WORLD TRADE
ORGANIZATIONRESTRICTED
G/LIC/M/19
18 May 2004
(04-2192)
Committee on Import Licensing
MINUTES OF THE MEETING HELD ON 5 MAY 2004
Chairperson: Miss Philippa Davies (Jamaica)
The Committee on Import Licensing held its nineteenth meeting on 5 May 2004. The agenda
proposed for the meeting, contained in WTO/AIR/2301, was adopted as follows.
Table of contents
1. Members' compliance with notification obligations – Developments since the last
meeting.......................................................................................................................................1
2. Notifications...............................................................................................................................6
(i) Notifications under Articles 1.4(a) and/or 8.2(b) of the Agreement (publications and
legislation) ..................................................................................................................................6
(ii) Notifications under Article 7.3 of the Agreement (replies to the Questionnaire on
Import Licensing Procedures) ....................................................................................................6
(iii) Notifications under Article 5 of the Agreement (new import licensing procedures,
changes to existing licensing procedures and reverse notifications)..........................................7
3. Other Business...........................................................................................................................8
(i) Argentina: Resolution 56/2004 of the Ministry of Economy and Production............................8
(ii) Date of the next meeting .............................................................................................................9
4. Election of officers.....................................................................................................................9
1. Members' compliance with notification obligations – Developments since the last
meeting
1.1 The Chairperson informed the Committee that compliance with notification obligations under
the Agreement on Import Licensing Procedures remained generally low. As of the date of the
meeting, out of a total Membership of 147 (counting each of the EC member States individually),
there remained 24 Members who had not submitted any notification since joining the WTO;
Members which had not submitted any notification under the Agreement were Angola, Belize,
Botswana, Central African Rep., Congo, Congo, Dem. Rep., Djibouti, Egypt, Guinea, Guinea Bissau,
Israel, Kuwait, Lesotho, Macedonia, Mauritania, Mozambique, Myanmar, Papua New Guinea,
Rwanda, St. Vincent & the Grenadines, Sierra Leone, Solomon Islands, Tanzania and Thailand.
Except for Macedonia which had become a Member in April 2003, and seven others which had been
Members in 1996 or 1997, others had been Members since 1995. Only 113 Members had submitted
notifications of laws and regulations (under Articles 1.4(a) and/or 8.2(b)); there remained 34
Members who had yet to submit a notification to the Committee on Import Licensing of their laws and
regulations relevant to import licensing. Only a cumulative total of 109 Members had submittedG/LIC/M/19
Page 2
replies to the Questionnaire1(under Article 7.3) since the entry into force of the WTO Agreement.
For Article 7.3 notifications, the annual deadline of 30 September was not often respected by many
Members; for example, Article 7.3 notifications had been received from only 46 Members in 2000,
38 Members in 2001, 56 Members in 2002, 40 Members in 2003, and from eight up to the date of this
meeting this year. Only 43 Members had notified new licensing procedures or changes in existing
procedures (under Paragraphs 1-4 of Article 5); of this, two Members (Mexico and Papua New
Guinea) had notified changes to import licensing procedures without submitting the initial
notifications of legislation or replies to the Questionnaire. While Article 5.5 of the Agreement
allowed Members to submit counter-notifications where a Member considered that another Member
had not notified the institution of a licensing procedure or changes in the procedures, up to the date of
this meeting, no such counter-notifications had been received. Compliance with the notification
obligations under this Agreement remained low despite efforts to improve the situation.
1.2 The Chairperson said that at the end of each year, the Central Registry of Notifications sent to
each Member a list of notifications that should be made under all WTO Agreements in the following
year, and followed this list up with periodic reminders (twice a year) to those Members who had not
submitted the required notifications during the year. In addition, several communications had been
sent to delegations by previous Chairpersons and herself in order to remind them of the notifications
due. Delegations had been requested to indicate to the Secretariat what kind of problems they faced
in complying with the notification obligations, and to identify any technical assistance needs in this
area. However, up to the date of this meeting, no Member had requested any technical assistance to
fulfil these obligations.
1.3 The representative of the United States said that he appreciated the submissions that had been
provided by Members since the last meeting, and especially those that had notified for the first time.
Notifying an import licensing system or lack of one was central to the transparency obligations of this
Agreement. In particular, he appreciated the responses to their written questions received from
Indonesia and Turkey, and responses that he had received the day before the meeting from China,
Bahrain and the United Arab Emirates. Such notifications and responses were essential elements of
WTO Members' obligations and tangible evidence of the respect that they owed each other as
Members, to be both transparent in the administration of their trade regimes and responsive to
legitimate requests for information about access to each other's markets. The United States thanked
the Chairperson and the Secretariat for their continuing efforts to encourage compliance by sending
reminders to Members on notifications and responses to questions. The United States believed that
the efforts of the Chairperson and Secretariat had significantly improved the notification situation, and
they continued to encourage them.
1.4 The Committee took note of the statement made.
1.5 The Chairperson said that since the last meeting several documents containing either
questions to or replies from Members had been circulated in the G/LIC/Q/- series. These were
questions to Brazil from the United States in G/LIC/Q/BRA/1, questions to China from the United
States in G/LIC/Q/CHN/8, questions to Indonesia from the United States in G/LIC/Q/IDN/3,
questions to Indonesia from Australia in G/LIC/Q/IDN/4, replies from Indonesia to the United States
in G/LIC/Q/IDN/2 and G/LIC/Q/IDN/2/Add.1, and replies from Turkey to the United States in
G/LIC/Q/TUR/2. She informed the Committee that the Secretariat had reminded Brazil and Indonesia
of these questions. She further requested delegations that were in a position to provide replies to the
questions posed since the last meeting, or prior to the last meeting, to do so at this meeting, keeping in
mind that under the procedures adopted in the Committee (G/LIC/4) they were required to provide
replies, in writing, to those delegations that had posed questions, with copies to the Secretariat.
Copies of replies received by the Secretariat would be issued in the same document series.
1The Questionnaire is annexed to document G/LIC/3.G/LIC/M/19
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1.6 The representative of Brazil said that written responses to questions from the United States
circulated in document G/LIC/Q/BRA/1 would be provided after this meeting2and that the
notifications relating to import licensing requirements for soda ash and lithium carbonate would be
submitted to the Committee soon.
As concerned soda ash, the United States was of the view that the Ministry of Justice
Regulation 169 violated Article 1.6 of the Agreement on Import Licensing Procedures,
inasmuch as the importation of the product was subject to preliminary authorization by the
Federal Police Department and by the Overseas Trade Department (SISCOMEX). Article 1.6
of the Agreement, as rightly pointed out by the United States, required that applicants should
have to approach only one administrative body in connection with an application. He said
that the Overseas Trade Department (SISCOMEX) was not an administrative body in the
sense of Article 1.6 but merely a computerised databank in which a wide range of information
on import/export transactions were stored. SISCOMEX was hence an instrument, a computer
programme, used by the Federal Police Department when granting import licences for
products such as soda ash. The only administrative body in charge of granting preliminary
authorization for the importation of soda ash was thus the Federal Police Department, which
used SISCOMEX in order to accomplish this task. The need for the preliminary authorization
by the Federal Police Department derived from the fact that soda ash could be used to
transform cocaine into "crack". For this reason, there was a severe control in Brazil not only
on imports and exports, but also on the production, storage, buying, selling, etc., as stated in
Law 10.357 of 27 December 2001. Besides the Agreement on Licensing Procedures, such
measures were also based on Article XX(b) of GATT 1994. He believed that this clarified
any doubt that Ministry of Justice Regulation 169 did not violate Article 1.6 of the
Agreement.
The second question from the United States concerned import licensing requirements in
Brazil established by Law 6189 and Decrees 2464 and 7781. In the case of lithium carbonate,
the reason behind such a requirement was mainly technical as some components of lithium,
once enriched, could have an application in the production of nuclear energy. For this reason,
imports of lithium carbonate had been under the control of Brazil's National Nuclear Energy
Commission (CNEN) since the 1970s. The import licensing requirements had not, however,
prevented the normal flow of imports of lithium carbonate into Brazil and current suppliers of
the product included Germany, Italy, and the United States, which in 2003 and up to March
2004 had been the biggest supplier. He said that these were preliminary responses to the
United States' questions and that any further requests for clarification on this would be
forwarded to his capital.
1.7 The representative of the United States said that he looked forward to seeing the written
response from Brazil for any follow-up on this matter.
1.8 As concerned questions from the United States to China circulated in G/LIC/Q/CHN/8, the
Chairperson informed the Committee that China had provided responses to these questions only the
day before the meeting. Document G/LIC/Q/CHN/10 containing these replies was available, in
English only, in the room and would be circulated shortly.
1.9 The representative of the United States said that the replies received from China had been sent
to his capital and were being studied by his authorities. They planned to have further discussions on
the matter, if necessary, at or before the next Committee meeting.
1.10 The representative of China said that they would be glad to engage in further discussions with
the United States on the issues raised.
2Circulated in document G/LIC/Q/BRA/2.G/LIC/M/19
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1.11 The representative of the United States said that at the May and October 2003 meetings of
this Committee, his delegation had expressed concern that Decree 732/2002 of the Minister of
Industry and Trade of Indonesia pertaining to import licensing for textiles was restricting and
distorting trade, contrary to the Agreement on Import Licensing Procedures. The United States
appreciated the initial responses of Indonesia circulated in G/LIC/Q/IDN/2 and Add.1. However, his
authorities remained concerned that two provisions of the Decree might be overly restrictive, i.e. the
decision to grant import licences only to textile producers with a local production capacity, and the
decision to bar the transfer of imported textiles to other private parties. Consequently, the United
States had posed some additional questions to Indonesia at the October 2003 meeting which had been
circulated in G/LIC/Q/IDN/3. The United States looked forward to Indonesia's responses.
1.12 The representative of Indonesia said that responses to the follow-up questions from the
United States on Indonesia's import licensing requirements for textiles would be submitted to the
Secretariat after this meeting.3He said that Decree No 732/2002 aimed only to provide administrative
import procedures, with the main purpose of combating smuggling activities that caused
anti-competitive behaviour, unfair trade in the domestic market, an adverse impact on the domestic
market, loss of government revenue, and an adverse impact on investment and labour. Smuggling
activities in Indonesia had significantly increased since 2000 and had been a serious problem.
According to estimates by the University Research Institution of Indonesia, smuggled textiles entering
into the Indonesian market had resulted in the loss of Rupiah 50 trillion (US$ 5.8 billion) in terms of
government revenue and caused injury to 7,000 textile companies which absorbed more than
3.5 million labour and with an investment value of Rp. 132 trillion (US$ 15.35 billion). Smuggling
activities were closely related to the nature of Indonesia, which was a large country consisting of more
than 17,000 big and small islands. Indonesia had many borders far beyond the ability and control of
customs through which smuggled textile products entered the Indonesian market. These included not
only textile products smuggled by illegal companies but also those smuggled into the country by legal
companies in order to avoid the payment of customs duties. This had resulted in a substantial increase
in imports of illegal textile products, which could not be curbed by trade remedy instruments such as
anti-dumping, countervailing or safeguards. Indonesia was concerned that smuggling of textiles had
adversely affected many business activities as well as employment and government revenue.
Indonesia believed that these problems had to be resolved by all means, including import licensing.
Indonesia fully considered the importance of the role of customs offices and police in cooperation
with the Ministry of Trade and Industry (MOIT) in combating smuggling. In this regard, the MOIT
had played its role by using import licensing procedures to prevent the distribution of illegally
imported textile products in the domestic market. Of various administrative procedures, his
authorities still believed that import licensing was the only effective means to administer controls on
all textile importers, and all kinds of imported products as mentioned in the Decree. By this policy,
the government could easily identify and combat illegal textiles trade. As concerned the question of
whether the Decree was trade-restricting according to Article 3.2 of the Agreement on Import
Licensing Procedures, Indonesia was of the view that it was not so since:
(i) no person, firm or institution would be refused an import licence as far as they fully
complied with all the requirements as contained in the Decree (Article 2.2(a)(i) of the
Agreement). The requirements they had to comply with to be approved as a Textile Producer
Importer were to attach to the application the following documents, which were normally in
the possession of companies: industrial business licence/industry registry number or other
similar business permits from other related Ministries; special textiles and textile product
importer identity number (NPIK-TPT); producers-importer identity number (API-P) or
approved importer identity number (API-P); corporate registry number (TDP); taxpayer code
number (NPWP); and statement of plan for the need of raw material or auxiliary materials
and marketing of products for one year, signed by management of the company.
3Circulated in document G/LIC/Q/IDN/5.G/LIC/M/19
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(ii) Article 4 of the Decree stated that the approval or rejection of the application for a licence
should be issued no later than ten working days from the date of receipt of application. The
period for processing applications provided for in the Decree was much less than the 30 days
provided for in Article 3.5(f) of the Agreement, hence no burden for companies to apply a
licence.
(iii) The Decree did not limit the number of companies, institutions or persons who could
have import licences as far as they fully complied with the requirements, nor limit volume to
be imported by each company. There had been as many as 315 importers that had obtained
import licences under these procedures and import licences were still open to other companies
that would like to be involved in the import of textiles.
1.13 The representative of the United States thanked Indonesia for the information given and said
that any further follow-up on the matter would be decided after receiving the response in writing.
1.14 The representative of Australia informed the Committee that the Indonesian delegation had
just provided him with written responses to the questions that Australia had posed in document
G/LIC/Q/IDN/4, and that the responses would be studied carefully by his authorities.4
1.15 The representative of the United States expressed his appreciation to Turkey for the responses
provided in G/LIC/Q/TUR/2.
1.16 The Chairperson recalled that several other Members had also received questions on their
licensing systems prior to the last meeting. For example, replies were due to the United States from
the following Members: Antigua & Barbuda (to questions circulated in G/LIC/Q/ATG/1 in
October 2001); Bahrain (to questions circulated in G/LIC/Q/BHR/1 in November 2000); Chad (to
questions circulated in G/LIC/Q/TCD/1 in November 2000); China (to questions circulated in
G/LIC/Q/CHN/4 in May 2003); Ghana (to questions circulated in G/LIC/Q/GHA/1 in October 2001);
Oman (to questions circulated in G/LIC/Q/OMN/1 in June 2001); and from the United Arab Emirates
(to questions circulated in G/LIC/Q/ARE/1 in November 2000). In addition, Colombia had posed
some questions to Chile at the last meeting (G/LIC/M/18, paragraphs 5.1-5.3). The Secretariat had
also reminded these delegations of these questions. She informed the Committee that replies from
Bahrain and the United Arab Emirates had been sent by the two delegations to the United States the
day before the meeting, with copies to the Secretariat5. Delegations that were in a position to provide
replies to the questions were requested to do so at this meeting, keeping in mind that under the
procedures adopted in the Committee they were required to provide replies, in writing, to those
delegations that had posed questions, with copies to the Secretariat (G/LIC/4).
1.17 The representative of the United States said that as the communications from Bahrain and
the United Arab Emirates had been received late he could not provide a response to them yet, hence
he would have to revert to them at or before the next meeting.
1.18 The representative of China noted that the questions contained G/LIC/Q/CHN/4 from the
United States to China were already covered by their replies provided in G/LIC/Q/CHN/10, and said
that in case the United States had more questions his delegation would be glad to provide their replies.
1.19 The Chairperson requested other Members who had not yet responded to the questions
posed to do so in writing with copies to the Secretariat.
4Circulated in document G/LIC/Q/IDN/6.
5Pending clarification from Bahrain and the United Arab Emirates these responses had not yet been
circulated.G/LIC/M/19
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1.20 The Committee took note of the responses and the statements made.
2. Notifications
(i) Notifications under Articles 1.4(a) and/or 8.2(b) of the Agreement (publications and
legislation)
2.1 The Chairperson recalled that Articles 1.4(a) and 8.2(b), and procedures agreed to by the
Committee, required all Members to publish their laws, regulations and administrative procedures,
and submit copies of any relevant publications or laws and regulations upon becoming a Member of
the WTO. Any subsequent changes to these laws and regulations were also required to be notified.
She noted that even those Members which did not apply import licensing procedures or had no laws
or regulations relevant to the Agreement were required to notify the Committee of this fact in order
for it to obtain a complete overview of the licensing regimes of all Members. She urged all Members
which had not yet provided any information on their laws and regulations relevant to import licensing
to submit their notifications without further delay.
2.2 The Chairperson said that there were notifications from nine Members before the Committee
for review, received from Armenia (G/LIC/N/1/ARM/1), China (G/LIC/N/1/CHN/2 & 3), Croatia
(G/LIC/N/1/HRV/2), El Salvador (G/LIC/N/1/SLV/1), Ghana (G/LIC/N/1/GHA/1), Macao China
(G/LIC/N/1/MAC/2), Suriname (G/LIC/N/1/SUR/1), Turkey (G/LIC/N/1/TUR/4), and Zambia
(G/LIC/N/1/ZMB/2). Copies of laws and regulations submitted under these provisions by Armenia,
China, the Dominican Republic, El Salvador, Macao China and Turkey were available for
consultation in the Secretariat. In addition, the Secretariat had received a notification from the
Dominican Republic (G/LIC/N/1/DOM/1) which was available for the time being in Spanish only and
which would be reviewed at the next meeting.
2.3 The Committee took note of the notifications.
(ii) Notifications under Article 7.3 of the Agreement (replies to the Questionnaire on Import
Licensing Procedures)
2.4 The Chairperson said that there were notifications from 17 Members listed in the airgram,
received from Armenia (G/LIC/N/3/ARM/1 & Add.1), Brazil (G/LIC/N/3/BRA/3), China
(G/LIC/N/3/CHN/2), Croatia ((G/LIC/N/3/HRV/2), Cuba (G/LIC/N/3/CUB/2), the European
Communities (G/LIC/N/3/EEC/6 & Add.1 & Corr.1), Ghana (G/LIC/N/3/GHA/3), Guyana
(G/LIC/N/3/GUY/2), Hong Kong China (G/LIC/N/3/HKG/7), India (G/LIC/N/3/IND/6), Japan
(G/LIC/N/3/JPN/3), Macao China (G/LIC/N/3/MAC/6), Panama (G/LIC/N/3/PAN/2), Philippines
(G/LIC/N/3/PHL/4/Add.1), Singapore (G/LIC/N/3/SGP/4), Turkey (G/LIC/N/3/TUR/5) and Zambia
(G/LIC/N/3/ZMB/2). In addition, the Secretariat had received a notification from the Dominican
Republic (G/LIC/N/3/DOM/2) which was available for the time being in Spanish only and which
would be reviewed at the next meeting.
2.5 Similarly to the situation with respect to the notifications of legislation, notifications under
this provision were overdue from many Members. Even those Members which had not made any
changes to their import licensing procedures since their previous notification, or which did not apply
import licensing procedures, were required to notify this fact to the Committee. The Chairperson
therefore requested Members to submit their notifications without any further delay and said that the
Questionnaire used for these notifications was annexed to document G/LIC/3.
2.6 The representative of Canada referred to reply 2 of the notification from Brazil, circulated in
document G/LIC/N/3/BRA/3, which stated that the products subject to non-automatic import
licensing were mentioned in the communications published by their Ministry of Foreign Trade, andG/LIC/M/19
Page 7
asked whether Brazil intended to submit a more detailed notification as to the specific products
subject to these non-automatic import licensing procedures. He noted that the notification had a
general description of products that were subject to this procedure, and said that it would be useful to
have a detailed list of the products as well as a notification to the Committee with such information.
2.7 The representative of Brazil said that he would convey the request to his capital and that he
did not foresee any problem in providing more detailed information on the notification.
2.8 The representative of Canada referred to the notification from China, circulated in
G/LIC/N/3/CHN/2, reply 6.III of which, relating to tariff rate quotas, stated that "after getting consent
from the importers that obtain quotas, list of quota-holders can be provided to foreign authority or
promoting agencies for export upon request". In reviewing this notification, Canada had a question
which had now been partially addressed by the responses given by China to the United States,
contained in G/LIC/Q/CHN/10; the response from China to the additional question 1 regarding its
TRQ administration stated that "enterprises receiving a TRQ take the amount of quota granted to
these enterprises as business secret." Canada took note of this response that the amount of quota was
information that was business secret and wished to know whether it was possible to obtain, upon
request, information as to who the quota-holders were. Canada considered it would be useful to
obtain the names of those quota-holders from an export promotion perspective. In the case of certain
products of interest to Canada, his authorities had sought to obtain such information from China but it
had not seemed possible. Canada therefore requested China to confirm what was stated in their reply
to the Questionnaire, i.e. that not the amount, but the list of quota-holders, was something that could
be provided upon request.
2.9 The representative of China said that the question would be conveyed to his capital.
2.10 The representative of the United States, referring to the frequently cited "ITC(HS)
Classifications of Export and Import Items, 2002-2007" in the notifications made by India, said that
while this document existed in a query-based format under the Directorate General of Foreign Trade's
(DGFT) website (http://dgft.delhi.nic.in/itchs2002web.htm), the entire document did not appear to be
available on the DGFT's website. Moreover, although there was an indication on the homepage
(http://dgft.delhi.nic.in/) that the ITC(HS) was available at the "Downloads" link
(http://164.100.9.245/exim/2000/download.htm), the ITC(HS) did not seem to be at that link. His
delegation wished to know whether the entire ITC(HS) was available anywhere on the DGFT website
and if not, whether it could be added in the interests of transparency and as an aid to the trading
community.6
2.11 The representative of India said that as far as his understanding of the existing website was
concerned, a query-based format was being maintained for the ITC(HS) classification of export and
import items. As concerned the availability of the entire compendium of ITC(HS) on the website, he
said that he would consult the customs authorities in the DGFT and inform the United States in
writing through the Secretariat.
2.12 The Committee took note of the notifications and the statements made.
(iii) Notifications under Article 5 of the Agreement (new import licensing procedures, changes to
existing licensing procedures and reverse notifications)
2.13 The Chairperson recalled that under paragraphs 1-4 of Article 5, Members which instituted
licensing procedures or changes in these procedures were required to notify the Committee of such
within 60 days of publication of these procedures. Paragraph 2 of Article 5 listed the information that
6Circulated in document G/LIC/Q/IND/8.G/LIC/M/19
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should be included in such notifications. Members also had to submit copies of publications in which
the information required in Article 1.4 would be published. Furthermore, paragraph 5 of Article 5
provided the possibility of making counter-notifications where a Member considered that another
Member had not notified the institution of a licensing procedure or changes therein, in accordance
with paragraphs 1-3 of Article 5.
2.14 The Chairperson said that there were two notifications listed in the airgram, submitted by
Jamaica (G/LIC/N/2/JAM/1) and Chinese Taipei (G/LIC/N/2/TPKM/2).
2.15 The representative of the United States, referring to Annex I of the notification from
Jamaica, requested a clarification concerning the limitation on the issuance of import licences for
"repairs only" for "other (motor vehicle parts – front and back clip)" of tariff heading ex 87.08.99.9
and whether this meant that licences would not be approved for sales and distribution.7
2.16 The representative of Jamaica said that the question would be referred back to capital for
clarification.
2.17 The Committee took note of the notifications and the statements made.
3. Other Business
(i) Argentina: Resolution 56/2004 of the Ministry of Economy and Production
3.1 The representative of the United States understood that Argentina's Ministry of Economy and
Production Resolution 56/2004, published in the Official Bulletin on 26 January 2004, might subject
certain goods listed in the Resolution to an import licensing requirement, and asked whether
Argentina intended to notify this measure to the Committee, and if so, when; whether the measure
had been implemented and if not, when it was proposed to be implemented; whether it would affect
exports from all WTO Members; whether the measure was an automatic or non-automatic import
licensing procedure, and if it were the latter, the WTO basis for any restriction on imports; and
whether an opportunity to provide comments on the measure would be provided before it was
implemented.8
3.2 The representative of Argentina said that he would forward the question to his capital and
that he would be able to inform the United States of the status of this Resolution and to respond to the
questions and concerns expressed by the next meeting.
3.3 The Committee took note of the statements made.
7Circulated in document G/LIC/Q/JAM/1.
8Circulated in document G/LIC/Q/ARG/1.G/LIC/M/19
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(ii) Date of the next meeting
3.4 The Chairperson informed Members that the Secretariat had tentatively reserved
30 September 2004 for the next meeting of the Committee, on the understanding that additional
meetings would be convened if necessary.
3.5 The Committee took note of the above.
4. Election of officers
4.1 The Committee elected Ms. Victoria Campeanu (Romania) as Chairperson of the Committee
by acclamation, to hold office until the end of the first meeting of 2005, under Rule 12 of the
Committee's Rules of Procedure (G/L/147). It also elected Dr. Dayaratna Silva (Sri Lanka) as
Vice-Chairman by acclamation.
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