RESTRICTED  
  
G/STR/M/32  
 
8 January 2018  
(18-0121) Page: 1/5 
Working Party on State Trading Enterprises    
 
 MINUTES OF THE MEETI NG 
HELD ON 9 NOVEMBER 2 017 
CHAIR: RIKE OCTAVIAN A (INDONESIA)  
1   ADOPTION OF THE AGEN DA ................................ ................................ ........................  1 
2   REVIEW OF NEW AND FU LL NOTIFICATIONS SUB MITTED BY MEMBERS  .....................  1 
3   REVIEW OF NOTIFICATI ONS PREVIOUSLY REVIE WED BY THE WORKING 
PARTY  ................................ ................................ ................................ ..............................  3 
4   CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S BY THE 
RUSSIAN  FEDERATION  ................................ ................................ ................................ ..... 4 
5   CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S BY THE 
UNITED ARAB EMIRATES  ................................ ................................ ................................ . 4 
6   OTHER BUSINESS  ................................ ................................ ................................ ........  5 
7   ANNUAL REPORT (2017)  TO THE COUNCIL FOR T RADE IN GOODS  ..............................  5 
8   DATE OF N EXT MEETING ................................ ................................ ..............................  5 
 
1  ADOPTION OF THE AGEN DA 
1.  The Chair started the meeting by thanking the outgoing Chair, Yeili Rangel Peñaranda for her 
successful leadership in chairing the past meetings and wished her success. The Chair then 
referred to the proposed agenda contained in WTO/AIR/STR/7, circulated on 30 October  2017. 
Nothing was raised under Other Business.  
2.  The Working Party adopted  the agenda.  
2  REVIEW OF NEW AND FU LL NOTIFICATIONS SUB MITTED BY MEMBERS  
3.  The Chair  recalled that, acco rding to paragraph 5 of the Understanding on the Interpretation of 
Article XVII of GATT 1994, the Working Party was tasked with reviewing the notifications and 
counter -notifications presented by Members on their State Trading Enterprises (STEs). As 
recomme nded by the Working Party (G/STR/8) and agreed by the Council for Trade in Goods on 
22 June 2012, these new and full notifications were now presented every two years.  
4.  The last new and full notification was due on 30 June 2016. The Working Party had alread y 
reviewed a number of the notifications for 2016 during its meetings in October 2016 and 
May 2017, and this meeting's agenda included 2016 notifications received since that time, as well 
as recently submitted notifications corresponding to previous period s.  
5.  The Chair proposed that the Working Party review the notifications in the same way as in 
previous meetings, focusing on two main elements: (i) whether the notification responded 
adequately to the information requested in the Questionnaire (G/STR/3/Rev. 1); and (ii) whether 
more information was required in order to permit, in  the language of paragraph 2 of the 
Understanding, "a clear appreciation of the manner of operation of the enterprises notified and the 
effect of their operations on international tra de". G/STR/M/32  
 
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  6.  The Chair recalled that, as provided in the Working Party's 1995 Report (G/L/35), Members 
wishing to raise questions on a notification under review were to present them in writing to the 
delegation and to the Secretariat three weeks before the meeting . Replies were also to be 
presented in writing. Both questions and replies would be distributed to all Members.  
7.  No questions were raised regarding the notifications of Argentina  (G/STR/N/16/ARG); 
Australia  (G/STR/N/16/AUS/S uppl.1); Burundi  (G/STR/N/16/BDI)  and Zambia 
(G/STR/N/16/ZMB).  
8.  Regarding the notification by  Colombia (G/STR/N/16/COL), the European Union  thanked 
Colombia for the submission of a new notification. The European Union noted that the notification 
contained a list of companies qualified as STEs, as well as additional companies. The 
European  Union appreciated the additional transparency but wanted to understand why these 
other distilleries and enterprises were included in the notification.  
9.  Colombia  thanked the European Union for the question s raised and for providing them ahead of 
the meeting. Colombia was not in a position to provide an answer at this point, but had some 
preliminary comments. Colombia asked the European Union to be more specific about its concerns 
with regard to the list pro vided. In its latest notification, Colombia had updated the list of 
companies based on information received from local authorities in Colombia. Changes were made 
to the list because some enterprises closed and because other companies were added to the list . 
The decision to place enterprises on the list of STEs did not come from the central government, 
whose input was limited to complying with the transparency commitments that Colombia had 
undertaken within the WTO. Colombia indicated that it was undergoing a period of legislative 
transition such that it was likely that the list of STEs would be further amended in the upcoming 
2018 notification.  
10.  Regarding the notification by Iceland  (G/STR/N/15/ISL), the European Union  thanked Iceland 
for its notification, n oting that it was Iceland's first notification since 1999. The European Union 
said that it had passed a question to Iceland and had received a reply before the meeting. It would 
nevertheless read out its question for the sake of transparency. The European Union noted that 
the notification did not seem to fulfil all requirements and that not all questions had been 
answered. It asked whether Iceland intended to elaborate further on this notification and in 
particular completing it with statistics on the state  alcohol and tobacco monopoly. This question 
applied also to the next notification obligation of Iceland in June 2018.  
11.  The Chair noted that the delegation of Iceland was not present and asked the European Union 
to circulate the question in writing.  
12.  The Chair drew the attention of delegations to the revised notifications of the United States 
(G/STR/N/16/USA/Rev.2, G/STR/N/15/USA/Rev.1, G/STR/N/14/USA/Rev.1, 
G/STR/N/13/USA/Rev.1, G/STR/N/12/USA/Rev.1, G/STR/N/11/USA/Rev.1).  
13.  The United States  indicated that it  submitted these updated notifications to include statistical 
data from 2004 to 2015. The United States had committed to doing this at the last meeting of the 
Working Party because it placed great importance on transparency and wanted to ensure that 
Member s had all information required.  
14.  The Working Party took note  of the notifications, questions, answers and statements made.  
15.  The Chair drew the attention of delegations to document G/STR/17, which contains a Status 
of Notifications and noted that many, if not  the majority, of Members were not fulfilling their 
notification obligations. Regarding the notification requirement for 2016, the Working Party had, to 
date, received notifications from just 45  Members. The Chair encouraged Members to work with 
their capi tals to improve the notification record.  
16.  The United States  thanked the Chair for her initiative to encourage notifications and noted 
that a number of Members had either failed to make any notification or had not done so for some 
time. According to the lat est data circulated by the Secretariat, 38 Members had not made a 
notification in the last ten years. Transparency was an important requirement for all WTO Members 
and notifications and counter -notifications were sometimes the only way that other Members c ould G/STR/M/32  
 
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  be properly informed of certain Members' activities in any given area. Low levels of compliance 
undermined the transparency function of the Working Party. The United States also noted that if it 
were a matter of updating a notification, the notificati on process need not be cumbersome, as 
much of the information to be provided in the context of STE notifications had been provided and 
discussed in the Trade Policy Review process, in the WTO Committee on Agriculture, or had been 
otherwise provided to the WTO. The non -notification issue was a serious problem for the 
Working  Party and required some kind of action. The United States supported the Chair's initiative 
in this regard.  
17.  The Working Party took note  of the statement made.  
3  REVIEW OF NOTIFICATI ONS PRE VIOUSLY REVIEWED BY THE WORKING PARTY  
18.  The Chair noted that this item concerned the review of notifications previously reviewed by 
the Working Party. Delegations had asked the Working Party to revert to three notifications.  
19.  Regarding the notification of Costa Rica  (G/STR/N/16/CRI), the European Union had posed 
written questions (G/STR/Q1/CRI/1) and Costa Rica had provided written responses 
(G/STR/Q1/CRI/2).  
20.  Regarding the notification of India  (G/STR/N/14/IND), questions had been posed by the 
European Union  (G/STR/Q1/IND/13) and India had provided written responses 
(G/STR/Q1/IND/14).  
21.  The European Union  thanked India for the answers provided and indicated that it still had a 
disagreement with regard to the status of TASMAC. India had explained that TASMAC wa s not an 
STE as defined in the Foreign Trade Policy of India. The European Union did not consider it to be a 
sufficient condition for exempting India from its obligation to notify TASMAC in accordance with 
Article XVII. Despite India's confirmation that TA SMAC was a governmental entity and enjoyed 
special privileges, India considered that it was not subject to notification because it did not have 
exclusive privileges, so that the third criterion of the STE defin ition was not met. The 
European  Union disagree d and explained that the level of imports of beverages and spirits into 
Tamil Nadu was influenced by the activities of TASMAC. TASMAC was mandated to undertake 
several commercial activities within Tamil Nadu such as off -trade retail sale and purchases of 
imported foreign liquor brands for local manufacturing and bottling units. These activities 
influenced imports and exports of alcoholic beverages and spirits into Tamil Nadu. The European 
Union asked India, if it disagreed with this view, to substantiate it s position. It remained of the 
view that TASMAC was an STE and should be notified to the WTO. Finally, the European Union 
recalled that at the last meeting, India indicated that internal consultations on this issue were 
ongoing and asked whether India coul d provide the result of these consultations.  
22.  India thanked the European Union and noted that it had responded to questions regarding 
TASMAC in documents G/STR/Q1/IND/10 and G/STR/Q1/IND/14. India reiterated that, in its point 
of view, TASMAC was not an ST E under the Foreign Trade Policy of India (available at 
http://www.dgft.gov.in ). India noted that none of the HS lines under Chapter 22, comprising 
beverages, spirits and vinegar, were under the STE category. Therefore  there were no STEs 
designated for these imports. In addition, TASMAC being a provincial level entity, India was 
consulting with the relevant entities at different levels of government and seeking more 
information to respond to the issues raised by the Eur opean Union. India's response in this regard 
would be provided shortly.  
23.  Regarding the notification of Viet Nam  (G/STR/N/15/VNM -G/STR/N/16/VNM), the 
United  States had asked written questions (G/STR/Q1/VNM/1) and Viet Nam had provided written 
responses (G/S TR/Q1/VNM/2).  
24.  The United States  thanked Viet Nam for its replies and indicated that it had submitted 
follow -up questions in G/STR/Q1/VNM/3. It looked forward to receiving Viet Nam's replies.  
25.  Viet Nam  thanked the United States for its questions and stateme nts. Notifications had been 
provided in  document G/STR/N/15/VNM -G/STR/N/16/VNM and questions had been received from 
the United States, to which Viet Nam had replied in document G/STR/Q1/VNM/2. Viet Nam had G/STR/M/32  
 
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  received a new set of questions from the United St ates before the meeting. Viet Nam looked 
forward to continuing working alongside other Members to ensure that Viet Nam's notifications are 
consistent with its international obligations.  
26.  The Working Party took note  of the statement made.  
4  CONTINUED NON -NOTIF ICATION OF STATE TRA DING ENTERPRISES BY THE 
RUSSIAN  FEDERATION  
27.  The European Union  reiterated its concern with the lack of notifications of Russian STEs under 
Article XVII. On the basis of replies submitted by the Russian Federation at previous meetings of 
the Working Party and in the context of its Trade Policy Review, the European Union had 
understood that Russia granted exclusive rights to several companies, as established by the 
relevant orders of the government of the Russian Federation. At the last mee ting of the 
Working  Party, Russia had indicated that the notifications for Gazprom in response to the 2014 call 
for notifications, as well as other organizations in response to the call for notifications for 2016, 
were under internal coordination. The Euro pean Union regretted that Russia had not yet fulfilled its 
notification obligation and urged it to transform these positive announcements into concrete 
actions.  
28.  The United States  regretted that this was the sixth consecutive meeting that this topic was on  
the agenda and the fifth year that this issue had been raised in the Working Party. Russia had 
made an effort to meet its transparency commitments in other WTO bodies, but the United States 
regretted that this effort was not being exhibited in this Workin g Party. Russia had missed three 
consecutive notification cycles, or six years, as indicated in Secretariat document G/STR/17 of 
20 October 2017, and had not fulfilled a single STE notification since it had joined the WTO. This 
being said, the United State s welcomed Russia's indication at the October 2016 meeting of the 
Working Party that companies had been granted the exclusive right to export liquefied natural gas. 
In addition, the United States noted that according to a Presidential Decree from March 200 9, 
JSC United Grain Company and its subsidiaries were state agents that conducted procurement and 
commodity interventions in the grain market, with mandates to increase (1) grain export volumes, 
(2) the volume of grain purchases, and (3) sales on the domes tic market. These entities all 
appeared to have elements and activities that fell under the working definition of a STE in the 
Understanding on the Interpretation of Article XVII. The United States trusted that Russia would 
provide all the required informa tion in its eventual notifications, both for the past six years and 
going forward. Russia had repeatedly stated in the Working Party that its STE notification was 
"nearly finalized and would be submitted in the near future". Transparency was an important W TO 
requirement that Russia agreed to abide by when it joined the WTO. It allowed WTO Members to 
better understand and evaluate a Member's STE operations and its compliance with relevant 
WTO obligations. The United States urged Russia to fulfil its notifica tion obligation as quickly as 
possible. It was willing to further engage with Russia either here in the Working Party, or outside 
the room if that would be helpful, on helping it make its required  notification.  
29.  The Russian Federation  thanked the United Sta tes and the European Union and confirmed that 
the preparation of the notification was ongoing but that more time for coordination between the 
ministries of Energy and Economic Development as well as with the enterprises concerned was 
required. The delegate  for the Russian  Federation explained that the necessary explanatory work 
had been done with the enterprises concerned, following explanations given by the 
WTO Secretariat. The Russian Federation acted in conformity with its WTO commitments and 
intended to  submit only a fully completed notification. The Russian Federation would table its 
notification once the necessary work is finalized.  
30.  The Working Party took note  of the statements made.  
5  CONTINUED NON -NOTIFICATION OF STAT E TRADING ENTERPRISE S BY THE UNITE D 
ARAB EMIRATES  
31.  The United States  noted that the delegation of the United Arab Emirates was not in the room 
and required that this item be carried forward to the next meeting of the Working Party. The 
United States continued to be concerned by this respons e because it gave the impression that the 
United Arab Emirates did not place much value in its transparency obligations.  G/STR/M/32  
 
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  32.  The Working Party took note  of the statement made.  
6  OTHER BUSINESS  
33.  The Working Party took note  that no issue had been raised under othe r business.  
7  ANNUAL REPORT (2017)  TO THE COUNCIL FOR T RADE IN GOODS  
34.  The Chair noted that paragraph 5 of the Understanding on the Interpretation of Article XVII of 
the GATT 1994, instructed the Working Party to report annually to the Council for Trade in Goo ds. 
At its meeting of 30 October 2012, the Working Party had agreed on a new format for the annual 
report. It was agreed to separate the draft annual report and the table of notifications since 1995 
into two separate documents, with both to be circulated a s room documents in advance of the 
formal meeting. The draft annual report had been circulated as room document RD/STR/20 and 
the table of notifications as room document RD/STR/19.  
35.  With regard to the table of notifications, the United States  indicated tha t it was not impressed 
by the number of missing notifications and urged Members to comply with their notification 
obligation as quickly as possible.  
36.  The Working Party adopted  its 2017 Annual Report.  
37.  The Chair indicated  that the table of notifications wou ld be issued as document G/STR/17, and 
would be updated before the next meeting of the Working Party.  
8  DATE OF NEXT MEETING  
38.  The Chair indicated that the Working Party was holding two meetings per year and interest 
had been expressed in continuing with this approach. The Chair proposed to hold the next meeting 
on 31 May 2018. The draft annotated agenda would be circulated on 11 May 2018 and the airgram 
would be issued on 21 May 2018.  
39.  The United States  proposed to hold the next meeting closer to the Rules Week , in order to 
allow for participation of officials travelling from capital for this event.  
40.  The Working Party took note  of the statement made by the United States.  
41.  The meeting was adjourned . 
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