RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/SAU/29/Add.4
24 June 1999
(99-2585)
Working Party on the Accession
of the Kingdom of Saudi ArabiaOriginal:  English
ACCESSION OF THE KINGDOM OF SAUDI ARABIA
Additional Questions and Replies
The Ministry of Commerce of the Kingdom of Saudi Arabia has submitted additional replies
to questions raised after the fifth meeting of the Working Party held on 17-19 November 1998, withthe request that they be circulated to members of the Working Party.  The questions and replies are
reproduced hereunder.
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TABLE OF CONTENTS
Question
NumberPage
Number
II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(d) Foreign and domestic investment policies 1-2 2
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(h) Customs valuation (WTO Customs Valuation Agreement, the
Brussels Definition of Value, or any other system) whether used only
for purposes of levying ad valorem  rates of duty or for other
purposes3-4 2
(l) Rules of origin 5 4
3. Internal policies affecting foreign trade in goods
(b) Technical regulations and standards, including measures taken at the
border with respect to imports6-9 4
4. Policies affecting foreign trade in agricultural products
(b) Exports – i.e. description of, and the budgetary expenditure and any
revenue foregone involved in each of the export subsidy measures inplace10 6
(e) Internal policies – i.e. description of, and the budgetary expenditure
and any revenue foregone involved in each of the domestic support
measures in place11 6
VI. TRADE-RELATED SERVICES REGIME
1. General 14 7
3. Market Access and National Treatment 15 7WT/ACC/SAU/29/Add.4
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II. ECONOMY, ECONOMIC POLICIES AND FOREIGN TRADE
2. Economic Policies
(d) Foreign and domestic investment policies
Question 1.
Please provide as detailed information as possible  on how far the principle of national treatment
is observed when a non-Saudi national invests in Saudi Arabia.  Is the principle observed even
in the area not covered by the revised initial offer?
Answer:
Please refer to the following replies: Question 31 of document WT/ACC/SAU/3 and
Questions 11 and 12 of document WT/ACC/SAU/6.
As for the sectors not included in the Saudi Offer, national treatment may not be applicable to
foreign service suppliers.
Question 2.
Please provide Saudi Arabia’s specific criteria for approving foreign investment in each
industry?
Answer:
There are no special criteria for each industrial sector.  There are only general criteria which
have been explained in reply to Questions 191 and 192 in  L/7645/Add.1.
IV. POLICIES AFFECTING TRADE IN GOODS
1. Import Regulation
(h) Customs valuation (WTO Customs Valuation Agreement, the Brussels Definition of Value, or
any other system) whether used only for purposes of levying ad valorem  rates of duty or for
other purposes
Question 3.
WT/ACC/SAU/38 sets out the actions that Saudi Arabia is taking to fully implement the
Customs Valuation Agreement and the timetable for this.  This is helpful.  However Saudi
Arabia apparently does not intend to fully implement the Agreement before 2004, which is an
unacceptably long timeframe.
Could Saudi Arabia please explain why it is unable to commit itself to applying Article VII of
GATT 1994 and the Agreement on Implementation of Article VII from the time of its accession
to the WTO?  Would it be possible for Saudi Arabia  to accelerate its Action Plan to permit this?WT/ACC/SAU/29/Add.4
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Answer:
As explained earlier, there is no lack of desi re or will on the part of the Kingdom of Saudi
Arabia to implement the Agreement on Customs Va luation.  It is committed to implementing this
Agreement.  However, because of the complexity of the Agreement, it will take time.  The Action
Plan that was submitted in document WT/ACC/SAU/38 gives a phased and realistic programme for
implementing the Customs Valuation Agreement.  Th e rationale of the Action Plan was explained at
the plurilateral meeting on customs valuation held in Geneva in November 1998 on the occasion of
the fifth meeting of the Working Party on the Accession of Saudi Arabia.
To recapitulate, the reasons for delayed implementation are as follows:
- Detailed legislation on customs valuation has to be drafted and enacted, which is a
time consuming process;
- Manuals and administrative guidelines have to be prepared to implement the
Agreement;
- A large number of customs officials have to be trained in the new system of valuation;- A computerized data base, connecting all customs ports, airports and customs
stations, will have to be prepared to effectively apply the second and third methods ofvaluation (identical and similar goods);
- Institutional organization and strengthening will be necessary for effective
implementation.
Having said that, it may be stated that whereas the Kingdom of Saudi Arabia will commit to
implement the Customs Valuation Agreement in accordance with the Action Plan, it will make best
endeavours to accelerate the Action Plan as much as possible.
Question 4.
If one files an appeal against the Saudi authoritie s’ decision on the amount of customs valuation,
is there a definite period for the appeal procedure?
Answer:
After the Customs Officer assesses the value of goods, if the importer does not challenge the
assessment before the customs clearance of goods, and he pays the customs duty so assessed and
clears the goods out of customs control, it is considered that he has accepted the assessment and has
no objection to it.
However, if the importer objects to the assessment of value before customs clearance of
goods, a memorandum of objection will be prepared , the goods will then be cleared out of customs
control on payment of duty on the value assessed by customs (which will be held in deposit) and the
importer can then file an appeal to a standing committee of customs comprising a valuation expert, a
tariff expert and a legal expert.  On the decision of the standing committee the deposit of duty will be
adjusted accordingly.WT/ACC/SAU/29/Add.4
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(l) Rules of origin
Question 5.
Trade with most countries is conducted withou t the legalisation of invoices and fees.  We
request that Saudi Arabia review the requirement th at certificates of origin must be attested by
a Saudi Embassy or Consulate.
Answer:
Attestation of certificates of origin are considered necessary to check use of fraudulent
documents.  However, the requirement will be reviewed, as the Customs Department is modernizingits procedures and planning to use EDI systems.
3. Internal policies affecting foreign trade in goods
(b) Technical regulations and standards, including  measures taken at the border with respect to
imports
Question 6.
To ensure that suppliers are able to exercise thei r right of access to an assessment of conformity
under the rules of the conformity assessment procedure (Article 5.1.1 of the TBT Agreement)
and that such procedures do not have the effect of creating unnecessary obstacles to
international trade (Article 5.1.2), we hope that:
Nationally Recognised Laboratory Accredit ation Bodies such as Australia’s National
Association of Testing Authorities (NATA) will be recognised by SASO for accrediting
laboratories to carry out type and conformity testing under the ICCP;
The additional option of the kind that was pr oposed by Australia to the ICCP’s existing
approved laboratory accreditation procedures in 1997 will be incorporated into the
Programme.
This would help to simplify and streamline the Programme, help to eliminate unnecessary costs,
and be a relevant and useful way for Saudi Arabia to meet the requirements of Article 6.1 and
Article 6.2 of the TBT Agreement.
Answer:
Saudi Arabia has already recognized that any Australian laboratory accredited by NATA is
eligible for approval.
Saudi Arabia is not in a position to objectively evaluate National Accreditation Bodies of
various countries, not to mention the requirement to review and maintain the evaluation on an
ongoing basis.  Such functions are normally reserved for specialized International Bodies.  Moreover,
the criteria proposed by Australia is selective, and can be questioned by other countries as tailored
specifically for Australian conditions.
Option A of the procedures for approval of laboratories opened the eligibility for approval to
any laboratory accredited by the Nationally Recognized Accreditation Body of countries that have
such a body.  The procedure for approval of accredited laboratories is very simple and requires the
particular interested laboratory to submit the required information and documentation to SASOWT/ACC/SAU/29/Add.4
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Programme Management demonstrating its capability and competence to carry out the specific tests
prescribed for conformity of specific Regulated Products to the Saudi standards and requirements.
Once listed with the Programme, these laboratories remain updated on any new or revised
requirements of the ICCP and receive assistance, guidance and clarifications required to carry out
their testing tasks in the most proper, complete a nd efficient manner.  Their inclusion on the list of
Approved Laboratories shortcuts any wasted efforts by exporters in their contacts with other
laboratories who may not be interested nor qualified to test the particular product in question.
Question 7.
Where third party certification is required manufacturers will be given a choice between
product type approval or factory quality system certification, but will not be required toundertake both.
The requirement for annual licensing of manufacturing quality systems, which seems excessive,
will be eased and made to reflect the risks relevant to different quality systems.
Answer:
Please refer to reply to Ques tion 81 of WT/ACC/SAU/35/Corr.1.
Question 8.
Further explanation will be provided of why the different conformity assessment procedures
under Type Approval for manufacturers and inde pendent exporters should not be considered to
be based on an arbitrary or unjustifiable distinction we note that Saudi Arabia has claimed
(reply to question 78 of WT/ACC/SAU/35) that the situations of manufacturers as a group andindependent exporters as a group are not comparable.
However we are unable to see why manufacturers could not undertake the kinds of activities
that exporters have been portrayed as undertaking.
Further evidence and reasoning in support of this distinction would be appreciated.
Answer:
Please refer to the reply to Question 78 and Question 87 of WT/ACC/SAU/35/Corr.1.
Question 9.
Saudi Arabia’s previous answers that its ad valorem  approach is in conformity with Article VIII
of GATT 1994 are unconvincing.  A small, high value export would attract disproportionate
fees, as would large shipments compared to smal ler ones.  The fee structure set out in Appendix
F to the ICCP Comprehensive Procedures and Guidelines of August 1998 shows that the ad
valorem  approach to PSI fees is being maintained.
Will Saudi Arabia’s future obligations under Article VIII of GATT 1994 be observed in any
application of PSI for ICCP purposes?
Answer:
Please refer to reply to Ques tion 68 of WT/ACC/SAU/35/Corr.1.WT/ACC/SAU/29/Add.4
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4. Policies affecting foreign trade in agricultural products
(b) Exports – i.e. description of, and the budgetary expenditure and any revenue foregone
involved in each of the export subsidy measures in place
Question 10.
Saudi Arabia continues to seek to reserve the ri ght to grant subsidies in  the future, in spite of
the fact that it does not grant export subsidies, and did not do so in the base period. This
proposal is unacceptable. Our expectation is that export subsidy commitments will be bound at
zero. Will Saudi Arabia bind its export subsidies at zero?
Answer:
Saudi Arabia commits to bind its export subsidies at zero.
(e) Internal policies – i.e. description of, and the budgetary expenditure and any revenue foregone
involved in each of the domestic support measures in place
Question 11.
In Table DS:1, are figures available for 1995 for inspection services and infrastructural
services?
Answer:
Figures for inspection services and infrastructural services are not available for 1995.
Question 12.
We seek information concerning predetermined targets of public stockholding for food security
purposes in Saudi Arabia's domestic support notification, as required under Annex 2 of the
Agreement on Agriculture.
Answer:
Targets for public stockholding of wheat are fixed each year at half of the total requirements
of the Kingdom for that year.
Question 13.
In table DS:9 (d) "bad debts for agricultural loans", Saudi Arabia continues to average this
over a ten year period as the loans are provided for ten years. We would like to see information
provided on support levels for ten years 1993-95?
Answer:
Bad debts represent due balance carried forward for several financial years. These amounts
are based on a ten-year average because medium-term loans are extended for a period of ten years.WT/ACC/SAU/29/Add.4
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VI. TRADE-RELATED SERVICES REGIME
1. GeneralQuestion 14.Is there any period of obligatory residency in Saudi  Arabia for a foreign lawyer to provide legal
consultancy for home country law and international law in Saudi Arabia?  If so, what are the
specific requirements?
Answer:
There is no period of obligatory residency.
3. Market Access and National Treatment
Question 15.The limitation on national treatment on Mode 3 in the revised initial offer on services provides
that “foreign service entities and foreign natura l persons are not eligible for services subsidized
by the State”.  Please provide an exhaustive list of those services.
This member requests Saudi Arabia to accept the following understanding:
As for the services sectors where the specific co mmitments are made, foreign service entities and
foreign natural persons shall be entitled to prov ide the services concerned  even when the sectors
become subsidized in th e future.  Restrictions which are in consistent with the commitments in
each sector can only be introduced after the completion of the necessary procedures for the
changes of such commitments.
Answer:
Some of the examples we mention in this context:
- Free or Subsidized Health Services.
- Free or Subsidized Educational Services.
- Free or Subsidized Training Services.
The requested understanding will be the subject of bilateral negotiations.
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