WORLD TRADE WT/TC/NOTIF/STR/1
15October 1996
ORGANIZATION(96-4340)
Original: English
TECHNICAL COOPERATION HANDBOOK ONNOTIFICATION REQUIREMENTS
Article XVII ofGATT 1994 andtheWTO Understanding on
theInterpretation ofArticle XVII
(State Trading Enterprises)
1. Thissection oftheHandbook onNotification Requirements covers thenotification obligations
under Article XVII ofGATT 1994andtheWTO Understanding ontheInterpretation ofArticle XVII
(State Trading Enterprises) (STR). Itconsists ofthefollowing fiveparts:
PartI: Overview ofnotification requirements
PartII: Listing ofthenotification obligations
PartIII: Document(s) concerning guidelines andformats
PartIV: "Mock" examples ofnotifications
PartV: TextofArticle XVII ofGATT 1994 andoftheWTO Understanding onthe
Interpretation ofArticle XVII
2. Foracceding countries, thedeadlines forthesubmission oftheirnotifications willbegoverned
bytheirrespective Protocols ofAccession.
Note: TheHandbook onNotification Requirements doesnotconstitute alegalinterpretation of
thenotification obligations under therespective Agreement(s). Ithasbeen prepared bythe
Secretariat toassist Members incomplying withtheirnotification obligations.STR-I -Page1
STR-I
ARTICLE XVII OFGATT 1994 AND THE WTO
UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII
OVERVIEW OFNOTIFICATION REQUIREMENTSSTR-I -Page2
ARTICLE XVII:4(a) OFGATT 1994 AND THE WTO UNDERSTANDING
ONTHE INTERPRETATION OFARTICLE XVII
Members aretonotify allstatetrading enterprises inaccordance withthedefinition provided
inparagraph 1oftheWTO Understanding onArticle XVII. Thelatter covers governmental andnon-
governmental enterprises, including marketing boards, which havebeengranted exclusive orspecial
rights orprivileges, intheexercise ofwhich theyinfluence through theirpurchases orsalesthelevel
ordirection ofimports orexports.
(a) Thenotification istobemade annually bythedeadline of30June, andshould cover theperiod
January through December oftheprevious year. (Seealsopoints (d)and(e).)
(b) Membersmustnotifytheenterprisesreferredtoinparagraph1whetherornotimportsorexports
havetaken place.
(c) Thenotification should bemade according toastandard format (G/STR/N/1, Annex) andits
contents should besufficient toenable aclearappreciation ofthemanner ofoperation ofthe
enterprises notified andtheeffect oftheiroperations oninternational trade.
(d) While thisisanannual requirement ,theinformation required tobenotified differs fromyear
toyearforthefollowing reason: thefirstnotification istobea"new andfull"oneproviding
alloftherequired information onstatetrading activities during theperiod covered (i.e.afull
response tothequestionnaire). Subsequently, a"new andfull"notification mustbemade every
thirdyear.1Ineachoftheinterveningtwoyears,updatingnotificationsmustbemade,indicating
anychanges instatetrading activities since thenewandfullnotification wasmade.
(e) Anotification must bemade every year, evenwhere
- theMember doesnotmaintain anystatetrading enterprises;
- existing statetrading enterprises havenotengaged intrade during theperiod under
review; or
- theMember hasnoteffected anychanges inpreviously notified statetrading activities.
1OncetheMember hasmade anewandfullnotification, itmustsubsequently respond totheschedule
ofnotifications ineffect. Forexample, anewandfullnotification wasrequired bythedeadline of
30June1995; in1996 and1997 updating notifications arerequired, andthenextnewandfull
notification willbedueby30June1998. However, aMember 'sfirstnotification mustalways bea
"new andfull"one,regardless oftheyearforwhich thenotification ismade.STR-II -Page1
STR-II
ARTICLE XVII OFGATT 1994 AND THE WTO
UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII
NOTIFICATION OBLIGATIONSSTR-II -Page2
STATE TRADING ACTIVITIES
NOTIFICATION OBLIGATIONS
Item Notification requirements Type ofmeasure Periodicity Format Members notifying Towhom
1. State trading State trading activities Triennial G/STR/N/1 WTO Members Council for
(new andfull Trade inGoods
GATT 1994, Art.XVII:4(a) and notification)
paragraph 1oftheUnderstanding
ontheInterpretation ofArticle XVII
ofGATT 1994 -annual
2. State trading State trading activities Annual G/STR/N/1 WTO Members Council for
(changes) Trade inGoods
GATT 1994, Art.XVII:4(a) and
paragraph 1oftheUnderstanding
ontheInterpretation ofArticle XVII
ofGATT 1994 -annualSTR-III -Page1
STR-III
ARTICLE XVII OFGATT 1994 AND THE WTO
UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII
DOCUMENT
G/STR/N/1RESTRICTED
WORLD TRADE G/STR/N/1
13March 1995
ORGANIZATION(95-0545)
Original: English
STATE TRADING
Notifications Pursuant toArticle XVII:4(a) oftheGATT 1994 and
Paragraph 1oftheUnderstanding ontheInterpretation ofArticle XVII
1. Pursuant toArticle XVII:4(a) oftheGATT 1994 andParagraph 1oftheUnderstanding on
theInterpretation ofArticle XVII, Members shallnotify theirstatetrading enterprises totheCouncil
forTrade inGoods inaccordance withthefollowing working definition ofsuchenterprises:
"Governmental andnon-governmental enterprises, including marketing boards, which
have been granted exclusive orspecial rights orprivileges. including statutory or
constitutional powers, intheexercise ofwhich theyinfluence through theirpurchases
orsalesthelevelordirection ofimports orexports."
2. Inaccordance withthedecision oftheCouncil forTrade inGoods of20February 1995
(G/C/M/1,item5(b)),the1995notificationobligationforMembersistosubmitnewandfullnotifications
ofstatetrading enterprises andthedeadline forsubmission ofsuchnotifications is30June1995.
3. Members aretherefore invited tosubmit, notlaterthan30June1995, newandfullresponses
tothequestionnaire onstatetrading (BISD 9S/184-185) reproduced intheAnnex tothisdocument.
4. Members willrecall thattheCONTRACTING PARTIES totheGATT 1947havedecided that,
ifameasure issubject toanotification obligation bothunder theWTO Agreement andtheGATT 1947,
thenotification ofsuchameasure totheWTO shall, unless otherwise indicated inthenotification,
bedeemed tobealso anotification ofthatmeasure under theGATT 1947 (L/7582 of
13December 1994). Accordingly, thenotification ofstatetrading enterprises pursuant tothisinvitation
would bedeemed tobeanotification responding totherequest fornotifications under Article XVII:4(a)
oftheGATT 1947 (L/7623).
5. Responses totheabove request willbeissued, asreceived, intheG/STR/N/1 series under
therespective country codes.G/STR/N/1
Page2
ANNEX
Questionnaire onState Trading
I. Enumeration ofState-trading enterprises
Does yourcountry maintain enterprises covered bytheprovisions ofArticle XVII? Ifso,list
theproducts orgroups ofproducts forwhich aStateenterprise ismaintained orforwhich anenterprise
hasexclusive orspecial privileges.
II. Reason andpurpose forintroducing andmaintaining State-trading
enterprises
State foreachproduct thereason andpurpose forintroducing andmaintaining theenterprise
(itshould beindicated, forexample, whether thepurpose fortheeffect oftheenterprise istoprevent
prices toconsumers fromexceeding certain maximum limits, ortoprotect domestic producers bythe
control ofimports and/or thepurchase ofdomestic supplies atabove world pricelevels, ortofacilitate
export sales, ortomake itpossible toestablish oradminister astabilization arrangement). Adescription
ofthelegalprovisions should beincluded sofarasthishasnotbeensubmitted inearlier notifications.
III. Description ofthefunctioning oftheState-trading enterprises
Describe, itembyitem, thefunctioning ofsuchenterprises andstateinparticular:
- Whether theenterprise deals withexports orwithimports, orboth.
- Whether private traders areallowed toimport orexport and,ifso,onwhatconditions.
Whether there isfreecompetition between private traders andtheState-trading
enterprise.
- Thecriteria usedfordetermining thequantities tobeexported andimported.
- How export prices aredetermined. How themark-up onimported products is
determined. Howexport prices andthere-sale prices ofimports compare withdomestic
prices.
- Whether long-term contracts arenegotiated bytheState-trading enterprise. Whether
State-trading methods areusedtofulfil contractual obligations entered intobythe
Government.
IV. Statistical information
Furnish statistics (where possible byquantity andvalue) ofimports, exports andnational
production ontheproducts notified, onthefollowing lines:
(a) thefigures should cover thelastthree available years;
(b) thefigures forthethree groups (imports, exports andnational production) should be
given, where possible, inacomparable form;G/STR/N/1
Page3
(c) thefigures should bebroken down soastoshow:
(i) trade bytheenterprise;
(ii) other trade.
V. Reason whynoforeign trade hastaken place (ifthisisthecase) in
products affected
Incases where noforeign trade hastaken place intheproducts affected, statethereasons.
VI. Additional information
Provide anyadditional information thatmaybeappropriate.STR-IV -Page1
STR-IV
ARTICLE XVII OFGATT 1994 AND THE WTO
UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII
"MOCK" EXAMPLESSTR-IV -Page2
"MOCK" EXAMPLES OFNOTIFICATIONS UNDER ARTICLE XVII OF
GATT 1994 AND THE WTO UNDERSTANDING ONARTICLE XVII
Case 1: Your country does notmaintain anystate trading enterprises (asdefined in
paragraph 1oftheUnderstanding).
Aletter stating thisfactissufficient.
EXAMPLE:
"Pursuant toArticle XVII:4(a) ofGATT 1994 andparagraph 1ofthe
Understanding ontheInterpretation ofArticle XVII, andinresponse tothe
request fornotifications contained indocument [G/STR/N/ ],Iwishtonotify
that[name ofMember] doesnotmaintain anystatetrading enterprises in
accordance withtheworking definition contained inparagraph 1oftheabove-
mentioned Understanding."
Case 2: Your country maintains oneormore state trading enterprises (asdefined in
paragraph 1oftheUnderstanding) .
Anotification should bemade containing afullresponse tothequestionnaire onstate
trading (Annex toG/STR/N/1). Itshould besubmitted notlaterthan30Juneofthe
yearfollowing theperiod covered bythenotification.1
Case 3: There have been nochanges inyourcountry 'sstatetrading activities (asdefined
inparagraph 1oftheUnderstanding) since yourfullnotification onstatetrading
in[relevant year].
Aletter stating thisfactissufficient.
EXAMPLE:
"[Name ofMember] wishes toinform theSecretariat thatthere hasbeenno
change inthesituation since [name ofMember] 'sfullnotification made in
[relevant year]."
Case 4: There have been changes inyourcountry 'sstate trading activities (asdefined in
paragraph 1oftheUnderstanding) since yourfullnotification onstatetrading in
[relevant year].
Anotification should bemade indicating thechanges inyourstatetrading activities
sincethedateofyourfullnotification onstatetrading. Itshould besubmitted notlater
than30Juneoftheyearfollowing theperiod covered bythenotification.1
1Asthequestionnaire which istheformat forthenotification isintheprocess ofbeing revised,
itisnotappropriate atthistimetoprovide amock example ofasubstantive notification ofstatetrading
activities.STR-V -Page1
STR-V
ARTICLE XVII OFGATT 1994 AND THE WTO
UNDERSTANDING ONTHE INTERPRETATION
OFARTICLE XVII
TEXT OFARTICLE XVII OFGATT 1994
AND OFTHE WTO UNDERSTANDING ON
ARTICLE XVIISTR-V -Page2
ARTICLE XVII OFGATT 1994
State Trading Enterprises
1.* (a) Each contracting party undertakes thatifitestablishes ormaintains aState
enterprise, wherever located, orgrants toanyenterprise, formally orineffect, exclusive orspecial
privileges,* suchenterprise shall, initspurchases orsalesinvolving either imports orexports, actin
amanner consistent withthegeneral principles ofnon-discriminatory treatment prescribed inthis
Agreement forgovernmental measures affecting imports orexports byprivate traders.
(b) Theprovisions ofsub-paragraph (a)ofthisparagraph shallbeunderstood to
require thatsuchenterprises shall, having dueregard totheother provisions ofthisAgreement, make
anysuchpurchases orsalessolely inaccordance withcommercial considerations,* including price,
quality, availability, marketability, transportation andother conditions ofpurchase orsale,andshall
affordtheenterprisesoftheothercontractingpartiesadequateopportunity,inaccordancewithcustomary
business practice, tocompete forparticipation insuchpurchases orsales.
(c) Nocontracting party shallprevent anyenterprise (whether ornotanenterprise
described insub-paragraph (a)ofthisparagraph) under itsjurisdiction fromacting inaccordance with
theprinciples ofsub-paragraphs (a)and(b)ofthisparagraph.
2. Theprovisions ofparagraph 1ofthisArticle shallnotapply toimports ofproducts
forimmediate orultimate consumption ingovernmental useandnototherwise forresale oruseinthe
production ofgoods* forsale.With respect tosuchimports, eachcontracting party shallaccord to
thetrade oftheother contracting parties fairandequitable treatment.
3. Thecontracting parties recognize thatenterprises ofthekinddescribed inparagraph
1(a)ofthisArticle might beoperated soastocreate serious obstacles totrade; thusnegotiations on
areciprocal andmutually advantageous basisdesigned tolimitorreduce suchobstacles areofimportance
totheexpansion ofinternational trade.*
4. (a) ContractingpartiesshallnotifytheCONTRACTINGPARTIESoftheproductswhich
areimported intoorexported fromtheirterritories byenterprises ofthekinddescribed inparagraph
1(a)ofthisArticle.
(b) Acontractingpartyestablishing,maintainingorauthorizinganimportmonopoly
ofaproduct, which isnotthesubject ofaconcession under Article II,shall, ontherequest ofanother
contracting partyhaving asubstantial tradeintheproduct concerned, inform theCONTRACTING PARTIES
oftheimport mark-up* ontheproduct during arecent representative period, or,when itisnotpossible
todoso,oftheprice charged ontheresale oftheproduct.
(c) TheCONTRACTINGPARTIESmay,attherequestofacontractingpartywhichhas
reason tobelieve thatitsinterest under thisAgreement arebeing adversely affected bytheoperations
ofanenterprise ofthekinddescribed inparagraph 1(a),request thecontracting party establishing,
maintaining orauthorizing suchenterprise tosupply information about itsoperations related tothe
carrying outoftheprovisions ofthisAgreement.
(d) Theprovisionsofthisparagraphshallnotrequireanycontractingpartytodisclose
confidential information which would impede lawenforcement orotherwise becontrary tothepublic
interest orwould prejudice thelegitimate commercial interests ofparticular enterprises.STR-V -Page3
UNDERSTANDING ONTHE INTERPRETATION OFARTICLE XVII
OFTHE GENERAL AGREEMENT ONTARIFFS AND TRADE 1994
Members,
Noting thatArticle XVII provides forobligations onMembers inrespect oftheactivities of
thestatetrading enterprises referred toinparagraph 1ofArticle XVII, which arerequired tobe
consistent withthegeneral principles ofnon-discriminatory treatment prescribed inGATT 1994 for
governmental measures affecting imports orexports byprivate traders;
Noting further thatMembers aresubject totheirGATT 1994 obligations inrespect ofthose
governmental measures affecting statetrading enterprises;
RecognizingthatthisUnderstandingiswithoutprejudicetothesubstantivedisciplinesprescribed
inArticle XVII;
Hereby agree asfollows:
1. Inorder toensure thetransparency oftheactivities ofstatetrading enterprises, Members shall
notify suchenterprises totheCouncil forTrade inGoods, forreview bytheworking party tobeset
upunder paragraph 5,inaccordance withthefollowing working definition:
"Governmental andnon-governmental enterprises, including marketing boards, which have
beengranted exclusive orspecial rights orprivileges, including statutory orconstitutional
powers, intheexercise ofwhich theyinfluence through theirpurchases orsalesthelevelor
direction ofimports orexports."
This notification requirement does notapply toimports ofproducts forimmediate orultimate
consumption ingovernmental useorinusebyanenterprise asspecified above andnototherwise for
resale oruseintheproduction ofgoods forsale.
2. EachMember shallconduct areview ofitspolicy withregard tothesubmission ofnotifications
onstatetrading enterprises totheCouncil forTrade inGoods, taking account oftheprovisions ofthis
Understanding. Incarrying outsuchareview, eachMember should haveregard totheneedtoensure
themaximum transparency possible initsnotifications soastopermit aclearappreciation ofthemanner
ofoperation oftheenterprises notified andtheeffect oftheiroperations oninternational trade.
3. Notifications shallbemade inaccordance withthequestionnaire onstatetrading adopted on
24May1960(BISD 9S/184-185), itbeing understood thatMembers shallnotify theenterprises referred
toinparagraph 1whether ornotimports orexports haveinfacttaken place.
4. AnyMember which hasreason tobelieve thatanother Member hasnotadequately metits
notificationobligationmayraisethematterwiththeMemberconcerned.Ifthematterisnotsatisfactorily
resolved itmaymake acounter-notification totheCouncil forTrade inGoods, forconsideration by
theworking party setupunder paragraph 5,simultaneously informing theMember concerned.
5. Aworking party shall besetup,onbehalf oftheCouncil forTrade inGoods, toreview
notifications andcounter-notifications. Inthelightofthisreview andwithout prejudice toparagraph 4(c)
ofArticleXVII,theCouncilforTradeinGoodsmaymakerecommendationswithregardtotheadequacy
ofnotifications andtheneedforfurther information. Theworking party shallalsoreview, inthelight
ofthenotifications received, theadequacy oftheabove-mentioned questionnaire onstatetrading and
thecoverage ofstatetrading enterprises notified under paragraph 1.Itshallalsodevelop anillustrative
listshowing thekinds ofrelationships between governments andenterprises, andthekinds ofactivities,
engaged inbytheseenterprises, which mayberelevant forthepurposes ofArticle XVII. Itisunderstood
thattheSecretariat willprovide ageneral background paper fortheworking party ontheoperationsSTR-V -Page4
ofstatetrading enterprises astheyrelate tointernational trade. Membership oftheworking party shall
beopen toallMembers indicating theirwishtoserve onit.Itshallmeetwithin ayearofthedate
ofentry intoforce oftheWTO Agreement andthereafter atleastonceayear. Itshallreport annually
totheCouncil forTrade inGoods.1
1Theactivities ofthisworking party shallbecoordinated withthose oftheworking group provided
forinSection IIIoftheMinisterial Decision onNotification Procedures adopted on15April 1994.