WORLD TRADE
ORGANIZATIONS/WPDR/W/25
10 July 2003
(03-3734)
Working Party on Domestic Regulation Original:  English
COMMUNICATION FROM THE EUROPEAN COMMUNITY AND ITS MEMBER STATES
Proposal for Disciplines on Licensing Procedures
The following communication has been received from the delegation of the European
Community and its Member States with the request that it be circulated to Members of the WorkingParty on Domestic Regulation.
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I. INTRODUCTION
1. The EC considers the development of regulatory disciplines as an important component in the
current round of negotiations. Regulatory disciplines should in principle contribute to creating more
appropriate, trade friendly and transparent regulatory frameworks, and thereby facilitate and promote
trade in services, while taking full account of the legitimate policy objectives pursued by governmentregulation.
2. At the same time, disciplines on domestic regulation should help ensuring that regulation,
while legitimate, is not applied with a view to undermine commitments negotiated. However, it is
neither the intention nor the purpose of such disciplines to prescribe or impose certain regulatory
approaches, or the substance of any domestic regulations.
3. The Working Party on Domestic Regulation under the Council for Trade in Services has an
essential part to play in this work. The mandate of the Working Party on Domestic Regulation(S/L/70), in accordance with GATS Article VI.4, calls  on the Working Party to develop any necessary
disciplines to ensure that measures relating to licensing requirements and procedures, technical
standards and qualification requirements and procedures do not constitute unnecessary barriers to
trade in services.
4. Discussions in the WPDR over the last years have allowed members to make significant
progress towards better understanding the various concepts involved in the development of disciplines
under Article VI:4, as well as to the potential scope of such disciplines. The more focused approach
adopted allowed members to start to move from the abstract to the concrete, in particular through the
review of the actual regulatory issues
1 that relate to Article VI:4. The EC considers these discussions
and review very useful in assisting members to better identify the kind of regulatory barriers whichany disciplines under Article VI:4 should address, and what form and scope of application any future
disciplines could have.
5. Members also discussed the question whether any future disciplines under Article VI:4 should
adopt a horizontal approach, or s hould be developed on a sectoral basis. The EC is of the view that
these two approaches should not be seen as mutually exclusive.
                                                     
1 JOB(02)/20, and revisions.S/WPDR/W/25
Page 2
6. Disciplines under Article VI:4 should be sufficiently clear and precise to allow clear
implementation. The EC considers that there should be no overlap between Articles XVI and XVII,
which belong to Part III of the GATS, and Article VI, which belongs to Part II on general obligations
and disciplines. Therefore, measures subject to scheduling under Articles XVI and XVII of the GATS
would not be addressed by disciplines under Article VI:4.
7. Such an approach also does not preclude work on the development of other regulatory
principles that may be deemed necessary but are not within the scope of Article VI.  It is clear that
regulatory measures are not always the same in all sectors. A wide range of regulatory measures fall
outside the scope of measures which are supposed to be addressed by Article VI:4, such as for
instance the question of the independence of regulators, universal service obligations, access to
networks or essential facilities.
8. Some of these regulatory issues could be addressed through different approaches if members
felt the need to do so. Approaches which have b een discussed by members, both within the WPDR, as
well as in other fora, range from disciplines addressing only transparency of regulations, to horizontal
disciplines combining transparency and the specific criteria listed in Article VI:4 (a) to (c), sectoral
disciplines based on the same criteria, as well as disciplines 'tailored' to specific sectors (e.g. a
reference papers dealing also with issues such as universal service obligations, or access to networks,etc.)
II. DEVELOPMENT OF DISCIPLINES ON DOMESTIC REGULATION - THE CASE
FOR LICENSING PROCEDURES
9. The Chair of the WPDR suggested that Members work towards some common elements that
could form the basis, or indicate the general shape, of possible future disciplines
2. The EC has
welcomed this suggestion as it should help to further focus our work. In line with this suggestion, this
communication intends to contribute to the devel opment of such common elements with regard to
disciplines addressing licensing procedures.
10. Disciplines on licensing procedures would not address the substance of regulation, including
the ‘prudential carve-out’, i.e. the substantive requir ements to be fulfilled to obtain a licence. While
such an approach would still leave it up to each Member to determine the 'regulatory intensity' of, and
substantial requirements for the granting of a licence in, each service sector, it would ensure that the
procedures under which a licence is to be obtained are subject to some basic, common rules to avoid
that they become unnecessary barriers to trade in services.
11. To recall, Article VI:4 calls for the development of disciplines which should aim to ensure
that measures relating to qualification requirement and procedures, technical standards and licensing
requirements do not constitute unnecessary barriers to trade in services. Such disciplines shall aim toensure that such requirements are,  inter alia,
(a) Based on objective and transparent criteria, such as competence and the ability to
supply the service;
(b) not more burdensome than necessary to ensure the quality of the service;
(c) in the case of licensing procedures, not in themselves a restriction on the supply of
the service.
Subparagraph (c) of Article VI:4 implicitly recognises that licensing procedures in themselves
can create significant barriers to the supply of services. This has, in the EC's view, been confirmed by
                                                     
2 JOB(02)/46, dated 29 May 2002.S/WPDR/W/25
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the review of the actual regulatory examples , as well as information obtained from European services
suppliers on trade barriers encountered in third countries.
12. This focus on licensing procedures does not intend to exclude any of the other issues under
the mandate of Article VI:4. Nevertheless, the EC considers that disciplines on licensing procedures
are a useful starting point. Licensing procedures can potentially constitute significant barriers to tradein services in all sectors even though they should only be a means to handle an application for a
licence.
13. Licensing procedures are understood to be the administrative procedures relating to the
submission and processing of an application for a licence
3, covering such matters as time frames for
the processing of a licence, and the number of documents and the amount of information required in
the application for a licence.4
14. Disciplines on licensing procedures should address:
(a) Transparency of procedures, by building on existing principles and disciplines
contained in Article III and VI,
(b) the potential trade restrictiveness of licensing procedures, on the basis of Article VI:4,
(c) procedures related to review of, and where justified, appropriate remedies for,
administrative decisions on applications for licences, building on the provisions ofArticle VI:2.
15. Disciplines on licensing procedures in services have been developed in the context of,
amongst others, the 'Disciplines on Domestic Regu lation in the Accountancy Sector (S/L/64), and in
the context of the Reference Paper on Basic Telecommunication Services . These existing provisions
are of a general nature, and constitute a useful point of reference for the development of disciplinesaddressing licensing procedures in all service sectors.
16. Building upon the principles of GATS Articles III, VI:2 and VI:4, section III suggests
elements for possible disciplines on licensing procedures. Such disciplines should ensure that
licensing procedures:
• are pre-established, publicly available, and based on objective criteria;
• identify activities, terms and conditions;
• include all critical information for valid completion of applications;
• include relevant timeframe and critical deadlines (at least indicative ones);
• identify the competent authority;
• identify the appeal procedure.
                                                     
3 The GATS does not define the term ‘licence’. Given that different terms may be used in different
regulatory systems, this communication adopts a relatively wide concept of the term ‘licence’, coveringlicences, authorisations, permits, for which certain requ irements have to be fulfilled in order to obtain
permission to supply a service. This would also incl ude automatic authorisation procedures, that is where
approval for the supply of a service is granted in all cases. See proposed definition of ‘licensing procedures’under section III, General Principles.
4 Definition put forward in a Secretariat background paper S/WPPS/W/9, 11 September 1996.S/WPDR/W/25
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III. ELEMENTS FOR DISCIPLINES ON LICENSING PROCEDURES5
General principles
17. Members shall ensure that licensing procedures are not prepared, adopted or applied with a
view to or with the effect of creating unnecessary barriers to trade in services, and do not constitute, inthemselves, a restriction on the supply of services. [GATS VI:4(c), AD 2)
18. Where a licence is required for the provision of a service, the following disciplines shall
apply.
19. For the purpose of these disciplines, licensing procedures are defined as procedures to be
followed for the submission and processing of app lications under a licensing or other authorisation
regime requiring the submission of an application or other documentation to the relevant
administrative/regulatory body as a prior condition for the supply of a service in the territory of amember. [AILP 1.1]
1.  General provisions on licensing procedures
1. Licensing procedures shall be pre-established, publicly available and objective.
 [AD 14]
2. Licensing procedures shall be neutral in application and administered in a reasonable,
objective and impartial manner. [AILP 1.3]
3. The decision of and the procedures used by the competent authority preparing,
adopting or applying licensing procedures shall be impartial with respect to all market
participants. In particular, it shall be separate from any supplier of services for which
a licence is required.
1.1  Application procedures
4. Application procedures and, where applicable, renewal procedures shall be as simple
as possible.  Applicants shall be allowed a reasonable period for the submission of
licence applications. Applicants shall, in principle, have to approach only one
competent authority in connection with an application for a licence. [AILP 1.6]
5. Application for licences shall, wherever feasible, be possible at any time, and shall be
processed upon receipt. Wherever possible, applications should be accepted in
electronic format under the same conditions of authenticity as paper submissions.
[AD 15]
1.2 Documentation
6. Documentation requirements for obtaining a licence shall not impose unreasonable
requirements regarding the format of documentation. [AD 15]
                                                     
5 Most of the elements and language used are based on existing texts, in particular Article VI of the
GATS, the Disciplines on Domestic Regulation in the Accountancy Sector (S/L/64, hereafter AD), and the
Agreement on Import Licensing Procedures (hereafter AILP) and the Reference Paper for Telecommunication
Services (RP).  The source of those provisions which are based on, or inspired by, such existing provisions will
be indicated in brackets at the end of each paragraph. In most cases, though, the text will not be identical to thesource.S/WPDR/W/25
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7. The establishment of the authenticity of documents shall be sought through
procedures which are pre-established, publicly available and, wherever possible,
authenticated copies should be accepted in place of original documents. [AD 15]
8. The competent authorities shall, after receipt of an application, inform the applicant
whether the application is considered complete under the Member's domestic laws
and regulation and in the case of incomplete applications, identify the additional
information that is required to complete the application and provide the opportunity
to correct deficiencies within a reasonable timeframe.  [GATS VI:3]
1.3 Decisions
9. Decisions are to be taken promptly on all applications, and at the least within the
normal timeframe established and published by the competent authorities, as
stipulated under 2(a). Such timeframe may reflect public consultation processes
where foreseen.
1.4 Fees
10. Any fees charged, which are not deemed to include fees determined through auction
or a tendering process, are to be commensurate with the administrative cost of
processing an application. [AD 13]
1.5 Entry into force
11. A licence, once granted, shall enter into ef fect immediately, in accordance with the
terms and conditions specified therein. Such conditions may, in themselves, delayentry into effect. [AD 18]
2.  Transparency of licensing procedures
12. Members shall make publicly available, or shall ensure that their competent
authorities make publicly available, including through the enquiry and contact points,
and in an easily accessible manner, where possible by electronic means: [AD 3]
(a) All the licensing criteria and the period of time normally required to reach a decision
concerning an application for a licence; [RP 4(a)]
(b) the lists of service activities subject to licensing requirement,
(c) the names and addresses of the competent authorities (i.e. governmental or non-
governmental entities responsible for the licensing of service suppliers) to be
approached, [AD 3]
(d) the terms and conditions of individual licences; [RP 4(b)]
(e) requirements and procedures to obtain, renew or retain any licences and the
competent authorities' monitoring arrangements for ensuring compliance;  [AD 4(b)]
(f) information on technical standards to be fulfilled by the licensee; [AD 4(c)]
(g) the eligibility of persons, firms and institutions to make such applications; [AILP
1.4(a)]S/WPDR/W/25
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(h) where there is public involvement in the licensing process, information on how that
involvement is provided for.
13. Any exception, derogation or changes in or from the rules concerning licensing
procedures or the list of service activities subject to licensing shall also be published
in the same manner as specified above. [AILP 4(a)]
14. When introducing or changing licensing procedures in a way which would
significantly affect trade in services, Members shall endeavour to provide opportunity
for comment, and give consideration to such comments, before any new or changed
licensing procedures would come into effect. [AD 6]
3.  Review of licensing decisions
15. Members shall specify, or shall ensure that their competent authorities specify,
reasonable time frames for review and decision by all relevant authorities.
16. If an application is denied, the applicant will be informed in writing and without
delay. An unsuccessful applicant shall be informed of the reasons for rejection of theapplication, as well as if the possibility for an appeal against the decision exists.  An
applicant shall be permitted, within reasonable limits, to resubmit applications for
licensing. [AD 17]
17. Details of procedures for the review of licensing decisions, as well as any procedures
for appeal of licensing decisions, shall be made public, including the prescribed time
limits, if any, for requesting such a review.
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