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S/CSC/M/68  
 
25 November 2013  
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Committee on Specific Commitments    
 
 REPORT OF THE MEETING HELD ON 29 OCTOBER 2013 
NOTE BY THE SECRETARIAT1 
The Committee on Specific Commitments (CSC) held a meeting on 29 October 2013, chaired by 
Ms Monica Nagelgaard from Norway. The agenda for the meeting, contained in WTO/AIR/4217, was adopted as modified. 
 
1   ITEM A - ADOPTION OF THE ANNUAL  REPORT TO THE COUNCIL FOR TRADE IN 
SERVICES 
1.1.  The Chairperson drew attention to the draft report contained in document S/CSC/W/62.  It 
was factual and self-explanatory, reflecting the work the Committee had done during the past eleven months. She suggested that the Committee adopt the report. 
1.2.  It was so agreed.  
2    ITEM B - CLASSIFICATION ISSUES 
2.1.  The Chairperson announced that the delegati on of Brazil, headed by Mr. Humberto Ribeiro, 
Secretary of Commerce and Services of Brazil, would present an online system developed by 
Brazil's Ministry of Development, Industry and Trade (MDIC), which kept track of services 
transactions between residents and non-residents. It consisted of a statistical database aimed to guide policy making and evaluation in services trade as well as a services classification system.   
2.2.  The representative of Brazil stated th at two important initiatives were taken by his 
government, in particular by the Secretariat of Commerce and Services, with a view to supporting 
external competitiveness of the services sector.  The two initiatives consisted of the SISCOSERV, 
an online system to register all international transactions involving services and intangibles; and 
the NBS, a product classification system focused on the services sectors, based on the UN/CPC.  
The initiatives were within the scope of the country's broader economic strategy (Plano Brasil Maior) and intended to deal with the deficit in the services trade balance.  Since the dynamics of 
services impacted on competitiveness and sustaina bility of all other segments of the economy, 
three committees had been created within the Brazil Maior: the first one focusing on commerce (wholesale, retail, e-commerce), the second on logistics services covering all transport and 
warehousing, and the third on services in general (education, health, tourism, audiovisual, etc.). 
The three committees engaged around 70 business associations including labours and entrepreneurs in the discussion on services-related strategies. For this purpose, an updated 
classification system compatible with the governance structure was needed.      
2.3.  Under the joint management of Brazil's Federal Revenue Service and the Secretariat of 
Commerce and Services, SISCOSERV would not only ge nerate statistics for policy-making, but also 
strengthen Brazil's participation in services trade. It was developed to deal with commercial 
intelligence, sectoral diagnosis and monitoring of ongoing operations between 
enterprises/individuals inside and outside Brazil in services and intangibles.  SISCOSERV was in compliance with the GATS and the Brazilian tax law, describing trade in services through four 
modes of supply. It was available on the Inte rnet. Access to the system was through digital 
certification and electronic Power of Attorney.  The nomenclature was based on the CPC 2.0 of the 
                                               
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/CSC/M/68 
 
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  UN Central Product Classification.  It could be integrated with other information systems of the 
Federal Government.  There was no prior approval of export or import operations by government agencies.   
2.4.  SISCOSERV registered transactions between residents and non-residents involved in the 
provision of services (such as construction, engineering or consultancy services) and intangibles 
(licensing of property rights, for instance).  Th e information recorded by the user included the 
transaction data (value, start date of service, da te of completion of service, code of NBS, the 
transaction currency and delivery mode) and the foreign service acquirer or seller data (name, 
address and country).  Since the inauguration of the system in August 2012, the number of users 
reached about 13,300 in September 2013.  
2.5.  The NBS, based on the CPC, was a national classification system to identify services and 
intangibles as products. It enabled the proper preparation, monitoring and evaluation of public 
policies in an integrated way and promoted the harmonization of activities.  The elaboration of the system was the result of joint work by the Secretariat of Commerce and Services, the Federal 
Revenue Service, the Brazilian Institute of Statistics and the Central Bank as well as consultations 
with 55 public institutions, municipal governments and the private sector. The NBS was currently undergoing a review which included consultations with private and public entities involved in 
services.  The process of adjustments aimed to reflect the reality in Brazil's services sector, 
maintaining CPC as a reference.    
2.6.  After the presentation, a number of delega tions raised questions. The representative of 
Australia noted that statistics on mode 3 were absent.  Since it was difficult to capture transactions 
under this mode, she wondered how SISCOSERV dealt with this challenge.  She also wished to know how business reacted to the reporting requirement to the system.  
2.7.  In response, the representative of Brazil explained that the collection of mode 3-related 
information would start in 2014.  In order to engage the private sector, the government had 
launched a training programme one year before the implementation of the system.  A manual had also been produced, available online, to assist the private sector in using the system. In addition, 
the reporting itself was part of the education process and steps would be taken in the future to 
increase the accuracy of the system.   
2.8.  Referring to "servicification", the representative of Turkey noted that due to ignorance, 
companies tended to leave many services they used or purchased in their business unrecorded.  
He asked how this was dealt with in the Brazilian system.    
2.9.  According to the representative of India, the presentation had highlighted the importance of 
services classification issues and the mechanism of collecting services data.  Recognizing the value 
of services data for policy formulation, India was also trying to address similar issues by 
identifying the institutional mechanism to collect services trade data, capturing the whole ambit of services imports and exports. Presently, India's balance-of-payment data was the only source of 
information for services trade.  Unlike goods data, the collection of services data was at a nascent 
stage.  The lessons learnt from Brazil would thus be highly relevant for countries like India which were developing a similar system.  He then asked several questions:  First, was it an obligation for the private sector to report to the system? Was this done by law or an executive order? Was there 
any penalty for non-disclosure? Second, was the data collected from all types of business through 
Internet? How did SMEs comply with the reporting requirement?  And, finally, how was the new system integrated into the data system of Brazil's Central Bank?  
2.10.  Replying to the above questions, the repres entative of Brazil said that a large share of the 
companies reporting to SISCOSERV was actually en gaged in goods trade.  In the past, they had 
not reported services separately as these were considered to be part of their business package 
(e.g. maintenance, training, etc.).  The new initiative remained a learning process.  The private 
sector began to recognize the importance of serv ices for competitiveness.  Moreover, the system 
was part of Brazil's industrial policy which recognized the key role played by the tertiary industry and the welfare of service consumers.   Concerni ng the institutional arrangement for the system, a 
President Decree, effective as of April 2012, had been issued for the nomenclature and, in July 
2012, the President had authorized the Secretariat of Commerce and Services and the Federal Revenue Service to implement SISCOSERV which then started to operate from 1 August 2013.  It S/CSC/M/68 
 
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  was an obligation for enterprises in Brazil to report to the system.  There were penalties involved.  
SMEs (i.e. enterprises with annua l revenue of less than about US$1.5 million) in Brazil were not 
obliged to report to the system.  Brazil's Minist er of Development, Industry and Trade enjoyed a 
long lasting relationship with the Central Bank in exchanging trade information and SISCOSERV 
was another step of this partnership.  Further, related information in this regard was available on 
the SISCOSERV website.  
2.11.  The representative of the European Union asked a number of questions: why had CPC 2.0 
rather than CPC provisional been chosen as th e basis of SISCOSERV? Why was it not mandatory 
for foreign companies established in Brazil to report to the system? How did the system distinguish between services and non-services, such as in the case of energy? Were there any results from the 
database? 
2.12.  The representative of South Africa stated that, like most governments, his government 
relied on balance-of-payment data from the Central Bank to measure cross-border services 
transactions. The information was based on surveys undertaken with the private sector and did not 
capture certain modes of supply. The difficulty with this was businesses' reluctance to provide 
information.  He wondered how Brazil had managed to overcome this problem in its new system.   
2.13.  The representative of Chile asked whether the new system had any impact on the 
interpretation of commitments Brazil had undertake n under the GATS or in a regional context.   
2.14.  The representative of Brazil explained that CPC provisional was used for trade negotiations, 
while CPC 2.0 for commercial intelligence, and that it was possible to establish correspondence 
between them. Specialists had been involved in establishing such correspondence. Foreign 
companies' affiliates established in Brazil were  treated as Brazilian enterprises according to 
Brazilian law and were therefore obliged to report to the system. Concerning the delineation between services and non-services, while import s and exports of goods were registered in a 
separate system called SISCOMEX, all other products including services and intangibles were 
registered in SISCOSERV.  The new system was star ting to produce results, and the private sector 
was shown the benefits that could be derived from the system. The fact that reporting to the 
system was made obligatory was instrumental in overcoming the problem described by South 
Africa. The system would help Brazil in trade negotiations and had no impact on the interpretation of Brazil's services commitments.   
2.15.  The Chairperson thanked the delegation of  Brazil for their informative presentation and 
invited the Committee to move on to the next sub-item, i.e. the sectoral discussion of classification 
issues.  This exercise had started in late 2011, focusing on challenges facing the current GATS classification system due to dramatic technologi cal and business developments over the past two 
decades.  In order to get a complete picture, the Committee had agreed to examine the remaining 
sectors on the list at this meeting, namely: educational, health, tourism, recreational and cultural services. Following previous practice, the Secretariat had prepared three informal Notes 
(JOB/SERV/158-160) to facilitate discussion, which had been circulated to Members last 
September. Each Note consisted of an overview of relevant classification issues and some questions for consideration. 
2.16.  The representative of the Secretariat indi cated that the Notes were all straightforward, 
drawing attention to various issues arising in the three sectors.  He reiterated that the questions 
put forward in the Notes were suggestive only, and Members were encouraged to raise any issues or points as appropriate. 
2.17.  The Committee then discussed the classification issues relevant to educational services, 
health services and tourism in informal mode. 
2.18.  The Chairperson recalled that the Secretariat had also presented a factual Note 
(S/CSC/W/61 and S/CSC/W/61/Corr.1) on services classification issues arising in WTO 
jurisprudence, including the interpretative approa ch adopted by panels and the Appellate Body. As 
an input to the current exercise on classification, the Secretariat Note was aimed at stimulating the Committee's discussion. At the previous two meet ings, a number of Members had shared their 
views on some issues such as legal certainty of existing commitments, the legal status of the S/CSC/M/68 
 
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  Chairman's Note on Basic Telecom, and the fl exibility of scheduling outside the existing 
classification system. 
2.19.  There were no further comments on this Note. 2.20.  The Chairperson suggested that the Committ ee continue to examine classification issues 
relevant to educational services, health services and tourism at the next meeting as some 
Members had indicated that they would make comments later.  She also suggested that the Committee take note of the statements made and revert to this item at its next meeting.   
2.21.  It was so agreed.  
3    ITEM C - SCHEDULING ISSUES 
3.1.  The Chairperson recalled a suggestion made at the last meeting that Members share 
scheduling experience in services, in particular in sights gained outside the WTO. Such an exercise 
would be beneficial to future negotiations and help ensure the uniformity and clarity of 
commitments. She had been asked to hold consultations on this idea. 
3.2.  While the DDA negotiations had been stalled, most Members were involved in various 
negotiations on services.  In the WTO, there were accession negotiations which entailed services 
commitments. Outside the WTO, services-related Preferential Trade Agreements (PTAs) were 
proliferating, which generally followed the GATS pattern, i.e. key disciplines combined with 
country-specific schedules of commitments.  With respect to the scheduling of commitments, there 
were probably two types or two levels of general issues, which were also interlinked.  The first concerned scheduling or listing approaches, and the second related to how to schedule specific restrictive measures.  In line with what had been suggested at the last meeting, it might be worth 
sharing views and experiences in various aspects, such as: advantages and disadvantage of 
different listing approaches as liberalization modalities and the treatment of specific measures in accession schedules under the GATS as well as in PTAs. 
3.3.  With these thoughts in mind, she had held consultations with a number of Members on how 
to follow up with the idea of sharing scheduling experiences in the Committee. While some had shown interest in discussing issues related to liberalization modalities and listing of specific 
measures, most Members were concerned about time constraints at the present stage.  She would 
resume her consultations at the beginning of ne xt year. Members were meanwhile encouraged to 
consider relevant issues and the value of undertaking the proposed exercise in the Committee. 
3.4.  No delegation intervened and the Chairperson suggested that the Committee revert to this 
item at its next meeting. 3.5.  It was so agreed.  
4    ITEM D - OTHER BUSINESS 
4.1.  There was no intervention under this item . The Chairperson then adjourned the meeting.  
 
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