RESTRICTED  
  
G/TRIMS/M/38  
 
27 July 2015  
(15-3845)  Page: 1/25  
Committee on Trade-Related Investment Measures    
 
 MINUTES OF THE MEETING HELD ON 
16 APRIL 2015 
CHAIR: MR VICTOR ECHEVARRIA UGARTE (SPAIN) 
INTRODUCTION 
1. The Committee on Trade-Related Investment Measures (the "Committee") met on 
16 April 2015. The Committee adopted the following agenda: 
1   TURKEY – LOCAL CONTENT REQUIREMENTS IN THE ELECTRICITY GENERATION ................................................................................................................... 2
 
2   CHINA – LOCAL CONTENT REQUIREMENTS FOR PURCHASES OF TECHNOLOGY 
BY THE BANKING SECTOR ................................................................................................ 3  
3   INDIA – LOCAL CONTENT REQUIREMENT IN SOLAR POWER GENERATION PROJECTS ...................................................................................................................... .. 5
 
4   INDIA – CERTAIN PREFERENCES TO DOMESTICALLY MANUFACTURED 
ELECTRONIC GOODS AND TELE COMMUNICATIONS PRODUCTS ........................................ 5  
5   INDONESIA – LOCAL CONTENT REQURE MENTS FOR 4G LTE MOBILE DEVICES ............ 6  
6   INDONESIA – CERTAIN MEASURES  ADDRESSING LOCAL CONTENT IN 
INVESTMENT IN THE TELECO MMUNICATIONS SECTOR .................................................... 8  
7   INDONESIA - CERTAIN LOCAL CO NTENT PROVISIONS IN THE ENERGY 
SECTOR (MINING, OIL AND GAS) ..................................................................................... 9  
8   INDONESIA – NEWLY ADOPTED INDUSTRY LAW AND TRADE LAW ........................... 10  
9   INDONESIA – MINIMUM LOCAL PRODUCT REQUIREMENT FOR MODERN 
RETAIL SECTOR .............................................................................................................. 13  
10   NIGERIA – CERTAIN MEASURES TAKEN IN THE "ACT TO PROVIDE FOR THE 
DEVELOPMENT OF NIGERIAN CONTENT IN THE NIGERIA OIL AND GAS 
INDUSTRY" OF APRIL 2010 ............................................................................................ 16  
11   RUSSIAN FEDERATION – LOCAL CONTENT REQUIREMENTS FOR PURCHASES 
BY STATE-OWNED ENTERPRISES ................................................................................... 17  
12   RUSSIAN FEDERATION – LOCAL CONTENT REQUIREMENTS FOR 
AGRICULTURAL EQUIPMENT .......................................................................................... 19  
13   RUSSIAN FEDERATION – SUPPORT MEASURES FOR THE AUTOMOTIVE 
SECTOR ........................................................................................................................ .. 21 
14   UNITED STATES – CERTAIN LOCAL CONTENT REQUIREMENTS IN SOME OF 
THE RENEWABLE ENERGY PROGRAMS ............................................................................ 22  
15   OTHER BU SINESS .................................................................................................... 25  
16   DATE OF THE NEXT MEET ING .................................................................................. 25  
17   ELECTION OF CHAIRPERSON AND VICE – CHAIRPERSON ........................................ 25  
 G/TRIMS/M/38 
 
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  2. The Chair informed Members that Indonesia had just provided, on the morning of the 
meeting, several written responses, advance copies of which had been placed at the back of the 
room, which the Secretariat would circulate as soon as possible. 
1  TURKEY – LOCAL CONTENT REQUIREMENTS IN THE ELECTRICITY GENERATION  
3. The Chair noted that this was a new item placed on the agenda at the request of the 
European Union. Questions to Turkey had circulated in document G/TRIMS/W/151.  
4. The European Union expressed its concern about Turkey's amendments to the Law on the 
Utilization of Renewable Energy Sources for the Purpose of Generating Electrical Energy, despite 
the text of the Law not being entirely clear. Based on Article 6B and its heading ("use of domestic products"), it could be assumed that if domestic components were used at the generation plants reliant on renewable energy resources within the scope of the Law, the generation company would 
obtain a higher subsidy compared with the situation where no domestic content was used. The 
European Union had submitted written questions to  Turkey seeking clarifications on the Law's 
amendments and asked Turkey to explain, in particular, how those new provisions were in 
compliance with the obligations laid down in Article III of the GATT and Article 2 of the TRIMS 
Agreement. The European Union encouraged Turkey to provide written replies soon. 
5. Turkey stated that it was preparing a written response to the EU questions which would be 
submitted in due course. In the meantime, it referred to the Secretariat's Report (document 
WT/TPR/S/259) in the context of Turkey's last Trade Policy Review (TPR) in 2011, and quoted the 
following excerpt under the title "Energy/Renewable Energy":  
"(47) The legal framework, i.e. the Law on the Utilization of Renewable Energy 
Sources for the Purpose of Generating Electrical Energy (2005) together with the 
Electricity Market Law and the Energy Efficiency Law, includes several instruments to promote electricity generation from renewable sources of energy including feed-in 
tariffs and purchase obligations, connection priority, reduced licence fees, and reduced 
fees for project preparation and land acquisition. Furthermore, the 2005 Law was amended in January 2011 to introduce bonus tariffs for licence holders using locally 
manufactured mechanical or electro-mechanical components. Under an implementing 
regulation issued on 19 June 2011, the beneficiaries must obtain a manufacturing certificate attesting that the components comply with international or Turkish standards, as well as a "manufacture status document" certifying that the components 
were manufactured in Turkey."  
6. Turkey noted that during that same TPR, some Members, including the European Union, had 
requested further information about the timeline for adopting implementing legislation regarding 
the Law on the Utilization of Renewable Energy So urces for the Purpose of Generating Electrical 
Energy. Turkey referred to the reply provided in paragraph 30, page 93 of the same report, 
quoting the following excerpt:  
"In order to reduce energy import dependency and increase utilization of indigenous 
resources, further measures aiming at facilitating utilization of vast renewables potential and supporting market penetration of renewable based electricity generation were crucial elements of Turkey's energy stra tegy. Turkey aims to reach at least thirty 
percent (30%) share of renewables in electricity mix until 2023. This was also one of 
the main tools in the context of the Electricity Market and Security of Supply Strategy Paper, as a road map of Turkish Electric ity sector. The Renewable Energy Law (2005), 
The New Renewables Law (2011), The Electricity Market Law and Energy Efficiency 
Law, together set the legal framework for promoting electricity generation from renewable sources and include these main instruments:  
- Supporting mechanisms and incentive schemes such as differentiated feed-in tariffs 
(7,3 US cents per kWh for hydro and wind, 10,5 US cents for geothermal and 13,3 US cents for solar and biomass),  
- purchase guarantees, 
- connection priorities,  
- lower license fees and exemptions and  G/TRIMS/M/38 
 
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  - various practical conveniences in project preparation and land acquisition were 
defined. 
 In addition, a certain support of 0.4 to 3.5 US cents per kWh was to be provided to 
the plants if they choose to utilise domestically manufactured technical equipment. 
Please note that this was not a requirement to be fulfilled by the investor, but a support scheme for the development of rene wable related technology and knowhow in 
Turkey. Investors were not under any sort of obligation or required or compelled to 
use or buy local content under any circumstances, but would be rewarded with a small extra incentive if they desire and decide to use domestically produced or manufactured equipment. It should be noted that the basic intention was not to 
discriminate foreign goods but to further contribute to the development of renewable 
technology and facilitate maturing of new energy sciences. To sum up, it would be incorrect to assert that there exists a "local content requirement" for renewable 
energy sector in Turkey as investors we re not required to use local content but 
extended additional incentives in order to improve renewable energy use." 
7. The European Union appreciated Turkey's statem ent and looked forward to a written reply. 
8. The Committee took note of the statements made. 
2  CHINA – LOCAL CONTENT REQUIREMENTS FOR PURCHASES OF TECHNOLOGY BY THE 
BANKING SECTOR  
9. The Chair informed Members that the next agen da item would be also discussed for the first 
time, upon the request of Japan and the United States. Questions from the United States had 
circulated in document G/TRIMS/W/150.  
10. The United States expressed its concern about a measure recently adopted by the Chinese 
authorities appearing to place local content requirements, referred to as indigenous innovation 
requirements, on information and communication technology (ICT) equipment used by the banking sector. The measures in question were the Guidel ines for Promoting the Application of Secure and 
Controllable Information Technology in the Banking Sector ("Guidelines") and the accompanying 
Classification Catalogue of Banking Information Technology Assets and Indexes of Security and 
Controllability ("Catalogue"), issued by the China Banking Regulatory Commission ("CBRC") on 26 December 2014.  
11. Those measures were framed in terms of improving cybersecurity in an important sector. 
Without questioning the right of WTO Members to  take steps to improve cybersecurity, the 
United States was concerned that the Guidelines reflected a definition of "secure and controllable" 
technology that would severely limit access to China's commercial banking sector for many foreign 
ICT products, services and technologies, and would dictate the business decisions of financial institutions, including foreign financial institution investors. 
12. In particular, a key policy objective of the Guidelines was to encourage indigenous 
innovation, and "utilize the banking sector's informatization needs to cultivate and drive the market." By blending the concept of security and indigenous innovation, the Guidelines and Catalogue appeared to promote local content, cloaked in the language of reliability. 
13. The Guidelines imposed the following requirement: "When choosing technology, if secure 
and reliable products and technologies innovated indigenously were available, at least one vendor of such products and technologies shall be introduced for technology selection and testing; in case 
of vendors providing specialized equipment or integration solutions, both the hardware and 
software used in their solutions shall respectively adopt at least a secure and reliable product or technology innovated indigenously." 
14. The policies and tasks of the Guidelines appear ed to be implemented by the Catalogue. The 
Catalogue defined "indigenous IPR" as "IPR exclusively owned by and relatively controlled by Chinese citizens, corporate legal persons or non-legal person institutions." The Catalogue also specified that 100% of new purchases by the ba nking industry of computer servers, desktop 
computers and laptop computers and 50% of new purchases of tablets and smartphones must G/TRIMS/M/38 
 
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  meet "security and controllability" requirements. The Catalogue and Guidelines, taken together, 
thus appeared to use concepts such as security, controllability, reliability and local manufacture interchangeably. 
15. There had been recent reports that China may be reviewing the policies set out in the 
Guidelines and Catalogue. In addition to the questions that had been posed in writing, the 
United States asked China to provide further details on that ongoing review, given the international call for China to reconsider and suspend implementation of those banking 
regulations. 
16. Japan stated that, on 3 September 2014, the Government of China, namely the CBRC, 
National Development and Reform Commission, Minist ry of Science and Technology and Ministry of 
Industry and Information, issued the "Guiding Opinions on the Application of Secure and 
Controllable Information Technology to Strengthen Banking Industry Network Security and 
Informatization". The description of the Guiding Opinion was the following: first, it called for the banking sector in China to switch to "secure an d controllable" technologies aiming that, by 2019, 
the level of adoption of such technologies in the sector would be increased to 75%; second, it 
envisaged strengthening the security inspection of  ICT specialized in banking sector and relevant 
products by establishing a standard for network security audit in the banking sector in China. 
Following the Guiding Opinions, Guidelines were issued on 26 December 2014, introducing 
requirements that ICT goods and services used by  banks should meet. For example, the Guidelines 
required that banking ICT equipment contain indigenous Chinese intellectual property; and that equipment should go through an assessment procedure and obtain certification based on a 
particular set of criteria set out by the Guidelines. 
17. Japan voiced its concern about the Guidelin es' consistency with the WTO agreements, 
including the TRIMS Agreement, and invited China to provide its view on how those requirements 
could be implemented consistently with the TRIMS Agreement. Further, Japan asked whether the 
Government of China was considering implementing or revising those Guidelines. Japan wished to continue exchanging views with China on the im plementation of those restricting measures and 
asked China: (1) whether it had provided detailed information on the procedures for the 
registration of source code of software and on measures concerning the assessment procedure and acquisition of certification based on a particular set of criteria prescribed by the Guidelines; and (2) whether China could describe, in relation to a CBRC document of 12 February 2015 requiring 
suppliers to provide either IP software certificate or a legal origin certificate, what the two 
certificates were and whether China would introduce concrete criteria for the two certificates in explicit language. 
18. The European Union echoed previous concerns on the proposed Chinese measures on 
"secure and controllable" ICT products in the bank ing sector. Without questioning the right of WTO 
Members to take steps to improve cyber security, the Guidelines reflected a definition of "secure 
and controllable" technology that would severely limit access to China's commercial banking sector 
for many foreign ICT products, services and technologies, and would dictate the business decisions of financial institutions, including foreign financial institutional investors. The European Union asked China to offer clarifications on the proposed  measures and looked forward to China's replies 
to the US questions. 
19. Canada acknowledged China's recent modifications to the new Guidelines for the banking 
sectors, the development and implementation of which Canada monitored closely. Canada would 
welcome the Chinese banking regulators making th emselves available for questions and dialogue. 
20. China appreciated the remarks of the United St ates, the European Union, Japan and Canada 
and noted that the US questions had been forw arded back to capital. The purpose of such 
measures was to protect information security of banking industries and the public. The relevant 
authorities were revising and perfecting the meas ures taking into account the comments received 
from various parties. China's opening-up polic y and commitment to fully implement WTO rules 
would remain unchanged. In the meantime, it was necessary to protect information security of 
banking industries. Many other countries had also established relevant laws and regulations in 
order to protect information security. The United States had learned China's position through bilateral channels and hoped that the United States and other Members would understand and 
respect China's practice and action in that regard. G/TRIMS/M/38 
 
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  21. The United States appreciated China's response and looked forward to more detailed 
responses to the US questions. The United States also took good note of China's statement that 
the measure would remain unchanged and assumed from this statement that the reports seen in the press about plans to suspend or delay implemen tation of the measure were incorrect. Finally, 
the United States would review carefully the respon ses to be received from China and might revert 
to this issue at a future meeting of this Committee. 
22. The Committee took note of the statements made. 
3  INDIA – LOCAL CONTENT REQUIREMENT IN SOLAR POWER GENERATION PROJECTS 
23. The Chair informed Members that the next agenda  item was also to be discussed for the first 
time, upon the request of the European Union. Qu estions from the European Union had circulated 
in document G/TRIMS/W/147. 
24. The European Union expressed its concern about India pursuing the policy of local content 
requirements in the solar power generation sector. Despite an on-going trade dispute, India, with 
its recent move, appeared not to relinquish its trade-obstructive behaviour in that sector. The 
European Union requested further information on India's current schemes, as per the EU 
questions, and on the rationale for such local co ntent requirements, bearing in mind that Indian 
domestic operators did not presently have the capa city to fulfil such requirements, and would not 
have such capacity most probably in the short term, meaning that the achievement of targets 
intended in the National Solar Mission could be seriously hampered. The European Union sought assurances from India as to future projects, indicating that India should be departing from localisation policies for the benefit both of foreign companies and the success of its National Solar 
Mission. 
25. India noted that it had recently received the EU questions which were being analysed in 
capital. The details of the measure in question were in the public domain at the MNRE website i.e. 
http://www.mnre.gov.in . India requested the European Union to go through the website and 
confirmed its belief that all the measures under question were GATT and TRIMS compliant as India 
took its WTO obligations very seriously. 
26. The Committee took note of the statements made. 
4  INDIA – CERTAIN PREFERENCES TO DOMESTICALLY MANUFACTURED ELECTRONIC 
GOODS AND TELECOMMUNICATIONS PRODUCTS  
27. The Chair recalled that the next item had been considered for the first time at the 
Committee's meeting in May 2012 and was on the agenda at the request of the European Union. 
Documents pertaining to that issue could be found in G/TRIMS/W/94 and G/TRIMS/W/105, containing questions posed by the United States, and G/TRIMS/W/97 and G/TRIMS/W/111 
containing India's replies. Further questions had been posed by the European Union in documents 
G/TRIMS/W/133 and G/TRIMS/W/143, to which India had responded, a few days prior to the meeting, in documents G/TRIMS/W/155 and G/TRIMS/W/156 respectively.  
28. The European Union thanked India for its st atement under this agenda item at the 
Committee's previous meeting of 6 October 2014, for pointing to the Notification No. 33(3)2013-
IPHW for more details of the revised policy and for its recently submitted replies to the EU questions. 
29. The European Union requested additional clarifications on whether the Government of India 
had issued, in December 2014, strict guidelines to al l Ministries asking them to identify and notify 
department-specific domestically manufactured electronic products for procurement and to adhere 
to a tender template. It asked India to share information about those guidelines, their 
implementation and the outcome of the instructions  given according to the data collected by the 
online monitoring system.  
30. Further, it requested to receive information about the revised policy of the modified special 
incentives package scheme (M-SIPS), as the revision had been finalised. G/TRIMS/M/38 
 
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  31. The European Union further noted that India, in its reply to the EU questions (document 
G/TRIMS/W/143) on its preference policy relating to certain domestically manufactured telecommunication products, had referred to the original telecoms Preferential Market Access 
(PMA) policy notification dated 05.10.2012. The Euro pean Union asked India to clarify whether it 
intended to publish a modified telecoms PMA policy (as had been the case for electronics); 
furthermore, whether the local manufacturing an d value addition requirements, often reaching 
100%, would remain unchanged, whether they would be applied as established in the 2012 
notification and whether India would publish explanatory guidelines for the methodology of value 
addition calculation. 
32. Japan shared the EU concerns and appreciated In dia's efforts to provide its views in writing. 
Japan would read India's responses carefully and wo uld be interested in following up this issue. 
33. The United States expressed its appreciation to India for the responses provided and noted 
that it would review the responses carefully in capital. 
34. Canada thanked India for providing responses to the outstanding questions. Unfortunately, 
as the information had only been circulated very recently, colleagues in capital had not had an 
opportunity to fully examine the information. Canada would review the information provided and would revert with questions, if necessary.  
35. India noted that it had already responded to the EU written questions. On the additional EU 
questions, India requested the European Union to go through India's written response and 
especially the web link provided as it contained detailed information on the current state of play with respect to that policy in India. In case the European Union or Japan desired more information, 
India requested written questions that could be forwarded to the capital for a suitable response. 
36. The Committee took note of the statements made. 
5  INDONESIA – LOCAL CONTENT REQUREMENTS FOR 4G LTE MOBILE DEVICES  
37. The Chair noted that this item was on the agenda for the first time at the request of the 
United States which had also submitted written questions, circulated in document 
G/TRIMS/W/148. Indonesia had provided written responses just before the beginning of the 
meeting, advance copies of which had been placed  at the back of the room. The Secretariat would 
circulate those written replies as soon as possible. 
38. The United States expressed its deep concern about recently announced measures 
seemingly imposing local content requirements on 4G LTE mobile devices. Such measures were 
especially alarming because of the three-fold natu re of the discrimination. First, assuming the US 
understanding of the measures was correct, the me asures appeared to require investors to use 
local content in manufacturing. Second, the measures appeared to award credit towards meeting 
the local content requirement discriminatorily, su ch that companies owned by Indonesians could 
meet the local content requirement more easily  than companies owned by non-Indonesians, 
resulting, ironically, in local companies being possibly able to use less local content. Third, the 
measures appeared to envisage that discriminator y subsidies could be granted based on the use of 
local content. 
39. Those measures were vivid illustrations of the dangers of local content requirements. 
Electronic equipment of the type covered by th ose measures was supported by modern global 
value chains. No product was entirely manufactured in any one jurisdiction, and it made no 
economic sense for companies to operate parallel manufacturing facilities in several countries for similar parts and components. Further, that measure appeared to apply to a broad range of 
companies, including companies that may design devices, but not manufacture them directly, as 
well as companies that were primarily software development companies and whose software ran on devices. It was not clear how such companies could comply with those measures. The most 
likely result of measures of that sort would be that Indonesian consumers would be cut off from 
the most up-to-date equipment. In some countries  that had tried similar approaches, a thriving 
black market had developed meaning that consumers paid high prices for products without warranties, the government was deprived of tax revenue, and no local manufacturing took place. G/TRIMS/M/38 
 
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  The only thing Indonesia would accomplish would be to send a clear signal that it was not a safe 
place to invest. 
40. The United States noted that the alternative ou tcome should be of even greater concern for 
this Committee. Given the nature of those products, it would be unlikely that manufacturers would 
set up facilities dedicated solely to supplying the Indonesian market, redundant of manufacturing 
facilities elsewhere. Rather, if Indonesia's meas ure were successful, companies might decide they 
had no choice but to move facilities into Indo nesia to supply both the Indonesian AND export 
markets. As investors would look to make new investments, they might shun smaller developing 
countries, because if they did not set up manufacturing in Indonesia, they might not be able to sell their products in Indonesia – a very big place with a lot of consumers. Such an outcome would be a boon to Indonesia, but would come at the direct expense of the countries where those products 
were manufactured presently. While a big manufacturing economy and consumer market like 
China could probably find ways to continue to attract foreign investment, Indonesia would be directly stealing investment from its smaller neighbours. In sum, those measures did not reflect 
the reality of how products were manufactured.  
41. The United States also expressed its interest in learning more about Indonesia's intentions. 
The United States understood that the multiple Indonesian ministries involved in developing those 
requirements were consulting private sector stakeholders and urged such consultations to continue 
and to take into account the US comments and those from foreign governments, including those made at this meeting. It also urged Indonesia to ensure its measures were consistent with its WTO commitments. Finally, the United States asked Indonesia the anticipated timeframe for those 
measures, and what the process for considering whether they should be imposed, modified or 
dropped would be. 
42. Japan fully shared the US concerns and was carefully monitoring the regulation in question. 
Japan understood that the regulation was under review and that the Indonesia would publish a 
draft of the regulation and call for public comment s by the end of the month, as announced in the 
website of the Ministry of Communication and In formation. Through such a process, Japan urged 
the Indonesia to bring the regulation into consistency with WTO rules. 
43. Canada noted that it had forwarded to capital for review the Indonesia's written responses 
to the US questions. 
44. Indonesia, referring to the US questions in document G/TRIMS/W/148, provided the 
following clarifications: 
45. Responding to question No 1, Indonesia note d that the plan was intended to strengthen 
Indonesia's role and further integrate itself into th e global value chains. This plan would only apply 
in the 4G/LTE sector equally and non-discriminatorily between domestic and foreign investors. In 
undertaking this plan, Indonesia, as a law-abiding member of the WTO, would ensure that due process would be upheld in line with all the WTO provisions and Indonesia's commitments, 
particularly the principles of transparency, inclusiveness, and non-discrimination. This plan also 
included a series of consultations with all stakeholders, such as telecommunications' operators, investors, and associations. Regarding question No 2, Indonesia stated that the local content calculation was subject to Ministry of Industry Regulation No 69/2014 on Conditions and 
Calculation Method of Local Content for Electronics and Telematics Industry.  
46. Indonesia noted that its responses to questions No 3 and 4 were in line with its response to 
question No 1; the plan to move up the value-chain of manufactured products in 4G/LTE sector 
was still being formulated and the substance had yet to be finalized. Thus, the response to 
question No 5 could not be determined since the plan was still under discussion. In conclusion, Indonesia expressed its willingness to continue working with other WTO Members, in order to 
support and strengthen the multilateral trading system which developed a favourable investment 
climate and trading regime. 
47. The Committee took note of the statements made. G/TRIMS/M/38 
 
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  6  INDONESIA – CERTAIN MEASURES ADDRE SSING LOCAL CONTENT IN INVESTMENT IN 
THE TELECOMMUNICATIONS SECTOR  
48. The Chair recalled that this issue had been pr eviously considered at all Committee meetings 
held since 20 May 2009. It was placed on the agen da of today's meeting at the request of Japan. 
Since the first time it had been raised, a number of  questions had been posed to Indonesia on this 
matter. These could be found in documents G/TRIMS/W/61, 71, 78, 86 and 104. Responses to these questions could be found in documents G/TRIMS/W/63, 75, 80, 96 and 131 respectively. A 
few days before this meeting, Japan submitted new questions in document G/TRIMS/W/154. As 
already mentioned, Indonesia had just provided written responses, advance copies of which had 
been placed at the back of the room. The Secretariat would circulate these written replies as soon as possible.  
49. Japan recalled that it had submitted written questions on this matter in G/TRIMS/W/154 and 
received written answers just two hours ago. Un fortunately, Japan's first impression of those 
answers was that Japan's views, as expressed in this Committee, were ignored. Japan invited 
Indonesia to carefully listen to its statement and to report it to capital in detail. This item had been 
on the agenda of this Committee for quite a long time. However, Japan still had significant concerns that the local content requirement in the telecommunications sector of Indonesia could 
be implemented inconsistently with the relevant WTO rules.  
50. By way of background, Japan recalled Minister ial Decree No. 7/2009 which was referred to in 
document G/TRIMS/W/80 in 2010. That Decree had stipulated that 30% of Broadband Wireless Access (BWA) devices using the 2.3GHz and the 3.3 GHz and 40% of base stations needed to be 
domestically manufactured. It also determined that electric and telecommunication equipment and 
devices should be manufactured with at least 50% of domestically procured components in five years. The method of calculation of the said requirements was determined in 
Ministerial Decree No. 41/2009, and the calculation was based on the cost of material, equipment, 
and operating machine. Therefore, those Decree s had put the local content requirement on the 
BWA equipment and the base stations. Japan continued to doubt the consistency of the 
Ministerial Decree No. 7/2009 with relevant WTO rules, namely, GATT Article III:4 and Article 2 of 
the TRIMS Agreement, because the Decree imposed an obligation to procure BWA equipment in the domestic market.  
51. At the previous meeting of this Committee, In donesia had explained that goods and services 
receiving supports from the government were cons idered as government procurement. However, 
Japan was not fully convinced with that explanation, because GATT Article III:8(a) should not be misinterpreted. The procurement in question was not done by government entities but by the 
private sector. 
52. The United States appreciated the responses Indonesia had provided to questions posed by 
Members in this Committee but remained concerned by local content requirements in 
telecommunications decrees adopted over the last several years. The United States was concerned 
that the requirements resulted in favourable treatment for domestic products over imported products and that investors could be penalized if they did not comply. Moreover, instead of 
curtailing the use of local content requirements, Indonesia appeared to be expanding their use to 
other sectors, as was demonstrated by the ever growing list of concerns of multiple trading 
partners in this Committee. The United States expressed its deep concern about that expansion, especially as those measures harmed Indonesia's investment and business climate. 
53. Canada shared the concerns expressed by others regarding certain provisions affecting the 
telecommunications sector and strongly encouraged Indonesia to consider the impact that such 
provisions could have on investment and innovation. Canada emphasized its interest in ensuring 
non-discriminatory treatment in the Indonesian telecommunications sector. Canada would review 
carefully Indonesia's written responses to Japan's questions and would continue to follow closely the developments in the Indonesian telecommunications sector. 
54. The European Union shared Japan's position, as  at previous meetings, and reiterated its 
general concern about the proliferation of local content requirements in the Indonesian legislation. 
Local content provisions in the telecoms sector had been a long-standing issue raised on several occasions. The European Union asked Indonesia (1) whether it was planning to increase further G/TRIMS/M/38 
 
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  the mandatory local content requirements for broad band "equipment and facilities" and if so, 
how; (2) when those requirements would be issued and be subject to public consultations; and (3) whether it planned to issue any other related measures and, if so, when. 
55. Indonesia referred to Japan's questions, in G/TRIMS/W/154, and provided the following 
clarifications. Responding to question No 1, Indone sia reiterated its previous response in document 
G/TRIMS/W/75 that Decree No. 7/2009 was already in line with all WTO provisions, especially GATT Article III:8(a). The Decree did not provide for differentiated treatment between local and 
foreign-service providers and was consistent with Article 2 of the TRIMS Agreement. In response 
to questions No 2 and 3, Indonesia noted that the regulation was intended to develop the telecommunication sector in remote and under-served/unserved areas, as well as rural areas which required government assistance. Therefore, Indonesia perceived this program as falling 
under government procurement activities, regulated under Article III:8(a) of GATT 1994. As such, 
the enactment of that regulation did not violate the national treatment principle as stipulated in Article III:4 of GATT 1994 and the TRIMS Agreement. Furthermore, in response to question No 4, 
Indonesia clarified that, so far, there was no revision or additional regulation to the measures in 
question. In conclusion, Indonesia expressed its willingness to continue working with other WTO Members in order to support and strengthen the multilateral trading system resulting in a 
favourable investment climate and trading regime. 
56. The Committee took note of the statements made.  
7  INDONESIA - CERTAIN LOCAL CONTENT PROVISIONS IN THE ENERGY SECTOR 
(MINING, OIL AND GAS)  
57. The Chair recalled that this item had been considered at all Committee meetings held since 
October 2009. Questions to Indonesia had been circulated in documents G/TRIMS/W/70, 88, 108 
and 128; to which Indonesia had replied in documents G/TRIMS/W/74, 79, 100, 123, 128, 137 
and 137 Corr.1. This item had been placed on th e agenda at the request of the European Union, 
Japan and the United States. 
58. The United States  raised its concerns about investment restrictions in the energy sector 
(mining, oil and gas), in particular about the requirement to "prioritize" the use of domestic goods 
and services in the mining, and oil and gas sector s, and how that requirement had been enforced. 
The responses provided by Indonesia appeared to co nfirm the US fears that "prioritize" might be a 
polite way of saying "require". Indonesia had used the word "prioritize" rather than "require" and 
some of its earlier responses seemed to hint that consideration of circumstances such as price and 
quality might be relevant for determining whether the local content provision would apply. However, the most recent responses from Indonesia made clear that there was very little flexibility 
in those measures. It was hard to conceive of a more negative signal to potential investors than 
telling them that they would be prohibited from co nsidering the price and quality of the inputs they 
purchased. The United States had also raised concerns about the overall investment climate in 
those sectors through these and other actions that had created uncertainty in the market. 
However a quick review of the responses seemed to confirm the US' worst fears. The United States would study these responses in capital and would revert at a later date. 
59. The European Union stated that those provisions had been discussed at length in this 
Committee and that it had repeatedly conveyed its concerns with regard to the prioritisation of 
local content in Indonesia's legislation covering mining products in mineral and coal. Several Members had already shared strong doubts regarding the compatibility of the measures with the 
WTO Agreements, including TRIMS. The European Union regretted that Indonesia had not yet 
reviewed those measures and asked Indonesia whet her it intended to do so. Measures had been 
taken over the past few years and months in the Indonesian energy and mineral resources 
sectors, including not only local requirements, but also export restrictions and limits imposed on 
foreign participation. Those provisions continued to act as a deterrent to foreign investment. The European Union welcomed the new Government's de clarations in favour of cutting red tape and 
improving the investment climate and, in this context, invited again Indonesia to consider the 
long-term impact of that policy, also bearing in mind G20 commitments to resist and roll-back 
protectionist measures. G/TRIMS/M/38 
 
- 10 - 
 
  60. Even though Japan had raised points in the pa st eight sessions of this Committee, it had 
been regrettable that there had not been any impr ovement. Japan considered that the prohibition 
of the exportation of raw materials based on the Mining Law constituted a violation of GATT Article XI which stipulated the general elimination of quantitative restrictions on imports and 
exports. Since the establishment of the new government in Indonesia, Japan had urged the 
Indonesian authorities to review the measures concerned at the various levels, including the one between the Head of States. When President Joko visited Japan in March 2015, Prime Minister Abe 
and President Joko confirmed that both countries  shared the value of rule-based multilateral 
trading system. Japan intended to solve this issue through bilateral dialogue, but, as the situation had not changed so far, had already started its internal consideration to take steps available under the DSU. 
61. Australia joined other Members in expressing continuous concerns over regulations in 
Indonesia's mining sector regulations, in particular ownership divestment requirements, 
restrictions on the export of raw materials, pressure to renegotiate contracts of work and 
restrictions on obtaining approvals for expatriate employees. These regulations created uncertainty 
for foreign and domestic mining ventures in Indonesia. In addition, the regulations were adversely affecting investor confidence more broadly. Australia looked forward to further clarification from 
Indonesia on the implementation of these regulations. 
62. Canada was also closely following the development of the new mining regime in Indonesia 
and continued to be concerned about the potentially negative impact on both current and future 
foreign mining investments in Indonesia. Canada shared the concerns expressed by others that 
certain provisions of the new mining regime appeared to discriminate against foreign suppliers, 
while others appeared to restrict exports. 
63. Indonesia recalled that for all the questions it had received, in documents G/TRIMS/W/88 
dated 22 September 2011, G/TRIMS/W/108 dated 20 September 2012 and G/TRIMS/W/128 dated 
4 October 2013, it had provided corresponding responses in documents G/TRIMS/W/100 dated 6 July 2012, G/TRIMS/W/123 dated 20 April 2013, G/TRIMS/W/131 dated 14 October 2013, 
G/TRIMS/W/137 dated 13 August 2014 and G/TRIMS/W/137/CORR.1 dated 25 September 2014. 
Indonesia concluded that it was ready to engage constructively with Members to further discuss this matter. 
64. The Committee took note of the statements made. 
8  INDONESIA – NEWLY ADOPTED INDUSTRY LAW AND TRADE LAW  
65. The Chair recalled that this item had been discussed for the first time in last year's June 
meeting of the Committee and had been placed on the agenda of today's meeting at the request of 
the European Union, Japan and the United States. Questions to Indonesia in relation to this item 
had circulated in documents G/TRIMS/W/138 and G/TRIMS/W/140. Indonesia had just provided the morning before the meeting written responses to these questions, advance copies of which had 
been placed at the back of the room. The Secretariat would circulate those written replies as soon 
as possible.  
66. The European Union stated that the legal fr amework provided by the Trade and Industry 
laws leaned towards protectionism, was potentially very trade restrictive and contributed to create 
a high degree of uncertainty and hesitation am ong investors. The European Union had submitted 
questions to Indonesia on 16 September 2014 asking to clarify those aspects that had already been raised during the previous meeting of th e Committee in October 2014. The European Union 
remained particularly concerned by certain conditions, notably:  
- the possibility for the Government to impose export bans on biological and non-biological 
raw materials (Industry law) and to impose restrictions on exports and imports of certain 
goods for national interests (Trade law); 
- the mandatory use of domestic products and increased use of national standards; and,  
- the use of safeguard measures, either tariff or non-tariff- measures to protect the industry 
from international competition. 
 G/TRIMS/M/38 
 
- 11 - 
 
  67. Furthermore, the European Union was interest ed in understanding whether several draft 
regulations, currently under discussion, would be op en to public consultation; in particular, the 
following regulations: i) Draft government regulati on on industrial business license and industrial 
zone activity; ii) Draft regulation on development of industrial resource; iii) Draft regulation on 
industry facility and infrastructure. 
68. Japan believed that the Law on Trade and the Law on Industry would further deteriorate 
Indonesia's business climate by introducing a legal framework for further trade-restrictive 
measures. More precisely, Articles 26 and 54 of the Law on Trade seemed to allow the Indonesian 
authorities to control exports and imports to protect certain industries. Article 25 of the Law on Trade could be interpreted to mean that the Government would control prices in certain situations. In the Law on Industry, Articles 32 and 33 banned an d restricted the import and the use of natural 
resources, and Article 87 stipulated the local content requirement on specific industries. Japan also 
had concerns about the consistency of those laws with Article XI:1 and Article III:4 of the GATT 
and Article 2 of the TRIMS agreement, and cl osely monitored how those laws were to be 
implemented. Japan asked Indonesia to share with Members the latest information on the 
consideration process of related implementation measures. 
69. The United States noted that while these laws were vague in many respects, with 
implementing regulations yet to be written, the theme of a broad shift to a government-dominated 
highly protected economy was clear. In the cont ext of other Indonesian measures the Committee 
had examined, the implications for the TRIMS and other agreements were quite troubling. Because of the vagueness of some aspects of those measures, the United States was particularly interested 
in reviewing the responses Indonesia had provided. The Industry Law and Trade Law contained 
numerous provisions that carried forward the theme of a protected industrial sector. During prior 
meetings of the Committee, the United States had highlighted some of the key provisions. Those 
laws could be read to signal a significant retreat from Indonesia's commitment to its obligations 
under the TRIMS and other WTO Agreements. The United States recognized that the Indonesia had been given time to draft implementing legislat ion and understood that the drafting process had 
begun, and requested Indonesia to keep the Committee apprised of developments. 
70. Australia stated it would study the responses of Indonesia closely and further noted that the 
WTO rules provided the parameters to guide governments on how best to provide assistance to 
industry sectors and how to avoid trade impacts on other Members' interests. How Indonesia 
would implement its Trade Law and Industry Law would be crucial to whether those laws would 
directly impact trade and investment. Australia was particularly interested in what this meant for Indonesia's use of trade remedy measures. For example, the Trade Law appeared to allow 
Indonesia to unilaterally take retaliatory trade measures against other trading partners who took 
legitimate trade remedy measures. Australia would appreciate Indonesia keeping the Committee informed on how it intended to go forward in issuing its implementing regulations for the new 
laws, taking into consideration the concerns raised by several Members. 
71. Canada recalled that at the June 2014 meeting, it had raised a number of questions 
concerning those measures and had subsequently provided them in writing (G/TRIMS/W/138). 
Canada stated it would forward Indonesia's written answers to those questions to capital for 
review. 
72. New Zealand echoed the concerns raised by all previous speakers regarding Indonesia's 
newly adopted Industry and Trade Laws which it  viewed as exacerbating existing concerns 
regarding Indonesia's trade regime. The newly adopted Trade Law appeared to open the door to 
an increase in protectionist measures across all sectors of the Indonesian economy. New Zealand would watch closely Indonesia's implementation measures and their WTO compatibility. Like 
others, New Zealand urged Indonesia to keep this Committee informed of the implementation 
progress. Finally, regarding the answers provided just at the beginning of this meeting, New Zealand would read them carefully, share with capita l and continue to be interested in this issue. 
73. Indonesia, referring to the questions contained in document G/TRIMS/W/138 dated 13 
August 2014, provided the following clarifications:  
74. Responding to question No 1, Indonesia wa s of the view that the Trade Law and the 
Industry Law were formulated in the spirit of strengthening the national economy, taking into G/TRIMS/M/38 
 
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  account Indonesia's commitments to the WTO. Furt hermore, GATT Art. XVIII clearly stipulated the 
right of Members who were in the early stages  of development to pursue their development 
interest to improve low standards of living. Accord ing to Indonesia, the obligation to use domestic 
goods and services would be reserved only for government procurement. Indonesia also noted 
that currently it was not party to the Government Procurement Agreement. 
75. Regarding question No 2, Indonesia clarified that the provision applied to all sectors and 
regions in Indonesia. 
76. Regarding question No 3, Indonesia clarified that the Government of Indonesia was 
responsible for providing and ensuring the availa bility of Basic Goods and Essential Goods in 
sufficient quantity, affordable price and excellent quality for the sake of public welfare, development and national security. 
77. Responding to question No 4, Indonesia stated that measures aimed at "controlling" those 
goods could not take the form of import and export restrictions. "Controlling" meant that the Government took the responsibility and therefore ha d to ensure the availability of Basic Goods and 
Essential Goods in sufficient quantities and afford able price for the people. Various measures which 
might be taken by the Government, as and when necessary, to attain this responsibility would take into account Indonesia's commitment to the WTO rules.  
78. Moreover, in order to respond to question No 5, the elucidation of Article 25 of the Trade 
Law provided definitions and examples of the goods that fell under those categories. Basic Goods  
meant goods that were exceptionally needed to serve the livelihood of the public as well as were supporting elements of public welfare; such as: rice, sugar, cooking oil, eggs and milk. Essential 
Goods  meant strategic goods which had important role in determining the continuity of national 
development; such as: fertilizer, cement, oil and gas. 
79. Responding to question No 6, according to  Article 121 of the Trade Law, Implementing 
Regulations to this Law, either in the form of Government Regulation, Presidential Regulation, or 
Ministerial Regulation, would be completed within two years after the promulgation of the Law. The 
Law had been signed, promulgated and entered into force on 11 March 2014. 
80. Regarding question No 7, Indonesia responde d that all stakeholders, including business 
community, would always be engaged in the proce ss of drafting the implementing regulations. 
81. Responding to question No 8, Indonesia noted that consultations with stakeholders had been 
regularly conducted before the Trade Law's signature. 
82. Responding to question No 9, Indonesia confirmed that official translations of those Laws 
had not yet been available and were still in the drafting process. 
83. Referring to the EU questions in G/TRIMS/W/140, dated 16 September 2014, Indonesia 
provided the following clarifications:  
84. Responding to question No 1a, Indonesia was of the view that, according to Articles 32 
and 33 of the Industry Law, the Government could take necessary measures to secure the 
availability of natural resources for the domest ic needs of and to support the development of 
domestic industries and to reduce excessive dependence on exporting raw materials through value addition. Such measures could be taken with the consideration, e.g.: 
- to preserve natural resources; 
- to apply to natural resources which were strategic, non-renewable and limited; and 
- to realize independent, competitive industrial structures and maintain price stability.  
 
85. As for Article 54 of the Trade Law, the Government could restrict exports and imports based 
on provisions of Article XX of the GATT, such as: 
- necessity to protect national security or public interest; and/or, G/TRIMS/M/38 
 
- 13 - 
 
  - necessity to protect the health and safety of people, animal, fish, plant, and the 
environment.  
 
86. Those laws had mandated numerous Implementing Regulations that would further elaborate 
the relevant provisions stipulated in the laws. Formulation of the Implementing Regulations would 
also be guided and take into consideration the Security, Safety, Health and Environment purposes for consumers, producers, market stability as well as international commitments, including WTO. 
The Government believed that this would be regulated and implemented in a manner that was not 
inconsistent with WTO rules.  
87. Further, responding to question No 1b, Indonesia noted that the mandatory use of domestic 
products provided for in the Trade and Industry Laws would be reserved only to government 
procurement. The use of national standards through Indonesia National Standard (SNI) was implemented on a voluntary basis aimed at protecting consumers. For certain products, however, the standard would be mandatory and would apply to both domestic and imported products.  
88. Moreover, responding to question No 1c, Indo nesia stated that safeguard measures were 
justified and commonly applied by WTO Members in case of import surges which caused, or threatened to cause, serious injury to the dome stic industry. In Indonesia, implementation of 
safeguard measures was regulated by Government Regulation No. 34/2011 concerning 
antidumping, countervailing and safeguard measures.  
89. Regarding question No 2, Indonesia respon ded that there were numerous implementing 
Regulations mandated by the Trade Law which included 9 (nine) Government Regulations, 14 
(fourteen) Presidential Regulations, and 20 (twenty) Ministerial Regulations.  
90. Responding to question No 3, Indonesia clarif ied that implementing Regulations of the Trade 
Law and the Industry Law would be completed within two years after the entry into force of the 
respective laws. Stakeholders would be clos ely engaged in the process of drafting the 
implementing regulations and Indonesia was ready to discuss further and consult with other Members providing clarifications of its policy. 
91. The Committee took note of the statem ents made and the answers provided. 
9  INDONESIA – MINIMUM LOCAL PRODUC T REQUIREMENT FOR MODERN RETAIL 
SECTOR 
92. The Chair recalled that this item had been di scussed for the first time at the meeting of 
20 June 2014 and was placed on today's agenda at  the request of the European Union, Japan and 
the United States. Questions to Indonesia from the United States and the European Union had circulated in documents G/TRIMS/W/139 and G/TRIMS/W/141 respectively. Indonesia had 
provided just before the start of the meeting wri tten responses to those questions, advance copies 
of which had been placed at the back of the r oom. The Secretariat would circulate those written 
replies as soon as possible.  
93. The European Union reiterated its concerns about the 80% local content requirement 
imposed by Regulation 70/2013. This requiremen t was burdensome, distorted competition, and 
limited consumers' choice. On 16 September 201 4 the European Union had submitted written 
questions to Indonesia asking to clarify those aspects that had been already raised during the 
previous meetings of this Committee. Those questions had remained unanswered. In particular, the European Union understood that the 80% local content requirement already existed for franchising, and by means of Regulation 70/2013 it  had been extended to the whole retail sector. 
The European Union also understood that under Regulation 56/2014, which amended 
Regulation 70/2013, retailers appeared to be exempted from the obligation to sell 15% own brand products and 80% domestic products, under certai n specific conditions. The European Union would 
like to receive clarifications on each specific condition for the exemption from the local content 
requirement to be applied. Furthermore, the European Union asked Indonesia to clarify when those provisions had entered into force, which Regulation set out the 80% local content 
requirement for franchising, whether there were any implementing regulations and whether similar 
exceptions to the rules were foreseen also in the franchising sector. G/TRIMS/M/38 
 
- 14 - 
 
  94. The United States recalled that during the prev ious meeting, it had brought to the attention 
of the Committee its concern about Regulation 70/ 2013, adopted by Indonesia's Ministry of Trade 
(MOT), and entitled Guideline on Planning and Development of Traditional Market, Shopping Centre and Modern Shop. That regulation built on  requirements in previous MOT regulations in 
2012 and 2013 (Regulations 53 and 68 of 2012 and Re gulation 7 of 2013) related to franchises, 
including modern retail franchises (such as minimarkets and hypermarkets) and food establishments. Regulation 70 required, among other things:  
- "Modern Shop may only market private-labelled and/or house-labelled products at most 
15% (fifteen percent) of stock keeping unit sold  in Modern Shop outlets." (Article 21.2)  
- "Shopping Centre and Modern Shop shall sell domestic products at least 80% 
(eighty percent) of quantity and type of products being traded" (Article 22.1).  
95. While those requirements applied to both domestic and foreign companies, those provisions 
seemed to specifically anticipate that in order for a foreign investor to establish in this sector in Indonesia, that investor had to acquire and sell lo cal goods. The regulation had been scheduled to 
come into force in June 2014. However, investors had had two years to come into compliance with 
the requirement to use local goods. The United States asked Indonesia to confirm whether that Regulation was not in force and to keep the Comm ittee informed of the process for implementing 
Regulation 70/2013.  
96. Similar regulations applied to franchise establishments. Ministry of Trade 
Regulation 53/2012 required that "Franchisors and franchisees must use domestically produced goods and/or services for at least 80 percent of their raw materials, business equipment and 
sales." This local sourcing requirement had been also reflected in Regulations 68/2012 
and 7/2013. The United States asked again Indonesia to keep the Committee apprised of developments concerning implementation of that Regulation. 
97. Japan repeated its concern about the trend in Indonesia towards imposition of local content 
requirements which could be implemented inconsistently with WTO rules. Japan considered that 
Trade Ministry Regulation No 70/2013 was problematic because it imposed an obligation on 
shopping centres and modern retail shops to ensure  that 80% of products in their outlets were 
domestic. Even with the new regulation No 56/20 14 which stipulated stand-alone brands handling 
goods from the global supply chain to be exempt ed from local-content requirements, it had not 
fully dispelled its concern that those regulations violated the WTO agreements, in particular, GATT 
Article III:4 and Article 2 of the TRIMS Agreement. Japan urged the Indonesian authorities to 
expeditiously bring the measures into  conformity with those provisions. 
98. Canada thanked Indonesia for its written answers to the outstanding questions which would 
be forwarded to capital for a thorough review. 
99. New Zealand shared the concerns of previous speakers regarding the minimum local product 
requirements for the modern retail sector. Such requirements appeared to further restrict trade 
across a range of products in a way that appeared to undermine core WTO principles, including 
those set out in the TRIMS Agreement. New Zeal and would read Indonesia's written responses 
carefully and review in capital, and would continue to be interested in this issue. 
100.  Referring to the US (G/TRIMS/W/139) and EU questions (G/TRIMS/W/141), Indonesia 
provided the following clarifications:  
101.  Responding to US question No 1 and EU questi on No 2, Indonesia noted that its government 
had enacted the Minister of Trade Regulation  No. 56/2014 to amend the Minister of Trade 
Regulation No. 70/2013. According to the new regulation, exemption to the 15% requirement 
applied to Modern Stores who had carried out partnership cooperation as had been stipulated in Article 15.3 of the Regulation No. 70/2013. 
102.  The new regulation also provided for an exemption, as described in Article 22, for Modern 
Stores in the form of stand-alone brand  and/or specialty stores  from meeting the 80% 
requirement, provided the products sold: G/TRIMS/M/38 
 
- 15 - 
 
  - "Require a uniformity of production and were de rived from single unit of global supply chain; 
- Are premium products  and had no production base in Indonesia; or 
- Are originated from certain countries to exclusively meet the needs of its citizens living in 
Indonesia." 
103.  That exemption would be given with the author ization of the Minister of Trade. Modern 
Stores who had obtained the exemption should gradually increase the sale of similar goods 
produced in Indonesia as well as submit the implem entation report to the Minister of Trade c.q. 
Director General of Foreign Trade. Based on thos e regulations, any Modern Stores, franchised or 
not franchised, were required to meet the minimum 80% requirement. For franchised Modern 
Stores, more specific rules were set out in the Minister of Trade Regulation No. 68/2012. 
104.  Regarding US question No 2, Indonesia noted that Regulation No. 70/2013 and 
Regulation No. 56/2014 were now in force. However, according to Article 41 of the Regulation No. 56/2014, Modern Stores were provided with a two-year period from the entry into 
force of the regulation, to come into compliance with the 80% requirement. That regulation had 
entered into force in September 2014.  
105.  Responding to US question No 3 and EU question No 1, Indonesia stated that the Minister of 
Trade Regulation No. 53/2012 concerning franchise provided general rules on establishing and 
operating franchise. It required all franchisors an d franchisees to use domestically produced goods 
and/or services for at least 80% of their raw materials, equipment, and sales. However, there 
were certain conditions which may allow the Minister  of Trade to grant exemption. The decision to 
grant exemption would be made after taking into consideration the recommendation made by the Assessment Team. The minimum 80% requiremen t and the exemption was also applied in 
Regulation No. 68/2012 which provided more specific rules on Modern Store Franchise and in 
Regulation No. 7/2013 which regulated in more detailed rules the Franchise Partnership 
Development for Food and Beverage Services. Furthe r, the definition of "certain conditions" and 
the procedure to request the exemptions were furt her detailed in the Decision of Director General 
of Domestic Trade No. 16/PDN/KEP/3/2014. 
106.  Responding to EU question No 3, Indonesia clar ified that the objective of that provision was, 
inter alia, to promote better climate for competition, especially for the participation of SMEs, and 
to ensure business certainty. The Minister of Trade Regulation No. 56/2014, in particular 
Article 21.2, provided for an exemption from meeting the 15% requirement. That exemption 
applied to Modern Stores who had carried out partnership cooperation as stipulated in Article 15.3 of the Regulation No. 70/2013.  
107.  Indonesia requested the United States to provide its questions of today in writing so as to 
convey them to capital for consultations. 
108.  The United States expressed its appreciation to Indonesia for its hard work on its responses 
which were useful and would be further reviewed by capital. The United States took particular note 
of Indonesia's reference to the exemption from the 80% requirement and the 15% requirement of 
Law No. 70/2013, specifically in its reply where it identified that there would be an exemption 
described in Article 22 with respect to stand-alone brands or specialty stores, an exemption that 
would allow them not to meet the 80% requirement subject to three criteria that there was: a) uniformity of production, i.e. the products were derived from a single unit of global supply chain; b) that the products were premium products that had no production base in Indonesia; and, 
c) that the products were originated from certain countries to exclusively meet the needs of their 
citizens living in Indonesia. The United States asked whether those criteria that established an exemption from the 80% requirement under Law No . 70/2013 would also constitute an exemption 
from the 4G LTE local content requirement that was raised earlier in the meeting. 
109.  Indonesia thanked the United States for its new question and requested to receive it in 
writing so as to forward it to capital for consultation. 
110.  The Committee took note of the statem ents made and the answers provided. G/TRIMS/M/38 
 
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  10  NIGERIA – CERTAIN MEASURES TAKE N IN THE "ACT TO  PROVIDE FOR THE 
DEVELOPMENT OF NIGERIAN CONTENT IN THE NIGERIA OIL AND GAS INDUSTRY" OF 
APRIL 2010  
111.  The Chair recalled that the next agenda item had been considered at all Committee 
meetings held since 3 October 2011. It was placed on the agenda of today's meeting at the 
request of the European Union and the United States. Reference should be made to documents G/TRIMS/W/89 and G/TRIMS/W/142 and G/TRIMS/W/142/Corr.1, containing questions posed by 
the United States and the European Union respectively.  
112.  The United States recalled that it had been over three years since the United States and the 
European Union had first drawn Members' attention to certain measures which appeared to require 
the use of local content in Nigeria's oil and gas industry. The United States had sent written 
questions to Nigeria in September 2011 in document G/TRIMS/W/89, and had described its 
understanding of the measures in the meeting of October 2011. At the time, Nigeria had stated that it had not received any instructions from capital, nor answers to the US questions. Although 
this issue had been raised at each subsequent meeting of the Committee, and on several 
occasions in the CTG, Nigeria had provided neither a formal response, nor any substantive engagement; Nigeria repeatedly informed that further information would be provided soon, but to 
date had provided nothing. Meanwhile implementa tion of those measures had been ongoing. The 
European Union had posed a very interesting set of questions focused on the assessment Nigeria may have undertaken in designing those measures, and on whether Nigeria had gathered any information about the effects of these measur es. However, as noted previously, the WTO 
Committee system provided a forum to gain a basic understanding of the trade policies of other 
Members, and to raise concerns outside the co ntext of dispute settlement. The US and EU 
questions would have helped Members understand th e Nigeria's policies. The United States urged 
Nigeria to make use of this body to clear up any misunderstandings it may have had. 
113.  The European Union echoed the US statement that this Committee had discussed the issue 
on a number of occasions, in regular TRIMS Committee meetings as well as in CTG meetings. 
Furthermore, the European Union recalled that it had submitted a full set of questions in 
September 2014 and was still awaiting detailed replies from Nigeria to all items raised in document G/TRIMS/W/142. As repeated in several meetings as from May 2012, the European Union had been concerned by the review of Schedule A. This  review had been meant to comprise the list of 
detailed local content requirements per good or service, and had been originally foreseen by the 
applicable legislation for spring 2012. The European  Union requested Nigeria to specify the date of 
that review and clarify the manner in which that was to be carried out; also, to clarify whether the 
Amendment Bill was still pending before the Nation al Assembly and the state of adoption of that 
Bill. Until the mentioned Bill had been adopted, the European Union understood that derogations from the requirements of the law could no longer be awarded under the specific mechanism 
provided for under Section 11 of the Act, as this possibility had expired in April 2013. The 
European Union asked Nigeria to explain how operators had been allowed, in the meantime, to face capacity shortfalls. The European Union looked forward to receiving detailed written replies to its questions as well as to the planned review and was confident that Nigeria would address the 
concerns expressed and would work to ensure that it complied with its commitments under the 
WTO agreements. 
114.  Australia reiterated its concerns expressed over  several meetings in different fora about the 
effect that those measures had been having on investment in the Nigerian oil and gas industry. 
Australia wished to understand better how the pref erential treatment accorded to local goods and 
services in the Act was consistent with Nigeria's national treatment obligations under GATT 1994. 
In particular, Section 11(1) of the Act establis hed minimum percentages of Nigerian content in 
goods, services and investment for any project in the Nigerian oil and gas industry. Further, 
Section 7 of the Act required operators to submit a Nigerian Content Plan demonstrating compliance with the Nigerian content requirements. Australia looked forward to Nigeria providing 
substantive responses to the issues raised by se veral Members over an extended period of time. 
115.  Norway echoed the EU and US concerns. Local content requirements could hinder important 
investments, and should Members wish to impose such requirements they would have to comply 
with WTO rules. The Nigerian Local Content Act had been a challenge for Norwegian companies 
operating in the Nigerian oil and gas industry. Large offshore projects were delayed due to long and complicated approval processes. Once projects were operative, monitoring and compliance G/TRIMS/M/38 
 
- 17 - 
 
  regimes added considerable costs and further delays. Collectively, the measures and requirements 
of the Local Content Act made the operating re gime for this industry unpredictable. Norway 
encouraged Nigeria to take the concerns expres sed into consideration and looked forward to 
Nigeria's answers to the EU questions. 
116.  Canada noted that it also looked forward to Ni geria's response to the sets of questions from 
the United States and the European Union. 
117.  Japan fully shared the systemic points of view expressed by the previous speakers and 
encouraged Nigeria to expeditiously provide its clarification in written form in accordance with the 
established practice in the WTO, as this had been a long-standing issue. 
118.  The delegate of Nigeria stated that he had not had a proper briefing before coming to the 
meeting and noted, for the record, that he was an intern at the Nigerian Mission through the 
mission's intern programme; he concluded that the concerns raised by the EU and the US were 
duly noted and would be communicated back to capital for proper review, and once the responses had been received, they would be duly transmitted to the concerned parties. 
119.  The Committee took note of the statements made. 
11  RUSSIAN FEDERATION – LOCAL CONTENT REQUIREMENTS FOR PURCHASES BY 
STATE-OWNED ENTERPRISES 
120.  The Chair noted that this item was on the agenda for the first time at the request of the 
European Union and the United States. Questions to the Russian Federation had been circulated in 
document G/TRIMS/W/149. 
121.  The United States expressed its concern about a growing emphasis in the 
Russian Federation on local content requirements an d import substitution policies. For example, on 
28 January 2015, the Russian Federation had publishe d its "Plan of Priority Measures to Ensure 
Sustainable Economic Development and Social Stability in 2015" – the so-called "Anti-Crisis Plan". 
An important element of the plan was the call for government action to support import 
substitution.  
122.  Steps had already been taken to implement this import substitution strategy on medical 
devices. On 5 February 2015, the Russian government adopted Resolution No. 102, "Establishing 
Market Entry Restrictions for Individual Types of Medical Devices Originating from Foreign Countries in the Context of Procurement for State and Municipal Needs." According to the Resolution, certain foreign-made medical devices were not eligible for state and municipal 
government procurement tenders if the device was made by two or more producers in the 
Eurasian Economic Union (the Russian Federation, Kazakhstan, Belarus, and Armenia).  
123.  Although such provisions related to government procurement, outside the scope of this 
Committee, other plans appeared to be in the works to expand those kinds of requirements 
beyond government procurement. In the US und erstanding, the Russian Federation had been 
considering applying requirements to purchase Russian-made inputs to State-Owned Enterprises 
("SOEs") as well. Proposed amendments to the Federal Law No. 223 (dated 18 July 2011) would 
allow the Russian government to "establish specifics of procurement plans and tender rules for procurement by specific entities or procurement of specific goods, works and services by state-
owned companies, including during implementation  o f  i n v e s t m e n t  p r o j e c t s . "  I n t e r e s t i n g l y ,  t h e  
background note acknowledged that the current law could be viewed as inconsistent with the 
Russian Federation's WTO obligations. It was not clear though how an obligation for SOEs to purchase local goods would be drafted in a manne r consistent with those obligations. Any further 
details the Russian Federation could provide as to the status of the proposed amendments to 
law 223, and the approach it would take in thos e amendments would be very much appreciated. 
124.  The European Union supported the US intervention and underlined the growing and 
concerning trend observed in the Russian Federation to further restrict the access to public 
procurements with local content requirements . Over the past months, the European Union 
witnessed with regret a series of government Decrees that had been adopted with the aim to exclude foreign country goods from public procurements, notably: medical devices since G/TRIMS/M/38 
 
- 18 - 
 
  February 2015, machinery and equipment since January 2015, certain types of textile and 
footwear since August 2014, imported vehicles since July 2014, light industry imports since September 2014. This long list seemed to be further extended as the Russian government 
appeared to be preparing a further access restriction to public procurement for foreign software 
companies already from 1 July this year. Therefore, the European Union asked for clarifications 
from the Russian Federation with a view to understanding whether it only affects "government purchases products" (in this case, it would fall outside the scope of the TRIMS agreement) or 
whether its scope was wider as it might seem. 
125.  Beyond public procurement, the European Unio n was also concerned by a possible extension 
of local content requirements to SOEs. The amendment to the Russian Federal law 223 of 18 July 2011, currently under consideration, seemed to give the Government the right to grant 
State-Owned Enterprises 'special requirements for planning and carrying out procurement'. This 
amendment was meant to bring this law in full compliance with the Russian Federation's WTO commitments that was why the European Union was concerned by that provision that effectively 
would lead SOEs to purchase Russian goods only. The European Union requested further 
clarifications on this point. 
126.  Canada noted its interest in hearing the Russian Federation's response to the EU and US 
questions. 
127.  Japan echoed the EU and US concerns in document G/TRIMS/W/149 that the 
Russian Federation appeared to be preparing to  expand the scope of th e procurement entities 
under the measure to SOEs. Japan would observe the development of the process of amendment 
of the Federal Law No. 223. 
128.  The Russian Federation  stated that the sponsors of this agenda item in support of their view 
on the existence in the Russian Federation of lo cal content requirements for purchases by SOEs 
made reference to the Resolution of the Government of the Russian Federation "On Establishing 
Restrictions for Certain Types of Medical Devices Originating from Foreign Countries for the Purposes of Procurement for State and Municipal Needs". That measure, on its face, related to the 
"requirement governing the procurement by governmental agencies of products purchased for 
governmental purposes and not with a view to co mmercial resale of with a view to use in the 
production of goods for commercial sale". It thus cl early fell into the scope of reservation from the 
national treatment rule and was therefore in full compliance with Russian WTO commitments. 
129.  With regard to the so-called "Anti-Crisis Plan" of the Russian Federation, it, indeed, 
presumed development of the national industry  and other sectors of economy and there were 
many tools that a Member might use without violat ing WTO rules. In the end, such policies were 
expected to increase domestic competitiveness which might lead to substitution of imports. In fact, 
any support given to the domestic industry did not necessarily favor imports nor was it required to under the WTO. The Russian Federation therefor e saw no basis for the concerns expressed by 
certain Members in respect of the Russian "Anti-Crisis Plan" and saw no factual support for the 
expressed presumptions that its implementation was accompanied with measures violating its commitments under the WTO, including impo sition of local content requirements.  
130.  Finally, it addressed the concern expressed by th e United States that the Russian Federation 
was considering to apply requirements upon SOEs to purchase Russian-made inputs beyond 
government procurement, basing such concern on an unnamed explanatory note of an amendment allegedly proposed to the Federal law No. 223 regulating procurement of goods and 
services by certain types of Russian SOEs. The Russian Federation had done its best to find the 
information referred to by the United States. Even if this note of an alleged amendment was correctly identified such amendment to the Federal Law No. 223 would have been under 
consideration by the relevant authorities taking account of, inter alia, the respective WTO rules. 
That said, it did not seem to be rational to discuss concerns in respect of some legal provisions that did not yet exist, if ever. 
131.  As for the existing measures, including Federal Law No. 223 and the Decrees regulating 
government procurement mentioned by the EU, the Russian Federation assured Members that 
those measures were in full compliance with the respective WTO rules. G/TRIMS/M/38 
 
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  132.  The Committee took note of the statements made. 
12  RUSSIAN FEDERATION – LOCAL CONTENT REQUIREMENTS FOR AGRICULTURAL 
EQUIPMENT 
133.  The Chair noted that this item was put on th e Committee's agenda upon the request of the 
European Union. Questions to the Russian Federation had been circulated in document 
G/TRIMS/W/116, to which the Russian Federation had responded in document G/TRIMS/W/130.  
134.  The European Union reiterated its concerns about local content practices in the farming 
equipment sector. Recalling its previous interven tions on this item in the 2013 and 2014 TRIMS 
Committee meetings, the European Union noted that the Russian subsidy programme for agricultural machinery foreseen for both producers and consumers still had preferential access. Such subsidies would be granted on the basis of  localization requirements, notably the use of 
locally-produced elements and the localization of certain production operations.  
135.  In relation to Resolution of the Government of the Russian Federation N°908 of 
11 October 2013 (and Decree N°1715), the European Union asked the Russian Federation to 
confirm if 15% of the sales price of agricultural machinery could be granted to Russian farmers 
(i.e. purchasers) if the products in question satisfied a certain level of domestic production in the Russian Federation; and to elaborate on how the local content was calculated as well as to clarify 
when such subsidies had started to be distributed and, if this was not yet the case, when it was 
intended to do so. 
136.  Regarding Resolution of the Government of the Russian Federation N°1432 of 
27 December 2012, according to which producers of agricultural machinery might be granted 
specific subsidies (up to 15% of the selling price) provided that a set of technical operations were 
respected and that its main components were produced domestically, the European Union asked the Russian Federation the following:  
- What these technical operations consisted of; was the local production a qualifying condition 
for being granted the subsidy (and how was the level of required local content calculated);  
- Which were the exact components that had been excluded from the necessary domestic 
production; and 
- Whether the above-mentioned subsidies were linked to the requirement that the company 
was established since more than 3 years in the Russian Federation. 
137.  The European Union reiterated its concern about concessional financing of the JSC 
'Rosagroleasing' for the purchase of combine ha rvesters and asked the Russian Federation to 
indicate what the conditions required for such financing were. 
138.  Finally, regarding the co-financing received  by the agricultural machinery producer 
Rostselmash from the Federal budget to cover R&D costs, the European Union asked what the 
conditions for such a financing were and whether any other combine harvester producer in the Russian Federation also benefited from such a financing. 
139.  The United States recalled its concerns, raised also in previous meetings, about reports that 
RosAgroLeasing (RAL), a state-owned leasing comp any created to supply agricultural equipment to 
farmers in the Russian Federation, had been im posing a local content requirement for that 
agricultural equipment. The United States appreciated the Russian Federation's responses to the 
US questions about that program, including the indication that, consistent with the working party 
report, subsidization of manufacturing in this sector had been abandoned. It continued reviewing Resolution No. 1432 of 27 December 2012, and may have questions at a future meeting. 
140.  The United States further recalled that in prior meetings it had posed several questions 
about the leasing process between RAL and farmer s to clear up some final points about this 
program. In its responses, the Russian Federati on had explained that: "the lessor shall acquire 
property, specified by the lessee, in its ownership from a particular seller and provide to the lessee G/TRIMS/M/38 
 
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  this property in temporary possession and use for a fee;" and "the leasing agreement was 
specified by the lessee. Exact features of such pr operty were specified by the leasing agreement."  
141.  The United States asked for a confirmation that there was no difference in the fee or other 
terms of leasing agreements dependent whethe r or not the leasing agreement pertained to 
Russian manufactured agricultural equipment.  
142.  It also requested a breakdown of the brands of  agricultural equipment that had been leased 
by RAL during the period 2013-2014. Such statistical information would help paint a more 
complete picture of RAL and the market for leased  agricultural equipment, and would help confirm 
their consistency with the TRIMS agreement. Finally, it would be helpful if samples of leasing agreements, signed by RAL and involving non-Russi an manufactured agricultural equipment, could 
be provided.  
143.  Japan expressed its continuing systemic concern in the local content requirement by the 
state-owned leasing company "RosAgroLeasing" for agricultural equipment and looked forward to 
further clarifications by the Russian Federation. 
144.  Canada looked forward to hearing the Russian Federation's response to the US questions 
and the potential impact on foreign suppliers. 
145.  The Russian Federation stated that, in respec t of the mentioned by the Members Resolution 
of the Government of the Russian Federation of  11 October 2013 No. 908, the subsidies envisaged 
by this Resolution had never been distributed. Moreover, the Decree of th e Ministry of Industry 
and Trade of 25 October 2013 No. 1715 in implementation of the said Governmental Resolution had never come into force. As for the possibility of distribution of those subsidies in future, it 
would depend on the availability of funds in the Federal Budget. Up to that moment, there were no 
such plans. 
146.  As for the Resolution of the Government of the Russian Federation of 27 December 2012 
No. 1432, it had already provided detailed explanations in writing, in document G/SCM/Q2/RUS/7, 
answers to the question 2.4.  
147.  Regarding Resolution No. 1432, the European Union had posed a question on what 
components were excluded from the necessary domestic production. The Russian Federation asked 
for a clarification on this question as it could not fully understand the question and to what legal provisions the European Union referred to. As for the questions regarding the operation of "RosAgroLeasing", the Russian Federation referred Members to its written explanations in 
document G/TRIMS/W/130 and the official website of the entity: http://www.rosagroleasing.ru . 
Finally, regarding the question on "co-financing re ceived by the agricultural machinery producer 
Rostselmash to cover R&D costs", again, it asked the European Union to specify the measure to 
which it was referring. 
148.  As for the issues raised by the United States, the Russian Federation recalled its statement 
in its written replies regarding "RasAgroLeasing", that it "was a commercial organisation with a 
state share in its authorized capital". And "the property acquired under the leasing agreement was 
specified by the lessee". It further added that there had been no difference in the fee or other terms of leasing agreements dependent on wh ether the lessee chose domestic or imported 
equipment. On the other hand, unfortunately, due to the confidential nature of the requested 
commercial information, it was not possible to share with the United States a breakdown of the 
brands leased in 2013 – 2014 and samples of si gned leasing agreements. For non-confidential 
information, it referred to the official website of the entity.  
149.  Finally, the Russian Federation invited Members to submit their questions in writing. 
150.  The Committee took note of the statements made and the responses provided. G/TRIMS/M/38 
 
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  13  RUSSIAN FEDERATION – SUPPORT MEASURES FOR THE AUTOMOTIVE SECTOR 
151.  The Chair stated that this item was on the Committee's agenda upon the request of the 
European Union and Japan; both Members had submitted written questions in respect to this 
matter in documents G/TRIMS/W/152 and G/TRIMS/W/153 respectively.  
152.  The European Union stated that it had submitted written questions to the 
Russian Federation, on 1 April 2015, seeking clar ifications on several aspects of the recent 
measures adopted by the Russian Government in support to the automotive industry, including as 
part of an "anti-crisis plan". 
153.  In the EU's understanding, the Russian government issued a Decree No 244 of 
18 March 2015, providing for subsidies to "compensate the costs related to the production of wheeled vehicles" and also re-activated the "cash for clunkers" program, which was understood as 
being based on Decree 1194 of 31 December 2009. This support came on top of the subsidies 
based on Resolutions No 29, 30, 31 and 32 of 15 January 2014 that had already been addressed to some extent in the previous meetings of this Committee. Moreover, there had been recent 
reports that the Ministry of Industry and Trade would launch a program of preferential car loans, 
for purchasing of domestically produced cars. Today, the European Union wished to highlight the main aspects of its questions that needed clarification. In particular, it asked the 
Russian Federation to provide:  
- An overview of all existing support measures for the automotive industry (that applied in 
addition to Resolutions No 29, 30, 31 and 32 of 15 January 2014);  
 
- An explanation of the eligibility conditions under those support measures and the relevant 
legal bases;  
 
- An explanation of the meaning of "industrial assembly" and "industrial assembly 
agreement", as referred to in various support measures; 
 
- An explanation of the conditions for the conclu sion of "industrial assembly agreements", and 
the general contents of such agreements; 
 - The rationale for the requirement for the manufacturer to had an "industrial assembly 
agreement", in order to benefit from various support measures; 
 - A clarification whether the various support measures were conditional on the production in 
"industrial assembly mode", pursuant to  an "industrial assembly agreement".  
 
154.  The EU looked forward to receive detailed written replies to its questions. 
155.  Japan associated itself with the concerns expressed by the European Union about the 
support measures for the automotive sector implemented by the Russian Federation. Having been 
monitoring the Russian Federation's implementation of WTO commitments in the automotive sector, Japan reiterated its concern about the industrial assembly program particularly on the 
local-content requirement imposed on companies which engaged in automobile production and 
assembly to obtain preferential treatment. Last  January, the Russian Federation had adopted a 
number of resolutions that provided subsidies in four areas relating to, namely, energy 
consumption, production of ecologically-friendly vehicles, employment and research and 
development, to automobile producers in the Ru ssian Federation. Those producers could receive 
subsidies in exchange for ensuring the production itself to be "in the industrial assembly mode". 
Japan suspected that those measures would be inconsistent with relevant provisions of the WTO 
agreements, such as Article 3.1 (b) of SCM Agr eement, Article III:4 of GATT and Article 2.1 of 
TRIMS Agreement because the conditions stipulated in them could constitute local-content requirements. Japan also expressed its doubt about the consistency of those measures with the 
Russian Federation's commitments under paragraph 2 of the Protocol of Accession to the WTO, 
particularly with regard to paragraphs 1450 and 1090 of the Working Party Report, as the benefit provided to the vehicles produced "in the industrial assembly mode" would be more than the 
preferential treatment in tariffs, which the Ru ssian Federation was allowed to maintain until 
1 July 2018.  G/TRIMS/M/38 
 
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  156.  Japan had already raised points of those support measures in the CTG meeting in the 
previous month and was disappointed with the remarks of the Russian Federation that it had already clarified the issues regarding industrial assembly program and its relation to the subsidies in automotive sector in the TRIMS Committee. Japan considered the information provided in the 
last meeting of this Committee and in the written answer to the US in G/TRIMS/W/146 was still 
inadequate to dispel Japan's concern and doubt about the local-content requirement in those measures. Japan had recently submitted questions in this Committee to encourage the 
Russian Federation to engage in deepening the di scussion on this matter. Japan also paid great 
attention to the measures on which the EU raised questions in G/TRIMS/W/152.  
157.  Lastly, in reply to the Russian remarks in the CTG meeting that no interested Member had 
bilaterally approached the Russian Federation, Ja pan underscored the fact that this issue had 
already been raised in the Trade and Investment Subcommittee of the Japan-Russian Federation 
Intergovernmental Committee on Trade and Economic  Issues, where both countries met regularly. 
158.  The United States shared the concerns expr essed by the European Union and Japan with 
respect to the measures in this sector. The United States also monitored the Russian Federation's 
implementation of its WTO obligations in that important sector and looked forward to hearing the Russian responses with respect with the questions that had been posed. 
159.  Ukraine echoed the concerns expressed by the European Union, Japan and the United States 
and indicated its interest in this issue, taking into account the current countervailing investigation 
which was being conducted by Ukraine with respect to subsidies provided to the producers of motor cars in the Russian Federation. In this context, Ukraine would appreciate the Russian 
Federation to provide its replies as soon as possible. 
160.  Canada looked forward to hearing the Russian Federation's response to the EU and Japan 
questions. 
161.  The Russian Federation underscored its understanding that this was a new agenda item for 
which it had received written questions from Japan and the European Union only two weeks ago 
and it was currently considering those questions.  
162.  Apart from the previous very detailed discussion of the issues related to the Russian 
measures in the automotive sector which should have clarified any misunderstandings, the Russian Federation would provide prelimin ary observations on this agenda item. 
163.  Firstly, according to the terms of accession of the Russian Federation to the WTO, the 
"industrial assembly" programme had been grante d a transition period until 1 July 2018, meaning 
that Members had agreed that until that date this investment programme would not be subject to the relevant provisions of the WTO Agreement. 
164.  Secondly, the relevant provisions of the WTO Accession Protocol of the Russian Federation 
did not contain any limitations on granting WTO- permitted specific subsidies to any industrial 
producers, including those participating in the "industrial assembly" programme.  
165.  In conclusion, the Russian Federation recalled that the main recipients of the subsidies in 
question were automobile producers controlled by foreign investors, a substantial number of which was based in the European Union and Japan, and invited interested Members to engage deeper in bilateral consultations on this matter to resolve the issues of commercial nature, if any. 
166.  As for the written questions received, the Russian Federation would reply in due course. 
167.  The Committee took note of the statements made and the responses provided. 
14  UNITED STATES – CERTAIN LOCAL CONTENT REQUIREMENTS IN SOME OF THE 
RENEWABLE ENERGY PROGRAMS 
168.  The Chair recalled that this item had been first raised and discussed at the Committee's 
meeting of 30 April 2013. It had been requested fo r today's meeting by the delegation of India. 
Initial questions on this matter had been circul ated in document G/TRIMS/W/117, to which the G/TRIMS/M/38 
 
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  United States had replied in document G/TRIMS/W/129 and 129/Rev.1. India had posed follow-up 
questions in document G/TRIMS/W/144. 
169.  India noted that this matter had been on the Committee since April 2013 when it had first 
tabled a set of questions. The US had responded to those questions but most of India's questions 
had not been appropriately answered and the responses had been partial and incomplete. As a 
result, India had tabled an additional set of questions in the previous Committee meeting and 
requested now the US to provide responses to those questions. 
170.  The Russian Federation remained concerned in respect of some of the renewable energy 
sector programs of the United States which appeared to impose local content requirements. It was 
further interested in hearing the United States' view on how the incentives in the renewable energy sector with legally binding local content requirements complied with the US obligations 
under the WTO. It also asked the United States to provide clarified information on the total 
amount of each programme. This data remained unclear as the United States had failed to provide the WTO with the relevant notifications. 
171.  The United States appreciated the follow-up questions from India regarding the information 
previously provided. Having reviewed the questions, it appeared that the responses had been 
contained in the information previously provided to the Committee. Nevertheless, the 
United States was pleased to further elaborate on its responses and to identify the information 
that addressed India's questions.  
172.  India had asked about the legal status, constitution, composition and functions of the 
Michigan Public Service Commission and its role in the formulation, approval, implementation, 
grant and allotment of the Renewable Energy Credit s. As described in the information previously 
provided to this Committee, the Michigan Public Service Commission (MPSC) was a regulatory agency which regulated public utilities in the state of Michigan, including electric power, 
telecommunications, natural gas and transportation services. The MPSC's headquarters were 
located in Lansing, Michigan. The MPSC had be gun its history in 1873 as the Michigan Railroad 
Commission (MRC), with a single Commissioner, to regulate railroad rates and conditions of 
service. The Legislature expanded the Commission  to a three-member body in 1909, to regulate 
rail and electric rates and conditions of service. The MRC's authority had been extended to include telephone services in 1911 and natural gas in 1957. The Michigan Public Service Commission was the regulator charged under statute with implementation and monitoring of application of the 
Michigan Renewable Energy Standard by investor-o wned electric utilities, cooperative electric 
utilities, municipal electric utilities and alternative electric suppliers. 
173.  Regarding India's questions about more details regarding the method of grant, transfer and 
trading of renewable energy credits, and as noted in the prior US response, the Michigan 
Renewable Energy Certification System (MIRECS) had been established by the Michigan Public Service Commission in 2009 and administered by AP X, pursuant to a contract with the State of 
Michigan, Department of Energy, Labor & Economic Growth. MIRECS was a tool to keep track of all 
relevant information about renewable energy produced and delivered in Michigan. MIRECS used verifiable generation data for all participating generators and created credits in the form of a tradable digital certificate for each MWh generated or saved. 
174.  The MIRECS website, www.mirecs.org, contai ned a complete listing of MIRECS account 
holders and projects, as well as a listing of non-Michigan projects certified for importation of credits into the MIRECS system. The web site also  contained a bulletin board for holders of excess 
credits seeking transferees. MIRECS had been able  to fully integrate with other tracking systems 
such as the Midwest Renewable Energy Tracking System and North American Renewables Registry. 
This integration allowed both businesses and individual citizens to sell their product to a wider 
market and enabled imports and exports of credits across renewable energy markets. 
175.  In question 3, India had asked about the Los Angeles Department of Power and Water 
(LADWP) – Solar Photovoltaic Incentive Program. More specifically, India had asked about the Los Angeles Manufacturing Credit (LAMC). However, in its prior response, the United States had 
provided all the information that existed about that program which had not been implemented, 
notwithstanding a written description of that unfunded program.  G/TRIMS/M/38 
 
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  176.  Concerning California's Self-Generation Incentive Program (SGIP), the United States 
confirmed that there was no list of pre-approved California suppliers or of 'eligible distributed generation or Advanced Energy Storage technologies.' 
177.  The United States, referring to India's question 4c about the meaning of the term 
"installation" under the SGIP, confirmed that the term had been based on the physical and 
contractual permanence of the equipment. The inte nt of the SGIP was to provide incentives for 
equipment installed and functioning for the duration of its useful life, only permanently installed 
systems were eligible for incentives. That meant that the system had to demonstrate to the 
satisfaction of the Program Administrator adequate assurances of both physical and contractual permanence prior to receiving an incentive. Physical permanence had to be demonstrated by electrical, thermal and/or fuel connections in accordance with industry practice for permanently 
installed equipment while contractual permanence  related to a minimum of the length of the 
applicable warranty period of 10 years. 
178.  The United States, referring to India's question about the legal status, constitution, 
composition and functions of the California Public Utilities Commission and its role in the 
formulation, approval, implementation, grant and al lotment of the SGIP program, noted that this 
information had been previously provided to the Committee. The California Public Utilities 
Commission (CPUC) regulated privately owned elec tric, natural gas, telecommunications, water, 
railroad, rail transit, and passenger transportation  companies, in addition to authorizing video 
franchises. The five Governor-appointed Commissioners ensured that consumers had safe, reliable utility service at reasonable rates, protect agains t fraud, and promoted the health of California's 
economy. The California Public Utilities Commission oversaw the Self-Generation Incentive 
Program (SGIP) by establishing the guidelines and setting the budget for the program. The process of approving projects under the SGIP was overseen  by the project administrators. Most customers 
had received credits on their bill to be applied towards energy consumed. If a customer had 
earned surplus incentive, they might request a check. However, this had not been common as they might only have done so if the surplus exceeded $1.00. 
179.  Referring to India's questions 5 through 8 relating to the Austin Energy Solar PV Rebate 
Program and quoting from its prior submission, the United States quoted: "A previously mentioned incentive for use of equipment manufactured or assembled in the Austin Energy service area had subsequently been removed from the guidelines for qualification for the rebates." This program 
had not existed for any type of customer. As this program had not existed, the United State had 
been unable to provide further details that would be responsive to India's questions. 
180.  Finally, with regard to concerns expressed by In dia about its inability to follow the Internet 
links provided by the United States, it had been co nfirmed that the links provided to access further 
information from the Los Angeles Department of Water and Power and the California Public Utility Commission had been active, functioning, not password-protected, and contained up-to-date 
information about the programs of concern to India. 
181.  India thanked the US delegation for provid ing detailed replies and believed that the 
United States had provided further clarification to the additional questions asked through W/144. 
India asked that the information provided orally today also be provided in writing so it would be 
transferred to capital as in many areas the information provided today had not been included in 
previous replies. 
182.  The United States confirmed that all the information provided today had been extracted 
directly from information provided previously to the Committee. However, the United States would 
review such information carefully to find out what  further transparency could be provided to India 
to ensure that India has had all the information needed to understand those programmes. 
183.  The Committee took note of the statem ents made and the answers provided. 
184.  Before moving on to the next agenda item, the Chair requested all Members that had posed 
oral questions or had provided oral responses to oral or written questions to send their questions 
and responses in writing to the Secretariat.  G/TRIMS/M/38 
 
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  15  OTHER BUSINESS 
185.  No Member raised any issues under this agenda item.  
16  DATE OF THE NEXT MEETING 186.  The Chair stated that the next item of the agen da was the date of the next meeting of this 
Committee. This had been scheduled for Monday, 5 October 2015. 
187.  In order to provide Members with ample oppo rtunity to prepare for this meeting, the 
Secretariat would issue an annotated draft agenda of each formal meeting three weeks in advance 
of the meeting. For the October 2015 meeting, the date for issuing the annotated draft agenda 
would be 14 September 2015. This annotated draft agenda would contain the proposed agenda for the meeting including all Members' requests for items to be placed on that agenda. Members' requests to place any items on the annotated draft agenda should be communicated in writing to 
the Secretariat by close of business on Tuesday,  8 September 2015. The annotated draft agenda 
would be open to Members' comments until close of business on Wednesday, 23 September 2015. In addition, Members wishing to circulate documents should do so by close of business on 
Wednesday, 23 September 2015 so that they could be reflected on the airgram. The airgram 
convening the meeting would be issued on Friday, 25 September 2015.  
17  ELECTION OF CHAIRPERSON AND VICE – CHAIRPERSON 
188.  The Committee elected Mr Zaher Al-Qatarneh (Jordan) as Chair and Ms Marine Willemetz 
(Switzerland) as Vice-Chair of this Committee for 2015.  
189.  The Chair thanked his Vice-Chair, Mr Hüseyin Güngör, for his readiness to assist and 
conveyed his gratitude to the Secretariat, the interpreters and to Ms Vasiliki Avgoustidi, who had 
done an excellent job as the Committee Secretary. 
190.  The meeting was adjourned. 
 
 
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