WORLD TRADE  
ORGANIZATION  TN/TF/W/3 
12 January 2005 
 (05-0120) 
Negotiating Group on Trade Facilitation  
 
 
 
 
ARTICLE VIII OF GATT 1994 – SCOPE AND APPLICATION 
 
 
Note by the Secretariat  
  
 
 
  
  
  
I. INTRODUCTION 
1. This paper revises an earlier note
1 on the matter, bringing it up to date with latest 
developments in this area and aligning it with two other Secretariat contributions on the GATT 
provisions currently being addressed in the Trade F acilitation negotiations.  Changes to the original 
document (G/C/W/391)  mostly relate to the organi zation of the paper, whilst also offering some 
small additions to the jurisprudence section.   
II. STRUCTURE OF THE PAPER 
2. As in the case of the Secretariat's previous document on Article VIII, the current paper first 
introduces the text of the provision with a brief re ference to its negotiating history, followed by a 
factual analysis of the Article's coverage and an outline of the basic obligatio ns prescribed.  It then 
looks at how the provision has been interpreted by GATT/WTO panels up to now.   
III. TEXT OF THE PROVISION 
1. (a) All fees and charges of whatever char acter (other than import and export duties and 
 other than taxes within the purview of Ar ticle III) imposed by contracting parties2 on or in 
 connection with importation or exportation shall be limited in amount to the approximate cost 
 of services rendered and shall not represent an i ndirect protection to domestic products or a 
 taxation of imports or ex ports for fiscal purposes. 
 
(b) The contracting parties re cognize the need for reducing the number and diversity of 
fees and charges referred to in sub-paragraph (a). 
 
                                                      
1 G/C/W/391, 9 July 2002.   
2 See the Explanatory Notes 2 (a) and (b) of GATT 1994. This document has been prepa red under the Secretariat's own 
responsibility and without prejudice to the positions of 
Members and to their rights and obligations under the WTO TN/TF/W/3 
Page 2  
 
  (c) The contracting parties also recognize the need for minimizing the incidence and 
 complexity of impo rt and export formalities and for decr easing and simplifying import and 
 export documentation requirements.* 
 
2. A contracting party shall, upon request by another contracting party or by the 
CONTRACTING 
PARTIES , review the operation of its laws and regulations in  the light of the provisions of this Article.  
 3. No contracting party shall impose subst antial penalties for minor breaches of customs 
regulations or procedural requirements.  In particul ar, no penalty in respect of any omission or mistake 
in customs documentation which is easily rectifiabl e and obviously made withou t fraudulent intent or 
gross negligence shall be greater than nece ssary to serve merely as a warning.   
 4. The provisions of this Article shall extend to fees, charges, form alities and requirements 
imposed by governmental authorities in connection with importation and exportation, including those 
relating to:  
 
 (a) consular transactions, such as  consular invoices  and certificates; 
 (b) quantitative restrictions;  (c) licensing;  (d) exchange control;  (e) statistical services; 
 (f) documents, documentation and certification; 
 (g) analysis and inspection;  and  (h) quarantine, sanitation and fumigation.
 
 
*Interpretative note to paragraph 1 (c): 
1. While Article VIII does not cover the use of multiple rates of exchange as such, paragraphs 1 
and 4 condemn the use of exchange taxes or fees as a device for implementing multiple currency 
practices;  if, however, a contracting party is us ing multiple currency exchange fees for balance-of-
payments reasons with the approval of the Inte rnational Monetary Fund, the provisions of 
paragraph 9(a) of Article XV fully safeguard its position. 
2. It would be consistent with  paragraph 1 if, on the importation of products from the territory 
of a contracting party into the territory of another contracting party, the production of certificates of 
origin should only be required to the ext ent that is strictly indispensable. 
 
IV. NEGOTIATING HISTORY 
3. The negotiating history of Article VIII: 1 was considered by the panel in  US – Customs User 
Fee.3  Much of the language of Article VIII of the GATT was drawn from a proposal made by the 
United States in September 1946.4  This proposal in turn had its origins in the International 
Convention Relating to the Simplification of Customs Formalities  of 3 November 19235, and in 
recommendations made by the World Economic Conference of 1927.6  The Convention and the 
Conference aimed to reduce the consular fees impos ed in connection with the issuance of visas for 
                                                      
3 Panel Report, United States – Customs User Fee  ("US – Customs User Fee "), adopted 
2 February 1988, BISD 35S/245.    
4 Article VIII:1(a) first appeared as Article 13, Suggested Charter for an International Trade 
Organization of the United Nations, submitted by the United States in September 1946.  Department of  State, 
Publication 2598, Commercial Policy Series 93.   
5 League of Nations Treaty Series, vol. 30, p. 372 (1925).  
6 League of Nations Document C.356.M.129.1927.II, para. 5 (1).   TN/TF/W/3 
 Page 3 
 
 
 commercial travellers and consignmen ts of goods, and to limit such fees to the cost of the relevant 
government activity performed.  Thus, the Worl d Economic Conference of 1927 recommended that: 
(1) Consular fees should be a charge, fixed in amount and not 
exceeding the cost of issue, rather than an additional source of revenue. Arbitrary or variable consular fees cause not only an 
increase of charges, which is at times unexpected, but also an 
unwarrantable uncertainty in trade. 
4. Article VIII was neither discussed extensively nor modified significantly through the 
negotiations leading to the approval, at the close of  the 1947 Geneva Conference, of the text that was 
to become the GATT.
7  In  US – Customs User Fee ,  the panel explained that: 
"The criteria stated in the initial draft texts submitted to the negotiating 
conference were almost id entical to those adopted  in the final texts, 
with the result that the actual negotiations presented no occasions for further elaboration of their meaning."
8 
5. Although the Havana Charter never came into force,  its Article 36, which dealt with the same 
subject matter as Article VIII of the GATT, contained certain differences from the text of Article VIII.  
Only one of the modifications discussed during the Havana Conference, and included in the Havana Charter, was subsequently made part of Article VIII of the GATT.
9  During the Havana Conference, it 
was considered important to clarify that the scope  of Article VIII did not relate to import duties 
(regulated by Article II), to export duties, or to the ty pe of internal taxes regulated by Article III of the 
GATT.10  The Havana Charter thus revised paragraph 1 to include the phrase "all fees and charges of 
whatever character (other than import and export du ties, and other than taxes within the purview of 
Article 18)" .11   
6. Three noteworthy changes were made to Article  VIII in the Review Session amendments to 
Part II of the GATT, which were adopted in March 1955 and entered into force in October 1957.12  
The first was the addition to paragraph 1 of the Havana Charter language aimed at distinguishing the 
scope of Article VIII from the scope of Articles II  and III.  The second was the replacement of the 
word "should"  in paragraph VIII:1(a) with the word "shall"  and the deletion of language stating that 
contracting parties need take action in accordance with that provision only "at the earliest practicable date".  This modification had the effect of maki ng the obligations in Article VIII:(1)(a) mandatory 
rather than simply hortatory.  Third, the second interp retative note to Article VIII, which states that, in 
                                                     
 
7 The text of Article 13 of the Suggested Charter for an International Trade Organization of the United 
Nations  is very similar to the text of Article VIII as adopted in 1947. 
8 Panel Report, US -  Customs User Fee , BISD 35S/245, para. 73. 
9 The following modifications contained in the Havana Charter were not subsequently incorporated into 
Article VIII of the GATT:  (i) that a Member was required to review its internal laws and regulations only if 
such request was made by another Member that was "directly affected" by those laws and regulations 
(Article 36.2 of the Havana Charter);  (ii) the addition of a provision relating to tariff discrimination based on 
the use of regional or geographical names (Article 36.6 of the Havana Charter);  (iii) the first interpretative note 
relating to the International Monetary Fund did not requ ire the "approval" of the International Monetary Fund, 
but only that the relevant currency exchange fees "not be inconsistent with the Articles of Agreement of the 
International Monetary Fund" (Report of Committees a nd Principal Sub-committees of the UN Conference on 
Trade and Employment, 1948, p. 77, para. 41). 
10 Havana Report, U.N. Doc. ICITO/1/8, p. 76, para. 35.  
11 Article 18 of the Havana Charter corresponds to Article III of the GATT. 
12 See Final Act and Instruments adopted at the Ninth Session of the CONTRACTING PARTIES, 
10 March 1955, in the  Protocol Amending the Preamble and Parts II and III of the General Agreement on 
Tariffs and Trade (Legal Instrument 37) , p. 85;  and BISD 3S/214. TN/TF/W/3 
Page 4  
 
 accordance with paragraph 1, "the production of certifi cates of origin should on ly be required to the 
extent that is strictly indispen sable", was also added in 1955. 
7. In paragraph 1(c) of Article VIII, the contr acting parties "recognize the need for minimizing 
the incidence and complexity of import forma lities and for decreasing and simplifying import and 
export documentation requirements".  To this e nd, the CONTRACTING PARTIES adopted a number 
of reports, decisions, and recomme ndations intended to simplify docu mentary requirements relating to 
the importation of goods, including certificates of or igin;  to simplify formalities associated with the 
administration of quantitative requirements, the impo rtation of commercial samples, and inspections;  
and to abolish consular formalities.
13  Much of this work was c onducted in conjunction with the 
International Chamber of Commerce and the Customs Co-operation Council.14   
8. Certain subjects covered by Article VIII are also now regulated by specific Uruguay Round 
Agreements.  For example, the Agreement on Preshipment Inspection, the Agreement on Sanitary and 
Phyto-Sanitary Measures  and the Agreement on Technical Barriers to Trade  impose disciplines on, 
inter alia , certain fees and formalities imposed by Memb ers in connection with importation.  The 
Agreement on Rules of Origin  and the Agreement on Import Licensing  also relate to the subject matter 
covered by Article VIII.   
V. COVERAGE  
9. Article VIII addresses fees and formalities connect ed with importation and exportation.  The 
first paragraph of Article VIII makes clear that th e disciplines set forth in Article VIII apply to all 
"fees and charges of whatever character … impo sed on or in connexion with importation or 
exportation" except for :  (i) import and export duties;  and (ii) internal taxes within the scope of 
Article III of the GATT.  Thus, Article VIII applie s to a residual category of fees and charges.  
Examples of the types of fees and charges covered by Article VIII are set forth in the fourth paragraph 
of Article VIII.   
10. Typical fees and charges that would fall within  the scope of Article VIII include licence fees, 
document fees, stamp fees and inspection fees.  Ex amples of import-related formalities that would fall 
within the scope of Article VIII include requirement s relating to the documentation needed for import, 
and to the procedures to be followed for customs clearance.   
11. Article VIII includes specific legal obligations applicable to fees and charges and to the 
penalties that may be imposed for minor breach es of customs procedures, as well as hortatory 
statements recognizing the need to reduce the numb er and complexity of import and export-related 
fees and formalities.   
A. P ARAGRAPH 1 
12. In addition to defining the residual cate gory of fees connected with importation and 
exportation to which Article VIII applies, paragrap h 1(a) contains the principal legal obligations 
imposed pursuant to that provision.  Members ar e directed to limit such fees "in amount to the 
approximate cost of services rendered".  The phrase "services rendered" can be understood to refer to 
government regulatory activities performed in conn ection with the importation and customs entry 
processes , such as the processing and clearing of documents and goods, and inspections.15   
                                                      
13 The various actions taken by the CONT RACTING PARTIES are summarized in the Analytical 
Index, Guide to GATT Law and Practice (World Trade Organization, 1995), Vol. I, pp. 278–281. 
14 The Customs Co-operation Council is now called the World Customs Organization. 
15  See Panel Report, US – Custom User Fee , BISD 35S/245, paras. 76 and 77.  TN/TF/W/3 
 Page 5 
 
 
 13. In addition, such fees and charges must not "represent an indirect protection to domestic 
products or a taxation of imports or exports for fiscal purposes".   
14. Paragraph 1(b) and (c) do not contain specific le gal requirements.  Rather, in these provisions, 
Members simply "recognize the need" for "reducing the number and diversity of fees and charges" 
covered by Article VIII, and "for minimizing th e incidence and complexity of import and export 
formalities and for decreasing and simplifying im port and export documentation requirements". 
15. In 1952, the CONTRACTING PARTIES  took a Decision adopting a Code of Standard Practices 
for Documentary Requirements for the Importation of Goods.16 
B. PARAGRAPH 2 
16. Paragraph 2 of Article VIII requires a Member  to review the operation of its "laws and 
regulations in the light of the provisions of this Article", at the request of another Member or the 
relevant WTO body.17  In the Havana Charter, this provision included a qualification that the 
obligation to "review" only applied when the re questing Member was "directly affected" by the 
relevant laws and regulations.  However, this qualification was not inserted into the GATT.18 
C. PARAGRAPH 3 
17. Paragraph 3 prohibits the impos ition of "substantial" penalties for minor breaches of customs 
regulations or procedures.  Specifically, when cust oms documentation contains mistakes or omissions 
that are easily rectifiable and were "obviously ma de without fraudulent intent or gross negligence", 
then the penalties imposed as a result of such mistakes or omissions may not exceed what is 
"necessary to serve merely as a warning".  
18. In 1952 the CONTRACTING PARTIES  issued a Recommendation on Standard Practices for 
Consular Formalities, suggesting that no charge, othe r than the regular charge for replacement of a 
document, should be imposed for mistakes made in  good faith, and that, "within reasonable limits", 
corrections to the original documents should be allowed.19   
D. PARAGRAPH 4 
19. The last paragraph of Article VIII sets forth an  illustrative list of the types of fees, charges, 
formalities and requirements that fall within the scope  of Article VIII.  These include fees, charges, 
formalities and requirements relating to:   
(a) consular transactions, such as consular invoices and certificates; 
(b) quantitative restrictions; 
(c) licensing; 
(d) exchange control; 
(e) statistical services; 
(f) documents, documentation and certification; 
(g) analysis and inspection;  and 
(h) quarantine, sanitation and fumigation. 
 
                                                      
16 BISD 1S/23 and 24. 
17 According to the Explanatory Note contained in paragraph 2(b) of the language incorporating the 
GATT 1994 into Annex 1A of the WTO Agreement , functions assigned by the GATT 1994 to the 
CONTRACTING PARTIES are to be alloca ted by the Ministerial Conference. 
18 See Article 36.2 of the Havana Charter.  
19 BISD 1S/26, para. 4. TN/TF/W/3 
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 Interpretative notes 
 
20. There are two interpretative notes to Article VIII.  The first states that th e use of taxes or fees 
as a device for implementing multiple currency practices is inconsistent with Article VIII, but creates 
an exception, in accordance with  Article XV:9(a) of the GATT 
20, for circumstances in which a 
Member uses multiple currency ex change fees for balance-of-payment s reasons with the approval of 
the International Monetary Fund.   
21. The second interpretative note recognizes that re quiring the production of certificates of 
origin is not, as such, inconsistent with Article VIII, but qualifies the use of such requirements by 
stipulating that "the production of certificates of origin shoul d only be required to the extent that is 
strictly indispensable".  
VI. BASIC OBLIGATIONS  
22. Article VIII seeks to limit the costs and complexity of the importation and exportation process 
by imposing specific legal obligations on Members w ith respect to the fees and charges that may be 
charged in connection with importation and exporta tion and the penalties that may be imposed for 
minor breaches of customs procedures;  as well as by explicitly recognizing the need to reduce the 
number and complexity of import- and export-related fees and formalities.   
23. Article VIII requires each WTO Member to ensure that:  
(i) the non-tariff fees and charges that it impo ses on or in connectio n with importation or 
exportation:  (a) are limited in their amount to the approximate cost of the regulatory 
activities performed by that Member in conne ction with such importation or exportation;  
and (b) do not represent indirect protection to  domestic products or taxation of imports 
or exports for fiscal purposes (paragraph 1);   
(ii) upon request by another Member  or by the relevant WTO Body21, it reviews the 
operation of its laws and regul ation in the light of the provisions of Article VIII 
(paragraph 2);  and 
(iii) it does not impose substantial penalties fo r minor breaches of customs regulations or 
procedural requirements, in pa rticular when such breaches are the result of mistakes that 
are easily rectifiable and do not result fr om fraud or gross negligence (paragraph 3). 
24. In Article VIII, Members also "recognize", but undertake no explicit obligations with respect 
to:   
(i) the need to reduce the number and diversity of the fees and charges addressed by 
Article VIII;  and 
(ii) the need to minimize the incidence and complexity of import and export formalities, and 
to decrease and simplify import and export documentation requirements. 
 
                                                      
20 Article XV:9(a) provides: 
Nothing in this Agreement shall preclude: 
(a) the use by a contracting party of exchange controls or exchange restrictions in 
accordance with the Articles of Ag reement of the International M onetary Fund or with that 
contracting party's special exchange ag reement with the CONTRACTING PARTIES. 
21 See footnote 17 above.  TN/TF/W/3 
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 VII. INTERPRETATION AND APPLICATION 
25. Article VIII has been interpreted by both GA TT and WTO panels, as well as by the Appellate 
Body.  The aim of this section is to identify some of  the principal findings that have been made with 
respect to the specific provisions of Article VIII.22  This section begins with a brief summary of the 
general nature of Article VIII:1(a), and then follo ws the order of the text of Article VIII.   
A. G ENERAL  
26. In US – Customs User Fee , the panel summarized the nature of Article VIII:1(a) as follows: 
Article VIII:1(a) states a rule appli cable to all charges levied at the 
border, except tariffs and charges which serve to equalize internal 
taxes.  It applies to all such charges, whether or not there is a tariff 
binding on the product in question.  The rule of Article VIII:1(a) 
prohibits all such charges unless they  satisfy the three criteria listed 
in that provision:  
a) the charge must be "limited in amount to the approximate 
cost of services rendered"; 
b) it must not "represent an indirect protection to domestic 
products"; 
c) it must not "represent … a taxation of imports … for fiscal 
purposes".23   
B. "ALL FEES AND CHARGES … ON OR IN CONNECTION WITH IMPORTATION OR EXPORTATION " 
27. In US – Customs User Fee , the panel considered the types of fees and charges covered by 
Article VIII, and determined that there was "a ra ther well established general understanding of this 
concept, demonstrated more by practice than by the actual text of the General Agreement." 24  The panel 
noted that the illustrative list in paragraph 4 of Article VIII "includes various aspects of the customs 
process such as 'consular tr ansactions', 'statistical services', and 'analysis and inspection'."  According to 
the panel, in practice the illustrative list has be en interpreted "as a list of those customs-related 
government activities which the draftsmen meant wh en they referred to 'services rendered'". 25  T h e  
panel noted that consular fees, customs fees, and stat istical fees had been treated as falling within the 
scope of Article VIII:1(a) or Article II:2(c).26  That panel also found that a merchandise processing fee 
for imports was covered by Article VIII:1(a).   
28. The panel in EEC – Minimum Import Prices  considered whether the forfeiture of a security 
lodged in anticipation of importation when no importa tion took place within the date specified in an 
import certificate constituted a charge in conn ection with importation within the meaning of 
Article VIII:1(a).  In the view of the panel, "s uch a penalty should be considered as part of an 
                                                      
22 This note is not intended to be a comprehensive analysis of  all  findings related to Article VIII that 
have been made by GATT/WTO dispute settlement panels and the Appellate Body. 
23 Panel Report,  US – Customs User Fee,  BISD 35S/245  , para. 69. 
24 Ibid., para. 76. 
25 Ibid.  
26 Ibid.  TN/TF/W/3 
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 enforcement mechanism and not as a fee or formal ity 'in connection with importation' within the 
purview of Article VIII".
 27   
29. The potential forfeiture of security was also at issue in EEC – Bananas II .28  That panel 
referred to the reasoning of the panel in EEC – Minimum Import Prices,  agreed that the potential 
forfeiture of a security deposit did not, as such, fall within Article VIII:1(a), and added that "it had not 
received sufficient evidence demonstrating that the security requirement gave rise to costs amounting 
to a charge prohibited by paragraph 1(a) of Article VIII".29   
30. The relationship between "fees and charges"  falling within the scope of Article VIII:1 and 
Article II was considered by the panel in US – Customs User Fee.30  According to that panel, 
Article II:1(b) establishes a ceiling on the charges that can be levied on a product whose tariff is 
bound.  Such product must be exempted from all tari ffs in excess of the bound rate, and from all other 
charges in excess of those:  (i) in force as of the date  of the relevant tariff concession;  or (ii) directly 
and mandatorily required by legislation in force on that date.  In addition, the panel observed, 
Article II:2 authorizes governments to impose thre e types of non-tariff charges above the tariff-
binding ceiling, including "fees or other charges commensurate with the cost of services rendered".31  In 
the view of the panel in US – Customs User Fee , no difference in meaning was intended between this 
exception in Article II:2(c) and the phrase "fees a nd charges … limited in am ount to the approximate 
cost of services rendere d" in Article VIII:1(a).32   
31. The panel in US – Tobacco considered the consistency of an inspection fee with Article VIII, 
as all the parties to the dispute had asked it to.  The panel, however, noted that the question of the 
consistency of the inspection fees with the GATT "c ould present itself differently under Article III in 
that the focus of the examination would then be  on the inspection fees as internal charges and on 
whether or not national treatment was ac corded in respect of such charges".33   
C. "LIMITED IN AMOUNT TO THE APPROXIMATE COST OF SERVICES RENDERED " 
32. The panel in US –  Customs User Fee observed that:   
"… [this] requirement is actually a dual requirement, because the 
charge in question must first involve  a 'service' rendered, and then the 
level of the charge must not exceed the approximate cost of that 'service'".
34 
33. In discussing the meaning of "services rendered",  the panel noted that "the drafters … were 
clearly not employing the term … in the econom ic sense", since government regulation is not 
                                                      
27 Panel Report, EEC – Programme of Minimum Import Prices, Licences and Surety Deposits for 
Certain Processed Fruits and Vegetables  ("EEC – Minimum Import Prices "), adopted 18 October 1978, 
BISD 25S/68, para. 4.3. 
28 Panel Report, EEC – Import Regime for Bananas  ("EEC – Bananas II "), 11 February 1994, 
unadopted, DS38/R. 
29 Ibid. , para. 150. 
30 Panel Report, United States – Customs User Fee  ("US – Customs User Fee "), adopted 
2 February 1988, BISD 35S/245. 
31 The other two types of charges authorized pursuant to Article II:2 are:  (a) charges equivalent to 
internal taxes imposed consistently with Article III: 2;  and (b) anti-dumping and countervailing duties imposed 
consistently with Article VI.   
32 Panel Report, US – Customs User Fee,  BISD 35S/245, para. 75. 
33 Panel Report, United States Measures Affecting the Importation, Internal Sale and Use of Tobacco  
("US – Tobacco "), adopted 4 October 1994, BISD 41S/I/131. 
34 Ibid. , para. 69.  TN/TF/W/3 
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 necessarily desired by importers and does not necessarily add value to the imported goods.35  Rather, 
"services rendered" means "government activities closely enough connected to the processes of customs entry that they might, with no more than the customary artistic license accorded to taxing authorities, be 
called a 'service' to the importer in question".
36   
34. The panel considered a variety of activities that the United States claimed were "services"  that 
should be included in calculating the cost base of th e merchandise processing fee.  In the view of the 
panel, "the government imposing the fee should have  the initial burden of justifying any government 
activity being charged for".37  The panel examined a variety of activities to determine whether they 
were "both proximate enough, and of sufficiently general applicability, that their costs could be included in the fee applicable to all commercial importers".
38  The panel found that the costs of airport 
passenger processing, the costs of collecting and tr ansmitting export documentation, certain costs of 
customs officers stationed in other countries, and the costs of customs processing for imports that 
were exempt from the merchandise processing fee could not be included in the cost base of the merchandise processing fee.  These activities coul d not be considered to be government activities 
"serving" the commercial importe rs paying the merchandising free.
39  Conversely, the panel found 
that the costs of the following activities could be included  in the cost base of the fee:  investigations of 
customs fraud and counterfeit goods;  the collecti on of anti-dumping and countervailing duties;  
technical laboratories and the provision of legal rulings on customs matters;  and the clearance of carriers.
40   
35. The panel also noted that, in determining whet her fees are limited in amount to the cost of 
services, "revenues must be measured against th e costs of the period in which the revenues are 
collected".41   
36. The panel in US – Certain EC Products  expressed doubts regarding the United States' 
contention that "bonding requirements could be viewed as a form of fee for services rendered (the 
services being the 'early release of merchandise')".42   
37. In EC –  Minimum Import Prices43, the panel considered the cons istency with Article VIII of 
certain interest charges and costs in connection with the lodging of security associated with import 
certificates, and noted that "the incidence of th ese charges did not exceed 0.005 per cent".  In the 
opinion of the panel, "these interest charges and co sts were limited in amount to the approximate costs 
of administration", and "the term 'cost of services rendered' in Article VIII:1(a) would include these 
costs of administration".44   
                                                      
35 Ibid. , para. 77. 
36 Ibid.  
37 Ibid. , para. 98. 
38 Ibid. , para. 103. 
39 Ibid. , paras. 100, 101, 105, and 106. 
40 Ibid. , paras. 103 and 104. 
41 Ibid.,  para. 111. 
42 The panel did not, however, need to decide the issue as it found that the European Communities had 
failed to satisfy its burden of proving that Article VIII was relevant to the dispute:  Panel Report, United States – 
Import Measures on Certain Products from the European Communities ("US – Certain EC Products "), 
WT/DS165/R and Add.1, adopted 10 January 2001, as modified by the Appellate Body Report, WT/DS165/AB/R, paras. 6.70 and 6.71.   
43 Panel Report, EEC – Programme of Minimum Import Prices, Licences and Surety Deposits for 
Certain Processed Fruits and Vegetables  ("EEC – Minimum Import Prices "), adopted 18 October 1978, 
BISD 25S/68. 
44 Ibid. , para. 4.2. TN/TF/W/3 
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 38. In the same case, the panel held that the author ity of EC member States to suspend totally or 
partially the issuance of import certificates pendi ng Community action in response to a request for 
safeguard action was not incons istent with Article VIII.
45   
39. In US –  Customs User Fee,  the United States argued that an ad valorem fee was the simplest 
and cheapest way to administer its merchandise processing fee, was not price distortive, and was 
predictable for traders.46  The panel, however, found that the ad valorem  fee was not compatible with 
the plain meaning of the text or with the objectives of the GATT.47  The Panel held that the term "cost 
of services rendered" referred "to the approximate cost of customs processing for the individual entry in question".
48  The panel found the merchandise processing fe e was inconsistent with Article VIII:1(a) "to 
the extent that it caused fees to be levied in excess of such costs".49   
40. In Argentina – Textiles and Apparel , the panel reasoned that: 
"An ad valorem  duty with no fixed maximum fee, by its very nature, 
is not "limited in amount to the approximate cost of services rendered".  For example, high-price items necessarily will bear a much greater tax burden than low-price goods, yet the service 
accorded to both is essentially the same.  An unlimited ad valorem  
charge on imported goods violates the provisions of Article VIII because such a charge cannot be re lated to the cost of the service 
rendered".
50   
D. "AN INDIRECT PROTECTION TO DOMESTIC PRODUCTS OR A TAXATION OF IMPORTS OR 
EXPORTS FOR FISCAL PURPOSES " 
41. In US –  Customs User Fee , the panel raised, but did not decide, the issue of whether the 
prohibition on fees and charges that "represent an indirect protection to domestic products" involves a requirement to consider whether the fees and charges had adverse trade effects.
 51   
42. In the same case the panel also noted that, in  considering whether fees and charges represent 
taxation for fiscal purposes, it is relevant to consider "the question of whether total revenues exceeded 
total attributable costs".52   
43. In Argentina – Textiles and Apparel53 the panel observed that the statistical tax at issue 
"purportedly raises revenue for the purpose of financ ing customs activities relate d to the registration, 
computing and data processing of information on both imports and exports".  The panel found the tax 
to be a measure designated for fiscal purposes incons istent with Article VIII, reasoning that:   
"While the gathering of statisti cal information concerning imports 
may benefit traders in general, Ar ticle VIII bars the levying of any 
tax or charge on importers to support the related costs "for the 
                                                      
45 Ibid. , para. 4.5. 
46 Panel Report, US – Customs User Fee,   BISD 35S/245, para. 83.  
47 Ibid. , paras. 80–85. 
48 Ibid. , para. 125.  See also para. 86. 
49 Ibid.  
50 Panel Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other 
Items  ("Argentina – Textiles and Apparel "), WT/DS56/R, adopted 22 April 1998, as modified by the Appellate 
Body Report, WT/DS56/AB/R and Corr.1, DSR 1998:III, 1033, para. 6.75. 
51 Panel Report, US – Customs User Fee,   BISD 35S/245, para. 120. 
52 Ibid, para. 119. 
53 See footnote 50.  TN/TF/W/3 
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 individual entry in question" since it will also benefit exports and 
exporters".54   
44. In that case, Argentina also argued that it was collecting the tax for "fiscal"  purposes in the 
context of undertakings it had given to the Interna tional Monetary Fund.  The panel observed that:   
"… not only does Article VIII of GATT expressly prohibit such 
measures for fiscal purposes but that clearly a measure for fiscal 
purposes will normally lead to a situation where the tax results in charges being levied in excess of the approximate costs of the statistical services rendered".
55   
E. ARTICLE VIII:1( C) – "THE CONTRACTING PARTIES ALSO RECOGNIZE THE NEED FOR 
MINIMIZING THE INCIDENCE AND COMPLEXITY OF IMPORT FORMALITIES AND FOR 
DECREASING AND SIMPLIFYING IMPORT AND EXPORT DOCUMENTATION REQUIREMENTS " 
45. In EEC – Bananas II , the panel examined whether the banana import licensing procedures at 
issue were consistent with Article VIII:1(c).  According to the panel:   
"Article VIII:1(c) refers to im port formalities and documentation 
requirements, not to the trade regul ations which such formalities or 
requirements enforce.  It further noted that the complaining parties had criticized the complexity of the EEC's banana import regulations but that they had not submitted any evidence substantiating that the EEC's import formalities and import documentation requirements, by 
themselves, were more complex than necessary to enforce these 
regulations.  The Panel therefore found that the complaining parties 
had not demonstrated that the EEC  had acted inconsistently with 
Article VIII:1(c)".
56 
F. RELATIONSHIP WITH OTHER AGREEMENTS  
46. In Argentina – Textiles and Apparel, the Appellate Body held that there is nothing in the 
Agreement between the IMF and the WTO, the Decl aration on the Relationship of the World Trade 
Organization with the International Monetary Fu nd or the Declaration on Coherence which would 
justify a Member's commitment to the IMF preva iling over its obligations under GATT Article VIII.57  
Argentina had argued on appeal that, in interpretin g Article VIII and applying it to determine the 
consistency of the statistical tax with Article VIII, the panel should have taken account of a 
"Memorandum of Understanding" be tween Argentina and the IMF wh ich, according to Argentina, 
included an "undertaking" to impose a statistical tax.58   
                                                      
54 Ibid. , para. 6.77. 
55 Ibid. , para. 6.78. 
56 Panel Report, EEC – Import Regime for Bananas  ("EEC – Bananas II "), 11 February 1994, 
unadopted, DS38/R, para. 151. 
57 Appellate Body Report, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, 1003, 
para. 70. 
58 Appellate Body Report, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, 1003, 
para. 65. TN/TF/W/3 
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 47. The Appellate Body ruled that: 
"Argentina did not show an irreconcilable conflict between the 
provisions of its "Memorandum of Understanding" with the IMF and 
the provisions of Articl e VIII of the GATT 1994. We thus agree with 
the Panel's implicit finding that Arge ntina failed to demonstrate that it 
had a legally binding commitment to the IMF that would somehow 
supersede Argentina's obligations under Article VIII of the GATT 
1994."
59 
 
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59 Appellate Body Report, Argentina – Textiles and Apparel, para. 69.