagraph 1shall promptly notify anysuchagreement andany
enlargement oranysignificant modification ofthatagreement totheCouncil forTrade in
Services. Theyshallalsomake available totheCouncil suchrelevant information asmaybe
requested byit.TheCouncil mayestablish aworking party toexamine suchanagreement
orenlargement ormodification ofthatagreement andtoreport totheCouncil onitsconsistency
withthisArticle".
- Article Vbis(paragraph (b))-Labour Markets Integration Agreements ;"(b)isnotified to
theCouncil forTrade inServices".
- Article VII(paragraph 4)-Recognition ;"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
inparagraph1inordertoprovideadequateopportunitytoanyotherMembertoindicate
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".
- Article VIII(paragraph 4)-Monopolies andExecutive Service Suppliers ;"If,afterthe
dateofentry intoforce oftheWTO Agreement, aMember grants monopoly rights regarding
thesupply ofaservice covered byitsspecific commitments, thatMember shallnotify theCouncilS/L/5
Page2
forTrade inServices nolaterthanthreemonths before theintended implementation ofthegrant
ofmonopoly rights andtheprovisions ofparagraphs 2,3and4ofArticle XXIshall apply.
(Paragraph 5)Theprovisions ofthisArticle shall alsoapply tocases ofexclusive service
suppliers, where aMember, formally orineffect, (a)authorizes orestablishes asmall number
ofservice suppliers and(b)substantially prevents competition among those suppliers inits
territory".
- Article X(paragraph 2)-Emergency Safeguard Measures ;"Intheperiod before theentry
intoeffect oftheresults ofthenegotiations referred toinparagraph 1,anyMember may,
notwithstanding theprovisions ofparagraph 1ofArticle XXI,notify theCouncil onTrade in
Services ofitsintention tomodify orwithdraw aspecific commitment afteraperiod ofone
yearfromthedateonwhich thecommitment enters intoforce; provided thattheMember shows
cause totheCouncil thatthemodification orwithdrawal cannot await thelapse ofthethree-year
period provided forinparagraph 1ofArticle XXI".
- Article XII(paragraph 4)-Restrictions toSafeguard theBalance ofPayments ;"Any
restrictionsadoptedormaintainedunderparagraph1,oranychangestherein,shallbepromptly
notified totheGeneral Council".
- Article XIVbis(paragraph 2)-Security Exceptions ;"TheCouncil forTrade inServices
shallbeinformed tothefullest extent possible ofmeasures taken under paragraphs 1(b)and
(c)andoftheirtermination".
- Article XXI(paragraph 1(b))-Modification ofSchedules ;"Amodifying Member shallnotify
itsintent tomodify orwithdraw acommitment pursuant tothisArticle totheCouncil forTrade
inServices nolater thanthree months before theintended dateofimplementation ofthe
modification orwithdrawal".
- Annex onArticle IIExemptions (paragraph 7)"AMember shallnotify theCouncil forTrade
inServices atthetermination oftheexemption period thattheinconsistent measure hasbeen
brought intoconformity withparagraph 1ofArticle IIoftheAgreement".
3. Itshould benoted thatArticle V:7establishes theobligation tonotify thefulltextsofthe
agreements concerned, oranysignificant modification ofthem, forthepurpose oftheiranalysis in
aworking party. Article Vbisalsorequires thefulltextoflabour markets integration agreements
tobenotified totheCouncil. Acopyofthefulltextoftheagreements should therefore beprovided
forretention bytheSecretariat andconsultation byinterested members; asynthesis ofthemainelements
oftheagreements should beincluded inthestandard format fornotification purposes.
4. Inrelation toArticle VII(Recognition) thenotification should contain asynthesis ofthemain
elements ofthemeasure ortheinternational agreement inquestion andadvice onwhere additional
information isavailable (e.g., enquiry point established under Article III:4ortheWTO Secretariat).
5. Thenotification requirement inArticle XII:4 differs from those contained inother Articles
oftheAgreement inthesense thatthenotification hastobemade toTheGeneral Council instead of
TheCouncil onTrade inServices. Since anydiscussion onbalance ofpayments restrictions willtake
place inTheBalance ofPayments Committee andthenotification ofmeasures taken under thisArticle
should presumably bemade inconjunction withthatofmeasures adopted under GATT disciplines,
modalities fornotifications made under Article XII:4 willbedetermined bytheBalance ofPayments
Committee andtheGeneral Council.
6. Inordertoavoidunnecessaryreproductionanddistributionofallinternationalagreementsnotified
under theGATS, theWTO Secretariat willbethedepository oftheagreements notified byMembers,S/L/5
Page3
Copies ofsuchagreements willbeavailable toMembers uponrequest. Forthepurpose ofanyworking
parties thatmaybe established under Article V-Integration Agreements, Members thatareparties
tosuchagreements willprovide copies fordistribution.
7. Notifications made under theprovisions oftheGATS willfollow thestandard format attached
tothisNote andbesubmitted inoneoftheWTO 'sthree official languages.
8. Inorder toavoid duplication ofnotifications, Members should notneedtonotify ameasure
oraninternational agreement more thanonce. Itwould beenough inmaking thefirstnotification
toindicate anyother provisions oftheGATS under which thesame subject-matter isbeing notified.S/L/5
Page4
NOTIFICATION
1. Members(s) notifying. Ifapplicable theSubcentral government orauthority ornon
governmental bodies involved should bespecified.
2. Notification under Article(s):
3. Dateofentry intoforce/duration:
4. Agency responsible forenforcement ofthemeasure:
5. Complete description ofthemeasure*indicating themodes ofsupply covered, theeffect
ontrade inservices (e.g., restrictions/liberalization measures) andtheimpact ofthe
measure oncommitments intheMember 'sschedule andArticle II(MFN) exemption
list,ifrelevant:
6. Members specifically affected, ifany:
7. Textavailable from:
- Enquiry point
- WTO Secretariat
- Other sources (address, fax
andtelephone ofother body)
*Including international agreements, recognition measures orother types.WORLD TRADE S/L/23
27June1996
ORGANIZATION(96-2475)
Trade inServices
DECISION ONTHE NOTIFICATION OFTHE ESTABLISHMENT OF
ENQUIRY AND CONTACT POINTS
Adopted bytheCouncil forTrade inServices on28May1996
TheCouncil forTrade inServices ,
Having regard toparagraph 4ofArticle IIIandparagraph 2ofArticle IVoftheGATS,
Acting withaviewtofurthering theobjectives ofthese provisions,
Decides asfollows:
Members shallnotify totheCouncil forTrade inServices theestablishment ofenquiry points
pursuant toparagraph 4ofArticle III,andtheestablishment ofcontact points pursuant toparagraph 2
ofArticle IVoftheGATS.GATS-IV -Page1
GATS-IV
"MOCK" EXAMPLESGATS-IV -Page2
"MOCK EXAMPLES OFNOTIFICATIONS UNDER THE GATS"
Article III.3andrelated notifications
Case 1: During thelast12months, your country hasnotintroduced anychanges toits
regulation affecting significantly trade inanyofthesectors covered byitsspecific
commitments under theGATS.
EXAMPLE:
Nonotification isrequired under Art.III.3.GATS-IV -Page3
Case 2: During thelast12months, yourcountry hasintroduced newregulation improving
thetrading conditions ofitspartners inasector covered byitsspecific commitments
under theGATS.
EXAMPLE:
Anotification isrequired under Art.III.3. Theform provided onp.4ofdoc.S/L/5
should beused. Inparticular, thedateofentry intoforce andtheintended duration
ofthenewregulation should bespecified, andtheagency responsible forenforcement
ofthemeasure indicated. Thenotification should provide acomplete description of
themeasure andexplain itseffect ontrade inservices andimpact ontheMember 's
commitments. There maynotalways beanimpact ifthenewregulation doesnotaffect
market access ornational treatment inthesector concerned.
NOTIFICATION
1. Member notifying:
name ofMember.
2. Notification under Article: III.3
3. Date ofentry intoforce: 1March 1996
Duration: indefinite
4. Agency responsible forenforcement ofthemeasure:
Ministry ofTourism
5. Description ofthemeasure: thelimitation onforeign direct investment inhotels, hotel
companies andhotel operators hasbeen raised from 25% to30%. Affects the
commitments ofthemember insector 9.A-Hotel andrestaurants formode 3.
6. Members specifically affected: none
7. Textavailable from:
Enquiry pointGATS-IV -Page4
Case 3: Your country hasintroduced during thelast12months anewregulation worsening
thetradingconditionsinasectorcoveredbyitsspecificcommitmentsundertheGATS,
butwhich doesnotaffect either market access ornational treatment.
EXAMPLE:
Anotification isrequired under Art.III.3. Theform provided onp.4ofdoc.S/L/5
should beused. Asthemodification doesnotaffect thescheduled commitments of
your country, (although itaffects asector covered inyour schedule ofspecific
commitments), theprocedure ofArt.XXIforthemodification ofschedules doesnot
apply.
NOTIFICATION
1. Member notifying:
name ofMember.
2. Notification under Article: III.3
3. Date ofentry intoforce: 1March 1996
Duration: indefinite
4. Agency responsible forenforcement ofthemeasure:
Ministry ofJustice
5. Description ofthemeasure: lawyers, attorneys atlaw, solicitors andbarristers
registered with aCourt inthiscountry must subscribe toaProfessional Indemnity
Insurance. Theminimum coverage ofthisinsurance must be$100000/year.
6. Members specifically affected: none
7. Textavailable from:
Enquiry pointGATS-IV -Page5
Case 4: Your country hastheintention tointroduce anewregulation worsening thetrading
conditions ofitspartners inasector covered byitsspecific commitments under the
GATS andaffecting either access toitsmarket orthenational treatment inthissector.
(Remark: nosuchmodification should evertakeplace without prior notification;
thecasewhere suchanewregulation hasbeenintroduced during thelast12months
should consequently never occur).
EXAMPLE:
Anotification isrequired under Art.XXI.1.b atleast3months before theintended
dateofimplementation ofthenewregulation. Theformprovided onp.4ofdoc.S/L/5
should beused. Thenotification willstarttheprocedure ofArtXXIforthemodification
ofschedules.
NOTIFICATION
1. Member notifying:
name ofMember.
2. Notification under Article: XX1.1.b
3. Date ofentry intoforce: 1July1997
Duration: indefinite
4. Agency responsible forenforcement ofthemeasure:
Ministry ofTourism
5. Description ofthemeasure: newforeign direct investment inhotels, hotel companies
andhotel operators inthesouth region willrequire prior authorization oftheMinistry
ofTourism asof1July1997. Authorization willdepend ontheabsence ofimpact of
theinvestment ontheenvironment.
6. Members specifically affected: none
7. Textavailable from:
Enquiry pointGATS-V -Page1
GATS-V
GENERAL AGREEMENT ONTRADE INSERVICES
TEXT OFTHE AGREEMENTGATS-V -Page2
ANNEX 1B
GENERAL AGREEMENT ONTRADE INSERVICES
PART I SCOPE AND DEFINITION
Article I Scope andDefinition
PART II GENERAL OBLIGATIONS AND DISCIPLINES
Article II Most-Favoured-Nation Treatment
Article III Transparency
Article IIIbis Disclosure ofConfidential Information
Article IV Increasing Participation ofDeveloping Countries
Article V Economic Integration
Article Vbis Labour Markets Integration Agreements
Article VI Domestic Regulation
Article VII Recognition
Article VIII Monopolies andExclusive Service Suppliers
Article IX Business Practices
Article X Emergency Safeguard Measures
Article XI Payments andTransfers
Article XII Restrictions toSafeguard theBalance ofPayments
Article XIII Government Procurement
Article XIV General Exceptions
Article XIVbisSecurity Exceptions
Article XV Subsidies
PART III SPECIFIC COMMITMENTS
Article XVI Market Access
Article XVII National Treatment
Article XVIII Additional Commitments
PART IV PROGRESSIVE LIBERALIZATION
Article XIX Negotiation ofSpecific Commitments
Article XX Schedules ofSpecific Commitments
Article XXI Modification ofSchedules
PART V INSTITUTIONAL PROVISIONS
Article XXII Consultation
Article XXIII Dispute Settlement andEnforcement
Article XXIV Council forTrade inServices
Article XXV Technical Cooperation
Article XXVI Relationship withOther International Organizations
PART VI FINAL PROVISIONS
Article XXVII Denial ofBenefits
Article XXVIII Definitions
Article XXIX AnnexesGATS-V -Page3
Annex onArticle IIExemptions
Annex onMovement ofNatural Persons Supplying Services under theAgreement
Annex onAirTransport Services
Annex onFinancial Services
Second Annex onFinancial Services
Annex onNegotiations onMaritime Transport Services
Annex onTelecommunications
Annex onNegotiations onBasic TelecommunicationsGATS-V -Page4
GENERAL AGREEMENT ONTRADE INSERVICES
Members,
Recognizing thegrowing importance oftrade inservices forthegrowth anddevelopment of
theworld economy;
Wishing toestablish amultilateral framework ofprinciples andrulesfortradeinservices with
aviewtotheexpansion ofsuchtrade under conditions oftransparency andprogressive liberalization
andasameans ofpromoting theeconomic growth ofalltrading partners andthedevelopment of
developing countries;
Desiringtheearlyachievementofprogressivelyhigherlevelsofliberalizationoftradeinservices
through successive rounds ofmultilateral negotiations aimed atpromoting theinterests ofallparticipants
onamutually advantageous basis andatsecuring anoverall balance ofrights andobligations, while
giving duerespect tonational policy objectives;
Recognizing therightofMembers toregulate, andtointroduce newregulations, onthesupply
ofservices within theirterritories inorder tomeetnational policy objectives and,given asymmetries
existing withrespect tothedegree ofdevelopment ofservices regulations indifferent countries, the
particular needofdeveloping countries toexercise thisright;
Desiring tofacilitate theincreasing participation ofdeveloping countries intrade inservices
andtheexpansion oftheirservice exports including, interalia,through thestrengthening oftheir
domestic services capacity anditsefficiency andcompetitiveness;
Taking particular account oftheserious difficulty oftheleast-developed countries inviewof
theirspecial economic situation andtheirdevelopment, trade andfinancial needs;
Hereby agree asfollows:
PART I
SCOPE AND DEFINITION
Article I
Scope andDefinition
1. ThisAgreement applies tomeasures byMembers affecting trade inservices.
2. Forthepurposes ofthisAgreement, trade inservices isdefined asthesupply ofaservice:
(a) from theterritory ofoneMember intotheterritory ofanyother Member;
(b) intheterritory ofoneMember totheservice consumer ofanyother Member;
(c) byaservice supplier ofoneMember, through commercial presence intheterritory
ofanyother Member;
(d) byaservice supplier ofoneMember, through presence ofnatural persons ofaMember
intheterritory ofanyother Member.GATS-V -Page5
3. Forthepurposes ofthisAgreement:
(a) "measures byMembers" means measures taken by:
(i) central, regional orlocalgovernments andauthorities; and
(ii) non-governmental bodies intheexercise ofpowers delegated bycentral,
regional orlocalgovernments orauthorities;
Infulfilling itsobligations andcommitments under theAgreement, eachMember shalltake
suchreasonable measures asmaybeavailable toittoensure theirobservance byregional and
localgovernments andauthorities andnon-governmental bodies within itsterritory;
(b) "services" includes anyservice inanysector except services supplied intheexercise
ofgovernmental authority;
(c) "aservice supplied intheexercise ofgovernmental authority" means anyservice which
issupplied neither onacommercial basis, norincompetition withoneormore service
suppliers.
PART II
GENERAL OBLIGATIONS AND DISCIPLINES
Article II
Most-Favoured-Nation Treatment
1. Withrespect toanymeasure covered bythisAgreement, eachMember shallaccord immediately
andunconditionally toservices andservice suppliers ofanyother Member treatment nolessfavourable
thanthatitaccords tolikeservices andservice suppliers ofanyother country.
2. AMember maymaintain ameasure inconsistent withparagraph 1provided thatsuchameasure
islisted in,andmeets theconditions of,theAnnex onArticle IIExemptions.
3. Theprovisions ofthisAgreement shallnotbesoconstrued astoprevent anyMember from
conferring oraccording advantages toadjacent countries inorder tofacilitate exchanges limited to
contiguous frontier zones ofservices thatarebothlocally produced andconsumed.
Article III
Transparency
1. EachMember shallpublish promptly and,except inemergency situations, atthelatest bythe
timeoftheirentry intoforce, allrelevant measures ofgeneral application which pertain tooraffect
theoperation ofthisAgreement. International agreements pertaining tooraffecting trade inservices
towhich aMember isasignatory shallalsobepublished.
2. Where publication asreferred toinparagraph 1isnotpracticable, suchinformation shallbe
made otherwise publicly available.GATS-V -Page6
3. Each Member shallpromptly andatleastannually inform theCouncil forTrade inServices
oftheintroduction ofanynew,oranychanges toexisting, laws, regulations oradministrative guidelines
which significantly affect tradeinservices covered byitsspecific commitments under thisAgreement.
4. Each Member shall respond promptly toallrequests byanyother Member forspecific
information onanyofitsmeasures ofgeneral application orinternational agreements within themeaning
ofparagraph 1.Each Member shallalsoestablish oneormore enquiry points toprovide specific
information toother Members, upon request, onallsuchmatters aswellasthose subject tothe
notification requirement inparagraph 3.Such enquiry points shallbeestablished within twoyears
fromthedateofentry intoforce oftheAgreement Establishing theWTO (referred tointhisAgreement
asthe"WTO Agreement"). Appropriate flexibility withrespect tothetime-limit within which such
enquiry points aretobeestablished maybeagreed uponforindividual developing country Members.
Enquiry points neednotbedepositories oflawsandregulations.
5. AnyMember maynotify totheCouncil forTrade inServices anymeasure, taken byanyother
Member, which itconsiders affects theoperation ofthisAgreement.
Article IIIbis
Disclosure ofConfidential Information
Nothing inthisAgreement shallrequire anyMember toprovide confidential information, the
disclosure ofwhich would impede lawenforcement, orotherwise becontrary tothepublic interest,
orwhich would prejudice legitimate commercial interests ofparticular enterprises, public orprivate.
Article IV
Increasing Participation ofDeveloping Countries
1. Theincreasing participation ofdeveloping country Members inworld tradeshallbefacilitated
through negotiated specific commitments, bydifferent Members pursuant toParts IIIandIVofthis
Agreement, relating to:
(a) thestrengthening oftheir domestic services capacity anditsefficiency and
competitiveness, interaliathrough access totechnology onacommercial basis;
(b) theimprovement oftheiraccess todistribution channels andinformation networks;
and
(c) theliberalization ofmarket access insectors andmodes ofsupply ofexport interest
tothem.
2. Developed country Members, andtotheextent possible other Members, shallestablish contact
points within twoyears fromthedateofentry intoforce oftheWTO Agreement tofacilitate theaccess
ofdeveloping country Members 'service suppliers toinformation, related totheirrespective markets,
concerning:
(a) commercial andtechnical aspects ofthesupply ofservices;
(b) registration, recognition andobtaining ofprofessional qualifications; and
(c) theavailability ofservices technology.GATS-V -Page7
3. Special priority shallbegiven totheleast-developed country Members intheimplementation
ofparagraphs 1and2.Particular account shallbetaken oftheserious difficulty oftheleast-developed
countries inaccepting negotiated specific commitments inviewoftheirspecial economic situation and
theirdevelopment, trade andfinancial needs.
Article V
Economic Integration
1. ThisAgreement shallnotprevent anyofitsMembers from being aparty toorentering into
anagreement liberalizing tradeinservices between oramong theparties tosuchanagreement, provided
thatsuchanagreement:
(a) hassubstantial sectoral coverage1,and
(b) provides fortheabsence orelimination ofsubstantially alldiscrimination, inthesense
ofArticle XVII, between oramong theparties, inthesectors covered under
subparagraph (a),through:
(i) elimination ofexisting discriminatory measures, and/or
(ii) prohibition ofnewormore discriminatory measures,
either attheentry intoforce ofthatagreement oronthebasis ofareasonable time-
frame, except formeasures permitted under Articles XI,XII,XIVandXIVbis.
2. Inevaluating whether theconditions under paragraph 1(b)aremet,consideration maybegiven
totherelationship oftheagreement toawider process ofeconomic integration ortrade liberalization
among thecountries concerned.
3. (a) Where developing countries areparties toanagreement ofthetypereferred toin
paragraph 1,flexibility shallbeprovided forregarding theconditions setoutinparagraph 1,particularly
withreference tosubparagraph (b)thereof, inaccordance withthelevelofdevelopment ofthecountries
concerned, bothoverall andinindividual sectors andsubsectors.
(b) Notwithstanding paragraph 6,inthecaseofanagreement ofthetypereferred toin
paragraph 1involving onlydeveloping countries, morefavourable treatment maybegranted tojuridical
persons owned orcontrolled bynatural persons oftheparties tosuchanagreement.
4. Anyagreement referred toinparagraph 1shallbedesigned tofacilitate tradebetween theparties
totheagreement andshallnotinrespect ofanyMember outside theagreement raisetheoverall level
ofbarriers totradeinservices within therespective sectors orsubsectors compared tothelevelapplicable
prior tosuchanagreement.
5. If,intheconclusion, enlargement oranysignificant modification ofanyagreement under
paragraph 1,aMember intends towithdraw ormodify aspecific commitment inconsistently withthe
terms andconditions setoutinitsSchedule, itshallprovide atleast90daysadvance notice ofsuch
modification orwithdrawal andtheprocedure setforthinparagraphs 2,3and4ofArticle XXIshall
apply.
1Thiscondition isunderstood interms ofnumber ofsectors, volume oftrade affected andmodes
ofsupply. Inorder tomeetthiscondition, agreements should notprovide fortheapriori exclusion
ofanymode ofsupply.GATS-V -Page8
6. Aservice supplier ofanyother Member thatisajuridical person constituted under thelaws
ofaparty toanagreement referred toinparagraph 1shallbeentitled totreatment granted under such
agreement, provided thatitengages insubstantive business operations intheterritory oftheparties
tosuchagreement.
7. (a) Members which areparties toanyagreement referred toinparagraph 1shallpromptly
notify anysuchagreement andanyenlargement oranysignificant modification ofthatagreement to
theCouncilforTradeinServices.TheyshallalsomakeavailabletotheCouncilsuchrelevantinformation
asmayberequested byit.TheCouncil mayestablish aworking party toexamine suchanagreement
orenlargement ormodification ofthatagreement andtoreport totheCouncil onitsconsistency with
thisArticle.
(b) Members which areparties toanyagreement referred toinparagraph 1which is
implemented onthebasisofatime-frame shallreport periodically totheCouncil forTrade inServices
onitsimplementation. TheCouncil mayestablish aworking party toexamine suchreports ifitdeems
suchaworking party necessary.
(c) Based onthereports oftheworking parties referred toinsubparagraphs (a)and(b),
theCouncil maymake recommendations totheparties asitdeems appropriate.
8. AMember which isaparty toanyagreement referred toinparagraph 1maynotseek
compensation fortrade benefits thatmayaccrue toanyother Member from suchagreement.
Article Vbis
Labour Markets Integration Agreements
ThisAgreement shallnotprevent anyofitsMembers from being aparty toanagreement
establishing fullintegration2ofthelabour markets between oramong theparties tosuchanagreement,
provided thatsuchanagreement:
(a) exempts citizens ofparties totheagreement fromrequirements concerning residency
andwork permits;
(b) isnotified totheCouncil forTrade inServices.
Article VI
Domestic Regulation
1. Insectors where specific commitments areundertaken, eachMember shall ensure thatall
measures ofgeneral application affecting trade inservices areadministered inareasonable, objective
andimpartial manner.
2. (a) Each Member shallmaintain orinstitute assoonaspracticable judicial, arbitral or
administrative tribunals orprocedures which provide, attherequest ofanaffected service supplier,
forthepromptreviewof,andwherejustified,appropriateremediesfor,administrativedecisionsaffecting
trade inservices. Where suchprocedures arenotindependent oftheagency entrusted withthe
2Typically, suchintegration provides citizens oftheparties concerned witharightoffreeentry
totheemployment markets oftheparties andincludes measures concerning conditions ofpay,other
conditions ofemployment andsocial benefits.GATS-V -Page9
administrative decision concerned, theMember shallensure thattheprocedures infactprovide for
anobjective andimpartial review.
(b) Theprovisionsofsubparagraph(a)shallnotbeconstruedtorequireaMembertoinstitute
suchtribunals orprocedures where thiswould beinconsistent withitsconstitutional structure orthe
nature ofitslegalsystem.
3. Where authorization isrequired forthesupply ofaservice onwhich aspecific commitment
hasbeenmade, thecompetent authorities ofaMember shall, within areasonable period oftimeafter
thesubmission ofanapplication considered complete under domestic lawsandregulations, inform
theapplicant ofthedecision concerning theapplication. Attherequest oftheapplicant, thecompetent
authorities oftheMember shallprovide, without undue delay, information concerning thestatus of
theapplication.
4. With aviewtoensuring thatmeasures relating toqualification requirements andprocedures,
technical standards andlicensing requirements donotconstitute unnecessary barriers totradeinservices,
theCouncil forTrade inServices shall, through appropriate bodies itmayestablish, develop any
necessary disciplines. Such disciplines shallaimtoensure thatsuchrequirements are,interalia:
(a) based onobjective andtransparent criteria, suchascompetence andtheability tosupply
theservice;
(b) notmore burdensome thannecessary toensure thequality oftheservice;
(c) inthecaseoflicensing procedures, notinthemselves arestriction onthesupply of
theservice.
5. (a) Insectors inwhich aMember hasundertaken specific commitments, pending theentry
intoforce ofdisciplines developed inthese sectors pursuant toparagraph 4,theMember shallnot
apply licensing andqualification requirements andtechnical standards thatnullify orimpair suchspecific
commitments inamanner which:
(i) doesnotcomply withthecriteria outlined insubparagraphs 4(a),(b)or(c);
and
(ii) could notreasonably havebeenexpected ofthatMember atthetimethe
specific commitments inthose sectors were made.
(b) Indetermining whether aMember isinconformity with theobligation under
paragraph 5(a),account shallbetaken ofinternational standards ofrelevant international organizations3
applied bythatMember.
6. Insectors where specific commitments regarding professional services areundertaken, each
Member shallprovide foradequate procedures toverify thecompetence ofprofessionals ofanyother
Member.
3Theterm"relevant international organizations" refers tointernational bodies whose membership
isopentotherelevant bodies ofatleastallMembers oftheWTO.GATS-V -Page10
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 thatisaparty toanagreement 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.
Article VIII
Monopolies andExclusive Service Suppliers
1. Each Member shallensure thatanymonopoly supplier ofaservice initsterritory doesnot,
inthesupply ofthemonopoly service intherelevant market, actinamanner inconsistent withthat
Member 'sobligations under Article IIandspecific commitments.
2. WhereaMember'smonopolysuppliercompetes,eitherdirectlyorthroughanaffiliatedcompany,
inthesupply ofaservice outside thescope ofitsmonopoly rights andwhich issubject tothatMember 'sGATS-V -Page11
specific commitments, theMember shallensure thatsuchasupplier doesnotabuse itsmonopoly position
toactinitsterritory inamanner inconsistent withsuchcommitments.
3. TheCouncil forTrade inServices may, attherequest ofaMember which hasareason to
believe thatamonopoly supplier ofaservice ofanyother Member isacting inamanner inconsistent
withparagraph 1or2,request theMember establishing, maintaining orauthorizing suchsupplier to
provide specific information concerning therelevant operations.
4. If,afterthedateofentry intoforce oftheWTO Agreement, aMember grants monopoly rights
regarding thesupply ofaservice covered byitsspecific commitments, thatMember shallnotify the
Council forTrade inServices nolaterthanthree months before theintended implementation ofthe
grant ofmonopoly rights andtheprovisions ofparagraphs 2,3and4ofArticle XXIshallapply.
5. Theprovisions ofthisArticle shallalsoapply tocases ofexclusive service suppliers, where
aMember, formally orineffect, (a)authorizes orestablishes asmall number ofservice suppliers and
(b)substantially prevents competition among those suppliers initsterritory.
Article IX
Business Practices
1. Members recognize thatcertain business practices ofservice suppliers, other thanthose falling
under Article VIII, mayrestrain competition andthereby restrict trade inservices.
2. EachMember shall, attherequest ofanyother Member, enter intoconsultations withaview
toeliminating practices referred toinparagraph 1.TheMember addressed shall accord fulland
sympathetic consideration tosucharequest andshallcooperate through thesupply ofpublicly available
non-confidential information ofrelevance tothematter inquestion. TheMember addressed shallalso
provide other information available totherequesting Member, subject toitsdomestic lawandtothe
conclusion ofsatisfactory agreement concerning thesafeguarding ofitsconfidentiality bytherequesting
Member.
Article X
Emergency Safeguard Measures
1. There shallbemultilateral negotiations onthequestion ofemergency safeguard measures based
ontheprinciple ofnon-discrimination. Theresults ofsuchnegotiations shallenter intoeffect ona
datenotlaterthanthree years from thedateofentry intoforce oftheWTO Agreement.
2. Intheperiod before theentry intoeffect oftheresults ofthenegotiations referred toin
paragraph 1,anyMember may, notwithstanding theprovisions ofparagraph 1ofArticle XXI, notify
theCouncil onTrade inServices ofitsintention tomodify orwithdraw aspecific commitment after
aperiod ofoneyearfromthedateonwhich thecommitment enters intoforce; provided thattheMember
shows cause totheCouncil thatthemodification orwithdrawal cannot await thelapseofthethree-year
period provided forinparagraph 1ofArticle XXI.
3. Theprovisions ofparagraph 2shallcease toapply threeyears afterthedateofentry intoforce
oftheWTO Agreement.GATS-V -Page12
Article XI
Payments andTransfers
1. Except under thecircumstances envisaged inArticle XII,aMember shallnotapply restrictions
oninternational transfers andpayments forcurrent transactions relating toitsspecific commitments.
2. Nothing inthisAgreement shall affect therights andobligations ofthemembers ofthe
International Monetary Fundunder theArticles ofAgreement oftheFund, including theuseofexchange
actions which areinconformity withtheArticles ofAgreement, provided thataMember shallnot
impose restrictions onanycapital transactions inconsistently withitsspecific commitments regarding
suchtransactions, except under Article XIIorattherequest oftheFund.
Article XII
Restrictions toSafeguard theBalance ofPayments
1. Intheevent ofserious balance-of-payments andexternal financial difficulties orthreat thereof,
aMember mayadopt ormaintain restrictions ontrade inservices onwhich ithasundertaken specific
commitments, including onpayments ortransfers fortransactions related tosuchcommitments. It
isrecognized thatparticular pressures onthebalance ofpayments ofaMember intheprocess of
economic development oreconomic transition maynecessitate theuseofrestrictions toensure, inter
alia,themaintenance ofaleveloffinancial reserves adequate fortheimplementation ofitsprogramme
ofeconomic development oreconomic transition.
2. Therestrictions referred toinparagraph 1:
(a) shallnotdiscriminate among Members;
(b) shallbeconsistent withtheArticles ofAgreement oftheInternational Monetary Fund;
(c) shallavoid unnecessary damage tothecommercial, economic andfinancial interests
ofanyother Member;
(d) shallnotexceedthosenecessarytodealwiththecircumstancesdescribedinparagraph1;
(e) shall betemporary andbephased outprogressively asthesituation specified in
paragraph 1improves.
3. Indetermining theincidence ofsuchrestrictions, Members maygivepriority tothesupply
ofservices which aremore essential totheireconomic ordevelopment programmes. However, such
restrictions shallnotbeadopted ormaintained forthepurpose ofprotecting aparticular service sector.
4. Anyrestrictions adopted ormaintained under paragraph 1,oranychanges therein, shallbe
promptly notified totheGeneral Council.
5. (a) Members applying theprovisions ofthisArticle shall consult promptly withthe
Committee onBalance-of-Payments Restrictions onrestrictions adopted under thisArticle.GATS-V -Page13
(b) TheMinisterial Conference shallestablish procedures4forperiodic consultations with
theobjective ofenabling suchrecommendations tobemade totheMember concerned asitmaydeem
appropriate.
(c) Suchconsultationsshallassessthebalance-of-paymentsituationoftheMemberconcerned
andtherestrictions adopted ormaintained under thisArticle, taking intoaccount, interalia,suchfactors
as:
(i) thenature andextent ofthebalance-of-payments andtheexternal financial
difficulties;
(ii) theexternal economic andtrading environment oftheconsulting Member;
(iii) alternative corrective measures which maybeavailable.
(d) Theconsultations shalladdress thecompliance ofanyrestrictions withparagraph 2,
inparticular theprogressive phaseout ofrestrictions inaccordance withparagraph 2(e).
(e) Insuch consultations, allfindings ofstatistical andother facts presented bythe
International Monetary Fund relating toforeign exchange, monetary reserves andbalance ofpayments,
shallbeaccepted andconclusions shallbebased ontheassessment bytheFund ofthebalance-of-
payments andtheexternal financial situation oftheconsulting Member.
6. IfaMember which isnotamember oftheInternational Monetary Fund wishes toapply the
provisions ofthisArticle, theMinisterial Conference shallestablish areview procedure andanyother
procedures necessary.
Article XIII
Government Procurement
1. Articles II,XVIandXVII shallnotapply tolaws, regulations orrequirements governing the
procurement bygovernmental agencies ofservices purchased forgovernmental purposes andnotwith
aviewtocommercial resale orwithaviewtouseinthesupply ofservices forcommercial sale.
2. There shall bemultilateral negotiations ongovernment procurement inservices under this
Agreement within twoyears from thedateofentry intoforce oftheWTO Agreement.
Article XIV
General Exceptions
Subjecttotherequirementthatsuchmeasuresarenotappliedinamannerwhichwouldconstitute
ameans ofarbitrary orunjustifiable discrimination between countries where likeconditions prevail,
oradisguised restriction ontradeinservices, nothing inthisAgreement shallbeconstrued toprevent
theadoption orenforcement byanyMember ofmeasures:
4Itisunderstood thattheprocedures under paragraph 5shall bethesame astheGATT 1994
procedures.GATS-V -Page14
(a) necessary toprotect public morals ortomaintain public order;5
(b) necessary toprotect human, animal orplant lifeorhealth;
(c) necessary tosecure compliance withlawsorregulations which arenotinconsistent
withtheprovisions ofthisAgreement including those relating to:
(i) theprevention ofdeceptive andfraudulent practices ortodealwiththeeffects
ofadefault onservices contracts;
(ii) theprotection oftheprivacy ofindividuals inrelation totheprocessing and
dissemination ofpersonal dataandtheprotection ofconfidentiality of
individual records andaccounts;
(iii) safety;
(d) inconsistent withArticle XVII, provided thatthedifference intreatment isaimed at
ensuring theequitable oreffective6imposition orcollection ofdirect taxes inrespect
ofservices orservice suppliers ofother Members;
(e) inconsistent withArticle II,provided thatthedifference intreatment istheresult of
anagreement ontheavoidance ofdouble taxation orprovisions ontheavoidance of
5Thepublic order exception maybeinvoked onlywhere agenuine andsufficiently serious threat
isposed tooneofthefundamental interests ofsociety.
6Measures thatareaimed atensuring theequitable oreffective imposition orcollection ofdirect
taxes include measures taken byaMember under itstaxation system which:
(i) apply tonon-resident service suppliers inrecognition ofthefactthatthetaxobligation
ofnon-residents isdetermined withrespect totaxable items sourced orlocated inthe
Member 'sterritory; or
(ii) apply tonon-residents inorder toensure theimposition orcollection oftaxes inthe
Member 'sterritory; or
(iii) apply tonon-residents orresidents inorder toprevent theavoidance orevasion oftaxes,
including compliance measures; or
(iv) apply toconsumers ofservices supplied inorfrom theterritory ofanother Member
inorder toensure theimposition orcollection oftaxesonsuchconsumers derived from
sources intheMember 'sterritory; or
(v) distinguishservicesupplierssubjecttotaxonworldwidetaxableitemsfromotherservice
suppliers, inrecognition ofthedifference inthenature ofthetaxbasebetween them;
or
(vi) determine, allocate orapportion income, profit, gain, loss, deduction orcredit of
residentpersonsorbranches,orbetweenrelatedpersonsorbranchesofthesameperson,
inorder tosafeguard theMember 'staxbase.
Taxterms orconcepts inparagraph (d)ofArticle XIVandinthisfootnote aredetermined
according totaxdefinitions andconcepts, orequivalent orsimilar definitions andconcepts, under the
domestic lawoftheMember taking themeasure.GATS-V -Page15
double taxation inanyother international agreement orarrangement bywhich the
Member isbound.
Article XIVbis
Security Exceptions
1. Nothing inthisAgreement shallbeconstrued:
(a) torequire anyMember tofurnish anyinformation, thedisclosure ofwhich itconsiders
contrary toitsessential security interests; or
(b) toprevent anyMember from taking anyaction which itconsiders necessary forthe
protection ofitsessential security interests:
(i) relating tothesupply ofservices ascarried outdirectly orindirectly forthe
purpose ofprovisioning amilitary establishment;
(ii) relating tofissionable andfusionable materials orthematerials fromwhich
theyarederived;
(iii) taken intimeofwarorother emergency ininternational relations; or
(c) toprevent anyMember from taking anyaction inpursuance ofitsobligations under
theUnited Nations Charter forthemaintenance ofinternational peace andsecurity.
2. TheCouncil forTrade inServices shallbeinformed tothefullest extent possible ofmeasures
taken under paragraphs 1(b)and(c)andoftheirtermination.
Article XV
Subsidies
1. Members recognize that,incertain circumstances, subsidies mayhavedistortive effects on
trade inservices. Members shall enter intonegotiations withaview todeveloping thenecessary
multilateral disciplines toavoid suchtrade-distortive effects.7Thenegotiations shallalsoaddress the
appropriateness ofcountervailing procedures. Suchnegotiations shallrecognize theroleofsubsidies
inrelation tothedevelopment programmes ofdeveloping countries andtakeintoaccount theneeds
ofMembers, particularly developing country Members, forflexibility inthisarea. Forthepurpose
ofsuchnegotiations, Members shallexchange information concerning allsubsidies related totrade
inservices thattheyprovide totheirdomestic service suppliers.
2. AnyMember which considers thatitisadversely affected byasubsidy ofanother Member
mayrequest consultations withthatMember onsuch matters. Such requests shall beaccorded
sympathetic consideration.
7Afuture work programme shalldetermine how, andinwhat time-frame, negotiations onsuch
multilateral disciplines willbeconducted.GATS-V -Page16
PART III
SPECIFIC COMMITMENTS
Article XVI
Market Access
1. Withrespect tomarket access through themodes ofsupply identified inArticle I,eachMember
shallaccord services andservice suppliers ofanyother Member treatment nolessfavourable thanthat
provided forunder theterms, limitations andconditions agreed andspecified initsSchedule.8
2. Insectors where market-access commitments areundertaken, themeasures which aMember
shallnotmaintain oradopt either onthebasis ofaregional subdivision oronthebasis ofitsentire
territory, unless otherwise specified initsSchedule, aredefined as:
(a) limitations onthenumber ofservice suppliers whether intheformofnumerical quotas,
monopolies, exclusive service suppliers ortherequirements ofaneconomic needs test;
(b) limitations onthetotalvalue ofservice transactions orassets intheformofnumerical
quotas ortherequirement ofaneconomic needs test;
(c) limitations onthetotalnumber ofservice operations oronthetotalquantity ofservice
output expressed interms ofdesignated numerical unitsintheform ofquotas orthe
requirement ofaneconomic needs test;9
(d) limitations onthetotalnumber ofnatural persons thatmaybeemployed inaparticular
service sector orthataservice supplier mayemploy andwhoarenecessary for,and
directly related to,thesupply ofaspecific service intheform ofnumerical quotas
ortherequirement ofaneconomic needs test;
(e) measures which restrict orrequire specific types oflegalentity orjointventure through
which aservice supplier maysupply aservice; and
(f) limitations ontheparticipation offoreign capital interms ofmaximum percentage limit
onforeign shareholding orthetotalvalue ofindividual oraggregate foreign investment.
8IfaMember undertakes amarket-access commitment inrelation tothesupply ofaservice through
themode ofsupply referred toinsubparagraph 2(a)ofArticle Iandifthecross-border movement
ofcapital isanessential partoftheservice itself, thatMember isthereby committed toallow such
movement ofcapital. IfaMember undertakes amarket-access commitment inrelation tothesupply
ofaservice through themode ofsupply referred toinsubparagraph 2(c)ofArticle I,itisthereby
committed toallow related transfers ofcapital intoitsterritory.
9Subparagraph 2(c)doesnotcover measures ofaMember which limitinputs forthesupply of
services.GATS-V -Page17
Article XVII
National Treatment
1. Inthesectors inscribed initsSchedule, andsubject toanyconditions andqualifications set
outtherein, eachMember shallaccord toservices andservice suppliers ofanyother Member, inrespect
ofallmeasures affecting thesupply ofservices, treatment nolessfavourable thanthatitaccords to
itsownlikeservices andservice suppliers.10
2. AMember maymeet therequirement ofparagraph 1byaccording toservices andservice
suppliers ofanyother Member, either formally identical treatment orformally different treatment to
thatitaccords toitsownlikeservices andservice suppliers.
3. Formally identical orformally different treatment shallbeconsidered tobelessfavourable
ifitmodifies theconditions ofcompetition infavour ofservices orservice suppliers oftheMember
compared tolikeservices orservice suppliers ofanyother Member.
Article XVIII
Additional Commitments
Members maynegotiate commitments withrespect tomeasures affecting tradeinservices not
subject toscheduling under Articles XVIorXVII, including those regarding qualifications, standards
orlicensing matters. Such commitments shallbeinscribed inaMember 'sSchedule.
PART IV
PROGRESSIVE LIBERALIZATION
Article XIX
Negotiation ofSpecific Commitments
1. Inpursuance oftheobjectives ofthisAgreement, Members shallenter intosuccessive rounds
ofnegotiations, beginning notlaterthanfiveyears from thedateofentry intoforce oftheWTO
Agreement andperiodically thereafter, withaview toachieving aprogressively higher level of
liberalization. Suchnegotiations shallbedirected tothereduction orelimination oftheadverse effects
ontrade inservices ofmeasures asameans ofproviding effective market access. Thisprocess shall
takeplace withaviewtopromoting theinterests ofallparticipants onamutually advantageous basis
andtosecuring anoverall balance ofrights andobligations.
2. Theprocess ofliberalization shalltakeplace withduerespect fornational policy objectives
andthelevelofdevelopment ofindividual Members, bothoverall andinindividual sectors. There
shallbeappropriate flexibility forindividual developing country Members foropening fewer sectors,
liberalizing fewer types oftransactions, progressively extending market access inlinewiththeir
development situation and,when making access totheirmarkets available toforeign service suppliers,
attaching tosuchaccess conditions aimed atachieving theobjectives referred toinArticle IV.
10Specific commitments assumed under thisArticle shallnotbeconstrued torequire anyMember
tocompensate foranyinherent competitive disadvantages which result from theforeign character of
therelevant services orservice suppliers.GATS-V -Page18
3. Foreachround, negotiating guidelines andprocedures shallbeestablished. Forthepurposes
ofestablishing suchguidelines, theCouncil forTrade inServices shallcarry outanassessment oftrade
inservices inoverall terms andonasectoral basiswithreference totheobjectives ofthisAgreement,
including those setoutinparagraph 1ofArticle IV.Negotiating guidelines shallestablish modalities
forthetreatment ofliberalization undertaken autonomously byMembers since previous negotiations,
aswellasforthespecial treatment forleast-developed country Members under theprovisions of
paragraph 3ofArticle IV.
4. Theprocess ofprogressive liberalization shallbeadvanced ineachsuchround through bilateral,
plurilateral ormultilateral negotiations directed towards increasing thegeneral level ofspecific
commitments undertaken byMembers under thisAgreement.
Article XX
Schedules ofSpecific Commitments
1. EachMember shallsetoutinaschedule thespecific commitments itundertakes under PartIII
ofthisAgreement. With respect tosectors where suchcommitments areundertaken, eachSchedule
shallspecify:
(a) terms, limitations andconditions onmarket access;
(b) conditions andqualifications onnational treatment;
(c) undertakings relating toadditional commitments;
(d) where appropriate thetime-frame forimplementation ofsuchcommitments; and
(e) thedateofentry intoforce ofsuchcommitments.
2. Measures inconsistent withbothArticles XVIandXVIIshallbeinscribed inthecolumn relating
toArticle XVI. Inthiscasetheinscription willbeconsidered toprovide acondition orqualification
toArticle XVII aswell.
3. Schedules ofspecific commitments shallbeannexed tothisAgreement andshallformanintegral
partthereof.
Article XXI
Modification ofSchedules
1. (a) AMember (referred tointhisArticle asthe"modifying Member") maymodify or
withdraw anycommitment initsSchedule, atanytimeafterthree years haveelapsed from thedate
onwhich thatcommitment entered intoforce, inaccordance withtheprovisions ofthisArticle.
(b) AmodifyingMembershallnotifyitsintenttomodifyorwithdrawacommitmentpursuant
tothisArticle totheCouncil forTrade inServices nolaterthanthree months before theintended date
ofimplementation ofthemodification orwithdrawal.
2. (a) AttherequestofanyMemberthebenefitsofwhichunderthisAgreementmaybeaffected
(referred tointhisArticle asan"affected Member") byaproposed modification orwithdrawal notified
under subparagraph 1(b),themodifying Member shallenter intonegotiations withaviewtoreaching
agreementonanynecessarycompensatoryadjustment.Insuchnegotiationsandagreement,theMembersGATS-V -Page19
concerned shallendeavour tomaintain ageneral levelofmutually advantageous commitments notless
favourabletotradethanthatprovidedforinSchedulesofspecificcommitmentspriortosuchnegotiations.
(b) Compensatory adjustments shallbemade onamost-favoured-nation basis.
3. (a) Ifagreement isnotreached between themodifying Member andanyaffected Member
before theendoftheperiod provided fornegotiations, suchaffected Member mayrefer thematter
toarbitration. Anyaffected Member thatwishes toenforce arightthatitmayhavetocompensation
must participate inthearbitration.
(b) Ifnoaffected Member hasrequested arbitration, themodifying Member shallbefree
toimplement theproposed modification orwithdrawal.
4. (a) Themodifying Member maynotmodify orwithdraw itscommitment untilithasmade
compensatory adjustments inconformity withthefindings ofthearbitration.
(b) Ifthemodifying Member implements itsproposed modification orwithdrawal anddoes
notcomply withthefindings ofthearbitration, anyaffected Member thatparticipated inthearbitration
may modify orwithdraw substantially equivalent benefits inconformity with those findings.
Notwithstanding Article II,suchamodification orwithdrawal maybeimplemented solely withrespect
tothemodifying Member.
5. TheCouncil forTrade inServices shallestablish procedures forrectification ormodification
ofSchedules. AnyMember which hasmodified orwithdrawn scheduled commitments under thisArticle
shallmodify itsSchedule according tosuchprocedures.
PART V
INSTITUTIONAL PROVISIONS
Article XXII
Consultation
1. EachMember shallaccord sympathetic consideration to,andshallafford adequate opportunity
for,consultation regarding suchrepresentations asmaybemade byanyother Member withrespect
toanymatter affecting theoperation ofthisAgreement. TheDispute Settlement Understanding (DSU)
shallapply tosuchconsultations.
2. TheCouncil forTrade inServices ortheDispute Settlement Body (DSB) may, attherequest
ofaMember, consult withanyMember orMembers inrespect ofanymatter forwhich ithasnotbeen
possible tofindasatisfactory solution through consultation under paragraph 1.
3. AMember maynotinvoke Article XVII, either under thisArticle orArticle XXIII, withrespect
toameasure ofanother Member thatfallswithin thescope ofaninternational agreement between them
relating totheavoidance ofdouble taxation. Incaseofdisagreement between Members astowhether
ameasure fallswithin thescope ofsuchanagreement between them, itshallbeopentoeither Member
tobring thismatter before theCouncil forTrade inServices.11TheCouncil shallrefer thematter
toarbitration. Thedecision ofthearbitrator shallbefinalandbinding ontheMembers.
11Withrespect toagreements ontheavoidance ofdouble taxation which existonthedateofentry
intoforce oftheWTO Agreement, suchamatter maybebrought before theCouncil forTrade in
Services onlywiththeconsent ofbothparties tosuchanagreement.GATS-V -Page20
Article XXIII
Dispute Settlement andEnforcement
1. IfanyMembershouldconsiderthatanyotherMemberfailstocarryoutitsobligationsorspecific
commitments under thisAgreement, itmaywithaviewtoreaching amutually satisfactory resolution
ofthematter haverecourse totheDSU.
2. IftheDSBconsiders thatthecircumstances areserious enough tojustify suchaction, itmay
authorize aMember orMembers tosuspend theapplication toanyother Member orMembers of
obligations andspecific commitments inaccordance withArticle 22oftheDSU.
3. IfanyMember considers thatanybenefit itcould reasonably haveexpected toaccrue toitunder
aspecific commitment ofanother Member under PartIIIofthisAgreement isbeing nullified orimpaired
asaresult oftheapplication ofanymeasure which doesnotconflict withtheprovisions ofthis
Agreement, itmayhaverecourse totheDSU. Ifthemeasure isdetermined bytheDSBtohavenullified
orimpaired suchabenefit, theMember affected shallbeentitled toamutually satisfactory adjustment
onthebasis ofparagraph 2ofArticle XXI, which mayinclude themodification orwithdrawal ofthe
measure. Intheevent anagreement cannot bereached between theMembers concerned, Article 22
oftheDSU shallapply.
Article XXIV
Council forTrade inServices
1. TheCouncil forTrade inServices shallcarry outsuchfunctions asmaybeassigned toitto
facilitate theoperation ofthisAgreement andfurther itsobjectives. TheCouncil mayestablish such
subsidiary bodies asitconsiders appropriate fortheeffective discharge ofitsfunctions.
2. TheCouncil and,unless theCouncil decides otherwise, itssubsidiary bodies shallbeopen
toparticipation byrepresentatives ofallMembers.
3. TheChairman oftheCouncil shallbeelected bytheMembers.
Article XXV
Technical Cooperation
1. Service suppliers ofMembers which areinneedofsuchassistance shallhaveaccess tothe
services ofcontact points referred toinparagraph 2ofArticle IV.
2. Technical assistance todeveloping countries shallbeprovided atthemultilateral levelbythe
Secretariat andshallbedecided upon bytheCouncil forTrade inServices.
Article XXVI
Relationship withOther International Organizations
TheGeneral Council shallmake appropriate arrangements forconsultation andcooperation
withtheUnitedNationsanditsspecializedagenciesaswellaswithotherintergovernmentalorganizations
concerned withservices.GATS-V -Page21
PART VI
FINAL PROVISIONS
Article XXVII
Denial ofBenefits
AMember maydenythebenefits ofthisAgreement:
(a) tothesupply ofaservice, ifitestablishes thattheservice issupplied from orinthe
territory ofanon-Member orofaMember towhich thedenying Member doesnot
apply theWTO Agreement;
(b) inthecaseofthesupply ofamaritime transport service, ifitestablishes thattheservice
issupplied:
(i) byavessel registered under thelawsofanon-Member orofaMember to
which thedenying Member doesnotapply theWTO Agreement, and
(ii) byaperson which operates and/or usesthevessel inwhole orinpartbut
which isofanon-Member orofaMember towhich thedenying Member
doesnotapply theWTO Agreement;
(c) toaservice supplier thatisajuridical person, ifitestablishes thatitisnotaservice
supplier ofanother Member, orthatitisaservice supplier ofaMember towhich the
denying Member doesnotapply theWTO Agreement.
Article XXVIII
Definitions
Forthepurpose ofthisAgreement:
(a) "measure" means anymeasure byaMember, whether intheformofalaw,regulation,
rule,procedure, decision, administrative action, oranyother form;
(b) "supply ofaservice" includes theproduction, distribution, marketing, saleanddelivery
ofaservice;
(c) "measures byMembers affecting trade inservices" include measures inrespect of
(i) thepurchase, payment oruseofaservice;
(ii) theaccess toanduseof,inconnection withthesupply ofaservice, services
which arerequired bythose Members tobeoffered tothepublic generally;
(iii) thepresence, including commercial presence, ofpersons ofaMember for
thesupply ofaservice intheterritory ofanother Member;
(d) "commercial presence" means anytypeofbusiness orprofessional establishment,
including through
(i) theconstitution, acquisition ormaintenance ofajuridical person, orGATS-V -Page22
(ii) thecreation ormaintenance ofabranch orarepresentative office,
within theterritory ofaMember forthepurpose ofsupplying aservice;
(e) "sector" ofaservice means,
(i) withreference toaspecific commitment, oneormore, orall,subsectors of
thatservice, asspecified inaMember 'sSchedule,
(ii) otherwise, thewhole ofthatservice sector, including allofitssubsectors;
(f) "service ofanother Member" means aservice which issupplied,
(i) from orintheterritory ofthatother Member, orinthecaseofmaritime
transport, byavessel registered under thelawsofthatother Member, or
byaperson ofthatother Member which supplies theservice through the
operation ofavessel and/or itsuseinwhole orinpart;or
(ii) inthecaseofthesupply ofaservice through commercial presence orthrough
thepresence ofnatural persons, byaservice supplier ofthatother Member;
(g) "service supplier" means anyperson thatsupplies aservice;12
(h) "monopoly supplier ofaservice" means anyperson, public orprivate, which inthe
relevant market oftheterritory ofaMember isauthorized orestablished formally or
ineffect bythatMember asthesolesupplier ofthatservice;
(i) "service consumer" means anyperson thatreceives orusesaservice;
(j) "person" means either anatural person orajuridical person;
(k) "natural person ofanother Member" means anatural person whoresides intheterritory
ofthatother Member oranyother Member, andwhounder thelawofthatother
Member:
(i) isanational ofthatother Member; or
(ii) hastheright ofpermanent residence inthatother Member, inthecaseof
aMember which:
1. doesnothavenationals; or
2. accords substantially thesame treatment toitspermanent residents
asitdoestoitsnationals inrespect ofmeasures affecting trade in
services, asnotified initsacceptance oforaccession totheWTO
Agreement, provided thatnoMember isobligated toaccord tosuch
permanent residents treatment more favourable than would be
accorded bythatother Member tosuchpermanent residents. Such
12Where theservice isnotsupplied directly byajuridical person butthrough other forms of
commercial presence suchasabranch orarepresentative office, theservice supplier (i.e.thejuridical
person)shall,nonetheless,throughsuchpresencebeaccordedthetreatmentprovidedforservicesuppliers
under theAgreement. Such treatment shallbeextended tothepresence through which theservice
issupplied andneednotbeextended toanyother parts ofthesupplier located outside theterritory
where theservice issupplied.GATS-V -Page23
notification shallinclude theassurance toassume, withrespect to
those permanent residents, inaccordance with itslaws and
regulations, thesame responsibilities thatother Member bears with
respect toitsnationals;
(l) "juridical person" means anylegalentity dulyconstituted orotherwise organized under
applicable law,whether forprofit orotherwise, andwhether privately-owned or
governmentally-owned, including anycorporation, trust, partnership, jointventure,
soleproprietorship orassociation;
(m) "juridical person ofanother Member" means ajuridical person which iseither:
(i) constituted orotherwise organized under thelawofthatother Member, and
isengaged insubstantive business operations intheterritory ofthatMember
oranyother Member; or
(ii) inthecaseofthesupply ofaservice through commercial presence, owned
orcontrolled by:
1. natural persons ofthatMember; or
2. juridical persons ofthat other Member identified under
subparagraph (i);
(n) ajuridical person is:
(i) "owned" bypersons ofaMember ifmore than50percentoftheequity
interest initisbeneficially owned bypersons ofthatMember;
(ii) "controlled" bypersons ofaMember ifsuchpersons havethepower toname
amajority ofitsdirectors orotherwise tolegally direct itsactions;
(iii) "affiliated" withanother person when itcontrols, oriscontrolled by,that
other person; orwhen itandtheother person arebothcontrolled bythesame
person;
(o) "direct taxes" comprise alltaxes ontotalincome, ontotalcapital oronelements of
income orofcapital, including taxes ongains from thealienation ofproperty, taxes
onestates, inheritances andgifts, andtaxes onthetotalamounts ofwages orsalaries
paidbyenterprises, aswellastaxes oncapital appreciation.
Article XXIX
Annexes
TheAnnexes tothisAgreement areanintegral partofthisAgreement.GATS-V -Page24
ANNEX ONARTICLE IIEXEMPTIONS
Scope
1. ThisAnnex specifies theconditions under which aMember, attheentry intoforce ofthis
Agreement, isexempted from itsobligations under paragraph 1ofArticle II.
2. Anynewexemptions applied forafterthedateofentry intoforce oftheWTO Agreement shall
bedealtwithunder paragraph 3ofArticle IXofthatAgreement.
Review
3. TheCouncil forTrade inServices shallreview allexemptions granted foraperiod ofmore
than5years. Thefirstsuchreview shalltakeplace nomore than5years aftertheentry intoforce
oftheWTO Agreement.
4. TheCouncil forTrade inServices inareview shall:
(a) examine whether theconditions which created theneedfortheexemption stillprevail;
and
(b) determine thedateofanyfurther review.
Termination
5. TheexemptionofaMemberfromitsobligationsunderparagraph1ofArticleIIoftheAgreement
withrespect toaparticular measure terminates onthedateprovided forintheexemption.
6. Inprinciple, suchexemptions should notexceed aperiod of10years. Inanyevent, theyshall
besubject tonegotiation insubsequent trade liberalizing rounds.
7. AMember shallnotify theCouncil forTrade inServices atthetermination oftheexemption
period thattheinconsistent measure hasbeenbrought intoconformity withparagraph 1ofArticle II
oftheAgreement.
ListsofArticle IIExemptions
[Theagreed listsofexemptions under paragraph 2ofArticle IIwillbeannexed hereinthetreaty copy
oftheWTO Agreement.]GATS-V -Page25
ANNEX ONMOVEMENT OFNATURAL PERSONS
SUPPLYING SERVICES UNDER THE AGREEMENT
1. ThisAnnexappliestomeasuresaffectingnaturalpersonswhoareservicesuppliersofaMember,
andnatural persons ofaMember whoareemployed byaservice supplier ofaMember, inrespect
ofthesupply ofaservice.
2. TheAgreement shallnotapply tomeasures affecting natural persons seeking access tothe
employment market ofaMember, norshallitapply tomeasures regarding citizenship, residence or
employment onapermanent basis.
3. Inaccordance withParts IIIandIVoftheAgreement, Members maynegotiate specific
commitments applying tothemovement ofallcategories ofnatural persons supplying services under
theAgreement. Natural persons covered byaspecific commitment shallbeallowed tosupply theservice
inaccordance withtheterms ofthatcommitment.
4. TheAgreement shallnotprevent aMember from applying measures toregulate theentry of
natural persons into,ortheirtemporary stayin,itsterritory, including those measures necessary to
protect theintegrity of,andtoensure theorderly movement ofnatural persons across, itsborders,
provided thatsuchmeasures arenotapplied insuchamanner astonullify orimpair thebenefits accruing
toanyMember under theterms ofaspecific commitment.13
13Thesolefactofrequiring avisafornatural persons ofcertain Members andnotforthose ofothers
shallnotberegarded asnullifying orimpairing benefits under aspecific commitment.GATS-V -Page26
ANNEX ONAIRTRANSPORT SERVICES
1. ThisAnnex applies tomeasures affecting trade inairtransport services, whether scheduled
ornon-scheduled, andancillary services. Itisconfirmed thatanyspecific commitment orobligation
assumed under thisAgreement shallnotreduce oraffect aMember 'sobligations under bilateral or
multilateral agreements thatareineffect onthedateofentry intoforce oftheWTO Agreement.
2. TheAgreement,includingitsdisputesettlementprocedures,shallnotapplytomeasuresaffecting:
(a) traffic rights, however granted; or
(b) services directly related totheexercise oftraffic rights,
except asprovided inparagraph 3ofthisAnnex.
3. TheAgreement shallapply tomeasures affecting:
(a) aircraft repair andmaintenance services;
(b) theselling andmarketing ofairtransport services;
(c) computer reservation system (CRS) services.
4. Thedispute settlement procedures oftheAgreement maybeinvoked onlywhere obligations
orspecific commitments havebeenassumed bytheconcerned Members andwhere dispute settlement
procedures inbilateral andother multilateral agreements orarrangements havebeenexhausted.
5. TheCouncil forTrade inServices shallreview periodically, andatleastevery fiveyears,
developments intheairtransport sector andtheoperation ofthisAnnex withaviewtoconsidering
thepossible further application oftheAgreement inthissector.
6. Definitions:
(a) "Aircraft repair andmaintenance services" mean suchactivities when undertaken on
anaircraft orapartthereof while itiswithdrawn from service anddonotinclude so-called line
maintenance.
(b) "Selling andmarketing ofairtransport services" mean opportunities fortheaircarrier
concerned tosellandmarket freely itsairtransport services including allaspects ofmarketing such
asmarket research, advertising anddistribution. These activities donotinclude thepricing ofair
transport services northeapplicable conditions.
(c) "Computerreservationsystem(CRS)services"meanservicesprovidedbycomputerised
systems thatcontain information about aircarriers 'schedules, availability, faresandfarerules, through
which reservations canbemade ortickets maybeissued.
(d) "Traffic rights" mean therightforscheduled andnon-scheduled services tooperate
and/or tocarrypassengers, cargo andmailforremuneration orhirefrom, to,within, orovertheterritory
ofaMember, including points tobeserved, routes tobeoperated, types oftraffic tobecarried, capacity
tobeprovided, tariffs tobecharged andtheirconditions, andcriteria fordesignation ofairlines,
including suchcriteria asnumber, ownership, andcontrol.GATS-V -Page27
ANNEX ONFINANCIAL SERVICES
1. Scope andDefinition
(a) ThisAnnex applies tomeasures affecting thesupply offinancial services. Reference
tothesupply ofafinancial service inthisAnnex shallmean thesupply ofaservice asdefined in
paragraph 2ofArticle IoftheAgreement.
(b) Forthepurposes ofsubparagraph 3(b)ofArticle IoftheAgreement, "services supplied
intheexercise ofgovernmental authority" means thefollowing:
(i) activities conducted byacentral bankormonetary authority orbyanyother
public entity inpursuit ofmonetary orexchange ratepolicies;
(ii) activities forming partofastatutory system ofsocial security orpublic
retirement plans; and
(iii) other activities conducted byapublic entity fortheaccount orwiththe
guarantee orusing thefinancial resources oftheGovernment.
(c) Forthepurposes ofsubparagraph 3(b)ofArticle IoftheAgreement, ifaMember
allows anyoftheactivities referred toinsubparagraphs (b)(ii) or(b)(iii) ofthisparagraph tobeconducted
byitsfinancial service suppliers incompetition withapublic entity orafinancial service supplier,
"services" shallinclude suchactivities.
(d) Subparagraph 3(c)ofArticle IoftheAgreement shallnotapply toservices covered
bythisAnnex.
2. Domestic Regulation
(a) NotwithstandinganyotherprovisionsoftheAgreement,aMembershallnotbeprevented
fromtaking measures forprudential reasons, including fortheprotection ofinvestors, depositors, policy
holders orpersons towhom afiduciary dutyisowed byafinancial service supplier, ortoensure the
integrity andstability ofthefinancial system. Where suchmeasures donotconform withtheprovisions
oftheAgreement, theyshall notbeusedasameans ofavoiding theMember 'scommitments or
obligations under theAgreement.
(b) NothingintheAgreementshallbeconstruedtorequireaMembertodiscloseinformation
relating totheaffairs andaccounts ofindividual customers oranyconfidential orproprietary information
inthepossession ofpublic entities.
3. Recognition
(a) AMember mayrecognize prudential measures ofanyother country indetermining
howtheMember 'smeasures relating tofinancial services shallbeapplied. Suchrecognition, which
maybeachieved through harmonization orotherwise, maybebased uponanagreement orarrangement
withthecountry concerned ormaybeaccorded autonomously.
(b) AMember thatisaparty tosuch anagreement orarrangement referred toin
subparagraph (a),whether future orexisting, shallafford adequate opportunity forother interested
Members tonegotiate theiraccession tosuchagreements orarrangements, ortonegotiate comparable
ones with it,under circumstances inwhich there would beequivalent regulation, oversight,
implementation ofsuchregulation, and,ifappropriate, procedures concerning thesharing ofinformation
between theparties totheagreement orarrangement. Where aMember accords recognitionGATS-V -Page28
autonomously, itshallafford adequate opportunity foranyother Member todemonstrate thatsuch
circumstances exist.
(c) Where aMember iscontemplating according recognition toprudential measures of
anyother country, paragraph 4(b)ofArticle VIIshallnotapply.
4. Dispute Settlement
Panels fordisputes onprudential issues andother financial matters shallhavethenecessary
expertise relevant tothespecific financial service under dispute.
5. Definitions
Forthepurposes ofthisAnnex:
(a) Afinancial service isanyservice ofafinancial nature offered byafinancial service
supplier ofaMember. Financial services include allinsurance andinsurance-related services, and
allbanking andother financial services (excluding insurance). Financial services include thefollowing
activities:
Insurance andinsurance-related services
(i) Direct insurance (including co-insurance):
(A) life
(B) non-life
(ii) Reinsurance andretrocession;
(iii) Insurance intermediation, suchasbrokerage andagency;
(iv) Servicesauxiliarytoinsurance,suchasconsultancy,actuarial,riskassessment
andclaim settlement services.
Banking andother financial services (excluding insurance)
(v) Acceptance ofdeposits andother repayable funds from thepublic;
(vi) Lending ofalltypes, including consumer credit, mortgage credit, factoring
andfinancing ofcommercial transaction;
(vii) Financial leasing;
(viii) Allpayment andmoney transmission services, including credit, charge and
debit cards, travellers cheques andbankers drafts;
(ix) Guarantees andcommitments;
(x) Trading forownaccount orforaccount ofcustomers, whether onan
exchange, inanover-the-counter market orotherwise, thefollowing:
(A) money market instruments (including cheques, bills, certificates of
deposits);
(B) foreign exchange;
(C) derivative products including, butnotlimited to,futures andoptions;GATS-V -Page29
(D) exchange rateandinterest rateinstruments, including products such
asswaps, forward rateagreements;
(E) transferable securities;
(F) other negotiable instruments andfinancial assets, including bullion.
(xi) Participation inissues ofallkinds ofsecurities, including underwriting and
placement asagent (whether publicly orprivately) andprovision ofservices
related tosuchissues;
(xii) Money broking;
(xiii) Asset management, such ascashorportfolio management, allforms of
collective investment management, pension fundmanagement, custodial,
depository andtrustservices;
(xiv) Settlement andclearing services forfinancial assets, including securities,
derivative products, andother negotiable instruments;
(xv) Provision andtransfer offinancial information, andfinancial dataprocessing
andrelated software bysuppliers ofother financial services;
(xvi) Advisory, intermediation andother auxiliary financial services onallthe
activities listed insubparagraphs (v)through (xv),including credit reference
andanalysis, investment andportfolio research andadvice, advice on
acquisitions andoncorporate restructuring andstrategy.
(b) Afinancial service supplier means anynatural orjuridical person ofaMember wishing
tosupply orsupplying financial services buttheterm"financial service supplier" doesnotinclude a
public entity.
(c) "Public entity" means:
(i) agovernment, acentral bankoramonetary authority, ofaMember, oran
entity owned orcontrolled byaMember, thatisprincipally engaged in
carrying outgovernmental functions oractivities forgovernmental purposes,
notincluding anentity principally engaged insupplying financial services
oncommercial terms; or
(ii) aprivate entity, performing functions normally performed byacentral bank
ormonetary authority, when exercising those functions.GATS-V -Page30
SECOND ANNEX ONFINANCIAL SERVICES
1. Notwithstanding Article IIoftheAgreement andparagraphs 1and2oftheAnnex onArticle II
Exemptions, aMember may, during aperiod of60daysbeginning fourmonths afterthedateofentry
intoforce oftheWTO Agreement, listinthatAnnex measures relating tofinancial services which
areinconsistent withparagraph 1ofArticle IIoftheAgreement.
2. Notwithstanding Article XXIoftheAgreement, aMember may, during aperiod of60days
beginning fourmonths afterthedateofentry intoforce oftheWTO Agreement, improve, modify
orwithdraw allorpartofthespecific commitments onfinancial services inscribed initsSchedule.
3. TheCouncil forTrade inServices shallestablish anyprocedures necessary fortheapplication
ofparagraphs 1and2.GATS-V -Page31
ANNEX ONNEGOTIATIONS ONMARITIME TRANSPORT SERVICES
1. Article IIandtheAnnex onArticle IIExemptions, including therequirement tolistintheAnnex
anymeasure inconsistent withmost-favoured-nation treatment thataMember willmaintain, shallenter
intoforce forinternational shipping, auxiliary services andaccess toanduseofportfacilities only
on:
(a) theimplementation datetobedetermined under paragraph 4oftheMinisterial Decision
onNegotiations onMaritime Transport Services; or,
(b) should thenegotiations notsucceed, thedateofthefinalreport oftheNegotiating Group
onMaritime Transport Services provided forinthatDecision.
2. Paragraph 1shallnotapply toanyspecific commitment onmaritime transport services which
isinscribed inaMember 'sSchedule.
3. Fromtheconclusionofthenegotiationsreferredtoinparagraph1,andbeforetheimplementation
date,aMember mayimprove, modify orwithdraw allorpartofitsspecific commitments inthissector
without offering compensation, notwithstanding theprovisions ofArticle XXI.GATS-V -Page32
ANNEX ONTELECOMMUNICATIONS
1. Objectives
Recognizing thespecificities ofthetelecommunications services sector and,inparticular, its
dualroleasadistinct sector ofeconomic activity andastheunderlying transport means forother
economic activities, theMembers haveagreed tothefollowing Annex withtheobjective ofelaborating
upon theprovisions oftheAgreement withrespect tomeasures affecting access toanduseofpublic
telecommunications transport networks andservices. Accordingly, thisAnnex provides notes and
supplementary provisions totheAgreement.
2. Scope
(a) ThisAnnex shallapply toallmeasures ofaMember thataffect access toanduseof
public telecommunications transport networks andservices.14
(b) ThisAnnex shallnotapply tomeasures affecting thecable orbroadcast distribution
ofradio ortelevision programming.
(c) Nothing inthisAnnex shallbeconstrued:
(i) torequire aMember toauthorize aservice supplier ofanyother Member
toestablish, construct, acquire, lease, operate, orsupply telecommunications
transport networks orservices, other thanasprovided forinitsSchedule;
or
(ii) torequire aMember (ortorequire aMember tooblige service suppliers under
itsjurisdiction) toestablish, construct, acquire, lease, operate orsupply
telecommunications transport networks orservices notoffered tothepublic
generally.
3. Definitions
Forthepurposes ofthisAnnex:
(a) "Telecommunications" means thetransmission andreception ofsignals byany
electromagnetic means.
(b) "Public telecommunications transport service" means anytelecommunications transport
service required, explicitly orineffect, byaMember tobeoffered tothepublic generally. Suchservices
mayinclude,interalia,telegraph,telephone,telex,anddatatransmissiontypicallyinvolvingthereal-time
transmission ofcustomer-supplied information between twoormore points without anyend-to-end
change intheform orcontent ofthecustomer 'sinformation.
(c) "Public telecommunications transport network" means thepublic telecommunications
infrastructurewhichpermitstelecommunicationsbetweenandamongdefinednetworkterminationpoints.
(d) "Intra-corporatecommunications"meanstelecommunicationsthroughwhichacompany
communicates within thecompany orwithoramong itssubsidiaries, branches and,subject toa
Member 'sdomestic lawsandregulations, affiliates. Forthese purposes, "subsidiaries", "branches"
14Thisparagraph isunderstood tomean thateachMember shallensure thattheobligations ofthis
Annexareappliedwithrespecttosuppliersofpublictelecommunicationstransportnetworksandservices
bywhatever measures arenecessary.GATS-V -Page33
and, where applicable, "affiliates" shall beasdefined byeach Member. "Intra-corporate
communications" inthisAnnex excludes commercial ornon-commercial services thataresupplied
tocompanies thatarenotrelated subsidiaries, branches oraffiliates, orthatareoffered tocustomers
orpotential customers.
(e) Anyreference toaparagraph orsubparagraph ofthisAnnex includes allsubdivisions
thereof.
4. Transparency
Intheapplication ofArticle IIIoftheAgreement, eachMember shallensure thatrelevant
information onconditions affecting access toanduseofpublic telecommunications transport networks
andservices ispublicly available, including: tariffs andother terms andconditions ofservice;
specifications oftechnical interfaces withsuchnetworks andservices; information onbodies responsible
forthepreparation andadoption ofstandards affecting suchaccess anduse; conditions applying to
attachment ofterminal orother equipment; andnotifications, registration orlicensing requirements,
ifany.
5. Access toanduseofPublic Telecommunications Transport Networks andServices
(a) EachMember shallensure thatanyservice supplier ofanyother Member isaccorded
access toanduseofpublic telecommunications transport networks andservices onreasonable andnon-
discriminatory terms andconditions, forthesupply ofaservice included initsSchedule. Thisobligation
shallbeapplied, interalia,through paragraphs (b)through (f).15
(b) Each Member shallensure thatservice suppliers ofanyother Member haveaccess
toanduseofanypublic telecommunications transport network orservice offered within oracross the
border ofthat Member, including private leased circuits, andtothisendshall ensure, subject to
paragraphs (e)and(f),thatsuchsuppliers arepermitted:
(i) topurchase orleaseandattach terminal orother equipment which interfaces
withthenetwork andwhich isnecessary tosupply asupplier 'sservices;
(ii) tointerconnectprivateleasedorownedcircuitswithpublictelecommunications
transport networks andservices orwithcircuits leased orowned byanother
service supplier; and
(iii) touseoperating protocols oftheservice supplier 'schoice inthesupply of
anyservice, other than asnecessary toensure theavailability of
telecommunications transport networks andservices tothepublic generally.
(c) EachMember shallensure thatservice suppliers ofanyother Member mayusepublic
telecommunications transport networks andservices forthemovement ofinformation within andacross
borders, including forintra-corporate communications ofsuchservice suppliers, andforaccess to
information contained indatabases orotherwise stored inmachine-readable form intheterritory of
anyMember. Anyneworamended measures ofaMember significantly affecting suchuseshallbe
notified andshallbesubject toconsultation, inaccordance withrelevant provisions oftheAgreement.
(d) Notwithstanding thepreceding paragraph, aMember maytakesuchmeasures asare
necessary toensure thesecurity andconfidentiality ofmessages, subject totherequirement thatsuch
15Theterm"non-discriminatory"isunderstoodtorefertomost-favoured-nationandnationaltreatment
asdefined intheAgreement, aswellastoreflect sector-specific usage ofthetermtomean "terms
andconditions nolessfavourable thanthoseaccorded toanyotheruseroflikepublic telecommunications
transport networks orservices under likecircumstances".GATS-V -Page34
measures arenotapplied inamanner which would constitute ameans ofarbitrary orunjustifiable
discrimination oradisguised restriction ontrade inservices.
(e) EachMember shallensure thatnocondition isimposed onaccess toanduseofpublic
telecommunications transport networks andservices other thanasnecessary:
(i) tosafeguard thepublic service responsibilities ofsuppliers ofpublic
telecommunications transport networks andservices, inparticular theirability
tomake theirnetworks orservices available tothepublic generally;
(ii) toprotect thetechnical integrity ofpublic telecommunications transport
networks orservices; or
(iii) toensure thatservice suppliers ofanyother Member donotsupply services
unless permitted pursuant tocommitments intheMember 'sSchedule.
(f) Provided thattheysatisfy thecriteria setoutinparagraph (e),conditions foraccess
toanduseofpublic telecommunications transport networks andservices mayinclude:
(i) restrictions onresale orshared useofsuchservices;
(ii) arequirement tousespecified technical interfaces, including interface
protocols, forinter-connection withsuchnetworks andservices;
(iii) requirements, where necessary, fortheinter-operability ofsuchservices and
toencourage theachievement ofthegoals setoutinparagraph 7(a);
(iv) typeapproval ofterminal orother equipment which interfaces withthe
network andtechnical requirements relating totheattachment ofsuch
equipment tosuchnetworks;
(v) restrictions oninter-connection ofprivate leased orowned circuits withsuch
networks orservices orwithcircuits leased orowned byanother service
supplier; or
(vi) notification, registration andlicensing.
(g) Notwithstandingtheprecedingparagraphsofthissection,adevelopingcountryMember
may,consistent withitslevelofdevelopment, placereasonable conditions onaccess toanduseofpublic
telecommunications transport networks andservices necessary tostrengthen itsdomestic
telecommunications infrastructure andservice capacity andtoincrease itsparticipation ininternational
trade intelecommunications services. Such conditions shallbespecified intheMember 'sSchedule.
6. Technical Cooperation
(a) Members recognize thatanefficient, advanced telecommunications infrastructure in
countries, particularly developing countries, isessential totheexpansion oftheirtrade inservices.
Tothisend,Members endorse andencourage theparticipation, tothefullest extent practicable, of
developed anddeveloping countries andtheirsuppliers ofpublic telecommunications transport networks
andservicesandotherentitiesinthedevelopmentprogrammesofinternationalandregionalorganizations,
including theInternational Telecommunication Union, theUnited Nations Development Programme,
andtheInternational Bank forReconstruction andDevelopment.
(b) Membersshallencourageandsupporttelecommunicationscooperationamongdeveloping
countries attheinternational, regional andsub-regional levels.GATS-V -Page35
(c) Incooperation withrelevant international organizations, Members shallmake available,
where practicable, todeveloping countries information withrespect totelecommunications services
anddevelopments intelecommunications andinformation technology toassist instrengthening their
domestic telecommunications services sector.
(d) Membersshallgivespecialconsiderationtoopportunitiesfortheleast-developedcountries
toencourage foreign suppliers oftelecommunications services toassist inthetransfer oftechnology,
training andother activities thatsupport thedevelopment oftheirtelecommunications infrastructure
andexpansion oftheirtelecommunications services trade.
7. Relation toInternational Organizations andAgreements
(a) Members recognize theimportance ofinternational standards forglobal compatibility
andinter-operabilityoftelecommunicationnetworksandservicesandundertaketopromotesuchstandards
through theworkofrelevant international bodies, including theInternational Telecommunication Union
andtheInternational Organization forStandardization.
(b) Members recognize theroleplayed byintergovernmental andnon-governmental
organizations andagreements inensuring theefficient operation ofdomestic andglobal
telecommunications services, inparticular theInternational Telecommunication Union. Members shall
make appropriate arrangements, where relevant, forconsultation withsuchorganizations onmatters
arising from theimplementation ofthisAnnex.GATS-V -Page36
ANNEX ONNEGOTIATIONS ONBASIC TELECOMMUNICATIONS
1. Article IIandtheAnnex onArticle IIExemptions, including therequirement tolistintheAnnex
anymeasure inconsistent withmost-favoured-nation treatment thataMember willmaintain, shallenter
intoforce forbasic telecommunications onlyon:
(a) theimplementation datetobedetermined under paragraph 5oftheMinisterial Decision
onNegotiations onBasic Telecommunications; or,
(b) should thenegotiations notsucceed, thedateofthefinalreport oftheNegotiating Group
onBasic Telecommunications provided forinthatDecision.
2. Paragraph 1shallnotapply toanyspecific commitment onbasic telecommunications which
isinscribed inaMember 'sSchedule.