RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/SAU/7 
26 October 2005 
 (05-4966) 
Working Party on the Accession 
of the Kingdom of Saudi Arabia  
 
 
 
 
REPORT OF THE WORKING PARTY ON 
THE ACCESSION OF THE KINGDOM OF SAUDI ARABIA 
TO THE WORLD TRADE ORGANIZATION 
 
 
  WT/ACC/SPEC/SAU/7 
 Page i 
 
 
 TABLE OF CONTENTS 
I. INTRODUCTION ................................................................................................................... .1 
- Documentation Provided......................................................................................................... .1 
II. ECONOMIC POLICIES..........................................................................................................9  
- Monetary and Fiscal Policies ................................................................................................... 9 
- Taxation and Zakat............................................................................................................. ....10  
- Foreign Exchange and Payments ..........................................................................................12  
- Competition Policy............................................................................................................. .....13  
- Pricing Policies ............................................................................................................... .........14  
- Privatisation and Enterprises that are State-Owned or –Controlled, or with 
Special or Exclusive Privileges...............................................................................................1 8 
- Investment Regime.............................................................................................................. ....31  
III. FRAMEWORK FOR MAKING AN D ENFORCING POLICIES ....................................38  
IV. POLICIES AFFECTING TRADE IN GOODS ...................................................................46  
- Trading Rights ................................................................................................................. .......46  
A. IMPORT REGULATIONS....................................................................................................51  
- Import Regime .................................................................................................................. ......51  
- Customs Tariff ................................................................................................................. .......51  
- Tariff Rate Quotas and Tariff Exemptions ..........................................................................52  
- Other Duties a nd Charges......................................................................................................5 3 
- Fees and Charges Connected with Importation (for Services Rendered) .........................54  
- Import Licensing Systems ......................................................................................................5 7 
- Quantitative Import Restrictions, In cluding Prohibitions and Quotas .............................69  
- Customs Valuation.............................................................................................................. ....71  
- Rules of Origin ................................................................................................................ ........74  
- Other Border Measures.......................................................................................................... 75 
- Application of Internal Taxes to Imports .............................................................................76  
- Preshipment Inspection......................................................................................................... .76 
- Anti-Dumping, Countervailing Duty  and Safeguard Regimes ...........................................77  
B. EXPORT REGULATIONS ...................................................................................................78  
- Export Restrictions ............................................................................................................ .....78  
- Export Duties.................................................................................................................. .........79  
- Export Subsidies ............................................................................................................... ......80  
C. INTERNAL POLICIES AFFECT ING TRADE IN GOODS .............................................80  
- Industrial Policy, Including Subsidies...................................................................................80  
- Technical Barriers to Trade...................................................................................................8 1 WT/ACC/SPEC/SAU/7 
Page ii  
 
 -
 Transparency ................................................................................................................... .......88  
- Implementation of TBT Agreement Obligations .................................................................88  
- Sanitary and Phytosanitary Measures ..................................................................................89  
- Trade-Related Investment Measures ....................................................................................97  
- Free Zones ..................................................................................................................... ..........97  
- Government Procurement......................................................................................................98  
- Trade in Transit ............................................................................................................... .......98  
- Agricultural Policy............................................................................................................ ......99  
- Trade in Ci vil Aircraft........................................................................................................ ..102  
V. TRADE-RELATED INTELLECTUAL  PROPERTY REGIME.....................................102  
A. GENERAL........................................................................................................................ .....102  
- Agencies Responsible for Policy Formulation and Implementation ................................103  
- Membership in International Intellectual Property Agreements.....................................103  
- Application of MFN and National Treatment to Foreign Nationals ................................103  
- Fees and Taxes ................................................................................................................. .....103  
B. SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING 
PROCEDURES FOR THE ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS .........................................................................105
 
- Copyrights ..................................................................................................................... ........105  
- Patents ....................................................................................................................... ..........105  
- Trademarks ..................................................................................................................... ......107  
- Geographical Indications .....................................................................................................10 8 
- Industrial Designs ............................................................................................................. ....108  
- Layout Designs of Integrated Circuits ................................................................................108  
- Plant Variety Protection....................................................................................................... 109 
- Undisclosed Information ......................................................................................................10 9 
C. ENFORCEMENT.................................................................................................................110  
- General Obligations............................................................................................................ ..110  
- Civil and Administrative Procedures..................................................................................111  
- Provisional Measures........................................................................................................... .111 
- Special Requirements Related to Border Measures ..........................................................112  
- Criminal Procedures............................................................................................................ .112 
VI. POLICIES AFFECTING TRADE IN SERVICES............................................................113  
VII. TRANSPARENCY ...............................................................................................................124  
VIII.  NOTIFICATIONS ................................................................................................................12 6 
IX. TRADE AGREEMENTS .....................................................................................................126  
CONCLUSIONS .................................................................................................................... ............128   WT/ACC/SPEC/SAU/7 
 Page iii 
 
 
 ANNEXES ....................................................................................................................... ..........130  
APPENDIX ...................................................................................................................... ...........162  
 
  WT/ACC/SPEC/SAU/7 
 Page 1 
 
 
 I. INTRODUCTION 
1. On 13 June 1993, the Government of the Kingdom of Saudi Arabia (hereinafter referred to as 
Saudi Arabia) requested accession to the General  Agreement on Tariffs and Trade (GATT 1947).  At 
its meeting on 21 July 1993, the GATT 1947 Council of Representatives established a Working Party 
to examine the application of the Government  of Saudi Arabia to accede to the General  Agreement 
under Article XXXIII, and to submit to the Counc il recommendations which may include a draft 
Protocol of Accession.  Membership of the Work ing Party was open to all contracting parties 
indicating the wish to serve on it.  In pursuance of  the decision of the General Council of the World 
Trade Organization (WTO) of 31 January 1995, the GATT 1947 Accession Working Party was transformed into a WTO Accession Working Party.  The terms of reference and the membership of 
the Working Party were reproduced in document WT/ACC/SAU/2/Rev.22. 
2. The Working Party met on 2-3 May and 6-8 November 1996; 29-30 May and 2 and 
4 December 1997; 17 and 19 November 1998; 22 Se ptember 1999; 5 April and 17 October 2000, 
under the Chairmanship of H.E. Ambassador Mr. J. Weekes (Canada); and on 23-24 October 2003; 25 February, 29 April and 16 June  2004; and 11 and [28] October 2005, under the Chairmanship of 
H.E. Ambassador Mr. Munir Akram (Pakistan). 
- Documentation Provided 
3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the 
Foreign Trade Regime of Saudi Arabia (L/7489)  and the questions submitted by members on the 
foreign trade regime of Saudi Arabia, together  with the replies thereto (L/7645 and Add.1; 
WT/ACC/SAU/3; WT/ACC/SAU/6, Add.1-3 and Add.3/Corr.1; WT/ACC/SAU/8 and Corr.1; WT/ACC/SAU/10; WT/ACC/SAU/13, Add.1, Add.1/Corr.1 and Rev.1; WT/ACC/SAU/29, Add.1-4, and Corr.1 and 2; WT/ACC/SAU/35 and Corr.1; WT/ACC/SAU/44; WT/ACC/SAU/46; and WT/ACC/SAU/47 and Corr. 1).  The Government of Saudi Arabia also provided the Working Party 
with information regarding the following: 
Economic Development Plans
 
- Sixth Development Plan, Decree No. 142 of 19.11.1413H (10 May 1993) 
- Seventh Development Plan, Decree No. 126 of 28.5.1421H (29 August 2000) WT/ACC/SPEC/SAU/7 
Page 2  
 
 Economic Policies
 
- Competition Policies  
-  Law on Competition Policies, issued pursuant to Royal Decree No. M/25 of 
4.5.1421H (22 June 2004) 
- Pricing Policies  
- Council of Ministers Resolution No. 68 of 29.5.1412H (1 December 1991) 
- Council of Ministers Resolution No. 260 of 23.10.1422H (7 January 2002) 
(cancelling Council of Ministers Resolution No. 68 of November 1992) 
- Supreme Council for the Petroleum and Mineral Affairs Resolution No. 15 of 
11.3.1422H (3 June 2001) 
- Pharmacy Law, issued pursuant to Royal Decree No. M/18 of 18.3.1398H (25 
February 1978) 
 - Privatisation
 
- Economic Reform Program of the Kingdom of Saudi Arabia, 
WT/ACC/SAU/54 (4 April 2003) 
- Council of Ministers Decision No. 219 of 6.9.1423H (11 November 2002) 
(Privatization Strategy) 
- Supreme Economic Council Decision No . 1/23 of 23.3.1423H (4 June 2002) 
- Council of Ministers Resolution No. 60 of 1.4.1418H (5 August 1997) 
- Council of Ministers Resolution No. 257 of 11.11.1421H (5 February 2001) 
- Royal Decree No. 7-B-16941 of 6.11.1417H (15 March 1997) 
- Council of Ministers Resolution 169 of 11.8.1419H (30 November 1998) 
(restructuring electricity sector) 
 - Investment Regime
 
- Foreign Investment Law, Royal Decree No. M/1 of 5.1.1421H (9 April 2000) 
and implementing regulations issued  14.4.1423H (24 June 2002) (replacing 
the 1979 Foreign Capital Investment Law) 
- "Negative List", issued by Supreme Economic Council Decision No. 17/23 of 
1.12.1423H (22 May 1993) 
- Foreign Capital Investment Law, Royal Order No. M/4 of 2.2.1399H (1 
January 1979) 
- Capital Market Law, Royal Decree No. M/30 of 2.6.1424H (13 July 2003) 
- Council of Ministers Decision No. 50 of 21.4.1415H (27 September 1994) 
- Council of Ministers Bureau Letter 8/490 of 28.6.1414H (13 December 1993) 
 
Framework For Making and Enforcing Policies  
- Basic Law of Governance, Royal Decree No. A/90 of 27.8.1412H (1 March 
1992) 
- Law of the Shoura Council, Royal Decree No. A/91 of 27.8.1412H (1 March 
1992) 
- Law of the Council of Ministers, Royal Decree No. A/13 of 27.3.1414H (20 
August 1993) 
- Commercial Agencies Law, issued pur suant to Royal Decree No. M/11 of 
20.2.1382H  (22 July 1962)  WT/ACC/SPEC/SAU/7 
 Page 3 
 
 
 - Combat of Commercial Fraud Law, Royal Decree No. M/11 of 29.5.1404H 
(1 March 1984) 
- Negotiable Instruments Law, Royal Decree No. M/37 of 11.10.1383H (24 
February 1964) 
- Board of Grievances Law, issued pursuant to Royal Decree No. M/51 of 
17.1.1402H (14 November 1981) 
- Council of Ministers Resolution No. 165 of 24.6.1423H (1 September 2002) 
(implementing the Vienna Convention on the Law of Treaties)  
Policies Affecting Trade in Goods  
- Trading Rights  
- Law on Commercial Registration, issued pursuant to Royal Decree No. M/1 of 
21.2.1416H (19 July 1995) 
- Law on Commercial Names, issued pursuant to Royal Decree No. M/15 of 
12.8.1420H (20 November 1999) and the associated rules and regulations  
- Professional Companies Law, Council of Ministers Resolution No. 16 of 
16.2.1412H (26 August 1991) 
- Commercial Agencies Law, issued pur suant to Royal Decree No. M/11 of 
20.2.1382H (22 July 1962) 
- Implementing Regulations for Commercial Agencies Law, Ministerial 
Resolution No. 1897 of 24.5.1401H (29 March 1981) 
- Customs Tariffs  
- GCC Common Customs Law (1999), ratified by Royal Decree No. M/41 of 
3.11.1423H (5 January 2003), and its rules of implementation  
- Royal Decree No. 104 of 20.4.1423H (30 June 2002) (applying GCC Common 
Customs Tariff)  
- Royal Decree No. 40 of 12.12.1424H (3 February 2004) (tariff rates for 
sensitive items)  
 - Fees for Services Rendered
 
- Council of Ministers Decision No. 5-B-57611 of 28.11.1424H (20 
January 2004) (terminating requirement fo r notarization or consularization) 
- Royal Decree No. 7/B/16941 of 6.11.1417H (15 March 1997) (private 
management of ports) 
- Council of Ministers Decision No. 5 of 3.1.1406H (18 September 1985) 
(requirement for notarization or consularization) 
 - Import Licensing Systems
 
- Council of Ministers Decision No. 84 of 1.4.1421H (3 July 2000) (Import 
Licensing Guide) 
- The Import Licensing Law, issued pursuant to Council of Ministers Decision 
No. 88 of 6.4.1423H (16 June 2002) (Import Licensing Procedures) 
- Telecommunications Act, Chapter 5 
- Response to Questionnaire on Import Licensing Procedures, 
WT/ACC/SAU/60  
 WT/ACC/SPEC/SAU/7 
Page 4  
 
 - Quantitative Import Restrictions, Including Prohibitions and Quotas 
 
- Ministry of Commerce and Industry Decision No. 1308 of 27.5.1424H 
(27 July 2003) 
- Customs Valuation  
- Royal Decree No. 190 of 16.12.1409H (19 July 1989) 
- Royal Decree M/41 of 3.11.1423H (5 January 2003) (Common Customs Law 
of the GCC) 
- Response to Questionnaire on Customs Valuation Procedures 
- Council of Ministers Decree No. 162 of 17.6.1423H (28 August 2002) 
- Ministerial Decision No. 1207 of 9.5.1425H (27 June 2004) 
 
Internal Policies Affecting Trade in Goods  
- Industrial Policy, Including Subsidies  
- Saudi Industrial Development Fund Law,  promulgated by Royal Decree No. 
M/3 of 26.2.1394H (20 March 1974) 
- Technical Barriers to Trade  
- Saudi Arabian Standards Organization (SASO) Technical Directive, Parts 1 
through 4, issued 18 July 2000, as amended on 24 May 2004, and as further amended on 18 June and 19 July 2005 
- Lists of SASO standards based on CODEX, ISO, IEC and OIML standards; 
list of Saudi standards and their corres ponding Gulf standards; list of the 2,338 
Saudi standards, including a cross-refe rence to the international standards 
adopted in their entirety as SASO standards (WT/ACC/SAU/59/Add.5) 
- List of standards deemed to be equivalent to Saudi standards, 
WT/ACC/SAU/15 
- SASO standards, adopted as GCC Standards and thereby incorporated as 
national standards in other GCC Countries, WT/ACC/SAU/29 (Annex III) 
- Procedures for the development of SASO standards, WT/ACC/SAU/29 
(Annex IV) 
- Comprehensive Guidelines and Proce dures concerning the International 
Conformity Certification Program (ICCP), WT/ACC/SAU/37 and /45 
- Appeals Procedures, included as an Appendix to the ICCP Guidelines 
 
- Preshipment Inspection  
- Council of Ministers Decision No. 213 of 3.8.1424H (30 September 2003) 
(cancelling the ICCP) 
- Ministerial Decision No. 6386 of 21. 6.1425H (8 August 2004) (establishing 
the ICCP Replacement Committee) 
- Sanitary and Phytosanitary Measures  
- Shelf Life of Food Products, WT/ACC/SAU/27 
- Ministerial Decision No. 943 of 2.5.1424H (1 July 2003) ("Sanitary and 
Phytosanitary Unified Procedures")  
- Council of Ministers Decision No . 109 of 30.4.1424H (30 June 2003)  WT/ACC/SPEC/SAU/7 
 Page 5 
 
 
 - Council of Ministers Decision No. 85 of 1.4.1421H (4 July 2000) 
- Council of Ministers Decree No. 207 of 26.1.1396H (28 January 1976)  
- Royal Decree No. M/10 of 3.3.1392H (16 April 1972) 
- Royal Decree No. M/3 of 8.2.1423H (21 April 2002) (Law of Private 
Laboratories) and Implementing Regulations, issued pursuant to Ministerial 
Decision No. M/3 of 21.2.1424H (23 April 2003) 
 
- Agricultural Policy  
- Tables on domestic support and export subsidies, WT/ACC/SAU/19 and 28; 
and WT/ACC/SPEC/SAU/1/Rev. 1-10 
- Royal Decree No. 58 of 3.12.1382H (6 May 1963) (founding the 
Saudi Arabian Agricultural Bank) 
- Royal Decree No. 184 of 24.9.1419H (14 December 1998) (ending issuance 
by GSFMO of permits for importing or exporting any product) 
- Royal Decree No. 4/B/49434 of 8.12.1423H (10 February 2003) (ending 
GFSMO receipt of domestic barley) 
- Trade in Transit  
- Ministerial Decree No. 5618 of 15.11.1424H (8 January 2004) 
- Trade Related Intellectual Property Regime  
- Copyrights Law, issued pursuant to Royal Decree No. M/41 of 2.7.1424H (30 
August 2003), and Implementing Regulations, issued pursuant to Ministerial 
Decision No. 1688/1 of 10.4.1425H (29 May 2004) 
- Law of Trademarks, issued pursuant to Royal Decree No. M/21 of 29.5.1423H 
(7 August 2002) and Implementing Regulations, issued pursuant to Ministerial Order No. 1723 of 26.7.1423H (4 October 2002) 
- Law of Trade Names, issued pursuant to Royal Decree No. M/15 of 
12.8.1420H (20 November 1999) 
- Law of Commercial Data, issued pursuant to Royal Decree No. M/15 of 
15.4.1423H (25 June 2002), a nd Regulations for the Protection of Confidential 
Commercial Information, issued pursuant to Council of Ministers Decision No. 50 of 25.2.1426H (4 April 2005), as amended by Ministerial Decision No. 3218 of 25.3.1426H (4 May 2005), and as further amended by Ministerial 
Decision No. 431 of 1.5.1426H (8 June 2005) 
- GCC Patents Law 
- Law on Patents, Layout Designs of Inte grated Circuits, Plant Varieties and 
Industrial Designs, issued pursuant to Royal Decree No. M/27 of 29.5.1425H (17 July 2004), and Implementing Regulations, issued pursuant to Ministerial 
Decision No. 118828/M/10 of 14.11.1425H (26 December 2004) 
- Border Measures Regulations, issued pursuant to Ministerial Decision No. 
1277 of 15.5.1425H (3 July 2004) 
 - Policies Affecting Trade in Services
 
- Cooperative Insurance Companies Cont rol Law, Royal Decree No. M/32 of 
2.6.1424 (31 July 2003), and Implementing Regulations, issued pursuant to 
Ministerial Decision No. 1/596 of 1.3.1425H (20 April 2004), as amended by Royal Decree No. 3120/MB of 4.3.1426H (13 April 2005) WT/ACC/SPEC/SAU/7 
Page 6  
 
 - Council of Ministers Decision No. 222 of 12.8.1422H (29 October 2001) 
(Compulsory Auto Insurance Act) 
- Royal Decree No. M/10 of 1.5.1420H ( 12 August 1999) (Law of Cooperative 
Health Insurance) 
- Royal Decree No. M/5 of 17.5.1405H (18 January 1986) (establishment of 
National Company for Co-operative Insurance) 
- Banking Control Law  
- Labour and Workmen Law, Royal Decree No. M/21 of 6.9.1389H (15 
November 1969) 
 
- GCC Documents  
- GCC Unified Economic  Agreement, signed 11 November 1981  
- Rules for the Coordination of Industrial Establishments in the Gulf 
Cooperation Council (GCC) States  
- Standard Rules for Giving Priority in Government Purchases to National 
Products and Products of National Origin  of Gulf Cooperation Council States  
- Common Customs Law of the GCC States (1999), ratified by Royal Decree 
No. M/41 of 3.11.1423H (5 January 2003) 
- Domestic Development Measures and Documents  
- Law for the Protection and Encouragement of National Industries  
- Saudi Industrial Development Fund Law 
 
- Government Procurement  
- Government Purchases Law, issued pur suant to Royal Decree No. M/14 of 
7.4.1397H (27 March 1977) 
- Grievance/Dispute Measures  
- Board of Grievances Law, issued pursuant to Royal Decree No. M/51 of 
17.1.1402H (14 November 1981) 
- Rules and Procedures of the Board of Grievances, Council of Ministers 
Resolution No. 190 of 16.11.1409H (19 June 1989)  
- Law of Arbitration, Royal Decree No. M/46 of 12.7.1403H (24 April 1983) 
- Other Measures and Documents  
- Import Statistics 
 
4. The representative of Saudi Arabia stated that, over the last 30 years, Saudi Arabia had 
become a State with a strong economy increasingly b ased on the private sector with a sophisticated 
infrastructure.  At the same time, government initia tives had been used to influence economic activity 
when necessary, in order to ensure the protection of  the Islamic values of Saudi Arabian society.  
Economic development of Saudi Arab ia had largely depended on the utili zation of its large oil and gas 
reserves.  Saudi Arabia was the largest producer of  oil in the world and one of the world's largest 
producers of natural gas.  The availability of these resources had given rise to an economy typical of  WT/ACC/SPEC/SAU/7 
 Page 7 
 
 
 oil-producing developing countries characterized by  a major concentration of exports on a single 
exhaustible resource and a high propensity to import. 
5. The representative of Saudi Arabia inform ed members of the Working Party that 
Saudi Arabia had adopted free market principles ensu ring that private enterprise would always be the 
main focus of economic activity, and had establishe d an indicative planning approach to economic 
and social development based on Islamic values a nd principles, which guide the development in a 
coordinated and balanced direc tion.  Economic indicative planning in the Kingdom provided an 
appropriate conceptual, practical and organizationa l framework for the development process, with all 
of its economic, social and institutional dimensions .  In addition to the underlying objectives of the 
preservation of Islamic values and the provision of national security, the consecutive five-year indicative plans aspired to achieve a number of ot her broad goals.  These incl uded diversification of 
the economy, particularly through laying more em phasis on industry and agriculture, and developing 
mineral resources; improvement of living standard s and quality of life; achievement of balanced 
growth throughout all regions of the Kingdom; stre ngthening the role of the private sector, through 
encouraging its participation in various socio-economic development projects; achievement of social 
and economic integration among Gulf Coopera tion Council (GCC) countries; and supporting 
economic cooperation with other countries.  Other objectives include development and sustenance of 
the country's physical infrastructure, protection of the environment and development and utilization of 
human resources through increasing the absorptive capacity  of educational institutions.  The First and 
Second Plans had laid the foundation for the Kingdom's  transformation into a modern industrialized 
State.  The Third and Fourth Plans had furthered the diversification of the economy, concentrating on 
infrastructure projects in educational, health, tr aining and other social services and encouraging the 
growth of the private non-oil sector.  The Fifth De velopment Plan had broadened the main objectives 
of the previous plans and further strengthened the pr ivate sector's role in economic diversification of 
the Kingdom’s economy.   
6. He further recalled that the Sixth Development Plan continued the main objectives of the 
previous development plans.  It set out to meet the Kingdom's development needs through maximizing the private sector's contribution in providing jobs, diversifying the economy to lessen its 
dependence on oil, building new physical infrastructure, improving social services, expanding job 
opportunities for the Saudi labour force, raisi ng the per-capita income of the population and 
maintaining a balanced budget over the Plan's period.  The development of the country's scientific and 
technological capabilities and the protection of the environment against pollution, as well as the preservation of the country's natural resources, we re also among the general objectives of the Sixth 
Plan, and later plans .  Over the past three decades, non-oil GDP  increased more than five-fold and WT/ACC/SPEC/SAU/7 
Page 8  
 
 private investment increased seven-fold.  Infant mo rtality rates dropped by over 80 per cent; the ratio 
of physicians per person improved by more than 95 per cent.  Over the same period, school enrolment 
rose from 600,000 to more than 4.7 million and Saudi Arabia had among the lowest pupil-teacher 
ratios in the world. 
7. The representative of Saudi Arabia further adde d that Saudi Arabia had also improved its 
trade with other nations of the world.  In 2004,  he reported, Saudi Arabia was the world's 26
th-largest 
importer and 16th-largest exporter, with a foreign investment balance of US$ 1.802 billion.  The 
Kingdom's gross domestic product grew from US$ 20 billion in 1970 to US$ 320 billion in 2004.  Also, he stated, Saudi Arabia maintained one of the least restrictive exchange and trade systems in the 
world.  Indeed, with limited exceptions noted belo w in this Report, Saudi Arabia only maintained 
trade restrictions for religious, health or security  reasons.  In his view, these exceptions are permitted 
under the WTO Agreements.   
8. Members of the Working Party asked Saudi Arabia to provide information regarding the most 
recent Development Plans.  In response, the repr esentative of Saudi Arabia noted that the Seventh 
Development Plan, Decree No. 126 of 28.5.1421H (29 August 2000), covered the years 2000 through 
2004.  The Plan focused on increasing the size and strength of the private sector, and developing 
Saudi Arabia's human resources.  In addition, the Plan emphasized increasing the level of efficiency 
of Saudi Arabia's industrial sector.  As with prior plans, a primary goal of the Seventh Plan had been 
to diversify as well as grow Saudi Arabia's economy. 
9. The representative of Saudi Arabia also descr ibed aspects of the Eighth Development Plan, 
covering the years 2005-2009, which was underway.  He noted that, under the Plan, Saudi Arabia 
continued to focus on higher growth rates and in creasing investment, foreign as well as domestic.  As 
with the previous Plan, Saudi Arabia continue d to develop its human resources.  The Eighth 
Development Plan emphasised committing to a long-term development strategy linked to time frames 
and quantitative objectives.  This aspect of the Plan , he said, allowed Saudi Arabia to measure its 
progress and to ensure that its policies were a ppropriate and assisted the Kingdom in achieving its 
goals. 
10. The representative of Saudi Arabia stated that  the diversification of the economy could only 
be achieved through much broader private sector par ticipation in the economy.  The private sector had 
already begun to pursue a wide range of business opportunities unrelated to government expenditures 
and this trend was expected to accelerate as pr ivate sector management, production and marketing 
capabilities strengthened and the competitive atmosphe re improved.  Institutional support for private 
sector-led growth and diversification would be provided by the Government, through liberalization  WT/ACC/SPEC/SAU/7 
 Page 9 
 
 
 and facilitation of investment and ra pid development of Saudi Arabia's  financial sector.  Saudi Arabia 
also recognized the need to build a technology base.   Whilst Saudi Arabia had kept up to date with 
global scientific and technological developments, this had largely been through the import of 
sophisticated technology owned by foreign partne rs.  Saudi Arabia still needed to improve its 
indigenous technological capabilities to the level of  that existing in developed countries.  The 
Government planned to assist through the implementation of a twenty-year national science and 
technology plan to commence with the Eighth De velopment Plan and through the expansion and 
improvement of educational courses and facilities re lated to science and technology at all levels, as 
well as improvement of the overall structural support for private sector initiatives.  In addition, Saudi Arabia was aware of the need to impart to its citizens the knowledge and skills that would 
enable them to participate effectively in all social, economic and cultural activities, as well as to 
further develop vocational and tec hnical education so that the country's skilled manpower needs could 
be met. 
11. In their opening remarks, members of the Working Party welcomed Saudi Arabia's decision 
to accede to the WTO and to implement the WTO  Agreements expeditiously through the 
establishment of institutional arrangements and the amendment and adoption of the required 
legislation and regulations.  It was noted that Saudi  Arabia had played and was expected to continue 
to play a significant role in contributing to main tain economic and financia l stability and growth, both 
in the region and globally.  Saudi Arabia's accession would reinforce the universality of the WTO and 
strengthen the multilateral trading system. 
12. The Working Party reviewed the economic polici es and foreign trade regime of Saudi Arabia 
and the possible terms of a draft Protocol of Accession.  The views expressed by members of the Working Party and the various aspects of Saudi Arab ia's foreign trade regime, and on the terms and 
conditions of Saudi Arabia's accession to the WTO, are summarized below in paragraphs 13 to 314. 
II. ECONOMIC POLICIES 
- Monetary and Fiscal Policies 
13. The representative of Saudi Arabia stated that  the Saudi Arabian Monetary Agency (SAMA) 
is charged with carrying out the Kingdom's monetary policy.  The objective of monetary policy is the 
maintenance of domestic price and exchange rate  stability.  To promote domestic price stability, 
SAMA takes measures to ensure that the growth in  domestic liquidity is broadly in line with the 
growth and availability of goods and services in th e economy and that the banking system is endowed 
with adequate liquidity so that the credit needs of  all the sectors of the economy are adequately met.  WT/ACC/SPEC/SAU/7 
Page 10  
 
 To maintain the stability of the fixed exchange rate , SAMA monitors the Riyal market to ensure its 
smooth functioning and takes corrective measures if there are any disruptive activities.  SAMA has 
been highly successful in achieving these objectives over the years.  Domestic prices have remained 
highly stable for years, with an average annual increase in the cost of living index of less than 
one per cent per annum over the last two decades.  Th e exchange rate of the Riyal vis-à-vis the U.S. 
dollar has also been maintained at Saudi Riyals (SAR) 3.75 per U.S. dollar since 1986.  The sustained 
stability in domestic prices and the exchange ra te over a prolonged period of time has greatly 
facilitated the growth of the Saudi economy. 
14. The primary objective of Saudi Arabia's fiscal policy was to encourage economic growth and 
diversification of the economy and improve livi ng standards through providi ng education and other 
public services.  Diversification of the economy woul d further integrate Saudi Arabia into the global 
economy.  He further noted that the preparations  for Saudi Arabia's accession to the WTO had further 
improved the climate for foreign and domestic investment and trade.  The major source of the Kingdom's revenues was oil, which accounted fo r roughly 80 per cent of total revenue; non-oil 
revenue consisted of corporate taxes, custom s duties and miscellaneous administrative fees.  
15. In response to requests for information on the national budget, he further noted that revenues 
for 2004 were SAR 393 billion; expenditures had been  projected to be SAR 295 billion, but, due to 
emergency expenditures, actual expenditures we re SAR 336 billion; the remaining revenue was 
allocated to retire part of the public debt.  In the 2005 budget, total revenues were projected at SAR 
280 billion and expenditures also were projected at SAR 280 billion, including SAR 75.5 billion for 
new projects.  The appropriation for the 2005 budget included appropriations for the main 
development and public service sectors as follows:  education and manpower development – SAR 
70.1 billion; health and social affairs – SAR 27.1 billion; municipality services – SAR 10.65 billion; transportation and telecommunications – SAR 8.85 billi on; and water, agriculture and infrastructure – 
SAR 19.2 billion. 
- Taxation and Zakat 
16. Some members of the Working Party requested information on how "Zakat" applied to 
Saudi Arabian citizens and how income tax applie d to foreigners.  These members noted that it 
appeared that the Zakat and income tax were applie d in such a manner that foreign investors typically 
carried a higher total tax burden than Saudi citizens.   The representative of Saudi Arabia stated that 
there was a general misunderstanding a bout Zakat and income tax.  It was not correct to say that the 
tax burden (as distinct from the nominal rate) was hi gher for foreigners than for Saudi nationals or 
Saudi companies.  The percentage of corporate in come tax applied to a non-Saudi was 20 per cent of  WT/ACC/SPEC/SAU/7 
 Page 11 
 
 
 net profit, while the percentage of Zakat may reach or even exceed 100 per cent of net profit.  Also, he 
reported, it was incorrect to say that all Saudi pe rsons are subject only to Zakat; just like non-Saudis, 
Saudis engaged in natural gas investment or oil or hydrocarbons production activities are subject to 
income tax.  A non-resident Saudi person w ho did business in the Kingdom through a permanent 
establishment and earned income from a source within  the Kingdom was subject to tax.  Zakat was a 
religious duty, and because its rate and basis of co llection was prescribed by religion, it could not be 
altered. 
17. According to the representative of Saudi Arab ia, the main features of Zakat were the 
following: 
- Zakat was applied at a flat rate of 2.5 per cent on the net worth of Saudi natural 
persons, wholly Saudi-owned companies and Saudi partners in joint ventures (except 
for rain-fed agricultural products and irri gated agricultural products, for which the 
rate was 10 per cent and 5 per cent, respectively). 
- The base for levy of Zakat, i.e., the assessable amount, was not the income or profits 
of the assessee.  It was much larger and in cluded: capital, retained earnings, reserves 
and net profits (it did not include fixed assets, investments in other companies, losses carried over from previous years and losses for the fiscal year).  There were no exemptions. 
- Zakat was payable even if the company did not make a profit. 
- Zakat was payable even if the company ceased its activities; it was non-payable only 
when the company was liquidated. 
- Non-payment of Zakat was punishable by seizure of assets and prohibiting the non-
payer from leaving Saudi Arabia. 
 
18. In contrast, he noted, income tax and corporate tax had the following features: 
- Persons subject to taxation included:  (i) shares held by non-Saudis in a company 
located in Saudi Arabia; (ii) a resident  non-Saudi natural person who does business in 
the Kingdom; (iii) a non-resident who does business in the Kingdom through a 
permanent establishment; (iv) a non-resident on other income subject to tax from sources within the Kingdom; (v) a Saudi or non-Saudi engaged in natural gas 
investment activities or oil and hydrocarbon production activities. 
- The maximum rate of corporate tax on net profit had been reduced from 45 to 
30 per cent, and now stood at a flat rate of 20 per cent, with the special exceptions 
described below, as per Council of Ministers Decision on 12.1.2004 (in contrast, Zakat was payable on net worth).  The tax base of a taxpayer engaged in natural gas 
investment activities was subject to tax at the rate of 30 per cent; internal rates of return higher that eight per cent were subject to higher taxes.  The tax base of a taxpayer engaged in oil and other hydrocarbon production is subject to tax at the rate 
of 85 per cent. 
- Income tax was payable by foreign natura l persons, foreign pa rtners and foreign 
shareholders in business entities, as described  above, on their net profit.  However, 
wages and salaries were exempt from taxation. 
- Corporate tax was payable by non-Saudi cor porations operating inside Saudi Arabia 
or both inside and outside of Saudi Arabia at the same time, as described above, 
based on: (i) the total share of foreign partne rs in the net profits of Saudi corporations WT/ACC/SPEC/SAU/7 
Page 12  
 
 (limited liability companies and joint-stock companies); and (ii) the total shares of 
foreign partners in the net profit of Saudi partnerships. 
- Unlike Zakat, corporate tax was not payable in relation to any year in which the 
company did not make a profit or was not in operation. 
- For corporate tax, there was a provision for carry forward of losses for unlimited 
number of years. 
19. Members of the Working Party thanked the re presentative of Saudi Arabia for the above 
information and requested clarification of how Za kat revenues were collected and allocated to the 
budget, in particular whether they were allocated  to the General Fund, and whether Zakat revenues 
were required to be used for particular purposes.  In response, the representative of Saudi Arabia 
provided the following information.  Zakat revenu es were earmarked for the welfare of poor and 
needy people and disbursed by the Social Welfare Organization under the Ministry of Social Affairs.  The entities subject to Zakat are Saudi indivi duals who conduct business in the Kingdom, Saudi 
companies of all types that conduct business in the Kingdom and shares of Saudis in joint companies.  
In response to a further question from a member of the Working Party, he reported that the 
Department of Zakat and Income Tax (DZIT) was responsible for collecting both Zakat and income 
tax. 
- Foreign Exchange and Payments 
20. The representative of Saudi Arabia stated th at Saudi Arabia maintained no exchange 
restrictions and imposed no trade restrictions for balance-of-payments reasons.  The exchange rate 
policy of the Kingdom had for a long time been geared  to maintaining a stable relationship with the 
U.S. dollar, which is the intervention currency.  As already mentioned, the exchange rate of the Riyal 
had been maintained at SAR 3.75 to the dollar sin ce 1986.  This had created a stable exchange rate 
environment for the private sector and had also been conducive to foreign investment. 
21. The exchange rate of the Riyal was determined  by SAMA in light of the economic, trade and 
balance of payments situation both at home a nd abroad.  Until the end of 2002, the Riyal was 
effectively (informally) anchored to the U.S. dollar,  within the framework of an official link to the 
SDR.  In pursuance of a decision taken by the GCC Heads of State in December 2001, the Riyal, 
along with other GCC currencies, has become offici ally (formally) pegged to the U.S. dollar as from 
the beginning of 2003 in preparation for the monetary union and the single currency for the GCC 
countries by the year 2010.  The choice of U.S. dollar to serve as a common denominator is based on 
the fact that the U.S. dollar is the intervention currency for all the GCC countries and their foreign 
reserves for currency cover and balance of paymen ts purposes are largely held in U.S dollars.  
Moreover, a stable relationship with the U.S. do llar is of crucial importance not only for fiscal 
management but also for the traders in their business planning.    WT/ACC/SPEC/SAU/7 
 Page 13 
 
 
 22. Since the early 1960s, when Saudi Arabia unde rtook the obligations of convertibility under 
Article VIII of the Articles of  Agreement of the IMF, the Saudi Riyal has remained fully convertible, 
with no taxes or subsidies on the purchase and sale of  foreign exchange.  He reported that currency 
can be freely purchased and sold in local banks at the official rate.  There are no restrictions on 
payments in Saudi Arabia.  Imports, exports, re mittances and capital movements from, or to, the 
Kingdom are free from restrictions.  There are also no currency controls that have a direct impact on 
imports, e.g., there are no surrender requirements, prior deposit for importation, import prepayment 
requirements or acquisition fees.  
23. He noted that Saudi Arabia was a market econom y with liberal trade and payment policies.  
Remittances by expatriate workers are also free of restrictions.  These totalled US$ 14.9 billion in 2003, equivalent to roughly 8.4 per cent of the nominal gross domestic product (GDP).  He added 
that there were no restrictions on current transfers via specific exchange controls.   
24. Saudi Arabia's balance of payments position has improved remarkably over the past few 
years.  The current account has been  in surplus since 1999.  The surp lus has risen from 0.3 per cent of 
GDP in 1999 to 13.8 per cent of GDP in 2003 and is expected to rise further in 2004.  Exports of 
goods and services during 2003 amounted to US$ 103.6 billion, approximately 48.3 per cent of GDP.  
Imports of goods and services stood at US$ 73.9 billion, or 34.5 per cent of GDP.  Over the years 1999-2003, the net foreign assets of SAMA, the central bank of the Kingdom, have increased from US$ 37.9 billion to US$ 64 billion.  This amount is sufficient to cover 10.5 months of imports of 
goods and services. 
- Competition Policy 
25. The representative of Saudi Arabia stated that , with the exception of certain sectors discussed 
below, Saudi Arabia's competition policies were b ased on free-market principles.  A Competition Law 
had been issued pursuant to Royal Decree No. M/25 of 4.5.1425H (22 June 2004), followed by 
implementing regulations.  The Law contained provisions, inter alia , on cartel and monopoly-type 
practices, on mergers and on unfair commercial practices.  In response to a question by a member of the Working Party, the representative of Saudi Ar abia reported that, although the Law is the first 
statute banning anti-competitive acts, Islamic law prohibited a number of anti-competitive practices 
under the general rule requiring fair d ealing in all commercial exchanges. WT/ACC/SPEC/SAU/7 
Page 14  
 
 - Pricing Policies 
26. Members of the Working Party requested information regarding restrictions on prices 
maintained by the Government of the Kingdom of Saudi Arabia.  In response, the representative of 
Saudi Arabia reported that prices for goods and servi ces in every sector in Saudi Arabia were freely 
determined by market forces with the exception of  the goods and services listed in Annex A of this 
Report, which were subject to price regulation with in Saudi Arabia to maintain price stability.  These 
policies were pursued to secure the needs and welf are of consumers and preserve important social 
interests of the Kingdom. 
27. The representative of Saudi Arabia further repor ted that price regulations were applied on a 
non-discriminatory basis, regardless of whether a product or service was supplied by the government or by the private sector and regardless of the nationality of the supplier.   
28. In response to a question from a member of  the Working Party, the representative of 
Saudi Arabia stated that all petroleum-based and natural gas-based products in Saudi Arabia were 
made available to all users regardless of whether th e users were Saudi or foreign owned.  He noted 
that currently domestic sales of heavy naphtha were not  subject to any discount and were priced at the 
prevailing international price.  Prices of exports of these products, he confirmed, were based entirely 
on international market conditions.   
29. Some members of the Working Party requested information on the pricing of certain 
feedstock, in particular, methane, ethane, butane, pr opane and natural gas or liquefied petroleum gas.  
In response, the representative of Saudi Arabia noted  that pricing of natural gas (including methane 
and ethane) was quite different from the pricing of natural gas liquids (NGLs) (butane, propane and 
natural gasoline).  Natural gas was not sold for expor t due to the high costs of liquefying, transporting 
and re-gasifying such gases, and therefore had no inte rnational reference price in the Gulf region.  
Previously, natural gas had been burnt as a waste pr oduct, but was later collected and made available 
to all interested users on a non-discriminatory basi s (whether Saudi or non-Saudi), currently at a 
regulated price of 281 Halalas per million BTU (US$  0.75 per million BTU).  This decision was taken 
based on a combination of commercial reasons a nd environmental concerns.  Rather than burn 
valuable natural resources, Saudi Arabia had take n steps to conserve and exploit those resources 
consistent with WTO disciplines.  Natural gas was used by many sectors, including power companies, 
desalination plants, cement manufactures and petrochemical plants. 
30. The representative of Saudi Arabia originally had noted that Council of Ministers Resolution 
No. 68 of 29.5.1412H (1 December 1991) set NGL prices 30 per cent lower than the export prices  WT/ACC/SPEC/SAU/7 
 Page 15 
 
 
 charged for those products.  At a later stage, th e representative of Saudi Arabia confirmed that 
Communication No. 19756/R of 21.11.1422H (4 Febr uary 2002) transmitted Council of Ministers 
Resolution No. 260 of 23.10.1422H (7 January 2002), which cancelled Council of Ministers 
Resolution No. 68.  He confirmed that Council of Ministers Resolution No. 260 served as the basis for applying commercial pricing to NGLs used as feedstoc k in Saudi Arabia and required that pricing of 
NGLs supplied to domestic users be commercially based; Decision No. 15 of the Supreme Council for 
Petroleum Affairs implemented Council of Minist ers Resolution No. 260 and reflected a negotiated 
pricing structure that ensured the full recovery of production costs and a reasonable profit.  Under 
Council of Ministers Resolution No. 260, NGLs were av ailable to all users within Saudi Arabia on a 
non-discriminatory basis, whether Saudi or non-Saudi.  
31. The current commercial pricing structure for NGL sales in Saudi Arabia as set out under 
Council of Ministers Resolution No. 260 and Deci sion No. 15 was negotiated between producer and 
consumers in Saudi Arabia and applied to all NGL users in Saudi Arabia on a non-discriminatory 
basis.  At the request of consumers in Saudi Ar abia, the pricing structure was formalized through 
Council of Ministers Resolution No. 260 and Decision No. 15, which set out a detailed formula for 
ensuring that domestic NGL prices are based on in ternational market prices, adjusted for the 
following cost-based and other commercial considerations: 
- Cost savings in infrastructure
 – exporting NGLs requires large investments in and 
maintenance of refrigeration, storage and te rminal facilities.  Selling to local users 
simply requires transferring the NGLs from lo cal gas recovery plants by pipeline.  
Expenditures in the capital and operating costs of export-related facilities are 
significant.  Lower domestic prices in Saudi Arabia reflect substantial cost savings 
that permit the producer to recover the full cost of production.  
- Cost savings in marketing  – export sales require a sizeable marketing staff both in 
Saudi Arabia and in foreign markets.  Marketing costs are not incurred on domestic 
sales because domestic customers are comm itted to long-term off-take agreements 
based on their proximity to NGL supplies and access to local supply infrastructure.  
- Commercial advantage associated with long-term contracts  – domestic sales reflect 
additional commercial value because they ar e based on stable, long-term contracts.  
These long-term contracts also reduce uncerta inty and transaction maintenance costs.  
Export sales contracts lack the permanen cy of domestic sales because, unlike 
domestic customers, foreign buyers can easily  change suppliers located in different 
countries.  The lack of long-term contracts for export sales also justifies a significant price-cushion to reduce the seller’s business risk.  
- Commercial value of reduced volatility
 – the export market for NGLs is based on 
their use, principally in East Asia, as fuel  rather than as a petrochemical feedstock.  
The export market is therefore characterized by large seasonal demand swings, with 
winter fuel demand (outside Saudi Arabia) much higher than summer demand.  These 
variations in demand cause wide seasonal price swings.  The domestic demand for WT/ACC/SPEC/SAU/7 
Page 16  
 
 NGLs, in contrast, is focused on industrial feedstock consumption and therefore is 
stable throughout the year. 
- Commercial value of large-volume purchases
 – Domestic purchasers commit to much 
larger volumes over the life of long-term contracts than do purchasers under spot or 
short-term export contracts.  Customers who commit to large-volume purchases 
expect prices to reflect their commitment.   
32. The representative of Saudi Arabia explained th at due to these market differences, local NGL 
sales have a higher relative commercial value to the producer than sales to seasonal customers in 
export markets that purchase NGLs for uses such as fu el, with seasonal swings in demand.  He added 
that producers consider NGLs sold to "industrial" versus "seasonal" customers as different products 
for purposes of pricing, marketing and corporate planning in general.  Since NGLs are produced year-round as a by-product of oil and gas production and cannot be stored for long periods, producers of 
NGLs place a high commercial value on long-term "off-take agreements" under which consumers 
commit to buy specific quantities of NGLs year-round.  Although shorter term contracts with, or 
"spot" sales to, seasonal consumers that purchase NGLs for heating or industrial purposes command different prices on international markets dependi ng on seasonal demand, such arrangements are much 
more variable and therefore have lower relative va lue to larger producers who must secure off-take for 
year-round sales.  In this sense, the export price of NGLs does not represent the commercial value of 
sales to local consumers.  The commercially negotia ted sale price of NGLs in Saudi Arabia reflects 
the market value to producers of local sales and en sured the full recovery of production costs and a 
reasonable profit.  The representative of Saudi Arabia  further explained that it was not appropriate, in 
the case of Saudi Arabian NGL supply, to address cost s associated with investment in the exploration 
or development of oil and gas fields, as Saudi Arabian NGLs were, and would continue to be, 
produced only as by-products of oil and gas production rather than as a primary product. 
33. In response to concerns expressed by a member  of the Working Party, the representative of 
Saudi Arabia stated that producers/distributors of  NGLs in Saudi Arabia would operate, within the 
relevant regulatory framework, on the basis of nor mal commercial considerations, based on the full 
recovery of costs and a reasonable profit.  He conf irmed that his Government's policy was to ensure 
that these economic operators, in respect of their supplies of NGLs to industrial users, would fully 
recover their production and investment costs (fractionation, overheads, financing charges, 
transportation, maintenance and upgrade of fractiona tion and distribution infrastructure) and make a 
profit in the ordinary course of business.  The Working Party took note of these commitments. 
34. Some members of the Working Party requested information on the pricing of pharmaceuticals 
in Saudi Arabia.  It was these members’ understanding that the Government set retail prices for pharmaceuticals and established retail and wholesale ma rgins through law.  They requested additional  WT/ACC/SPEC/SAU/7 
 Page 17 
 
 
 information from the representative of Saudi Arabia on pharmaceutical pricing practices, in particular 
how the Government would ensure that its prici ng policies would not discriminate against imported 
products.  In addition, members sought informati on on where price control information was published 
(now and in the future), and how Saudi Arabia ma de proposals for establishment or change of prices 
available for public comment prior to implementation.   
35. The representative of Saudi Arabia confirmed that pharmaceutical products were subject to 
price and profit regulation in the Kingdom.  The Pharmacy Law, issued under Royal Decree No. M/18 
of 18.3.1398H (25 February 1978), established rules for registration of pharmaceutical products and 
required that drugs be priced before their sale in retail pharmacies.  Under this Royal Decree, 
pharmaceutical wholesalers and retailers were allowe d a 10, 15 or 20 per cent profit margin, as set out 
in Annex A, depending on the export price (CIF) to Saudi Arabia.  He noted that establishing a base 
price was currently the last step in the regist ration process for pharmaceuticals.  After pharmaceutical 
products were registered to ensure their safety a nd quality, registered products were imported without 
restrictions in the form of import licenses or quotas.  The representative of Saudi Arabia confirmed that locally manufactured pharmaceutical products we re subject to the same registration processes, but 
received an additional 10 per cent margin on pricing.  He confirmed that this additional margin would 
be eliminated prior to accession.  The Working Party took note of this commitment. 
36. In reply to a question from the member of th e Working Party, the representative of Saudi 
Arabia stated that base price for imported pharmaceu ticals is determined taking into account: (1) the 
suggested CIF price for export to Saudi Arabia; (2) export prices to other countries; and (3) 
therapeutic comparison of similar products.  Base prices of domestic pharmaceuticals are based on the registered innovated imported products since mo st of the domestically produced products are 
generics.  Innovated products manufactured locally under licence agreements are priced similar to 
imported products.  Form 30 is used to get info rmation on prices of pharmaceuticals sold to other 
countries.  Local manufacturers are requested to submit Form 30 for the new innovated products 
produced locally through licence agreements.  He added that proposals from various Ministries to 
amend the price control setting process had not been  adopted.  The representative of Saudi Arabia 
further stated that the Ministry of Health and ot her agencies participating in the price control and 
registration process would comply with Saudi Ar abia’s commitments on transparency and would 
provide adequate opportunities to interested parti es to become familiar with and provide comments on 
draft proposals.  The Working Party took note of this commitment. 
37. The
 representative of Saudi Arabia confirmed th at the prices of goods and services listed in 
Annex A were the only ones currently subject to State price or profit control.  He also confirmed that WT/ACC/SPEC/SAU/7 
Page 18  
 
 from the date of accession Saudi Arabia would apply its price regulations and profit controls in a 
WTO-consistent fashion, taking into account th e interests of exporting WTO Members as provided 
for in Article III:9 of the GATT 1994 and in Artic le VIII of the General Agreement on Trade in 
Services (GATS).  He also confirmed that Saudi Ar abia would publish the price and profit controls of 
goods and services listed in Annex A, as well as any modi fications or additions, in the official gazette, 
the Umm al-Qura , or in another official publication or website accessible to the public, in advance of 
their implementation.  The Working Party took note of these commitments. 
- Privatisation and Enterprises that are State-Owned or –Controlled, or with Special or 
Exclusive Privileges  
38. The representative of Saudi Arabia stated that a very important component of the Economic 
Reform Program of the Kingdom of Saudi Arabia (circulated to the members of the Working Party in 
WT/ACC/SAU/54 (4 April 2003)) was privatisation.  An  ambitious privatisation strategy was issued 
by the Supreme Economic Council Decision No. 1/ 23 of 23.3.1423H (4 June 2002), to ensure a 
continued increase in the share of the private sector  and to expand its partic ipation in the national 
economy.  This would be achieved by adopting th e best available modality including transferring 
certain types of economic activity to the private sector, enhancing the participation of the private 
sector in economic development and enabling it to ca rry out its investment and financing role in 
accordance with the national development plans.   The Council of Ministers had approved the 
privatisation of 20 state-owned utilities, economic ac tivities and services, on the basis of the definition 
of "privatisation" in Saudi Arabia's Privati sation Strategy approved by the Supreme Economic 
Council ("Privatisation is the process of transferri ng ownership or management of public enterprises, 
projects, and services to the private sector, relying on market mechanisms and competition, through a number of methods, including contracts for managing,  operating, leasing, financing or selling all or 
part of the government's assets to the private sector").  Although the percentages of private ownership 
had not been set, the end result of the process, in each case, would be to ensure a continued increase in 
the share of the private sector and to expand its pa rticipation in the national economy by adopting the 
best available modality, including transferring certa in types of economic activities to the private 
sector.  In reply to a question from a member of th e Working Party, the representative of Saudi Arabia 
confirmed that leasing constituted privatisation.  The 20 state-owned utilities, economic activities and 
services subject to privatisation were:  
1. Water and sewage:  Efforts were under way to determine the best type of management 
contracts and to attract new investors in the field.  In Jeddah Industrial City, a build-operate-transfer (BOT) contract was granted to  a private entity to rehabilitate, maintain 
and expand a waste water treatment facility.  WT/ACC/SPEC/SAU/7 
 Page 19 
 
 
 2. Desalination:  Studies were being conducte d to explore how best to proceed with 
privatisation of desalination activity.  The government was encouraging new 
investment in the field.  
3. Telecommunications:  The government already had sold 30 per cent of its share in 
Saudi Telecom Co. to private owners. 
4. Aviation services:  Studies were being conduc ted at Saudi Arabian Airlines to explore 
how best to proceed with privatisation in this field. 
5. Railways:  Studies were being conducte d at the Saudi Railways Organization to 
explore how best to proceed with privatisation in this area. 
6. Roads, including management, operation,  maintenance and construction:  The 
government was encouraging private sector investment in managing and operating 
existing roads.  Studies are underway to explore best management modules for constructing new roads by the private sector. 
7. Airport services:  BOT contracts already had been granted to the private sector to 
rehabilitate and operate f acilities at Saudi airports. 
8. Postal services:  In January 2003, 100 private sector agencies were set up to handle 
postal services.  The government planned to open this sector to competition. 
9. Grain silos and flour mills:  Studies were  being conducted at GSFMO to explore how 
best to proceed with privatisation in this area. 
10. Seaport services:  A number of BOT contracts had been granted to the private sector to 
manage, rehabilitate and provi de services at Saudi ports. 
11. Services for industrial cities:  A joint-st ock company had been established in the twin 
industrial cities of Jubail a nd Yanbu to operate, maintain, manage and expand the tasks 
of infrastructure utilities as part of the privatisation program. 
12. Government shares in corporations such as SABIC and the Saudi Telecommunications 
Company:  Progress is discussed in paragraphs 44 and 51, below. 
13. Government shares in joint investment co mpanies with Arab and Islamic countries:  
Studies are being conducted regarding how best  to issue shares of these companies to 
the public.   
14. Government-owned hotels:  A committee had been formed to establish the value of the 
total assets of government-owned hotels and to recommend the best way of selling government ownership in those hotels. 
15. Sports clubs:  Studies were being conducte d regarding sports clubs to determine the 
best approach of privatizing this area. 
16. Municipal services, including slaughterhouses and waste removal:  Studies were 
underway to structure the privatisation of municipal services. 
17. Educational services, including school cons truction and transportation and recruitment 
of Saudis into the private sector:  The education sector already had received 
applications from the private sector to finance the provision of higher-educational services under various management contracts. 
18. Social services:  Privatisation of these services is underway. 19. Agricultural services, such as quarantine and operation of laboratories and clinics:  
Studies were being conducted regarding ag riculture services such as quarantine and 
clinics to investigate the best privatisation models in this field. 
20. Health services, such as operation of health  facilities and patient transportation:  The 
management and operation of some hospitals  already had been assumed by the private 
sector on the basis of management contract models. 
39. In response to questions from members of the Working Party, the representative of 
Saudi Arabia stated that the legal basis for the privatisation program was the Council of Ministers WT/ACC/SPEC/SAU/7 
Page 20  
 
 Resolution No. 60 of 1.4.1418H (5 August 1997).  Acco rding to this Resolution, the objectives of the 
privatisation strategy were as follows: 
i. Improving the efficiency of the nati onal economy and enhancing its competitive 
ability to meet the challenges of regional and international competition. 
ii. Encouraging private sector investment a nd effective participation in the national 
economy, and increasing its share of domestic  production to achieve growth in the 
national economy. 
iii. Enlarging the ownership of productive assets by Saudi citizens. iv. Encouraging domestic and foreign capital to invest locally. 
v. Increasing employment opportunities, optimizing the use of the national work force, 
and ensuring the continued equitable increase of individual income. 
vi. Providing services to citizens and investors in a timely and cost-efficient manner. vii. Rationalizing public expenditure and reducing the burden on the government budget 
by giving the private sector opportunities to finance, operate, and maintain certain 
services that it was able to provide. 
viii. Increasing government revenues from retu rns on participation in activities to be 
transferred to the private sector, and from financing compensation obtained, for example, from granting concessions and from the proceeds of the sale of part of government shares. 
40. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the privatisation strategy and program, referred to in the preceding paragraphs, were 
complementary.  They referred to the objectives, scope and modalities of privatisation.  The Council 
of Ministers issued a list of activities to be pr ivatised, and the Supreme Economic Council developed 
a strategic plan and timetable for that purpose. 
41. According to Council of Ministers Resoluti on No. 257 of 11.11.1421H (5 February 2001), the 
Supreme Economic Council of Saudi Arabia was r esponsible for supervising the privatisation 
program and monitoring its implementation.  In r esponse to a question from a member of the Working 
Party, the representative of Saudi Arabia stated that  a foreign entity could participate as a "strategic 
partner" and take equity par ticipation through a Saudi limited liability company, but could not 
otherwise directly purchase shares of state-owned en terprises subject to privatisation.  He further 
stated that objectives (iii) and (iv), above, were comp lementary and not mutually  exclusive.  He added 
that according to the Privatisation Strategy issued by Council of Ministers Decision No. 219 of 6.9.1423H (11 November 2002), its Fourth Objec tive specifies the polici es necessary to encourage 
domestic and foreign capital investment in privatised enterprises. 
42. He further noted that the basic principles that were taken into consideration when 
implementing the privatisation process were the need  for disclosure and transparency, the need for 
expeditious implementation, the need to change the management pattern and the need to create a 
regulatory framework for privatised sectors.  He further noted that according to the Privatisation  WT/ACC/SPEC/SAU/7 
 Page 21 
 
 
 Strategy, the criteria for determining priorities in selecting enterprises to be privatised were based on 
the positive effect on the national economy, the readiness of the enterprise for privatisation, the social 
benefits of privatizing the enterprise, the in adequacies of the services provided by the public 
enterprises, and the absorptive capacity of the capital market. 
43. The representative of Saudi Arabia stated that  the following implementation steps had been 
completed to date: 
i. Tasks related to the management, operati on and maintenance of port berths, as well as 
the provision of associated equipment, had been assigned to the private sector in accordance with Royal Decree No. 7-B-16941 of 6.11.1417H (15 March 1997), 
which assigned to the private sector a greater role in the management and operation 
of ports, and called for a review of organi zational structures and related procedures, a 
feasibility study on establishing free trade areas at the ports and the linking of the two 
ports of Jeddah and Dammam by a railroad. 
ii. Efforts are underway to attract private-sector investment in a North-South railroad 
connection to increase Saudi Arabia's ab ility to develop its mineral resources. 
iii. The education sector received applicati ons from the private sector to finance the 
construction of schools and to particip ate in providing higher education services 
through private colleges. 
iv. Saudi Arabia has announced that it will privatise Saudi Post.  Competition will be 
allowed in this sector. 
v. Council of Ministers Resolution No . 169 of 11.8.1419H (30 November 1998) 
approved the restructuring of the electricity sector.  Initial investments are to be made within the next few years. 
vi. A Saudi joint-stock utility company had been established in the twin industrial cities 
of Jubail and Yanbu to operate, mainta in, manage and expand the tasks of 
infrastructure utilities as part of the privatisation program. 
vii. The Saudi Telecommunications Comp any was established as a business-oriented 
stock company providing all telecommunications services previously provided by the Ministry of Post, Telephone and Telegra ph (MOPTT).  In 2002, a 30 per cent stake 
was sold to Saudi nationals in the private sector. 
viii. In Jeddah Industrial City, a concession st ructured on a BOT (build-operate-transfer) 
basis was granted to a private entity to rehabilitate, maintain and expand a waste-
water treatment facility.  This was completed in March 2002. 
ix. In Jubail, a pilot concession on a build, re novate and transfer basis was being pursued 
as a part of a joint venture with a salt water concession company.  This model will be 
used for future desalinization plants. 
 
44. The representative of Saudi Arabia gave th e following information on enterprises in the 
Kingdom that are state-owned or controlled, and en terprises with special or exclusive privileges: 
i. Saudi Arabian Basic Industries Corporation (SABIC)
:  
Established in 1976, SABIC remained the main petrochemical producer in Saudi Arabia and 
the major catalyst producer for a number of downstream petrochemical products.  SABIC is the largest non-oil company in the Middle East, with its industrial complexes operated by 16 WT/ACC/SPEC/SAU/7 
Page 22  
 
 affiliates.  In 2002, SABIC’s production capacity reached over 40 million metric tons.  
SABIC is also a producer of methanol and MTBE.  Eight of SABIC’s production companies are joint venture partnerships with intern ational companies, including such firms as 
ExxonMobil, Shell Oil, Hoechst-Celanese and Duck  Energy.  SABIC is a partner in three 
joint ventures in Bahrain and has two manufactur ing plants in Germany and Holland.  SABIC 
has an ownership interest in the Saudi Arabia n Fertilizer Company, which is an exporter of 
urea, granular fertilizer and urea fertilizer, and is 57 per cent privately owned.  SABIC also 
fully owns Saudi Iron & Steel Company (Hadeed) which is engaged in the manufacture of a variety of steel products.  SABIC’s paid-up capital is SAR 20.0 billion. 
Seventy per cent of SABIC is owned by th e Government; the remaining 30 per cent is 
privatised.  The company has been identified for further privatisation, but there is no 
timetable over which privatisation would occur. 
The Government appoints the Chairman of the Board, the CEO and three other Board 
Members out of a total of seven.  The other two Board Members represent the private sector and are nominated and selected by the sharehol ders’ general meeting.  The Government is 
represented on the Board, but does not play any role in setting company policy or in making 
operational decisions.   
SABIC conducts its business based on commercial considerations.  It does not enjoy any 
special or exclusive privileges.  There are no legal impediments to competition with SABIC. 
ii. Saudi Telecom Company (STC)
: 
Saudi Telecom Company had been established following the decision of the Council of 
Ministers to transfer the telecommunication division, then operated by the MOPTT, to a 
public joint-stock company.  STC had transformed itself, in a relatively short time, into one of 
the most technically advanced telecommunica tion companies in the Middle East region, 
offering a comprehensive range of services and products that matched other major 
international telecommunication companies.  
Thirty per cent of STC shareholding comprising 90 million shares of SAR 50.00 each has 
already been sold to the general public (20 pe r cent) and the General Organization for Social 
Insurance (GOSI) and Pension Fund (10 per cen t).  STC’s paid-up capital amounts to SAR 15 
billion.  The Government owns 70 per cent of STC shares.  There is no timetable over which 
further privatisation would occur. 
The Board of Directors of STC is headed by a representative from the private sector.  Five of 
nine Directors are government officials, three are from the private sector and one is a member 
of the Shoura Council.  The Government does not  play any role in setting company policy or 
in making operational decisions.  STC conducts its business based on commercial 
considerations.  The representative noted that  after 2006 no legal impediments to competition 
with STC will remain as per Saudi Arabia’s Schedule of Specific Commitments. 
 
iii. Saudi Electricity Company (SEC) : 
The Saudi Electricity Company, a Saudi public joint-stock company, was incorporated by 
Royal Decree M/16 of 6.9.1420H (14 December 1999) by merging all the electric power utilities companies and the General Electricity Corporation (100 per cent owned by the government) and its regional projects of several  Government controlled regional electricity 
corporations into one entity that commenced operation on 5 April 2000.  Its objectives, as set 
forth in its articles of incorporation, include electric power services in Saudi Arabia;  WT/ACC/SPEC/SAU/7 
 Page 23 
 
 
 investment in electric power projects within and outside Saudi Arabia; import and export of 
electric power across Saudi Arabia’s borders; investment in projects for supply of fuel to its wholly or partially owned subsidiaries and carrying out and support of research for service 
enhancement, power conservation, performan ce upgrade, environment protection and cost 
reduction.  
About 19 per cent and 7 per cent of the company’ s shareholding is owned by private investors 
and Saudi Aramco respectively.  The paid-up capital amounts to SAR 41.7 billion.  About 74 per cent of shares are held by the Government.  
The company was identified for privatisation on 11 November 2002, but no timetable has 
been established over which privatisation would occur. 
The Government appoints the Chairman of the Board of SEC, who is the Minister of Water 
and Electricity.  Of the remaining eleven Directors, six are from the private sector and five are government officials.  The Ministry of Water a nd Electricity is not responsible for regulating 
SEC.  The regulating authority for SEC, the El ectricity and Cogeneration Authority (ECRA), 
is not represented on the Board of SEC.  The Government does not play any role in the setting 
company policy or in making operational decisions.  
SEC conducts its business based on commercial cons iderations.  It does not enjoy any special 
or exclusive privileges.  There are no legal impediments to competition with SEC. 
iv. National Commercial Bank (NCB)
: 
The National Commercial Bank is a Saudi closed  joint-stock company formed pursuant to 
Royal Decree No. M/19 on 31 March 1997.  The month of July 1997 had been determined to 
be the effective date of the Bank’s conversion from general partnership to Saudi joint-stock 
company.   
The Bank operates through its 245 branches in  Saudi Arabia and two overseas branches 
(Lebanon & Bahrain).  The objective of the Bank is to provide a full range of banking 
services, including Islamic financing projects.  The Bank’s paid-up capital stood at SAR 6.0 
billion. 
The Government owned 69.30 per cent of the st ock of NCB, while the remaining stock is 
owned privately. 
The company was identified for further privatisa tion, but a timetable over which privatisation 
would occur has not been established. 
The Chairman of the Board of Directors is from the private sector.  All Board Members, 
including the Chairman, are elected by the shareholders.  Two out of a total of nine Directors 
are government officials.  The Government does not play a role in setting company policy or 
in making operational decisions.  NCB does not en joy any special or exclusive privileges, and 
there are no legal impediments to competition w ith this company.  NCB conducts its business 
based on commercial considerations.   
v. Saudi Real Estate Company (SREC) : 
Established in 1976, the SREC has a paid-up cap ital of SAR 600 million.  It is 64.60 per cent 
owned by the Government (through the Public Investment Fund).  The company’s operations 
and functions include: WT/ACC/SPEC/SAU/7 
Page 24  
 
 - ownership development of lands; 
- construction of residential and comme rcial properties for sale or rent; 
- management of real estate owned by the company or others; 
- purchase and/or production of building materials and equipment for sale or rent.  
The Government appoints the Chairman of the Board of Directors of SREC.  It appoints only 
one of a total of eight Board Members.  It does not play any role in setting company policy or 
in making operational decisions.    
SREC conducts its business on a commercial basis, and it does not enjoy any special or 
exclusive privileges.  There are no legal impediments to competition with SREC. 
vi. Saudi Arabian Oil Company (Saudi Aramco)
: 
The Saudi Arabian Oil Company (Saudi Aramco) is a State-owned company established by 
Royal Decree in 1988.  The company conducts its activities on a commercial basis subject to 
government regulations, including those relate d to the exploitation of national natural 
resources.  The objective and purpose of Saudi Ar amco is the exploitation of crude oil and 
natural gas, including their derivative products .  Saudi Aramco is the sole concessionaire 
producing crude oil in Saudi Arabia with the ex ception of one enterprise in the Saudi Arabia-
Kuwait Divided Zone.  Saudi Aramco produced over 95 per cent, by both value and volume, 
of the crude oil exported from Saudi Arabia and is the only supplier of crude oil for domestic 
refineries.  Saudi Aramco is not the sole concessionaire in the natural gas sector and significant investments by foreign investors relating to the upstream development of non-
associated natural gas have been approved and are underway. 
 
Saudi Aramco sells crude oil to domestic refine ries, joint venture refineries abroad, and other 
foreign refineries.  The company also sells in Saudi Arabia the output of domestic refineries 
and shares in the marketing of the output fro m two refineries operated with joint venture 
partners.  Although owned by the government , Saudi Aramco had always been run by 
independent management and Board of Directors. 
 In its purchases, the company follows market -based procurement policies consistent with 
customary business practices.  According to Saud i Aramco’s official procurement policies, its 
major contracting objectives are completion of work on schedule, conformance with 
demanding technical standards and lowest overa ll cost to Saudi Aramco.  Similar to the 
practices of international oil companies of WTO Members, Saudi Aramco encourages the 
development of a strong, broad-based local contractor community in its area of operation.  To meet these objectives, Saudi Aramco conduc ts its purchasing programs in an equitable 
manner and maintains an environment intende d to attract highly qualified, competitive 
contractors.  The representative of Saudi Arabia confirmed that Saudi Aramco’s procurement 
procedures afforded full opportunity for all qualified suppliers of goods and services of WTO 
Member countries to compete for participati on in competitive bidding.  The company selects 
the most technically and financially qualified contractor whose bid represented the least 
overall cost to Saudi Aramco. 
 Saudi Aramco is wholly-owned by the Government.  The Chairman of the Board of Directors 
(the Minister of Petroleum and Mineral Res ources) and three of the remaining eleven 
Directors are Government officials, four are members of the company’s management and four are from the private sector, including three non-Saudi nationals.  Although owned by the Government, Saudi Aramco is r un by independent management and Board of Directors.  The 
Government does not play any role in setting company policy or in making operational 
decisions.  WT/ACC/SPEC/SAU/7 
 Page 25 
 
 
  
Saudi Aramco conducts its business based on comme rcial considerations.  It enjoys certain 
concessionary rights and privileges with respect to the production of crude oil, as well as certain exclusive rights and privileges in the gas sector pursuant to Council of Ministers 
Resolution No. 163 of 20.6.1424H (18 August 2003). 
 
vii. Saudi Arabian Mining Co. (Ma'aden)
: 
 Ma'aden was established in 1997 as a closed join t-stock company, owned by the Government 
with a capital of SAR 4000 million, which would be privatised gradually.  It has no monopoly 
over mineral rights.  The company had undertak en several mining activities related to all 
stages of the mining industry, including devel opment and improvement of the mining industry 
and products as well as related industries.  The company exports gold, copper and zinc, but it 
does not enjoy a monopoly; exporters in the private sector are allowed to export these 
products.   
Ma’aden is 100 per cent owned by the Government.  Ma’aden is subject to privatisation under 
the Saudi Privatisation Strategy which was a pproved by the Council of Ministers in 2004.  
The Precious and Base Metals sector is being prepared for privatisation in 2006.  The 
Phosphate, Bauxite and Industr ial Minerals sectors would be privatised in the 2008-2010 
period. 
Ma’aden is registered as a commercial enterpri se with full management powers given to the 
Board of Directors.  The Minister of Petroleum and Mineral Resources is the Chairman of the Board of Directors .  Of the remaining eight Directors, three are officials of the Ministry of 
Petroleum and Mineral Resources, one is the Pr esident of Ma’aden, one is from the Saudi 
Arabian Monetary Agency (SAMA) and three ar e from the private sector.  The Ministry of 
Petroleum and Mineral Resources regulated the company, but the policy making and operations of the company are the sole res ponsibility of the Board.  The articles of 
association, including privatisation directives, are issued by the Government.   
Ma’aden’s by-laws commit it to operate based on commercial considerations.  Ma’aden does 
not enjoy any special or exclusive privile ges and there are no legal impediments to 
competition with this company.  A new Mini ng Law has been issued which has opened the 
mining sector to the local private sector and fore ign companies.  The law did not discriminate 
between local and foreign applicants.  Appli cants are treated on a first-come-first-served 
basis.    
viii. Saudi Arabian Airlines (SAUDIA)
: 
SAUDIA is 100 per cent owned by the Saudi Gove rnment.  The responsible ministry is the 
Ministry of Defence and Civil Aviation.  The first steps to privatise SAUDIA were taken in 
1994, when SAUDIA laid the groundwork to allow it to operate in accordance with 
commercial principles in order to meet the ch allenges of competition in the market.  SAUDIA 
restructured its administrative and executive sectors to reflect commercial principles.  
SAUDIA was subject to privatisation pursuant to the Privatisation Strategy.  The privatisation 
schedule has not yet been set, although the genera l objective is to carry out initial steps in a 
three to five-year period.  Separate privati sation timetables are being considered for core 
operations versus ancillary operations su ch as catering and ground transportation. 
SAUDIA is a public and independent organisati on operating under its by-laws and with legal 
capacity.  The company is managed by a Board of Directors, which is presided over by the WT/ACC/SPEC/SAU/7 
Page 26  
 
 Minister of Defence and Aviation and composed  of Board Members appointed by resolution 
of the Council of Ministers.  The Director General is appointed by a decision of the Council of Ministers.  The Board of Directors manages and controls SAUDIA’s business affairs and sets its general policies, independent of the ad ministrative and financial regulations followed 
by government departments.  Of the nine Board Members, three are from the private sector 
and six are from the Government.  The Board of Directors is composed of nine members, 
which include the company’s regulating authority, the Ministry of Defence and Aviation.  SAUDIA carries out all activities relating to air, commercial and civil transport, inside and 
outside of Saudi Arabia.  There are no other factors that indicated government control of the enterprise.  
ix. Saline Water Conversion Corporation (SWCC)
: 
SWCC is 100 per cent owned by the Government .  SWCC is responsible for all government 
desalination plants located on the east and west  costal areas (Red Sea and Arabian Gulf).  
Under SWCC, Saudi Arabia's desalinated wate r output had surpassed one billion cubic meters 
in 2002.  The Kingdom's desalination plants produce and provide drinking water to major 
urban areas through over 2,000 kilometres of pipelines. 
SWCC was subject to privatisation under the Pr ivatisation Strategy.  The company conducted 
an internal study concerning privatisation options and timetables.  Once completed, the study was submitted to the Ministry of Water and El ectricity for review and approval.  It was 
SWCC’s expectation that privatisation would be undertaken within approximately three years. 
The Government appoints all seven of the memb ers of the Board of Directors, including the 
Chairman, all of whom are from governmental ministries.  The Minister of Water and 
Electricity is the Chairman of SWCC Board of directors.  The Board of SWCC is responsible for setting the general policies of SWCC.  Ho wever, operational decisions are made by 
SWCC management.  The Ministry of Water and Electricity and the Ministry of Finance provide some regulatory and procedural oversight of the company.   
SWCC delivers desalinated water to the various  local water authorities, but does not itself 
distribute, purchase, sell or receive payment of the water.  SWCC is an independent entity under the jurisdiction of the Ministry of Water and Electricity.  SWCC’s funding comes solely from the Government with a small cont ribution from sales of excess electricity to the 
Saudi Electricity Company.  SWCC is a govern mental organization and did not operate on a 
commercial basis.  SWCC does not enjoy an ex clusive concession in this sector, and does not 
enjoy any other special rights or privileges.   In its purchases, SWCC follows market-based 
procurement policies consistent with customary business practices. 
x. Saudi Railways Organization (SRO)
: 
Saudi Railways Organization (SRO) is an autonomous State agency under the jurisdiction of 
the Ministry of Transportation.  The total netw ork consists of 1018 kilometres of railroad line.  
SRO is subject to privatisation under the Privati sation Strategy.  The company is in the early 
stages of a process designed to attract privat e sector developers who will build, own and 
operate both existing rail lines and newly constr ucted rail lines within Saudi Arabia.  The 
company is scheduled to hold preliminary meetings with potential bidders for these projects.  
The SRO was established by Royal Decree M/3 of 22.1.1386H (13 May 1966), as a wholly 
owned entity of the Government of Saudi Arab ia.  The SRO budget is covered by the General 
Budget of the Government of Saudi Arabia.  WT/ACC/SPEC/SAU/7 
 Page 27 
 
 
 The Supreme Economic Council of the Kingdom of Saudi Arabia issued Resolution No. 23/3 
on 23.3.1423H (5 June 2002), to upgrade and expa nd the existing railway network in Saudi 
Arabia through the construction of the Saudi  Landbridge and the Ma kkah Madinah Railway 
link on a Build, Operate and Transfer basis.  SR O was appointed to this project, according to 
the abovementioned Resolution as the Executing Agent. 
The Government appoints all six Directors, including the Chairman of the Board, who is the 
Minister of Transportation.  The implementing regulation of Royal Decree M/3 of 22.1.1386H (13 May 1966) named the Minister of Transport as the Chairman of the Board of Directors of SRO, and stipulated the structure of the Board of Directors to be composed of, 
predominantly, senior representatives of various Saudi Arabian Ministries.  Of the six 
Directors, four representatives are appointed by the Ministry of Finance, Ministry of 
Commerce and Industry, Ministry of Petrol eum and Mineral Resources and Ministry of 
Transportation.  The Ministries of Finance a nd Commerce and Industry have some regulatory 
oversight of the company. 
SRO’s policies are set by its Board of Directors.  The company’s operational decisions are 
made by the President of SRO.  In certain cases, the President obtains the approval of the 
SRO Board of Directors. 
In accordance with Royal Decree M/3 of 22.1. 1386H (13 May 1966), SRO is responsible for 
the implementation and operation of the Railways projects in Saudi Arabia, and projects that are directly related to transportation via the Railways network. 
The statutes and by-laws of the SRO empower the organization to enter into contracts and 
undertake the procurement of goods and services for the realization of its declared objectives 
and the development of its operation and activities. 
SRO conducts its business based on commercial considerations.  As provided under Royal 
Decree M/3, SRO is the sole agency in charge of railway transport in Saudi Arabia and all 
that relates to the operation of railway transport and development thereof.  No other private or 
governmental organization is empowered to carry out similar competing activities.  SRO has 
no stand-alone financial indepe ndence and does not have capital denominated in shares of any 
type. 
xi. National Company for Cooperative Insurance (NCCI):
 
NCCI provides cooperative insurance in the Kingdom.  On 29.3.1425H (18 May 2004), the 
Government announced that it would begin to sell its shares of NCCI to the private sector.  
The initial public offering of 50 per cent of N CCI’s shares was completed in January 2005.  
Thus, NCCI is 50 per cent owned by the Govern ment.  After the initial public offer had been 
completed, a new Board was elected by the shareholders’ general meeting.   
The company was identified for further privati sation, but there was no timetable over which 
privatisation would occur.  The Chairman of th e Board of Directors is a government official 
elected by the Board Members.  Two of the seven members of NCCI’s Board of Directors are 
government officials.  The Government does not play any role in setting company policy or in 
making operational decisions.   
NCCI conducts its business based on commercial considerations, and it does not enjoy any 
special or exclusive privileges.  There are no legal impediments to competition with NCCI. WT/ACC/SPEC/SAU/7 
Page 28  
 
 xii. Grain Silos and Flour Mills Organization (GSFMO)
:  
GSFMO was established by Royal Decree in 1972 to support the development of the 
domestic agricultural sector, particularly wheat  production for national security reasons, by 
forming a grain storage and flour production conglomerate, as well as by creating a stable market for grains in order to safeguard farm ers from price fluctuations.  GSFMO was 100 per 
cent owned by the Government.  The Ministry of  Agriculture is responsible for the operation 
of GSFMO and the Minister of Agriculture is th e Chairman of the Board of Directors.  The 
Government appoints eight Directors, of whom six are government officials and two are from the private sector. 
GSFMO has eleven facilities in Saudi Arabia: si x integrated silo, flour mill and feed mill 
facilities and five silo facilities.  Wheat flour pr oduced by GSFMO is subject to price controls 
with the aim of providing all people (especially the poor) with a stable, low-cost food source. 
Although the GSFMO facilities represent all of the mills and silos in Saudi Arabia, no legal 
measure prevents the construction and operation of additional facilities by the private sector.  
In addition, as discussed below, all of these f acilities were scheduled for privatisation in 
accordance with the Saudi Privatisation Strategy .  Nothing prevents private sector operators 
from requesting GSFMO to mill their flour, which GSFMO would agree to do at a commercially-agreed rate, although such interest had not arisen in the past because flour was 
imported by the private sector in processed form.  
GSFMO operates on a commercial basis in competition with the private sector.  GSFMO had 
previously imported wheat, wheat flour and barley under special government mandates.  
GSFMO’s mandate to import wheat products was terminated in 1987 by Royal Decree No. 
115/8 of 27.1.1407H (2 October 1986); GSFMO’s ma ndate to import barley was terminated 
in 1999 by Royal Decree No. 184 of 24.9.1419H (14 December 1998).  In response to a question, the representative of Saudi Arabia st ated that eighteen private firms are importing 
these products following the termination of GSFMO’s monopoly. 
Since 1999, GSFMO’s international trading activ ities have been limited to importing corn and 
soybeans, which are mixed as feed additives and sold to poultry and dairy farmers as animal 
feed.  GSFMO does not receive any financial support or assistance from the Government to import these products, for which it competed with the private sector under international market conditions.  GSFMO’s import decisions are informed exclusively by conditions of 
market supply and demand.  Furthermore, GSFMO no longer issues licenses or permits of any 
kind for importing or exporting any products, pursuant to Royal Decree No. 184 of 
24.9.1419H (14 December 1998).  GSFMO procures wheat from Saudi farmers at regulated prices, but does not export wheat or any other product.  In response to a question raised by a member of the Working Party, the representative of Saudi Arabia confirmed that GSFMO receives support for domestic wheat purchases as indicated in Communication from the 
Kingdom of Saudi Arabia, Domestic Support and Export Subsidies in the Agricultural Sector 
(WT/ACC/SPEC/SAU/1/Rev.9, 28 April 2004). 
The representative of Saudi Arabia confirmed th at all of GSFMO’s operations are subject to 
privatisation under the Saudi Privatisation Stra tegy.  In this regard, the Minister of 
Agriculture has requested the World Bank to c onduct a detailed study of the optimal strategy 
of privatisation of GSFMO.  The specific form and timetable for privatisation would be based 
on the results of the World Bank study.  The representative of Saudi Arabia undertook to 
report to WTO Members on the progress of GSFMO’s privatisation. 
There were no legal impediments to competition with GSFMO.  WT/ACC/SPEC/SAU/7 
 Page 29 
 
 
 xiii. Specialized Financial Institutions (SFI) : 
In the financial sector, there are five Government-owned SFIs: 
a. Saudi Arabian Agricultural Bank (SAAB), subject to privatisation (the 
schedule had not yet been set); 
b. Saudi Industrial Development Fund (SIDF); c. Public Investment Fund (PIF); d. Real Estate Development Fund (REDF); and 
e. Ministry of Finance Lending Program. 
 
45. The representative of Saudi Arabia stated that  the role of the SAAB is explained in 
paragraphs 237-238 of the Report; the role of SIDF is  explained in paragraph 187 of the Report.  The 
PIF was originally established to finance projects in the public sector.  That continues to be the major 
focus of the PIF.  However, its role had evolved.   For very large projects which were strategically 
important, but for which private-sector investors on their own could not raise financing, the PIF 
provided long-term financing on a commercial basi s on the condition of co-financing by commercial 
banks.  Further, the PIF was the custodian of the shares owned by the government in publicly traded 
companies.  It also managed the sale of the shares of government–owned enterprises as the 
government embarked on privatisation.  He stated that the role of the PIF would gradually shrink as 
the private sector assumed a leading role in the economy and the privatisation program progressed.  The representative further stated that the objective of  the REDF was to provide interest-free loans to 
Saudis to build houses for their own use.  He also  reported that the Ministry of Finance Lending 
Program was started some 30 years ago to provide funding for some essential sectors where the 
private sector funding was not forthcoming because of  a shortage of funds or non-availability of 
commercial lending at that time.  The lending was now  for human resource development.  In response 
to a question from a member of the Working Party,  the representative of Saudi Arabia stated that 
lending for human resource development was aimed at  training and upgrading the skills of Saudi work 
force in the private sector.  The lending is availabl e for Saudi employees of all firms in Saudi Arabia, 
whether Saudi or foreign-owned or joint ventures. 
46. The representative said that a major differe nce in operations of these Funds and in 
commercial bank lending was that, whereas commercia l lending was generally available for short-
term financing in Saudi Arabia, these Funds provided medium- and long-term financing.  The role of 
these funds, he said, had evolved in tune with developments in the economy.  For example, the role of 
the REDF would decline substantially due to the f act that its financial resources were limited, while 
there was a huge demand for the loans.  Thus, the f und could meet only a small percentage of requests 
for housing loans.  Consequently, the loans provided by commercial banks were rising.  The role of 
SAAB and SIDF would also keep evolving as th e capital market developed and diversified. WT/ACC/SPEC/SAU/7 
Page 30  
 
 47. These funds did not encroach on commercially viable lending, he reported.  In fact, they 
complemented commercial lending.  Whereas commerc ial lending was on a short-term basis in Saudi 
Arabia, these Funds provided financing on a medi um- and long-term basis.  Co-financing by 
commercial banks was a prerequisite for lending by th e funds.  Thus, at least 50 per cent of financing 
a project had to be arranged from commercial banks. 
48. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the specialized financial in stitutions supplemented lending by the private sector 
financial institutions and did not encroach upon th eir business.  For example, the Saudi Arabian 
Agricultural Bank (SAAB) provided loans in the ag ricultural sector where the private sector banks 
were traditionally reluctant to offer lending.  Similarly, the Saudi Industrial Development Fund 
(SIDF) provided loans to new industrial enterp rises and for replacement and modernization of 
machinery of existing enterprises focusing principa lly on segments where private sector banks were 
shy.  As stated earlier, SIDF loans were availabl e, for up to 50 per cent of the project cost only and 
were available to wholly-owned foreign compani es and Saudi-owned companies.  SIDF filled the 
vacuum left by private sector banks.  He further stated that loans by PIF were conditioned on co-
financing by commercial banks, which clearly showed that specialized financial institutions were not 
encroaching on the business of private sector banks. 
49. The representative of Saudi Arabia further adde d that the terms and conditions of lending by 
these institutions were based on viable economic f actors, with each institution having its own terms 
and conditions, tailored to the needs and requirement s of particular sectors and ensuring the viability 
of the financial institutions.  In fact, the interest  and charges by these institutions are close to the 
market driven rates. 
50. In reply to a further question, the representativ e of Saudi Arabia stated that there were no 
plans to privatise the specialized financial institu tions, except the SAAB.  However, as stated earlier, 
their role was on the decline and that of the commercial banks was on the rise. 
51. The representative of Saudi Arabia informed me mbers of the Working Party that the public 
enterprises partially privatised according to the defin ition in the Privatisation Strategy so far included 
the following: 
i. Saudi Electricity Company (19 per cent private ownership); 
ii. Saudi Arabian Fertilizer Company (57 per cent private ownership); 
iii. Saudi Arabian Basic Industries Corporati on (SABIC) (30 per cent private ownership); 
and 
iv. Saudi Telecommunications Company (30 per cent private ownership).  WT/ACC/SPEC/SAU/7 
 Page 31 
 
 
 52. The representative of Saudi Arabia confirmed th at, from the date of accession, enterprises that 
are state-owned or -controlled, and enterprises with  special or exclusive privileges, as defined in 
paragraph 44, would make purchases of goods and ser vices, which are not for government use, and 
sales in international trade in accordance with commercial considerations, including price, quality, 
availability, marketability and transportation, and would afford enterprises of WTO Members 
adequate opportunity, in conformity with customary practice, to compete for such purchases or sales.  
He also confirmed that Saudi Arabia would notify enterprises falling within the scope of Article XVII 
upon accession to the WTO.  With respect to priva tisation, the representative of Saudi Arabia 
confirmed that from the date of accession, Saudi Arabia would provide WTO Members with annual 
reports on the status of privatisation in the Kingdom.  The Working Party took note of these commitments. 
- Investment Regime 
53. The representative of Saudi Arabia informed  the Working Party that a new Foreign 
Investment Law, replacing the Foreign Capital Investment Law, had been promulgated by 
Royal Decree No. M/1 of 5.1.1421H (9 April 2000).  Implementing Regulations under the new 
Foreign Investment Law had been issued on 24 June  2002.  In response to questions from members of 
the Working Party, the representative of Saudi Arab ia noted that the Kingdom had started the process 
of attracting FDI long ago when it issued the firs t Foreign Investment Law in 1956.  Another Law 
followed in 1962 and, in 1979, Saudi Arabia issu ed a more comprehensive Law, which included 
wide-ranging incentives for investment, such as exem ption of customs duties for production inputs, 
nominal rental rates for land for the establishment of projects, financial assistance in the form of soft 
loans and exemption of exports from taxes and duti es.  The 1979 Foreign Capital Investment Law had
 
granted industrial and agricultural projects a 10-year  tax holiday and a 5-year tax holiday for other 
projects, provided that national capital formed 25 pe r cent of the project capital and on condition that 
this percentage did not decrease during the holiday  period.  The Law was amended to grant an 
addition 10-year tax holiday to expansions of exis ting projects.  But, to enjoy the incentives, the 1979 
Law required that foreign investments be:  (i) at least 25 per cent Saudi; (ii) among the specified projects of the national development plans; and (iii) of high technical content with foreign expertise to 
facilitate the transfer of technology.
 
54. The representative of Saudi Arabia clarified that, to address developments that took place in 
the international and regional economic landscap e, the investment laws were overhauled 
in April 2000, by the enactment of a new foreign investment law to build on the strengths of the old law and provide additional incentives to increase the level of FDI in the Kingdom.  The new 2000 WT/ACC/SPEC/SAU/7 
Page 32  
 
 Foreign Investment Law provided the legal structur e necessary to attract additional investment.  One 
of the features of the new Law was its departure from tariff incentives and use of other FDI-promoting 
measures in conformity with the recent global liberalization of trade and investment.  A comparison 
of the old 1979 Law and the new 2000 Law is attached  as Annex B (Comparison of the Provisions of 
the Old 1979 and the New 2000 Foreign Investment Laws).   In addition, in response to questions by 
members of the Working Party, the representative of  Saudi Arabia confirmed that the Saudi Arabian 
General Investment Authority (SAGIA) imposed no other requirements or criteria for new 
investments or foreign investments, other than those in the Foreign Investment Law of 2000 and its Implementing Regulations. 
55. Members of the Working Party requested in formation on whether GCC nationals received 
preferential treatment in Saudi Arabia.  The represen tative of Saudi Arabia replied that GCC nationals 
are treated as Saudi nationals for the purposes of investment. 
56. Some members of the Working Party requested cl arification of whether there were any formal 
requirements setting a minimum level of Saudi participation in any business venture.  The 
representative of Saudi Arabia stated that under the new law on foreign investment there was no 
requirement of a minimum share for Saudi investors.  Therefore, foreign investors are no longer 
required to take local partners and are permitted to  own real estate for company and housing purposes.  
In the past there had been minimum capital investment requirements of SAR 25 million for agricultural projects, SAR 5 million for industrial projects and SAR 2 million for services projects.  
However, to ensure compatibility with WTO rules,  Saudi Arabia had removed these requirements by 
applying national treatment pursuant to SAGIA Board of Directors Decision No. 1/44 of 19 April 2005, except as noted in Saudi Arabia’s Schedule on Specific Commitments in Services.  Under the 
new Foreign Investment Law, a foreign investment may take one of the two following forms: 
i. an enterprise owned by foreign and national investors, i.e., joint ventures, but with no 
requirement for minimum share for national investors; or  
ii. an enterprise wholly-owned by foreign investors, i.e., 100 per cent foreign 
shareholders' equity. 
57. The Saudi representative stated that a project, wh ether wholly-owned by foreign investors or 
a joint-venture, licensed in acco rdance with the Law, enjoyed all benefits, incentives and guarantees 
available to a national project.  In response to a question from a member of the Working Party, the 
representative of Saudi Arabia stated that Speci alized Financing Institutions were not providing 
financing for services projects.  For example, th e Saudi Arabian Agricultural Bank (SAAB) and the 
Saudi Industrial Development Fund (S IDF) provided financing for agri cultural and industrial projects, 
respectively.  Under the new Law, a foreign invest or was entitled to transfer, outside the Kingdom of  WT/ACC/SPEC/SAU/7 
 Page 33 
 
 
 Saudi Arabia, the proceeds from the sale of his sh ares or the excess funds from the liquidation of his 
assets or the profits earned by the enterprise or fro m the disposal of the business in any other legal 
manner.  Further, the investor was entitled to transfer outside the Kingdom of Saudi Arabia the 
required funds to settle any contractual obligations  related to the project.  Article 11 of the new 
Foreign Investment Law provided legal safeguards against confiscation or expropriation of foreign 
investments.  It was not permissible to confiscate foreign investments, wholly or partially, except by a 
court order.  In addition, it was not permissible to  expropriate the ownership of foreign investments, 
wholly or partially, except for the public inter est, and on payment of reasonable compensation in 
accordance with the law.  The repr esentative stated that foreign investment was permissible in all 
activities, except a short "Negative List", which would be revised and s hortened periodically.  
Members of the Working Party also inquired as to the specific content of the Negative List.  In 
response, the representative of Saudi Arabia stated  that the Negative List, which was issued by a 
decision of the Supreme Economic Council under Article  3 of the Foreign Investment Law, did not 
target specific companies; rather, it applied to certain limited industrial and services sectors.  The 
Saudi representative reported that the list woul d be updated prior to accession, to reflect the 
commitments in Saudi Arabia's Schedule on Speci fic Commitments in Services annexed to its 
Protocol of Accession.  He further noted that , following accession, Saudi Arabia would annually 
review and remove additional items from the Nega tive List each year (beyond Saudi Arabia's WTO 
commitments), to further liberalize the economy.  In  response to a further question from a member of 
the Working Party, he reported that the Negative List currently was being revised by the Supreme 
Economic Council to remove additional sectors from it a nd was subject to annual review and revision.  
The Negative List, including significant exceptions allowing the provision of certain printing and publishing services and certain telecommunications services, was at Annex C. 
58. Some members of the Working Party requested  clarification of the incentives offered by 
Saudi Arabia to foreign investors to invest in Saudi Arabia in order to support the inflow of 
technology and expertise, in particular whether technology transfer was in any way a condition for 
investment approval in all or certain areas.  The representative of Saudi Arabia replied that under the 
new Foreign Investment Law of 9 April 2000, technology transfer was not a condition for investment 
approval.  A foreign investor had to approach  only one authority - the Saudi Arabian General 
Investment Authority (SAGIA) - to obtain a licence.   In reply to a question from a member of the 
Working Party, the representative of Saudi Arabia stat ed that Saudi investors are not required to apply 
and obtain from SAGIA a licence to invest in the Kingdom, but foreign investors are required to apply and obtain a licence from SAGIA.  This national treatment limitation was inscribed in Saudi Arabia's 
Schedule on Specific Commitments in Services.  In response to a further question, the representative 
confirmed that investors could obtain information and assistance, as well as all of the necessary WT/ACC/SPEC/SAU/7 
Page 34  
 
 registration forms, including the forms for specifi c licenses, from SAGIA.  SAGIA was required to 
decide on the investment application within 30 days from the date all required documents were 
submitted.  SAGIA would also serve as the enquiry point on laws, regulations  and procedures relating 
to foreign investment.  The SAGIA licence provided th e foreign investor all of the privileges held by 
local investors.  In response to a question from a member of the Working Party regarding whether the 
SAGIA licence was the only licence or approval requi red by a foreign investor, the representative 
from Saudi Arabia stated that, after obtaining the S AGIA licence, the foreign investor was treated the 
same as any local investor and, thus, for certain businesses, must apply to the Ministry of Commerce 
and Industry to obtain a commercial registration.  For investments in financial, communications, 
education, information or medical services sectors, investors were required to obtain a licence from SAMA, the Telecommunications Authority and the Ministries of Education, Higher Education, 
Information and Culture or Health, respectively.  In addition, the Ministry of Commerce and Industry 
issued licenses for foreign investors in professional and consulting services, e.g., engineering and accounting.  In other words, he said, a licence was required for each business depending upon the nature of the business.  The licensing requirement s, he reported, were the same for Saudis and non-
Saudis.  For example, a company (whether Saudi  or non-Saudi) seeking to establish a company and 
set up a hospital—whether backed by a national or a foreign investor—would need to obtain a company registration and permit from the Ministry of Commerce and Industry and a health practice 
permit for hospitals from the Ministry of Health .  Similar requirements would apply to persons 
seeking to establish a school or a department stor e.  In response to a further question, the 
representative noted that the new Foreign Investme nt Law and the implementing regulations provided 
that foreign investment ventures had the right to own real estate to the extent necessary to carry out 
their licensed activities and to accommodate their employees, in accordance with regulations of 
property ownership for non-Saudis.  Further, it was provided that foreign investors had the right to 
sponsor and bring their non-Saudi employees, subject to the numerical limits set out in Saudi Arabia's 
Schedule on Specific Commitments in Services and pa ragraph 66 of the Working Party Report.  The 
representative confirmed that individuals contempla ting investing in Saudi Arabia, and their support 
staff, could obtain visas for a period of up to six months, for single entry or multiple entries, based on 
a request to SAGIA, the Chamber of Commerce or the Ministry of Foreign Affairs, including Saudi 
embassies.   
59. The representative of Saudi Arabia further noted  that the Foreign Investment Law allowed 
foreign investors to invest in local or foreign vent ures, provided that general conditions applicable to 
new investments were met.  A foreign investor could apply for multiple licenses permitting different 
activities, provided that the foreign investor was not the owner of or a shareholder in a project which 
was in financial default.    WT/ACC/SPEC/SAU/7 
 Page 35 
 
 
 60. Some members of the Working Party asked wh ether the government had issued licenses to 
100 per cent foreign-owned operations.  In response the representative of Saudi Arabia stated that 
1,540 licenses had been issued for wholly foreign-owne d enterprises.  In response to further questions, 
he noted that, under the new Foreign Investment La w of April 2000 "national treatment" was given to 
foreign investors.  He further stated that, in th e view of Saudi Arabia, the Foreign Investment Law 
was fully consistent with the WTO Agreement on Trade-Related Investment Measures (TRIMs 
Agreement) and that Saudi Arabia did not apply any TRIMs prohibited by the Agreement.   
61. In response to questions from some members of the Working Party concerning whether the 
Government of Saudi Arabia planned to liberalize its stock market and open it to non-Saudi investors, 
the representative of Saudi Arabia stated that Sa udi Arabia was gradually changing its regulations 
concerning participation of foreign investors in th e stock market.  Although direct share trading in 
Saudi Arabia was restricted to Saudi and GCC nati onals, there were no restrictions on investment by 
foreign investors in Government Bonds, Treasury B ills or Saudi mutual funds.  There were non-GCC 
nationals that held shares of public joint-stock co mpanies which were traded in the equity share 
market, but those non-GCC nationals were required to receive permission from the Capital Market 
Authority (CMA) prior to buying or selling their sh ares.  In its continuous review and assessment of 
the development of the financial market, the Kingdom  of Saudi Arabia had allowed the establishment 
of a close-ended fund (SAIF) listed on the L ondon Stock Exchange thr ough which international 
investors could participate in the Saudi shares ma rket.  In November 1999, Saudi Arabia had made 
further changes to its regulations and now permits foreigners to invest in open-ended mutual funds 
managed by banks that invest in the Saudi equity  shares market.  In response to a question from a 
member of the Working Party, he reported that th e rationale for allowing GCC nationals to invest 
directly in the Saudi Stock Market was the requi rement of the GCC Unified Economic Agreement.  
Given the current level of maturity (size and dept h) of the Saudi Stock Market and the volatility of 
portfolio investment, a policy of gradual liberaliza tion was being followed.  In response to a question 
from a member of the Working Party, the representativ e of Saudi Arabia stated that foreign investors 
are permitted to participate directly in the fo llowing areas of the capital market: corporate debt, 
government debt and derivatives thereof, and mutual  funds, and that the Government was considering 
the implications of allowing the participation of fo reign investors in the stock market to buy and sell 
shares.  He said that all the pros and cons would be  considered before a decision is taken whether or 
not to open the stock market to foreign investors.   The representative stated that no timeframe had 
been set for this decision. 
62. In response to questions from members of the Working Party, the representative of 
Saudi Arabia reported that the newly adopted Ca pital Market Law, promulgated by Royal Decree WT/ACC/SPEC/SAU/7 
Page 36  
 
 No. M/30 of 2.6.1424H (13 July 2003), established a strong government regulatory body, the CMA.  
The CMA had rule-making and enforcement pow ers necessary to guarantee that the Kingdom's 
security market was fair, efficient and vibrant.  Th e CMA had the authority to promulgate and enforce 
rules for the disclosures necessary in connection w ith the offering of securities, the continuous 
disclosure obligations of publicly traded compan ies, disclosures and practices in connection with 
takeovers of public companies, the regulation of pr oxy solicitations; and to define and police insider 
trading and other abusive securities practices.  Most notably, the CMA had powers to licence non-
bank financial intermediaries engaged in investme nt banking activities, such as corporate finance, 
asset management and brokerage activities.  Non-ba nk financial intermediaries had been required to 
incorporate as public joint-stock companies, with a minimum capital of SAR 50 million.  In response 
to a question from a member of the Working Party, the representative of Saudi Arabia confirmed that 
there was a minimum capital requirement of SA R 50 million for non-bank financial intermediaries 
engaged in brokerage business to incorporate as a public joint-stock company.  In response to a 
further question from the same member, the representa tive of Saudi Arabia stated that the Capital 
Market Law had no restriction on investment banks underwriting and br okering the initial public 
offerings of joint-stock companies in Saudi Arabia. 
63. The representative of Saudi Arabia further not ed that the new Capital Market Law also 
stipulated the creation of the Saudi Arabian Secu rities Exchange.  The Exchange was the exclusive 
securities market of the Kingdom.  Its nine-member Board of Directors included three public directors 
representing the Ministry of Finance, SAMA and the Ministry of Commerce and Industry.  In 
addition, the Law empowered the Exchange to estab lish professional and ethical standards for brokers 
and required the Exchange to establish as one of its  departments the Securities Deposit Centre, which 
had responsibility for the clearance and settlement  of all securities transactions executed on the 
Exchange.  The Centre also maintained the reco rd of ownership for all securities traded on the 
Exchange.  The law also called upon the CMA to est ablish and maintain a tribunal with exclusive 
jurisdiction to resolve all disputes involving securities.   (The provisions of the Capital Market Law are 
summarized at Annex D (Summary of the Provisions of the Capital Market Law).) 
64. Some members of the Working Party asked whether Saudi Arabia planned to remove its 
restrictions on foreign investment in explorati on and extraction of hydrocarbons.  The representative 
of Saudi Arabia replied that significant investments by foreign investors relating to the upstream development of non-associated gas had been approve d; others were underway.  He noted that, for 
reasons of important national policies, restricti ons on foreign investment in the upstream sector, 
though relaxed, could not be  completely removed.  WT/ACC/SPEC/SAU/7 
 Page 37 
 
 
 65. Some members of the Working Party sought a clarification about an article of the 
Implementing Regulations which said that licenses gran ted must not violate Saudi Arabia's regional or 
international  agreements and asked Saudi Arabia to indicat e where this might occur.  They further 
requested Saudi Arabia to clarify the relations hip of Implementing Regulations to the Foreign 
Investment Law and enquired whether there were cu rrent plans for any additional elaboration of the 
Regulations.  In response to these, the representative of Saudi Arabia stated that Article 5 of the 
Implementing Regulations provided that granting a foreign investment licence must not contravene 
international or regional treaties signed by th e Kingdom of Saudi Arabia.  These included the 
WTO  Agreement, the GCC and other treaties signed by Saudi Arabia.  He explained that, for 
example, Saudi Arabia would not issue any licen ce to produce chemicals or materials that were 
restricted under regional or international  agreements to which Saudi Arabia was a party.  Similarly, 
Saudi Arabia would not issue licenses to produce materials that were in breach of a regional or 
international  agreement on environmental protection to which Saudi Arabia was a party.  With regard 
to the observations of Working Party members on Implementing Regulations, the representative of Saudi Arabia explained that Implementing Regulati ons were in the nature of by-laws issued by 
SAGIA, under Article 17 of the Foreign Investment Law,  to implement the Law.  He stated that there 
were no current plans for additional ela boration of the Implementing Regulations. 
66. Members of the Working Party asked that Saudi Arabia clarify its rules regarding 
employment of Saudi nationals.  In response, the representative of Saudi Arabia noted that Council of 
Ministers Decision No. 50 of 21.4.1415H (27 Sept ember 1994) and Council of Ministers Bureau 
Letter 8/490 of 28.6.1414H (13 December 1993) set forth requirements regarding the hiring and 
employment of Saudi nationals.  He emphasized  that the rules were designed to increase the 
employment of Saudi nationals in the Kingdom, and applied to Saudi as well as non-Saudi investors.  
The rules were as follows: 
i. Companies of all types and activities should endeavour to attract and retain nationals. 
ii. Companies employing 20 or more people should increase the proportion of nationals 
employed by 5 per cent each year.  The 5 per cent figure is subject to modification according to workforce availability, the na ture and condition of the work and the 
availability of Saudis to fill the particular position(s). 
iii. Companies should, while working to reach th is average, employ nationals in a variety 
of positions. 
iv. Companies should not appoint a non-Saudi personnel officer, recruitment officer, 
receptionist, cashier, civilian security guard and transaction follow-up clerk to government departments.  
v. Violations of i-iv, above, could r esult in penalties ranging from suspension of 
approval of requests for workers to deprivation of credit or removal from 
consideration for governme ntal tenders or bids. WT/ACC/SPEC/SAU/7 
Page 38  
 
 67. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia confirmed that the above-noted requirements we re still in effect for Foreign Direct Investment.  
In response to a question from a member of the Wo rking Party, the representative of Saudi Arabia 
stated that the requirements applied on a national treatment basis whereas the numerical limits set out 
in the Schedule on Specific Commitments in Servi ces (10 or 15 per cent) applied to foreign service 
suppliers only and that these were covered by  the national treatment limitation on Mode 4. 
68. In addition, the Saudi representative repor ted, under Decision No. 50 and Council of 
Ministers Bureau Letter No. 8/490, the Ministry of Labour and Social Affairs had established a Committee to implement and oversee the provisions set forth above.  The Committee was headed by 
the Deputy Minister or a person he appointed, and co mprised delegates from the Ministry of Interior 
and the Ministry of Commerce and Industry. 
69. The representative of Saudi Arabia noted that , prior to accession to the WTO, the hiring and 
employment restrictions set forth above would be modified, as necessary, to comply with the provisions of the Saudi commitment on services as d escribed in Saudi Arabia's Schedule on Specific 
Commitments in Services.  The Working Party took note of this commitment.   
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
70. The representative of Saudi Arabia explained that  the Basic Law of Governance, instituted by 
Royal Decree No. A/90 of 27.8.1412H (1 March 1992), set down the law concerning political authority within Saudi Arabia.  Article 56 of the Basic Law of Governance stated that the King was 
the Chairman of the Council of Ministers and was assisted by Ministers in the performance of his 
duties.  The Basic Law of Governance also stated that the Law of the Council of Ministers laid down 
the powers of the Council regarding internal and ex ternal policies; the organization and coordination 
of the various Government authorities; and the c onditions to be satisfied by, the powers of, the 
method of responsibility and all affairs of the Ministers. 
71. He recalled that, pursuant to Article 17 of th e Consultative Council Law, resolutions passed 
by the Consultative Council were forwarded to the Chairman of the Council of Ministers, who passed 
them to the Council of Ministers for consideration.   When the points of view of both Councils were 
in agreement, they were enacted after being approved by the King.  In case of a difference of opinion, 
the King approved what he consider ed appropriate.  Article 70 of the Basic Law of Governance and 
Article 20 of the Council of Ministers Law provide th at laws were enacted and amended, and treaties, 
international  agreements and concessions were approved and implemented, by Royal Decrees after 
having been considered by the Consultative Council and the Council of Ministers, respectively.  In  WT/ACC/SPEC/SAU/7 
 Page 39 
 
 
 response to a question from the members of the Wo rking Party, the representative of Saudi Arabia 
confirmed that, under Article 70 of the Basic Law of Governance (Royal Decree No. A/90 of 
27.8.1412H (1 March 1992)), Royal Decrees were the legal instrument by which 
international  agreements and treaties were implemented in to domestic law.  In accordance with the 
lawmaking process described above, international  agreements and treaties were first referred to the 
Council of Ministers and the Consultative Council for approval.  Upon receiving approval of both 
bodies, the relevant  agreement or treaty became part of domestic law by means of Royal Decree.  
International  agreements and treaties did not take preced ence over other provisions of domestic law, 
nor did other provisions of domestic law take precedence over international  agreements or treaties.  
Rather, conflicts or inconsis tencies between international  agreements and treaties and other provisions 
of domestic law were resolved in accordance with the same rules of inte rpretation that were applied to 
domestic legislation, e.g., more recent laws t ook precedence over older laws.  In response to a 
question from a member of the Working Party, th e representative further noted that the rules of 
interpretation were as follows:  (i) an internationa l agreement could not override a rule of Shari’a 
(e.g., the prohibition on the importation, sale or c onsumption of alcoholic beverages could not be 
supplanted by an international agreement); (ii)  given an apparent in consistency between an 
international agreement and domestic law, the text of each would be interpreted so as to avoid any 
conflict; and (iii) where the text did not resolve the conflict, recourse could be had to the intent and 
purpose of the agreement and the law.  Where a conf lict still existed, he repor ted, the conflict would 
be resolved following the rule that a new law or  international agreement to which the Kingdom had 
agreed was superior to previous laws or interna tional agreements (with the exception noted above that 
no law or international agreement could overturn a Shari’a rule). 
72. In response to a question from members of the Working Party, the representative of 
Saudi Arabia stated that trade policies were implem ented by means of the enactment of an appropriate 
new law (nizam).  As part of the lawmaking process, the draft legislation was prepared by the relevant 
government agency (e.g., the Ministry of Commerce and Industry), which then submitted it to the Council of Ministers and the Consultative Council for comments.  Both bodies reviewed the draft law and either agreed with the text put forward by th e government agency or proposed changes to it.  If 
the Council of Ministers and the Consultative Council had divergent views of the draft legislation, 
then those views were communicated to the King who resolved the matter by deciding which view 
should prevail.  The final text of the legislati on was then promulgated in the official gazette ( Umm Al-
Qura ).  The representative of Saudi Arabia further e xplained that a new law would originate in the 
ministry having authority over the subject matter of the law.  The ministry would submit the draft law 
to the Council of Ministers, which would conduct an  initial review.  If the Council approved the draft, 
it would send the draft to the Bureau of Experts.  The Bureau of Experts would review the draft to WT/ACC/SPEC/SAU/7 
Page 40  
 
 ensure that the draft would accomplish its purpose and comply with international legal and/or 
technical norms.  If the Bureau approved the draft law, it would submit it to the Shoura Council, 
Saudi Arabia's consultative legislative council.  The role of the Shoura in this process was to ensure 
the compatibility of the draft law with internationa l legal norms and with Saudi Arabia's local and 
international policies.  The Shoura Council would then  send the law to the Council of Ministers for its 
final approval.  Last, the Council of Ministers, ha ving approved the draft law, would submit it to the 
King for his assent.  After the King issued a Royal Decree enacting the law, the law was returned to 
the ministry that drafted the law.  Subject to th e law and the Royal Decree, the ministry would be 
responsible for all aspects of implementation, incl uding the promulgation of implementing regulations 
required for implementation within the time period sp ecified in the law and the Royal Decree and, in 
some cases where necessary, additional laws (subject to approval of the Council of Ministers). 
73. The representative of Saudi Arabia further clar ified that a law itself specified the date on 
which it took effect (typically on a certain date afte r publication in the official gazette).  It also 
specified the agency or agencies that were responsible for drafting and approving the implementing 
regulations.  The purpose of the implementing regulations was to set out the procedural and 
administrative details by which the provisions of th e new law were implemented.  They were drafted 
by the relevant government agency and published in th e official gazette.  A function of the legislative 
process was to identify potential conflicts and in consistencies between the proposed new law and 
other applicable laws.  Therefore the new law, when  finally promulgated, generally dealt with such 
matters, and superseded any conflicting previ ous law.  Occasionally, laws and implementing 
regulations required further interpretation.  Th ese interpretations took the form of ministerial 
decisions or directives and were generally limited to  matters that were not legally significant.  The 
representative of Saudi Arabia confirmed that th e process of lawmaking and regulation preparation 
and drafting that applied to the implementation of trade policies was the same process that applied to 
the implementation of purely domestic policies.   
74. The representative of Saudi Arabia further c onfirmed that the Kingdom had acceded to the 
Vienna Convention on the Law of Treaties 1969, pur suant to Council of Ministers Resolution No. 165 
of 24.6.1423H (1 September 2002).  In response to further questions, the representative of 
Saudi Arabia stated that Article 70 of the Basic Law of Governance provided that 
international  agreements entered into force as domestic  laws following their ratification by 
Royal Decree and enactment by the Consultative Counc il and Council of Ministers.  As a general rule, 
should Saudi Arabia's laws or other acts be found to contradict international treaties or  agreements, 
Saudi Arabia would bring its laws or other acts into conformity with such treaties or  agreements, and 
would respond quickly to instances in which inconsis tencies were brought to the attention of Saudi  WT/ACC/SPEC/SAU/7 
 Page 41 
 
 
 officials.  He noted, however, that this principle did not apply in respect of fundamental religious rules 
and principles, such as prohibiting the consumption of alcohol and pork.  
75. A member of the Working Party later inquired as to the hierarchy of Saudi legal instruments.  
The representative replied that the order was not in  all cases firmly established, but generally operated 
as follows: 
i. Shari’a:  Shari'a functioned as the supr eme law of the land and was not subject to 
modification by legislation or international agreement. 
ii. Royal Decree: Royal Decrees were issued by the King to enact primary legislation 
and amendments approved by the Council of Ministers, and to approve international 
treaties. 
iii. Royal Order:  Royal Orders were issued by the King and could address any matter. 
iv. Council of Ministers Decisions:  The Council of Ministers had authority to 
promulgate Implementing Regulations to address particular matters raised under 
primary legislation, without a Royal Decree or Order.  Council of Ministers Decisions, however, cannot amend or change laws enacted by Royal Decrees. 
v. Ministerial Decisions:  Implementing Regulations were made effective through 
Ministerial Decisions.  These could not amend or change enacted laws. 
vi. Circulars:  Circulars were issued by Mi nistries to clarify to the public the rules and 
regulations that applied pursuant to a particular piece of legislation. 
 
76. The representative of Saudi Arabia described th e role and functions of the following cabinet-
level councils and authorities: 
i. The Supreme Economic Council (SEC) w as established in August 1999 to evaluate 
economic, trade, industrial, agricultural and labour policies to assess their effectiveness.  The SEC also oversaw economic restructuring and privatisation aimed at opening Saudi markets and attracting investment. 
ii. The Saudi Arabian General Investment Authority (SAGIA) was created to further 
promote foreign investment and serve the business community as a one-stop shop. 
iii. The Supreme Commission of Tourism was established to promote the tourism sector. iv. The Food and Drug Authority was estab lished to secure consumer protection 
regarding the safe use of all foodstuffs, pharmaceuticals and medical equipment. 
77. The representative of Saudi Arabia stated that the role and functions of different Ministries 
and agencies concerned with WTO issues was as follows: 
i. The Ministry of Commerce and Industry was the principal government agency 
concerned with formulation and conduct of tr ade policies, and with the development, 
support and encouragement of commercial activities within the Kingdom.  It 
implemented the laws and regulations relati ng to trade, in particular the Companies 
Law, the Law on Commercial Registration and the Law on Commercial Agencies.  The Ministry also formulated policies and procedures for the development and promotion of industries.  It was respons ible, through the Saudi Arabian Standards 
Organization (SASO), for standards and tec hnical regulations and for ensuring that 
imported and domestically produced goods m eet the technical regulations.  The WT/ACC/SPEC/SAU/7 
Page 42  
 
 Ministry was also responsible for applying the Trademarks Law, as well as policy 
overview for import licensing. 
ii. The Ministry of Finance was concerned with formulation and conduct of financial 
and fiscal policies and with international ec onomic issues.  It was also the parent 
Ministry of the Department of Customs (which was charged with the responsibility of 
implementing the Customs Law and the Customs Tariff of Saudi Arabia), Department 
of Zakat and Income Tax, Saudi Arab ian Agricultural Bank, Saudi Industrial 
Development Fund, Real Estate Developm ent Fund and Public Investment Fund. 
iii. The Ministry of Petroleum and Mineral Resources formulated and implemented the 
oil policies of the Kingdom and supervised concessions in the oil and mining sectors. 
iv. The Ministry of Agriculture was the principal government body responsible for the 
development and encouragement of the agricultural sector in Saudi Arabia.  It formulated and implemented agricultural policies and was responsible for matters 
relating to sanitary and phytosanitary measures. 
v. The Ministry of Health was responsible for supervising the health industry and for 
matters related to the import and sale of medicines and medical supplies. 
vi. The Ministry of Information and Culture was responsible for implementation of the 
Copyrights Law and matters relating thereto. 
vii. The King Abdulaziz City for Science and Technology (KACST) was responsible for 
implementation of the Patents Law and matters relating thereto. 
viii. SASO established and approved volunt ary standards and mandatory technical 
regulations for imported and domestically produced goods.  It was also concerned 
with the sampling, inspection and testi ng of goods to ensure conformity with 
standards. 
ix. The Saudi Arabian Monetary Agency  (SAMA) acted as the central bank of 
Saudi Arabia.  It was responsible for mone tary and exchange rate policies and the 
supervision of the banking and c ooperative insurance industries. 
78. Members of the Working Party inquired as to the role of the Chamber of Commerce in 
Saudi Arabia.  In response, the representative of Saudi Arabia reported that each of the principal 
commercial centres in Saudi Arabia had its own Chamber of Commerce.  He clarified that "commercial centres" were distinct from admini strative areas (e.g., provinces); one province might 
have several commercial centres.  Each local Ch amber was a private association to which local 
businesses (including traders, professionals and industr ialists) belonged.  The Chambers funded their 
operations by means of annual membership s ubscriptions, which varied depending on the size 
(registered capital) of the member business, but were  the same for international (i.e., foreign invested 
firms and joint ventures) and domestic firms.  Hence, larger businesses paid higher membership 
subscriptions than smaller ones; dues ranged from SA R 330/year (smaller retail stores, e.g., a grocery 
which was not part of a chain) to SAR 900/year (small businesses, e.g., a real estate broker) to 
SAR 2,100/year (medium-sized businesses, e.g., part nerships and limited liability companies with a 
registered capital of less that SAR 5 million) to SAR 5,200/year (the largest businesses, e.g., joint-
stock companies, banks and limited liability compani es with a registered capital of SAR 5 million or 
more).  Apart from paying dues, there were no ot her Chamber obligations.  The requirement was 
administered by means of the fact that each bus iness (apart from very small businesses) was required 
to produce evidence of Chamber of Commerce member ship in order to obtain commercial registration  WT/ACC/SPEC/SAU/7 
 Page 43 
 
 
 from the Ministry of Commerce and Industry.  A pr operly completed application form could not be 
rejected; the Chamber of Commerce was required to accept all applications that were properly 
submitted.  Commercial registration was required fo r the reason that it allowed the government to 
establish the true identity of the business for th e purposes of enforcing business-related laws; it 
allowed the government to ensure that it w ould track each business, hold the correct business 
accountable and, if appropriate, prosecute it.  Me mbership in the Chamber was required because the 
Chamber, by its nature, imposed peer pressure  which increased compliance with the laws.   
79. The representative of Saudi Arabia further re ported that each Chamber was governed by a 
Board of Directors.  The Minister of Commerce and Industry appointed one-third of the Directors; the rest were elected by the members.  Chambers of Commerce and Industry were under the supervision 
of the Ministry of Commerce and Industry which, inter alia , provided guidance and monitored the 
accounts.  In reply to a question from a member of  the Working Party, the representative of Saudi 
Arabia stated that the Ministry of Commerce and Industry cooperates with the Chambers of 
Commerce and Industry in Saudi Arabia in the following areas: (i) gathering and disseminating information; (ii) soliciting their comments on draft laws and regulations; and (iii) creating bilateral 
business contacts with businessmen in other countries.   The Ministry, however, does not influence the 
decisions of the private sector.  He stated that the Chamber performs a valuable notarial service for 
members by authenticating signatures.  He furthe r stated that membership in the Chamber was 
required because it was a pre-requisite to obt aining association membership in the business 
community and, therefore, could not be refused.  Annual dues for the Chamber varied with the size of 
the business and members had the right to participate in the organization and administration of the Chamber by means of voting for membership in its  governing body.  There were currently fourteen 
Chambers in the Kingdom, located in the followi ng cities:  Abha, Ahasa, Dammam, Hail, Jeddah, 
Majama, Makkah, Medina, Najran, Qassim,  Quariyat, Riyadh, Tabuk and Taif.  
80. In response to questions from members of the Working Party, the representative of 
Saudi Arabia stated that the primary legal basis fo r the trade regime of Saudi Arabia was provided by 
the following laws, decrees and implementing measures:  
i. Companies Law and Implementing Regulations 
ii. Professional Companies Law and Implementing Regulations iii. Commercial Register Law and Implementing Regulations iv. Commercial Agencies Law and  Implementing Regulations v. Trade Names Law and Implementing Regulations 
vi. Negotiable Instruments Law 
vii. Trademarks Law and Implementing Regulations viii. Composition with Creditors Law ix. Combat of Commercial Fraud Law and Implementing Regulations WT/ACC/SPEC/SAU/7 
Page 44  
 
 x. Commercial Statements Law 
xi. Import Licensing Guide xii. Import Licensing Procedures xiii. Patents of Inventions Law and Implementing Regulations 
xiv. Trade Secrets Law 
xv. Copyrights Law and Implementing Regulations 
xvi. GCC Common Customs Law, Implementing Regulations and Principles of 
Determination of Customs Valuation 
81. The Saudi representative reported that a complete  list of the principal laws and regulations 
that form the basis of the Saudi trade regime appears at paragraph 3, above. 
82. The representative of Saudi Arabia stated that  Saudi Arabia provided for a wide range of 
judicial, arbitral and administrative procedures with respect to trade matters.  An aggrieved party had 
a final right of appeal against all administrative decisions in matters of trade to a judicial body known 
as the Board of Grievances.  The first channel of  redress was to appeal administrative bodies.  For 
example, with regard to matters under the ju risdiction of the Customs Department, such as 
classification and valuation, there was an administra tive system for appeal against rulings.  Disputes 
pertaining to valuation of goods for customs pur poses were under the authority of the standing 
Committee within the Customs Department.  Similar dispute settlement systems had been established, 
for example, with regard to sanitary and phytosanita ry measures, licensing, standards and intellectual 
property rights.  Ministries and/or Agencies involved had established internal standing committees of senior officials to review initial administrative decisions.  All decisions made by these "standing 
Committees" could be appealed to the head of the Ministry or Agency concerned. 
83. He further stated that if the decision under appeal  was maintained by the head of the Ministry 
or Agency concerned, these decisions were subj ect to appeal to the Board of Grievances under 
Article 8(a) of the Board of Grievances Law,  issued pursuant to Royal Decree No. M/51 of 
17.1.1402H (14 November 1981).  The Board of Grie vances was an independent tribunal to which 
appeals were made from all governmental administ rative decisions.  The jurisdiction of the Board 
included appeals against all administrative deci sions of government departments and government 
officials, and its decisions were binding on the government office concerned.  It was composed of a President, Vice-Presidents and Members.  The Preside nt was appointed by and reported to the King.  
The Vice-Presidents and Members were appointed by Royal Decree on the recommendation of the 
President.  The time frames for hearing of app eals and handing down of decisions depended on the 
volume of work with the Board and on the nature  of appeals.  Although there were no fixed time 
frames, the Board was required to supply to all pa rties to any appeal a judicial judgment which 
included the reasons for the decision.  The time required depended upon the complexity of the case  WT/ACC/SPEC/SAU/7 
 Page 45 
 
 
 and similar other factors.  Article 47 of the Boar d of Grievances Law provided for the publications of 
the judicial decisions. 
84. He also noted that the Board's decisions coul d be challenged and appealed to the Appeals 
Court (Scrutiny Commission) within the Board of Gr ievances, which would either confirm or reverse 
appealed decisions.  In all cases, the Appeal Co mmission's decisions were final and enforceable. 
85. The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia's 
laws would provide for the right to appeal ad ministrative rulings on matters subject to WTO 
provisions to an independent tri bunal in conformity with WTO obligations, including but not limited 
to those set out in Article X of the GATT 1994, Article 23 of the Agreement on Subsidies and Countervailing Measures, Article 11 of the Agreement on Implementation of Article VII of the GATT 1994, Article 62 of the Agreement on Trade-Relate d Aspects of Intellectual Property Rights and 
Article VI of GATS.  The Working Party took note of this commitment. 
86. In response to questions from members of the Working Party, the representative of 
Saudi Arabia indicated the Ministry of Comme rce and Industry would continue to oversee and 
coordinate within the Saudi Government matters relating to the WTO, including implementation and 
interpretation issues. 
87. In response to questions from members of the Working Party, the representative of 
Saudi Arabia confirmed that only the central govern ment had authority over matters covered by the 
WTO  Agreements and that the central government was superior in authority to sub-central 
governments.  The authority of sub-central governme nts in Saudi Arabia, he noted, was quite limited 
in comparison to the situation in many countries.   For example, even as regards issues typically 
classified as local issues, e.g., local constructi on projects and water and sewage treatment, to the 
degree that sub-central governments had any role wh atsoever, the role was limited by and exercised 
within tight constraints set by the central government.  If a problem arose regarding non-uniform 
application or failure to apply WTO provisions, inte rested parties could provide information to the 
Ministry of Commerce and Industry. 
88. The representative of Saudi Arabia confirmed that the provisions of the WTO Agreement, 
including Saudi Arabia's Protocol, would be app lied uniformly throughout Saudi Arabia's customs 
territory and other territories under Saudi Arabia's control, including in regions engaging in border 
trade or frontier traffic, special economic zones,  and other areas where special regimes for tariffs, 
taxes and regulations were established.  He adde d that when apprised by a WTO Member of a 
situation where WTO provisions were not properly applied, e.g., were applied in a non-uniform WT/ACC/SPEC/SAU/7 
Page 46  
 
 manner, central authorities would act to correct the situation and enforce the WTO provisions without 
requiring formal legal proceedings.  The Working Party took note of these commitments. 
IV. POLICIES AFFECTING TRADE IN GOODS 
- Trading Rights 
89. The representative of Saudi Arabia noted that  members of the Working Party had, in 
connection with trading rights (the right to import and export), requested an explanation of:  (i) the 
requirements for approval; (ii) the grounds for di sapproval; and (iii) whether a licence was granted 
automatically upon satisfaction of (i).  The representa tive of Saudi Arabia stated firstly, by way of 
clarification, that Saudi businesses and foreign comp anies with branches or offices in Saudi Arabia 
must apply for commercial registration under the Law on Commercial Registration described above.  
This was a general requirement which applied to all businesses except for the smallest (businesses 
with capitalization of SAR 100,000 or less) irrespectiv e of whether they were engaged in import or 
export trade.  Commercial registration was largely a routine procedure that involved the completion of 
an application form, the payment of a fee and the submission of documentation to the Ministry of Commerce and Industry.  He further noted that the requirements described below applied both to 
foreign and Saudi businesses and confirmed that, excep t with respect to agricultural machinery listed 
in Annex E, any legal entity or natural person had the right to e ngage in importation or exportation 
without commercial registration – although if a legal entity or natural person wished to engage in 
importation or exportation as a trading activity (i.e., to  then distribute and/or sell the goods), that legal 
entity or natural person was required to be commercially registered.   
90. At a later stage, the representative of Saudi Arabia again confirmed that there were no 
substantive requirements to register with the Mini stry of Commerce and Industry in order to import 
goods other than agricultural machinery, although there was a requirement to obtain commercial registration for the carrying on of business in the Kingdom.  The representative stated that he 
understood an "importer of record" to be a person who wishes to import goods into Saudi Arabia, but 
had no presence or commercial registration in the Kingdom and did not wish to sell or distribute the goods in the Kingdom.  Such persons, he stated, were not subject to the minimum investment requirements referred to in paragraph 56 of the Work ing Party Report; they did not need to invest in 
the Kingdom to act as the importer of record, nor did they need to join the Chamber of Commerce or 
obtain commercial registration.  He confirmed th at, from the date of accession, foreign firms and 
individuals with no commercial presence in Saudi Arab ia, which were importers of record, would be 
able to register to engage solely in importation, without limitation on equity or requirement to invest 
in Saudi Arabia and could obtain any necessary import licenses.  He further confirmed that Saudi  WT/ACC/SPEC/SAU/7 
 Page 47 
 
 
 Arabia would, as necessary, review and amend its laws, including the Law on Import Licensing 
Procedures, and would implement such laws and regul ations in full conformity with these obligations.  
For other foreign businesses, to obtain a commercial registration for the carrying on of business in 
Saudi Arabia, they had to first obtain a foreign investment licence from the Saudi Arabian General 
Investment Authority (SAGIA).  Upon receiving a foreign investment licence from SAGIA, foreign businesses would apply to obtain a commercial registration from the Ministry of Commerce and 
Industry.  The rules and procedures for obtaining co mmercial registration were set forth in the Law on 
Commercial Registration, issued pursuant to Royal Decree No. M/1 of 21.2.1416H (19 July 1995), and the Law on Commercial Names, issued pursuant to Royal Decree No. M/15 of 12.8.1420H (20 November 1999), and the rules a nd regulations promulgated thereunde r.  In respect of commercial 
registration, separate forms were to be filled in depending on the form of entity to be given 
commercial registration.  The procedure in comme rcial registration further provided payment of a 
registration fee (for a registration valid for five years) of SAR 1,000 in case of establishments, SAR 4,000 in case of partnerships, SAR 6,000 in case of limited liability companies and SAR 8,000 in case of joint-stock companies.  In the case of limited lia bility companies, draft articles of association were 
required to be submitted to the Ministry of Comme rce and Industry for review.  Once such forms had 
been duly prepared, they were ch ecked and authenticated by a notary public.  Having been signed, 
authenticated and legalized, these documents were  then published in the official gazette ( Umm Al-
Qura ).  In the case of limited liability companies, after printing and formal signing of the articles of 
association before a notary public, such articles we re submitted to the Ministry of Commerce and 
Industry and commercial registration was issued. 
91. The representative of Saudi Arabia also noted that "commercial registration" was a separate 
procedure and different from registration as a "comme rcial agent" (as discussed in paragraphs 95-98, 
below).  He further noted that registration as a commercial agent was not necessary to obtain the right 
to import or export for goods other than agricultura l machinery.  Any company, whether Saudi or 
foreign, which was commercially registered in the fi eld of import trade or was an importer of record 
could import goods without the need to get any further permission or authorization, except that the company or importer of record would need to obt ain an import licence for products listed in Annex E 
and observe the restrictions or prohibitions on im port of products listed in Annexes F and G to the 
Report.  No requirements applied to the activity of importing (acting solely as the importer of record), 
but a firm that wished to be legally eligible to import goods and then engage in business activity in the 
Kingdom (i.e., distribution and/or sale of the imported goods) should formally incorporate the activity of importing within its scope ("object") of business clause of its articles of association. WT/ACC/SPEC/SAU/7 
Page 48  
 
 92. The representative of Saudi Arabia confirmed that the Ministry of Commerce and Industry 
had no discretion to deny commercial registrati on to a legitimate business, provided that the 
application form had been correctly complete d and was accompanied by the correct fee and 
supporting documentation.  A legitimate business was one whose contemplated activities did not contravene Saudi laws or regula tions (e.g., those prohibiting the production and distribution of pork 
products). 
93. The representative of Saudi Arabia confirmed that the commercial registration set out the 
scope of business activities of the registered entity.  A registered entity that wished to carry out 
activities not covered by its commercial registration could amend its articles of association to include 
the new activities (except those in the Negative List under the Foreign Investment Law) and apply to 
the Ministry of Commerce and Industry for its comme rcial registration to be amended so as to permit 
those new activities.  In response to a questi on from a member of the Working Party, the 
representative of Saudi Arabia stated that the pr ocedure for amendment was very simple.  Once the 
Articles of Association had been amended to in clude new activities, then an application for 
amendment of commercial registration could be  submitted; a fee of SAR 100 was charged for 
amendment. 
94. In response to a question from a member of the Working Party, the representative stated that 
Saudi Arabian law permitted the following types of bus iness entities, all of which were subject to the 
Law on Commercial Registration:  sole proprietors hips (the most common form of business entity), 
general partnerships, limited partne rships, joint ventures, joint-stoc k companies, partnerships limited 
by shares, limited liability companies and professional companies.  The represen tative stated that the 
Law permitted every practical form of business entity and was designed to cover all possible forms of 
business organization under law. 
95. The representative of Saudi Arabia informed th e Working Party that commercial registration 
was a distinct procedure from registration as a "co mmercial agent".  In Saudi Arabia "commercial 
agency" described a business activity in which a natural or legal person acted as the agent or 
distributor of a producer, typically a foreign producer.  The law governing the registration of commercial agents was set out in the Commercial Agencies Law, issued pur suant to Royal Decree 
No. M/11 of 20.2.1382H (22 July 1962), and its Im plementing Regulations, Ministerial Resolution 
No. 1897 of 24.5.1401H (29 March 1981). 
96. In addition to having Saudi nationality, the re quirements for approval as a commercial agent 
under the above measures were:  (i) a commercial registration certificate giving commercial agency as one of the applicant's business activities; (ii) a certificate from the Chamber of Commerce confirming  WT/ACC/SPEC/SAU/7 
 Page 49 
 
 
 that the applicant had paid his Chamber of Comme rce subscriptions; and (iii) the submission of an 
application form and supporting documentation to th e Ministry of Commerce and Industry, including 
a copy and a certified Arabic translation of the commercial agency or distribution contract which 
complied with the conditions set out in the law.  The Saudi representative confirmed that the Ministry 
of Commerce and Industry had no discretion to deny  registration of an entity as a commercial agent 
provided that the above requirements were sa tisfied and a registration fee was paid.  
97. In essence, the representative of Saudi Arabia reported, the distinction between commercial 
registration and registration as a commercial agent was that commercial registration was an essential 
requirement to the conduct of any significant busin ess activity in Saudi Arabia, whereas "Commercial 
Agency" was one type of business activity; it was a te rm used to describe the type of business activity 
described in paragraph 95, above. 
98. The representative of Saudi Arabia noted that the Commercial Agencies Law did not require a 
foreign manufacturer/supplier to appoint an agent or distributor in Saudi Arabia.  (However, pursuant 
to Council of Ministers Decision No. 84 of 1.4.1421H (3 July 2000) importers of the types of agricultural machinery listed in Annex E should be au thorized distributors or agents.)  Any company, 
whether Saudi or foreign, which was commercially registered to trade, or simply the importer of 
record and not engaged in selling or distri buting goods within the Kingdom could import goods 
without the need to get any further permission or au thorization, except that a company or importer of 
record would need to obtain an import licence for goods set forth in Annex E (List of Products 
Subject to Non-Automatic Import Licensing Requireme nts).  As noted in paragraphs 89-90, above, 
importers of record would not be required to obtain commercial registration, invest in Saudi Arabia or 
be subject to minimum capitalization requirements. 
99. In response to a question, the representative of Saudi Arabia stated that, except for certain 
agricultural machinery, foreign companies holding commercial registration in Saudi Arabia could 
directly import goods, without going through a commercia l agent.  He further stated that foreign 
companies could import and export goods directly if  the activity of importation and exportation was 
mentioned in their commercial registration; as in paragraph 93, above, comme rcial registration could 
be amended to include im portation and exportation. 
100. In response to a further question, the repr esentative confirmed that no special or unique 
"activity license" requirements existed for forei gn firms and individuals (including importers of 
record) and domestic persons or firms engaging in  importing or exporting goods, in contrast to the 
distributing of goods.  He confirmed that foreign firms that had a commercial registration in Saudi 
Arabia were not restricted in their ability to im port or export most goods except as listed in Annexes E WT/ACC/SPEC/SAU/7 
Page 50  
 
 (List of Products Subject to Non-Automatic Im port Licensing Requirements), F (List of Banned 
Imports), G (Seed Specifications), I (List of Ba nned Exports) and J (List of Exports Subject to 
Authorization/Licensing) to the Report and as describ ed in their scope of business ("object clause") or 
their registration, and that they could easily change their registration to allow for trade.  He further 
confirmed that the criteria for registration were published in the official gazette and generally 
applicable to all.  He stated that, upon accession, the minimum capitalization and commercial 
registration requirements would not be necessary either  to become an importer of record or to re-
export goods from Saudi Arabia (e.g., a non-Saudi outside of the Kingdom and with no presence or 
investment in the Kingdom would be allowed to import and then re-export goods from Saudi Arabia). 
101. In response to specific questions, the representativ e of Saudi Arabia recognized the distinction 
drawn in the WTO between the right to import and export under the GATT and the right, under the 
GATS, to provide services such as distribution and transportation, with respect to imported goods.  
Saudi Arabia would, in implementing its obligati ons under GATT 1994, ensure that the relevant laws, 
regulations and requirements would pe rmit foreign firms, not resident in Saudi Arabia and wishing to 
be importers of record, to engage in importati on and re-exportation without  limitation on equity or 
requirement to invest in Saudi Arabia.  Commercia l distribution in Saudi Arabia of imports as well as 
domestically produced goods would, upon accession, be governed by Saudi Arabia's commitments on 
distribution services as inscribed in its Schedule on Specific Commitments in Services.  Moreover, 
Saudi Arabia maintained the right to require impor ters that were not registered to engage in 
commercial distribution to provide information in  their customs document regarding the further 
disposition of the goods once they entered Saudi Arabia. 
102. The representative of Saudi Arabia said that Saudi  Arabia's requirements on the right to trade 
would not contradict Articles III, VIII and XI of  GATT 1994.  The representative of Saudi Arabia 
confirmed that there would be no restrictions on the right of foreign and domestic individuals and 
enterprises to import and export most goods to and from Saudi Arabia, except as provided in 
WTO  Agreement, and for goods listed at Annexes E (List of Products Subject to Non-Automatic 
Import Licensing Requirements), F (List of Banned Imports), G (Seed Specifications), I (List of 
Banned Exports) and J (List of Exports Subject to Authorization/Licensing) to the Report.  
Saudi Arabia emphasized that foreign enterprises and individuals had to comply with all WTO-
consistent requirements related to  importing and exporting, such as those concerning import licensing, 
TBT and SPS.  Moreover, foreign enterprises and i ndividuals which were only importers of record 
would not have the right to distribute goods with in Saudi Arabia, as providing distribution services 
would be done in accordance with Saudi Arabia's Schedule on Specific Commitments in Services.  
The representative of Saudi Arabia confirmed that i ndividuals and firms were not restricted in their  WT/ACC/SPEC/SAU/7 
 Page 51 
 
 
 registered scope of business and the criteria for re gistration of companies in Saudi Arabia were 
generally applicable and published in the Official G azette.  At a later stage he confirmed that, if a 
foreign business entity (whether commercially regist ered or not) could not distribute goods on its own 
behalf, it could engage a Saudi firm or individual as an  agent to do so.  He further clarified that hiring 
a Saudi as an employee and paying him a salary to perform this function was not permitted.  The representative of Saudi Arabia clarified that upon accession foreign firms could distribute goods in 
Saudi Arabia in accordance with the commitments of Saudi Arabia, as inscribed in its Schedule on 
Specific Commitments in Services. 
103. The representative of Saudi Arabia confirmed that, without prejudice to the limitations on 
distribution in its schedule on market access for services, from the date of accession Saudi Arabia 
would ensure that its laws and re gulations relating to the right to trade in goods and all fees, charges 
or taxes levied on such rights would be in fu ll conformity with its WTO obligations, including 
Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and its commitments in its Schedule on 
Specific Commitments in Services.  In particular, he confirmed that from the date of accession foreign 
firms and individuals with no commercial presence in Saudi Arabia, which were importers of record, 
would be able to register to engage solely in importation without limitation on equity or requirement 
to invest in Saudi Arabia and could obtain any necessary import licenses.  He further confirmed that, to fulfil this commitment, Saudi Arabia would, as necessary, review and amend its laws, including the 
Law on Import Licensing Procedures and would impl ement such laws and regulations in full 
conformity with these obligations.  The Working Party took note of this commitment. 
A. IMPORT REGULATIONS 
- Import Regime 
104. In response to a specific question, the represen tative of Saudi Arabia confirmed that the 
application of secondary and tertiary  boycotts had been terminated in practice and in law by the Saudi 
Council of Ministers Decision No. 5 of 13 June  1995.  The Working Party took note of this 
commitment.  
- Customs Tariff 
105. The representative of Saudi Arabia informed members of the Working Party that, according 
to Article 20 of the Basic Law of Governance, th e authority for setting customs tariffs and for any 
changes thereto, and for levying any surcharges, rests with the Council of Ministers.  Imposition, WT/ACC/SPEC/SAU/7 
Page 52  
 
 amendment or abrogation of customs tariffs requires issuance of a Decree by the Council of Ministers 
that is endorsed by a Royal Decree. 
106. The representative stated that Saudi Arabia  used HS 2002 for classification of goods for 
customs purposes.  There were 7,177 tariff lines at the 8-digit level.  The first six digits corresponded 
to the HS while the last two digits were specific to Saudi Arabia. 
107. The representative of Saudi Arabia said that cu stoms tariffs were applied on CIF basis and 
had been declining.  When Saudi Arabia applie d for accession in 1993, about 75 per cent of its tariff 
lines were subject to tariffs of 12 per cent, while about 6 per cent of its tariff lines carried duties of 
20 per cent or 50 per cent.  Since 1 January 2003, Saudi Arabia had applied the GCC common 
external tariff within the framework of the GCC Customs Union, pursuant to Royal Decree No. 104 of 
20.4.1423H (December 2002).  The representative reported that, later, Saudi Arabia had implemented 
Royal Decree No. 40 of 12.2.1424H (3 February 2004), pursuant to GCC rules allowing members to 
maintain tariff rates for some sensitive items outside  of the common external GCC tariff structure.  
More than 85 per cent of the tariff lines carried duti es of 0 or 5 per cent.  Of the remaining (roughly) 
14 per cent of the lines, 7 per cent carried duties of 12 per cent, 6 per cent carried duties of 20 per cent 
and 20 tariff lines (i.e., tobacco and tobacco-relate d products) carried duties of 100 per cent.  In 
response to a question from a member of the Work ing Party, the representative noted that, for a 
transition period of three years, from the date of issuance of the Royal Decree, these items would not 
be aligned in the GCC external tariff; they woul d be aligned after this period, per the agreement 
reached by the GCC member states.  Imports of the remaining 70 lines (i.e., alcohol and pork) were 
completely out of the GCC regime; they  were banned for religious reasons.   
108.  Following the completion of bilateral negotia tions with WTO Members, Saudi Arabia's 
Schedule of Concessions and Commitments on Goods will be reproduced in Part I of the Annex to the 
Protocol of Accession of Saudi Arabia. 
- Tariff Rate Quotas and Tariff Exemptions 
109. In response to questions raised by members of the Working Party, the representative of 
Saudi Arabia stated that Saudi Arabia did not appl y tariff rate quotas and had no intention to do so in 
the future, except as might be permitted under Article XIX of the GATT 1994 and the 
WTO  Agreement on Safeguards.  WT/ACC/SPEC/SAU/7 
 Page 53 
 
 
 110. The representative of Saudi Arabia further stated  that Section VIII, Articles 98 to 105 of the 
Common Customs Law of the GCC States, adopted 27-29 November 1999 (implemented from 2002), 
provided for the following tariff exemptions: 
i. Imports by diplomatic missions and by diplomats. 
ii. Imports of arms, ammunition, military equipment and other materials by military 
forces and by internal security forces. 
iii. Imports by philanthropic societies. 
iv. Goods exported or re-expor ted from Saudi Arabia and subsequently returned to 
Saudi Arabia (Returned Goods). 
v. Personal effects and household items  imported as passenger's baggage. 
111. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the exemption of customs du ties that was among the incentives for investment set 
out in the 1979 Investment Law (discussed in para graph 53 of this Report) was not conditioned on 
local content or exportation a nd was generally available. 
112. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the tariffs were not suspended for imports by the monarchy or by the government 
for its own use.  He further stated that  tariffs for imports for religious purposes, per se , were not 
suspended.  However, where a religious entity w as registered as a charity with the government and 
imported goods for the purpose of providing services, on a non-profit basis, for "human, social, 
educational, scientific or religious fields or any other charitable purpose" that was not for profit, the 
tariff would be suspended, pursuant to Articles 22-25 of the Rules of Implementation of the GCC Common Customs Law.  In response to a questi on from a member of the Working Party, the 
representative stated that the GCC Common Customs Law contained no provision for temporary 
suspension of customs duties for reasons such as national emergency. 
113. The representative of Saudi Arabia stated that Saudi Arabia would administer any tariff rate 
quota or tariff exemptions in conformity with the requirements of the WTO Agreement, in particular 
Articles I, II, VIII and XIII of the GATT 1994 and the Agreement on Import Licensing Procedures.  The Working Party took note of this commitment.   
- Other Duties and Charges 
114. The representative of Saudi Arabia stated th at in the Kingdom’s view Saudi Arabia was 
applying "other duties and charges" within the meaning of Article II:1(b) of the GATT 1994 on 22 tariff lines in HS Nos. 2401, 2402 and 2403, which had been shown in Saudi Arabia's revised offer 
of June 1999.  The representative of Saudi Arabia confirmed that other duties and charges on these 22 
tariff lines would be bound at the rat es shown in its June 1999 offer. WT/ACC/SPEC/SAU/7 
Page 54  
 
 115. He further confirmed that Saudi Arabia would not list other duties and charges in its Schedule 
of Concessions and Commitments on Goods under Artic le II:1(b) of the GATT 1994 on all other tariff 
lines, except the 22 tariff lines of HS Chapter 24 wh ich would be bound at the rates set forth in the 
Schedule, and would bind such other duties and charg es at zero.  The Working Party took note of this 
commitment. 
- Fees and Charges Connected with Importation (for Services Rendered) 
116. The representative of Saudi Arabia stated that Saudi Arabia imposed very few fees or charges 
for port clearance, customs processing, customs inspec tion or import or export licenses.  He said that 
there was a small fee of SAR 20, which corresponded to  the costs of the customs declaration form and 
use of Customs' computers to complete the declarati on form.  He added that, if goods were left in the 
Customs sheds and were not cleared after a delay of 13 days from the date of unloading, storage 
charges were levied at the rate of SAR 20 per ton per day.  However, no charges were levied if the 
delay was not caused by the importer, e.g., the delay in clearing the goods was due to one of the following reasons:   
i. the Customs Department was responsible for the delay;  
ii.  a natural disaster; or iii. an official holiday. 
 
He said that the fees imposed for loading, unloa ding and handling of import and export cargoes at 
Saudi Arabia’s ports of entry had two parts:   one part mandated by the Government ( see Annex A-3) 
and the rest determined by private-sector operators.  These fees were not collected by the government 
but by the companies operating the port facilities. 
117. In response to questions from members of the Wo rking Party, the representative noted that, in 
accordance with Article VIII:3 of the GATT 1994, Sa udi Arabia did not impose substantial penalties 
for minor Customs breaches. 
118. One member of the Working Party asked for additional information on the fees and charges 
for the provision of port services.  In response, th e representative of Saudi Arabia reported that the 
provision of port services was regulated by the Saudi Port Authority, a government agency overseeing 
private companies operating and providing services in each of the Kingdom's ports.  The fixed rate structure of such fees applicable to dry cargoes and livestock was set by the Saudi Port Authority 
under the authority of the Council of Ministers and applied to all ports other than oil terminals ( see 
Annex A-3 for a comprehensive list of such charg es); these charges were supplemented by additional 
charges applied by the private companies opera ting the port services and facilities, and depended upon  WT/ACC/SPEC/SAU/7 
 Page 55 
 
 
 the weight and volume of goods handled, including the packaging of the goods being imported and 
the number and size of the containers involved.  He  emphasized that the rates were not based on the 
value of the imports, and in his view reflected the approximate cost of the services rendered.  Fees for 
services rendered at Saudi Arabia’s oil ports and te rminals have no mandated component and are fully 
established by the private operators of tho se facilities on behalf of the Government.  
119. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that Royal Decree No. 7/B/16941 of 6.11.1417H (15 March 1997) had passed 
responsibility for all operations and maintenance of berths and equipment owned by the Ports 
Authority to the private sector, to be managed on commercial basis, based on the following principles: 
- The ports and their facilities would rema in under government ownership but would 
be privately managed on a commercial basis; and  
- The private sector was given incentives to invest in the field of heavy equipment 
necessary to operate the ports effectively. 
Under this new program, investment opportunities in  Saudi ports other than privately operated oil 
ports and terminals were put out for public biddi ng during the year 1997, according to the following 
rules: 
- The government and the private sector operato rs would share the terminal revenues as 
described above; 
- The private operator would collect charges on the basis of fixed fees calculated by the 
government in accordance with the port ta riff, based on the cost of the services 
provided and in order to pay for port infrastructure.  Additional charges were applied 
to cover the variable costs of the private company operating the port; 
- Projects were awarded based on bidding and given to the party who offered the 
highest percentage for the government’s share; 
- All Saudi companies which had, or which ha d partners that had, experience in the 
field were allowed to bid; 
- To widen the private sector’s participation and provide competition, the operator was 
not allowed to participate in more than one contract at the same port;  
- The operator was required to invest in ne w equipment, which becomes port property 
at the end of the contract; and  
- The operator would market the port services to attract maritime trade. 
Today, he said, non-oil ports and terminals were managed and operated by the private sector and all 
oil ports and terminals continued to be solely ow ned by the government but operated and maintained 
by private companies.  The responsibilities of ma naging and operating the non-oil ports and terminals 
were passed to the private sector on a facility-by-fac ility basis, subject to the oversight of the Ports 
Authority.  The non-oil Saudi ports were subdi vided into a number of independent facilities 
(container, general cargo, reefer cargo, bulk cargo, etc .) with every terminal having its own area, 
equipment, warehouses, workshops and open yards.   The unified Saudi Port Tariff, dated 31 WT/ACC/SPEC/SAU/7 
Page 56  
 
 December 1998 and developed by the Saudi Seaports  Authority, set forth all relevant charges 
applicable to non-oil ports and terminals and was available at www.ports.gov.sa/tariffs.htm
.  It was 
binding on all private port operators and port users, ot her than private operators and users of oil port 
and terminal facilities.  The operators were required to collect the charges s tipulated in the unified 
Port Tariff, based on the cost of services provided to port users.  
120. A member of the Working Party asked Saudi Arabia to explain requirements that applied to 
imports of non-unitized cargo such as rice, in particular the port levy fee.  In response, the 
representative of Saudi Arabia stated that this levy was based on the unified Port Tariff and was 
applied to compensate for the labour and equipment costs involved in unloading cargo.  The member further asked whether such insp ection was necessary given more modern methods of inspection, and 
asked Saudi Arabia to review these requirements.  The representative of Saudi Arabia stated that 
Saudi Arabia would introduce five x-ray machines, three of which were unde r construction in Jeddah 
Port and the rest under construction in King Abdulazi z Port in Damman.  In addition, Customs would 
review its inspection system in the context of its ongoing process of modernization. 
121. Members asked about fees imposed by Saudi Arabia for notarization or consularization of 
documents.  In response, the representative of Saudi Arabia stated that the only such fees currently 
imposed were for the authentication of certificates of origin and of invoices by Saudi consulates and the US-Saudi Arabian Business Council.  This was a general requirement imposed pursuant to 
Council of Ministers Decision No. 5 of 3.1.1406H (18 September 1985), which had been provided to 
the Working Party.  The Chambers of Commerce were not involved in the notarization or 
consularization of documents.  The Business Council was authorized to charge a fee of US$ 15 per 
document to authenticate invoices and certificates of origin.  The authentication was performed by 
Business Council officials located in the Saudi Cons ulates.  After being authenticated, the documents 
could then be provided to Consular officials for consularization.  The fee collected by the Ministry of 
Foreign Affairs for consularization was nominal, at  US$ 8 per document, regardless of the number of 
pages contained in the document.  Fees collected  by the Consulates were deposited in general 
government revenues; fees collected by the Busin ess Council were used by the Council to promote 
US-Saudi trade.  The practice of requiring authen tication and consularization had been necessary, he 
said, to combat commercial fraud and to ensure that  products prohibited for health reasons were not 
exported to Saudi Arabia.  Members noted that th e requirement posed difficulties for exporters not 
operating from areas served by consular offices or the Business Council and duplicated similar reviews conducted by Customs officials in Saudi Arabia at the time of importation.  They pointed out that revenues from the fees were not related to the co st of the service, and requested that Saudi Arabia 
eliminate the practice.  WT/ACC/SPEC/SAU/7 
 Page 57 
 
 
 122. The representative of Saudi Arabia confirmed that the requirement for notarization, 
authentication or consularization of trade documen ts, including certificates of origin and invoices, and 
the associated fees applied to all exports to Saudi  Arabia would be terminated no later than 31 
December 2007, as authorized by Council of Ministers Decision No. 5-B-57611 of 28.11.1424H (20 January 2004).  He confirmed that this commitment included fees charged by Consular Offices of the 
Kingdom of Saudi Arabia and by the Business Council.  The Working Party took note of this 
commitment.   
123. The representative of Saudi Arabia confirmed that any fees or charges imposed on or in 
connection with importation and expor tation, would be applied in accordance with Article VIII of the 
GATT 1994.  He further confirmed that the review of the inspection system described in paragraph 
120, above, would be completed with in one year of the date of Saudi Arabia's accession to the WTO.  
The Working Party took note of these commitments. 
- Import Licensing Systems  
124. In addition to information contained in th e Memorandum on the Foreign Trade Regime, the 
representative of Saudi Arabia had provided a deta iled description of the import licensing procedures 
prevailing in Saudi Arabia in document WT/ACC/S AU/30, together with the justification for the 
measures in document WT/ACC/SAU/29/Add.3, as well as documents WT/ACC/SAU/49, 53 and 56.  The representative of Saudi Arabia then provided an  Action Plan for the Implementation of the Import 
Licensing  Agreement in document WT/ACC/SAU/40, Council of Ministers Decision No. 84 of 
1.4.1421H (3 July 2000), and later noted that  document WT/ACC/SAU/30 would be updated and 
submitted to the Working Party by the time accession.  The Import Licensing Law, issued pursuant to 
Council of Ministers Decision No. 88 of 6.4.1423H ( 16 June 2002), incorporated into Saudi law the 
provisions of the WTO  Agreement on Import Licensing Procedures.  He further confirmed that some 
of the measures described in documentation submitted to the Working Party had been eliminated in 
order to conform with the requirements of the WT O Agreement, and that all measures remaining in 
place were described fully in Annexes E (List of Products Subject to Non-Automatic Import Licensing Requirements) and F (List of Banned Imports) to this Report.  He also noted that additional 
information could be obtained from the concerned de partment or division of the respective Ministry 
or from the Information Centre of the Ministry.  The information could also be obtained from the 
Chamber of Commerce and Industry.  He also confirmed that any person with a commercial 
registration (i.e., registration to do business), whethe r an individual or an entity, or an importer of 
record would be able to apply for an import licen ce, except for agricultural machinery, as provided for 
in Annex E.   WT/ACC/SPEC/SAU/7 
Page 58  
 
 125. The representative of Saudi Arabia confirmed that , in addition to the Ministry of Agriculture 
and the Ministry of Commerce and Industry, the Ministry of Health, Ministry of Information and 
Culture, Ministry of Interior, and Ministry of Petroleum and Mineral Resources, the Ministry of 
Education (Department of Museums and Archaeology), the Communications and Information Technology Commission (CITC), the National Commission for Wild Life Conservation and Development (NCWCD) and the Chivalry Club a ll had responsibilities concerning the approval of 
import licenses.  He also confirmed that there were  no substantive requirements to register with the 
Ministry of Commerce and Industry in order to import, although there was a requirement to obtain 
commercial registration for the carrying on of busin ess, whether manufacturing, retailing, trading or 
professional.  Any company, whether Saudi or forei gn, which was commercially registered in the field 
of import trade or was an importer of record coul d import goods without the need to get any further 
permission or authorization, except for items whic h required an import licence.  In response to a 
question from a member of the Working Party, the representative of Saudi Arabia reported that wheat 
imports no longer required permits or import licenses from the Grain Silos and Flour Mills Organization (GSFMO) ( see also  paragraph 44.xii, above).  Any provisions or references to such 
permits or licenses were null and void and would be  deleted from all laws, regulations or other 
measures as of the date of accession.  He further stated that domestic grain benefited from price support, as notified to the Working Party and cont ained in Saudi Arabia’s Schedule of Concessions 
and Commitments on Goods.  A GSFMO permit was not required to import grain and there was no 
approval process for imported grain.  Grain imports were not restricted in any way and prices were 
determined according to supply and demand.  Th e representative added, in response to another 
question, that Saudi Arabia no longer requi red licensing for "milk for industrial use." 
126. Members of the Working Party asked Saudi Arab ia to provide a list of products subject to 
automatic and non-automatic import licensing require ments.  The representative of Saudi Arabia 
stated that Saudi Arabia did not subject any imports to automatic licensing at this time; a list of 
imports subject to non-automatic licensing requirement s was attached at Annex E.  In addition, he 
confirmed that Saudi Arabia had circulated to the Working Party its response to the questionnaire 
"Information on Import Licensing Procedures" (WT/ACC/SAU/60).  In response to a question from a 
member of the Working Party, the representative of Saudi Arabia stated that: (i) automatic licensing 
was provided for in Council of Ministers Decision No. 88; and (ii) non-automatic licenses were not used for statistical purposes.  He further stated  that Saudi Arabia currently uses non-automatic 
licensing for all products which require an import licence, but in the future may use automatic 
licensing as authorized by the Council of Ministers Decision No. 88.  If Saudi Arabia does institute 
automatic licensing for products in the future, those requirements will be applied in a manner that is 
consistent with all provisions of the WTO Agreement on Import Licensing.  WT/ACC/SPEC/SAU/7 
 Page 59 
 
 
 127. A member of the Working Party raised questions  and concerns regardi ng Annex E relating to 
import licenses and asked whether Saudi Arabia was reviewing its licensing requirements to test 
whether non-automatic licenses were actually requi red and necessary on all products within the HS 
line listed or whether licenses were only needed fo r specific products within the category.  The 
member further observed that several products lis ted in Annexes E and F were covered by Saudi 
Arabia's ITA commitments and it was concerned that the market access achieved through elimination 
of tariffs might be undercut by non-automatic  licenses and bans on some of these technology 
products.  In response to these comments, the represen tative of Saudi Arabia stated that the Kingdom 
had carefully reviewed the Annexes and the licensi ng requirements and that the licenses were required 
and necessary for all products listed in Annex E.   
128. In response to a further question from a Me mber, the representative of Saudi Arabia 
confirmed that, for transmission apparatus classifi ed in heading 85.25 and listed in Annex E , only 
equipment whose operation requires a frequency assignment from  CITC or equipment using 
frequencies not in accordance with the Saudi Nationa l Frequency Plan, are subject to non-automatic 
import licensing.  Other transmission apparatus, such as personal digital assistants, whose operation 
requires a frequency assignment to a service provider, are not subject to licence.  The Working 
Party took note of this commitment. 
129. Members of the Working Party noted, in particular, that Article 3.5(f) of the  Agreement on 
Import Licensing provided that ordinarily an import licence must be granted within 30 days of receipt 
of a complete application.  These members noted that for some categories of goods, import licenses 
took longer than 30 days, in particular, radio co mmunication apparatus (one to two months) and 
network equipment (six to twelve months).  Th ese members earlier had noted that the importation of 
such products was also subject to approval by the Frequency Department of the Department of Post, 
Telegraph and Telephone.  In response to these comme nts, the representative of Saudi Arabia stated 
that the Frequency Department of the CITC ordinar ily completed its review in one week.  If a product 
met the frequency and necessary technical specifications , the CITC would ordinarily decide whether 
to grant an import licence within 30 days.  In r esponse to a question, the representative of Saudi 
Arabia stated that the new Saudi legislation on import licensing procedures clearly provided that 
import licenses must be issued within 30 days of application; the 30-day limit applied to 
telecommunications equipment, as well.  The repr esentative of Saudi Arabia confirmed that Council 
of Ministers Decision No. 84 of 1.4.1421H (3 July  2000) and Council of Ministers Decision No. 88 of 
6.4.1423H (16 June 2002) applied to  telecommunication equipment. WT/ACC/SPEC/SAU/7 
Page 60  
 
 130. In response to further questions from a member of the Working Party regarding import 
licensing for telecommunication equipment, the representative of Saudi Arabia furnished the 
following information: 
i. In accordance with Article 39 of the Telecommunication Act, Council of Ministers 
Decision 88, and Article 3 of the Rules of Procedures of Pleading before the Board of Grievances, the applicant has the right to challenge the rejection of his/her 
application.  First, he/she must appeal  to the Minister of Telecommunication and 
Information Technology within 15 days of th e applicant's notification of the rejection 
of his/her application.  The Minister has 30 days to reply.  Second, if the Minister rejects the appeal, the applicant has 30 days  to challenge such a decision before the 
Board of Grievances.  The Board acts in its  capacity as an independent administrative 
court.  In response to a question, the repr esentative of Saudi Arabia clarified that in 
case of rejection of an application for an import licence, reasons for rejection must be provided to the applicant. 
ii. The International Telecommunication Un ion (ITU) standards were generic and 
covered a wide range of specifications.  Saudi Standards were in line with ITU 
Standards, and covered local requirements.   
iii. The application for using radio teleco mmunications equipment would be processed 
within one month of submission.  After a pproval of the application, a one-year grace 
period was provided within which the equi pment and assigned frequencies are to be 
brought into use.  The applicant was to notify the CITC upon use of the equipment 
and frequencies and then the relevant licen ce would be issued.  The one-year period 
for bringing the equipment and frequencies into  use expired if the applicant failed to 
notify the CITC of bringing the equipment and frequencies into use within a year or, alternatively, request an extension from CITC.  Licenses for equipment and frequencies were renewable annually.  
In response to a comment from a member of the Wo rking Party, the representative confirmed that the 
CITC is the appropriate authority for licensing fo r "radio and telecommunication" equipment.  He 
stated that document WT/ACC/SAU/30 would be update d to reflect this change and submitted to the 
Working Party. 
131. A member of the Working Party inquired as to the meaning of terms "wireless sets", 
frequency spectrum" and "security reasons" as used in Saudi Arabia's Guidelines to Import Licensing 
Procedures.  The representative of Saudi Arabia rep lied that the meanings of these terms were as per 
their ITU-R definitions. 
132. With respect to Satellite Internet Receivers , HS 85291000, the representative of Saudi Arabia 
noted that these products were currently listed in  Annex F as banned imports.  He confirmed that 
Saudi Arabia would permit imports of these products, subject to a non-automatic licence, within three 
years of the date of Saudi Arabia’s accession to the WTO.  In his government’s view, non-automatic licensing was necessary to protect public morals.  He further stated that internet service providers  WT/ACC/SPEC/SAU/7 
 Page 61 
 
 
 transmitting to such satellite internet receivers w ould be required to use a Saudi internet filtering 
facility.  The Working Party took note of this commitment. 
133. Members of the Working Party also asked Sa udi Arabia to clarify the grounds for, and 
particulars of, its import licensing regime for the Chivalry Club.  The representative from Saudi Arabia clarified that the regime was necessar y to preserve a policy of great importance to the 
Kingdom.  The regime allowed the Saudi authorities to closely monitor the importation of non-
Arabian horses to ensure the preservation of the blood lines of the Arabian horse stock in 
Saudi Arabia.  He explained that only by closel y monitoring imports of live horses could this be 
ensured.  In response to further questions, he noted that the importation of non-Arabian horses was 
not banned; the Chivalry Club would grant an import licence for the importation of non-Arabian horses, after clearance by the Department of Anim al and Plant Quarantine at the Ministry of 
Agriculture, within 30 days of receipt of a complete application.  In this connection, some members of 
the Working Party requested additional information on the time limits for grant of other import licenses.  The representative reported that the appli cable time limit was 30 days.  He further reported 
that imports of horses, whether Arabian or non- Arabian, were not banned, but required a non-
automatic import licence.   
134. In response to requests for information concerning the fees payable for obtaining an import 
licence, the representative of Saudi Arabia stated th at there were no fees payable for the obtaining of 
an import license; Saudi ministries, including the Ministries of Agriculture, of Health and of 
Commerce and Industry, did not charge fees for import licensing procedures, including the application 
process.  Companies or persons wishing to import me rchandise for display at a trade fair were granted 
non-automatic import licenses that permitted the importation of all necessary samples, subject to the condition that the samples not be offered for direct sal e.  In response to a remark by a member of the 
Working Party, the representative of Saudi Arabia st ated that import licensing for trade fairs had been 
listed in Annex E. 
135. Some members of the Working Party requested information on the precise laws and 
regulations governing the time limits for issuing an import licence.  In response, the representative of 
Saudi Arabia stated that Council of Ministers Decision No. 88 of 6.4.1423H  (16 June 2002) provided 
that the time limit for issuance of licenses was thirty days.  In the event of an unsuccessful application 
for an import licence, the person requesting the li cence could appeal the refusal to the Board of 
Grievances. 
136. A member of the Working Party asked about the timing of appeals of decisions by particular 
ministries to reject an application.  The Saudi representative confirmed that the entire procedure for WT/ACC/SPEC/SAU/7 
Page 62  
 
 appeal (including re-appeal) to the Ministry of Hea lth generally would take thirty working days to 
complete.  He further stated that the process of appeal at the Ministry of Commerce and Industry 
depended upon the completion of the licensing requirement s by the importer, i.e., if the importer were 
to complete the requirements, the licence would be issued upon completion.  In the case of chemicals, 
he reported, the issuance process would take one day; for distillation equipment, the process would 
require from two to three days.  With regard to app eals to the Ministry of Agriculture, he stated that 
the process for the procedure of a ppeal, when the documents are correct and complete, requires only 
one day in most instances. 
137. In response to further requests for information,  the representative of Saudi Arabia noted that 
decisions to not grant an import licence could first be appealed to the Minister of the concerned 
Ministry or to the head of the Agency concerned.  Any subsequent appeal would be to the Board of 
Grievances.  If the Minister or the head of the Ag ency did not decide the appeal within 90 days, the 
applicant had the right to submit an appeal to the Board of Grievances.  The Board of Grievances and 
the applicant would receive reasons, in writing, from the concerned Ministry or Agency, and the 
applicant could appeal on that basis.  The repr esentative referred the members to paragraphs 82-84, 
above, regarding the composition and work ings of the Board of Grievances. 
138. Some members of the Working Party asked whether petroleum and natural asphalt were 
subject to import licensing and requested that Saudi Arabia provide the justification pursuant to the 
relevant provisions of the WTO Agreement for the maintenance of import licensing on those products.  
In response, the representative of Saudi Arabia st ated that no import licensing requirements currently 
existed for petroleum products, including asphalt.   
139. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia stated that high-quality photocopiers did not require an import licence from the Public Security Department of Forgery at the Ministry of  Interior.  However, anyone wishing to purchase and 
use such a copier was required to sign an undertaki ng with the Ministry of the Interior.  This was 
because such photocopiers could produce extremely high-quality reproductions of documents, making 
it hard to differentiate between the original and the photocopies of paper currency and official 
documents, certificates, passports, maps and stamps.  In response to a later question from a member of 
the Working Party, the representative of Saudi Arabia  stated that, as a matter of national security, the 
Saudi authorities monitored not only the importer, but also the purchaser and ultimate user of high-quality copiers to preclude, e.g., forging of identification papers and counterfeiting.  
140.   He also noted that burglar alarms require d a non-automatic import licence to prevent misuse 
by criminals or terrorists.  For this reason, impor t licenses were only issued to government enterprises,  WT/ACC/SPEC/SAU/7 
 Page 63 
 
 
 public enterprises and firms or individuals with a contract with the government to supply such 
security devices from inside the Kingdom or abroad.  Some members of the Working Party requested 
additional information on the justification for the import licensing requirements for security reasons.  
The representative of Saudi Arabia stated that those measures were necessary in order to prevent 
import and the misuse of the items by persons who could pose a security risk.  The Ministry of the Interior was the agency that determined whether th e importer posed a security risk or not.  He stated, 
in response to a further question of a member of the Working Party, that the non-automatic licensing 
requirement applied not to fire alarms, but only to bur glar (anti-theft) alarms.  He further stated that 
private entities were allowed to obtain licenses for importation of burglar (anti-theft) alarms. 
141.  The representative of Saudi Arabia stated that the list of items subject to import licensing was 
under review, and in this context he noted that the requirement for import licensing of fire-fighting 
equipment had recently been lifted.  Fire-figh ting equipment could now be imported without a 
licence, following a customs examination to determ ine compliance with Saudi mandatory standards 
(technical regulations) or international technical re gulations.  In response to a question from a member 
of the Working Party, he noted that fire extinguishers no longer were subject to licensing 
requirements, although SASO had issued applicable  mandatory standards (technical regulations).  
When SASO prepared the mandatory standards (t echnical regulations), it circulated them for 
comments to all concerned bodies, including foreign embassies in Saudi Arabia.  The standards were 
applied to both locally manufactured and imported fire extinguishers.    
142. The representative of Saudi Arabia later stated that the review of items subject to import 
licensing had been completed and was reflected in Annex E.  He assured the members of the Working 
Party that the list would continue to be reviewed at  least once a year and the findings and decisions of 
each review would be published in the Official Gazette Umm al-Qura  and notified to the Council on 
Trade in Goods.  The Working Party took note of this commitment.  
143. Some members of the Working Party requested  information on the system for licensing the 
importation of agricultural machinery.  The represen tative of Saudi Arabia stated that the import 
licenses for agricultural equipment were non-automa tic and had two purposes.  First, they were 
necessary to administer a system of subsidies paid to importers of such equipment.  Second, the 
import licence was required even if the importer di d not intend to apply for a subsidy payment in 
order to ensure that the equipment was suitable for the Kingdom's environment.  The representative 
confirmed that the licence requirement would not be applied as a disguised restriction to trade.  In response to a question and an observation by a memb er of the Working Party, the representative of WT/ACC/SPEC/SAU/7 
Page 64  
 
 Saudi Arabia stated that an importer of agricultura l machinery must be an authorized distributor or 
agent. 
144. One member of the Working Party inquired as to the procedures for importing medical 
products, including pharmaceuticals.  In response, th e representative of Saudi Arabia stated that no 
import licence is required for approved pharmaceutical and medical products, but that, as specified in Annex E (List of Products Subject to Non-Au tomatic Import Licensing Requirements), certain 
medical products were subject to non-automatic import licensing.  In response to a further question, 
he confirmed that imports of medicine for human use under numbers 30.03 and 30.04 were not 
subject to import licensing (as long as they had been approved for sale in Saudi Arabia), but that imports of medicines for veterinary use under those numbers were subject to import licensing 
requirements, for the purposes of guaranteeing animal health and safety.  He further reported that 
pharmaceutical or medical products not previously  approved were subject to an approval process 
administered by the Ministry of Health designe d to evaluate the product and ensure that the 
manufacturer follows Good Manufacturing Practices (G MP).  The representative reported that this 
process may take up to 18 months.  One of the members of the Working Party inquired as to whether 
Saudi Arabia required pharmaceuticals to be registered  in at least three EU countries before allowing 
for importation or marketing in Saudi Arabia.  Th e representative of Saudi Arabia confirmed that 
there was no such condition for importation of medi cines for human use.  The process for companies 
wishing to market their pharmaceutical s in Saudi Arabia was as follows: 
i. submit a completed registration form for the company; 
ii. the Technical Committee would examine the form and attachments and, upon 
preliminary approval, would establish a inspection group for the company and the product; 
iii. the inspection group would visit the company and its factory to ensure that the 
company applied Good Manufacturing Practice; 
iv. the final decision of the Technical Committee would be made based on the report of 
the inspection group; and 
v. after approval, the company would be allo wed to obtain registration of its product(s). 
In response to a question, he confirmed that th e base price for a pharmaceutical was established as the 
last stage in the registration process. 
145. A member of the Working Party noted that Saudi Arabia required agreement on a base price 
of a pharmaceutical as the last step before a product would be registered.  In the member’s view, 
safety and efficacy of a pharmaceutical and pricing presented two separate issues, and registration should not be conditioned on agreeing on a base price.  The pricing element of the registration process could be considered an unjustif ied restriction on imports.    WT/ACC/SPEC/SAU/7 
 Page 65 
 
 
 146. A member of the Working Party stated that in its view the requirement for factory inspections 
was a technical regulation.  In that member’s view, some form of certification that does not require 
on-site inspection should be possible in this regard, and the transparency and due process 
requirements of the WTO Agreements on TBT and Import Licensing should apply.  That member also requested additional information on application of  the registration process to both importers and 
domestic manufacturers -- in particular, whether domestically produced products must meet fewer 
requirements or if the registration process took less time and whether the government applied any 
prohibitions or limitations on importation of pharm aceuticals if domestically produced products were 
on the market.   
147. The representative of Saudi Arabia stated that inspection of plants to ensure use of Good 
Manufacturing Practice (GMP) was an essential part of the registration process to ensure safety and 
quality of pharmaceutical products.  Factory inspections  were carried out by many countries that had 
well-established Drug Regulatory Authorities.  Currently, a process for certification without inspection did not exist.  He confirmed that th e same registration process applied to both importers 
and domestic manufactures and that the same requirements and time frames applied.  Once a medicine 
for human use was registered, no further prohibitions  or limitations applied, and it could be imported 
without the need for any further licensing.  He  added that the fee for pharmaceutical company 
registration was SAR 1,000 and the fee for product re gistration was SAR 200.  (Information about the 
procedure for company registration w as provided in paragraphs 89-93.)   
148. A member of the Working Party observed that commercial importers of chemicals required a 
licence from the Ministry of Commerce and Industry whereas importation of chemicals for factories required a non-automatic import licence from the Ministry of Industry and Electricity.  The member observed that the same chemicals were imported for both commercial and factory purposes and that the treatment for the two should not be different.  The representative of Saudi Arabia explained that 
the procedures had been streamlined and that now the Ministry of Commerce and Industry was 
responsible for licenses for import of chemicals fo r company and factory use.  In response to a 
question from a member of the Working Party, th e representative of Saudi Arabia stated that 
document WT/ACC/SAU/30 would be update d and made public prior to accession. 
149. A member of the Working Party asked Saudi Ar abia to explain its reasons for requiring non-
automatic import licenses for certain "distillation e quipment".  In response, the representative of 
Saudi Arabia stated that, in the past, importe d distillation equipment had been used to produce 
alcoholic beverages.  He explained that, as th e production of alcoholic beverages was prohibited 
under Saudi law (Shari'a), the Kingdom of Saudi Arab ia had decided to regulat e imports of distillation WT/ACC/SPEC/SAU/7 
Page 66  
 
 equipment to address the problem.  In reply to a question from a member of the Working Party, the 
representative of Saudi Arabia reported that th ere was no ban on the importation of distillation 
equipment and that importation required an import licence from the Ministry of Commerce and 
Industry (and not from the Ministry of Industry and Electricity). 
150. A member of the Working Party inquired as to procedures regarding pesticides.  The 
representative of Saudi Arabia replied that non-au tomatic import licenses for pesticides are valid for 
six months (or for the remainder of the registra tion period) because this assists the Ministry of 
Agriculture in tracking the quantities of imports of potentially harmful substances, and for statistical 
tracking purposes.  Also, he reported, the system he lps ensure that importers' registration documents 
are valid during the period.  He further stated that, if an application were rejected for any reason, the 
applicant could appeal the decision to the Mi nistry, which would issue a licence as soon as the 
applicant had satisfactorily completed the necessary documentation. 
151. A member of the Working Party asked for de tails regarding the licensing procedures for 
veterinary drugs, vaccines, feeds and domestic animals.  In response, the representative of 
Saudi Arabia reported that, if the documents were  correct and complete, the process for appeal and 
issuance of the licence by the Ministry of Agriculture  would take one day.  He further explained that 
the use of the term "feed additives" indicated th at the provision in question applied only to feed 
additives and did not apply to feeds, and that a licence was required to import other domestic animal-
related products.  In response to a further questi on from a member of the Working Party regarding 
import licensing for other domestic animal-related pr oducts, the representative of Saudi Arabia stated 
that Annex E (List of Products Subject to Non- Automatic Import Licensing Requirements) contained 
the requested information on all products subject to import licensing. 
152. A member of the Working Party asked Saudi Arab ia to clarify its regime as it applies to seeds 
and fertilizers.  In response, the representative of Sa udi Arabia noted that the process of the Ministry 
of Agriculture's examination and approval of an a pplication for import licence, or of an appeal (re-
appeal), would take only one day where the doc umentation was complete.  He reported that 
organizations permitted to provide a health certificate for seeds and fertilizers included the governmental authorities in the country of origin, as well as official laboratories in the country of 
origin that had been approved by the Ministry of  Agriculture.  Also, he reported, such certificates 
were issued by the Saudi Ministry of Agriculture  and easily obtained where the products were free of 
pests and diseases.  Regarding the specifications u sed by the Saudi Arabian Standards Organization 
(SASO) to determine whether to approve an  application for import licence for seeds, the 
representative confirmed that the list of requireme nts had been submitted to the Working Party at  WT/ACC/SPEC/SAU/7 
 Page 67 
 
 
 Annex G (Seed Specifications) to the Working Part y Report.  The time limits for import licenses were 
based on the need to ensure that the Ministry of Agriculture could ensure the validity of importers' 
registration documents and to allow Saudi authorities to track import levels of seeds and fertilizers for 
statistical purposes.  One member of the Worki ng Party questioned whether Saudi Arabia imposed 
additional import requirements on seeds, through a non-automatic licensing process.  The representative of Saudi Arabia stated that the role of the Ministry of Agriculture was explained in 
Annex G, "Conditions and Requirement s", and that the procedure was si mple and short and did not, in 
his view, constitute a disguised restriction on intern ational trade.  A member of the Working Party 
raised the following questions and concerns regardi ng some entries in Annex G; the representative of 
Saudi Arabia responded to each point as follows: 
i. With regard to the provisions for markings on containers of treated seeds (Seed 
Specifications, point 5), the representative of Saudi Arabia responded that the markings should be in English and Arabic  and should specify that the seeds were 
treated with poisonous chemicals and are not fit for human or animal consumption.  The "skull and cross bones" danger sign s hould be printed on the seeds containers 
(bags, cans or tins). 
ii. With regard to "Conditions and Requirement s" (point 3c), the representative of Saudi 
Arabia responded that, if a pesticide were  used, it was only necessary to indicate the 
name and registration number of the product u sed, or alternatively, the ingredient, on 
the label or an additional label.  The repr esentative of Saudi Arabia agreed that only 
the name and registration number of the product would be used. 
iii. With regard to the requirement that certificates should confirm that the seeds have not 
been subject to radiation ("Conditi ons and Requirements", point 3d), the 
representative of Saudi Arabia stated that  these certificates had been requested only 
during the crisis of the Chernobyl nuclear plant.  These certificates were not requested any more. 
153. In response to further questions from a member of the Working Party regarding seed import 
restrictions, the representative of Saudi Arabia clarifie d that Annex G set forth in detail the role of the 
Ministry of Agriculture, that all imported seeds were subject to import licensing and that Saudi Arabia would not apply the Seed Specifications as an unjus tified barrier to trade.  The Working Party took 
note of this commitment. 
154. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia stated that Council of Minister s Decision No. 84 of 1.4.1421H (3 July 2000) and 
Council of Ministers Decision No. 88 of 6.4.1423H (16 June 2002) were the measures implementing 
the WTO Agreement on Import Licensing Procedures.  The Import Licensing Law issued pursuant to 
Council of Ministers Decision No. 88 incorporated into Saudi law the provisions of the 
WTO  Agreement on Import Licensing Procedures.  The salient features of the new Law were:  WT/ACC/SPEC/SAU/7 
Page 68  
 
 i. Persons, firms and institutions eligible to apply for import licenses are:  (a) Saudi, 
foreign or joint venture companies regist ered under Saudi laws; (b) natural persons 
registered in the Commercial Register; (c) foreign enterprises registered to engage 
solely in importation of goods into Saudi  Arabia; and (d) Saudi nationals and non-
Saudis holding residence permits, without commercial registration, provided they 
apply to import goods for their personal use. 
ii. Imports by categories (a) and (b) will be  limited to goods related to the scope of 
business inscribed in their commercial registration. 
iii. Applications for automatic import li censing may be submitted on any working day 
prior to the customs clearance of goods.  Licenses will be issued within a maximum 
of 10 days from the date of application. 
iv. Applications for non-automatic import licenses may be submitted within 21 days 
prior to the closing date of applications.  Licenses will be issued within a period of 
30 days from the date of application. 
v. Applications would not be rejected for minor variations in value or minor 
documentation errors. 
vi. Licence applicants have to approach onl y one administrative body.  If necessary, that 
body would coordinate with other administrative bodies. 
vii. Non-automatic licensing is required fo r imports subject to quantitative or other 
restrictions (Saudi Arabia applies no quotas). 
viii. Article 9 of the Law contains detailed provisions on allocation of quotas in line with 
the provisions of Article 3 of the  Agreement on Import Licensing Procedures 
(Saudi Arabia applies no quotas). 
ix. The Law requires publication in the Official Gazette of the amount of quotas and any 
changes thereto at least 30 days prior to the date of application (Saudi Arabia applies 
no quotas). 
x. In case of refusal of applications, th e reasons for refusal will be provided upon 
request of the applicant. 
xi. Right of appeal to the Head of the administrative body is provided for, within a 
period of 15 days from the date of refusal.  A further right of appeal to the Board of Grievances against the decision of the Head of the administrative body is provided for, within 30 days from the date of the decision. 
155. The representative of Saudi Arabia confirmed th at Saudi Arabia would, from the date of 
accession, eliminate and not introduce, re-introduce or apply non-tariff measures such as licensing, 
permits, prior authorization requirements, licen sing requirements and other restrictions having 
equivalent effect that cannot be ju stified under the provisions of the WTO  Agreement.  Any further 
amendments to the import licensing regime afte r accession would be fully in accordance with all 
relevant provisions of the WTO, including the  Agreement on Import Licensing Procedures.  He 
further confirmed that any discretionary authority permitting officials of the Kingdom of Saudi Arabia 
to suspend imports and exports or licensing requirements that could suspend, ban or otherwise restrict 
the quantity of trade would be applied from the date  of accession in conformity with the provisions of 
the WTO, including Articles XI, XII, XIII, XIX, XX and XXI of the GATT 1994, and the  Agreements 
on Agriculture, Application of Sanitary and Phyt osanitary Measures, Import Licensing Procedures, 
Safeguards and Technical Barriers to Trade.  The Working Party took note of these commitments.  WT/ACC/SPEC/SAU/7 
 Page 69 
 
 
 - Quantitative Import Restrictions, Including Prohibitions and Quotas 
156. In response to questions from members of the Working Party, the representative of 
Saudi Arabia supplied details rega rding quantitative restrictions maintained in Saudi Arabia.  In 
addition to information contained in the Memorandum on the Foreign Trade Regime, the 
representative of Saudi Arabia provided a current list of restricted (banned and controlled) items in 
Saudi Arabia, together with the justification, in A nnex F (List of Banned Imports).  He also noted that 
additional information could be obtained from the c oncerned department or division of the respective 
Ministry or from the Information Centre of the Ministry of Commerce and Industry.  The information could also be obtained from the Chamber of Commerce. 
157. Certain members of the Working Party requested further details on quantitative import 
restrictions, including those on certain imports of the following products:  long-life pasteurized milk 
in packing exceeding 1 litre (HS No. 0401.00.00); dates; rice; poultry, beef and lamb; offal; 
therapeutic medicines used in animal feed; le ntils; and certain tyres.  The representative of 
Saudi Arabia noted that Saudi Arabia had listed all of the products to which it applied quantitative 
import restrictions, as well as the relevant numbers a nd bases of the restrictions, at Annex F (List of 
Banned Imports).  Also, he said, Saudi Arabia ha d taken a series of actions to comply with WTO 
provisions.  He provided the following responses to specific questions from the members of the Working Party: 
i. Long-Life Pasteurized Milk - Saudi Arab ia had removed the import ban and replaced 
it with a tariff. 
ii. Dates - Saudi Arabia had removed the import ban and replaced it with a tariff. 
iii. Rice from the United States - Saudi Arabia did not ban imports of rice from the 
United States. 
iv. Poultry, Beef and Lamb from the United St ates - Saudi Arabia did not ban imports of 
poultry, beef or lamb from the United States. 
v. Offal - The import of offal was permitte d from all countries, or regions within 
countries, except those with livestock w ith infectious diseases, pursuant to the 
Guidelines on the Import of Meat and Meat Products (Ministry of Commerce and 
Industry Decision No. 123 of 16.1.1422H (9 April 2001), as amended by Ministry of 
Commerce and Industry Decision No. 1308 of 27.5.1424H (27 July 2003)).  The latter Decision permitted imports of offal from countries with livestock free of infectious diseases and provided safeguards for such imports.  These measures were imposed to protect the health and safety of persons living in the Kingdom. 
vi. Therapeutic Medicines Used in Animal F eed - There were two types of restrictions, 
which Saudi Arabia confirmed it would appl y in the least trade-restrictive manner: 
(a) a ban on certain antibiotics due to their side effects on human health according to 
recommendations of the WHO and the C openhagen Forum (September 1998), which 
applied to virginiamyacin, zinc bacitraci n, spiramycin and tylosin phosphate, and 
enrofloxacin and its use in poultry; and (b) a quantitative restriction designed to 
preclude importation of huge quantities of therapeutic drugs for use as feed additives, WT/ACC/SPEC/SAU/7 
Page 70  
 
 which created the risk that the drug no longer would be efficacious for its primary 
purpose as an antibiotic.  
vii. Lentils from Australia - The ban on le ntils from Australia had been lifted after 
the Agreement between Saudi Arabia and Au stralia had been signed.  The ban, and 
the problem that occasioned it, had been th e subject of successful bilateral discussions 
between Saudi Arabia and Australia.  Saudi Arabia and Australia had agreed that the 
ban would be lifted and that Austra lia would certify future shipments. 
viii. Tyres - The Ministry of Commerce and Industry had banned imports of certain tyres 
following a series of fatal accidents in the United States caused by design and/or manufacturing issues.  The action had been ta ken due to public safet y concerns and in 
light of the fact that, given the climate of Saudi Arabia, similar accidents would be 
even more likely to occur ther e than in the United States.  The Ministry requested the 
investigation results from the concerned U.S. authorities and, in the meantime, took the prudential action of banning imports of t hose tyres, pending review of the results.  
The ban was limited to those tyre models, produced at specific facilities, which were 
most similar to the tyres involved in the accidents.  The ban, therefore, applied only 
to certain tyre models and sizes, produced at certain facilities.  The representative of 
Saudi Arabia noted that specific information was available on request. 
ix. Used and Rethreaded Tyres - Saudi Ar abia had banned imports of used and 
rethreaded tyres to protect public safety.  Given the climate of Saudi Arabia, used and 
rethreaded tyres are particularly subject to failure and the safety of imports of these 
products could not be assured. 
x. Mobile phones fitted with digital cameras – Saudi Arabia had banned this item to 
preclude individuals from invading privacy  by surreptitiously photographing, and 
downloading onto the internet, pictures of pe rsons or property without consent of the 
person or the property owner.  The ban had been eliminated after a review. 
158. The representative of Saudi Arabia confirmed th at Saudi Arabia would, from the date of 
accession, eliminate and not introduce, re-introduce or  apply quantitative restrictions on imports or 
other non-tariff measures, such as quotas, bans, permits, prior authorization requirements, licensing requirements and other restrictions having equivale nt effect that could not be justified under the 
provisions of the WTO  Agreement.  He also confirmed that all import bans currently in place were 
listed in Annex F, and that the list of banned im ports would be reviewed on an ongoing basis but at 
least once a year to remove items where permitting importation would not compromise the legitimate objectives of the Kingdom.  Changes to Saudi law after accession would be fully in accordance with 
all relevant provisions of the WTO.  He further confirmed that any discretionary authority permitting 
officials of the Kingdom of Saudi Arabia to suspe nd imports and exports or otherwise restrict the 
quantity of trade would be applied from the date of  accession in conformity with the provisions of the 
WTO, including Articles XI, XII, XIII, XIX, XX and XXI of the GATT 1994, and the  Agreements on 
Agriculture, Application of Sanitary and Phyt osanitary Measures, Import Licensing Procedures, 
Safeguards and Technical Barriers to Trade.  The Working Party took note of these commitments.  WT/ACC/SPEC/SAU/7 
 Page 71 
 
 
 - Customs Valuation 
159. Some members of the Working Party stated that  the system of valuation described in the 
Memorandum on the Foreign Trade Regime, in Annex 4 to document WT/ACC/SAU/4 and in 
document WT/ACC/SAU/18 did not appear to fully comply with certain requirements of the Agreement on Implementation of Article VII of the GATT 1994 (Customs Valuation  Agreement).  
Some members requested that a number of areas of the customs valuation regime receive further 
elaboration so that they were in conformity with  the Customs Valuation Agreement, its Interpretative 
Notes, and relevant decisions and declarations.  In particular, members noted that, in addition to 
problems related to the right of appeal (Article 11 of the Agreement) and to transparency (Article 12 
of the Agreement), Saudi Arabia's valuation syst em lacked predictability and relied on the "nearest 
equivalent value" as an alternative to transaction va lue.  This could give customs officials excessively 
wide discretion in their determination of custom s value of the imported goods.  Members also sought 
confirmation that Saudi Arabia would adopt D ecisions 3.1 and 4.1 of the Customs Valuation 
Committee.  The representative of Saudi Arabia stat ed that the valuation regime referred to by 
Working Party members pertained to previous Customs Rules and Regulations that had been 
abrogated and superseded by the GCC Common Cust oms Law, which Saudi Arabia had ratified by 
Royal Decree No. M/41 of 3.11.1423H (5 January 2003).   
160. Concerning Article 11 of the Customs Valuation  Agreement and the right of appeal to a 
judicial authority, the representative of Saudi Arabia  stated that appeal rights for a relevant person 
before an independent judicial body (i.e., the Bo ard of Grievances) was guaranteed by Royal Decree 
No. 190 of 16.11.1409H (19 June 1989).  This applied to the Customs Department.  The requirements 
of Article 12 concerning publication of  laws, regulations and decisions were satisfied by Article 71 of 
the Basic Law of Governance, which required that such information be published in the official 
gazette, Umm Al-Qura .  The representative of Saudi Arabia noted that Article 1.I.3 of the Rules of 
Implementation of the Customs Valuation Law implemented Article 11 of the Customs 
Valuation  Agreement.  He confirmed that Decisions 3.1 and 4.1 of the Customs Valuation Committee 
would be implemented through Ministerial Decision not  later than the date of accession.  In response 
to request by a member of the Working Party th at Saudi Arabia should implement paragraph 2 of 
Decision 4.1 on the Valuation of Carrier Media Bear ing Software for Data Processing Equipment, the 
representative of Saudi Arabia agreed to that a nd confirmed that necessary provision had been made 
in the Ministerial Decision referred to in paragraph 162 , below.  
161. The representative of Saudi Arabia described the legal basis of the Saudi regime.  He stated 
that the Action Plan on Implementation of the Cust oms Valuation Agreement circulated in document WT/ACC/SPEC/SAU/7 
Page 72  
 
 WT/ACC/SAU/38/Rev.1 had been completed, that Cu stoms officials and brokers had been trained 
and necessary laws and regulations on customs valua tion had been promulgated.  The representative 
submitted to the Working Party the Common Customs Law of the GCC States and the Rules of 
Implementation, which contained Saudi Arabia's ne w system of customs valuation.  He further 
reported that the Common Customs Law of the GCC was ratified by Royal Decree No. M/41.  Articles 26 and 27 of the Law and Article 1 of the Rules of Implementation dealt with customs 
valuation.  He further reported that Saudi Arab ia had applied the new Common Customs Law and the 
Rules of Implementation with effect from 1 January 2003, and that they were, in the view of Saudi 
Arabia, consistent with the provisions of the Cu stoms Valuation Agreement.  The representative of 
Saudi Arabia emphasized that Article 1.I.3 of the Rules of Implementation of the Customs Valuation 
Law implemented Article 11 of the Customs Valuation Agreement. 
162. The members of the Working Party thanked Saudi  Arabia for confirming that the provisions 
of the GCC Common Customs Law and its Rules of Implementation were the legal authority for the 
operation of Saudi Arabia's customs valuation re gime.  They noted that, although the GCC Law and 
the Rules addressed many of the provisions of the Customs Valuation Agreement, they were missing 
some crucial components of a fully WTO-consistent re gime in this area.  They identified what they 
viewed as a number of deficiencies in the implementation of Articles 1, 2, 6-8 and 11-15 of the Customs Valuation Agreement. 
163. In response to the questions and concerns  of Working Party members regarding the 
consistency of the GCC Common Customs Law and Ru les of Interpretation with WTO provisions, the 
representative of Saudi Arabia stated that the defi ciencies with reference to Articles 1, 2, 6-8 and 
11-15 of the Customs Valuation Agreement pointed out  in the previous paragr aph had been taken care 
of in Ministerial Decision No. 1207 of 9.5.1425H ( 27 June 2004), a copy of which had been submitted 
to the Working Party.  He added that the Arabic  text of the Common Customs Law and the Rules of 
Implementation adopted the terminology of the Customs Valuation Agreement, and in any areas 
where the English translation was not clear, the G CC would be notified and requested to issue a new 
English translation that clarifies this.  Concer ning an importer’s ability to have goods released upon 
deposit of a sufficient guarantee, the representative of  Saudi Arabia confirmed that an importer had 
such right upon submission of a sufficient guarantee, wh ich could be in the form of a surety, bank or 
cash deposit, bank guarantee, or mortga ged property of equivalent value.   (In response to a subsequent 
question, the representative of Saudi Arabia expl ained that, on the form accompanying the submission 
of the guarantee, the importer was asked to write down his account number.  In the event that it was 
determined that no additional assessment was appr opriate, the amount of the guarantee would be 
deposited into the importer’s account, if the guarant ee was in the form of a bank or cash deposit.)   WT/ACC/SPEC/SAU/7 
 Page 73 
 
 
 Concerning the point raised on Article 11 of the Customs Valuation Agreement "that it did not appear 
that provision had been made either in the GCC La w or the Rules of Implementation for the right of 
appeal, without penalty to a judicial authority or for written notice of the decision on appeal", the 
representative of Saudi Arabia noted that this i ssue has been clarified in Ministerial Decision 
No. 1207 of 9.5.1425H (27 June 2004), which provide d that the importer or any person liable for 
payment of the customs duties could object to and appeal the assessment of the customs value, 
without penalty, to an independent judicial body (Boa rd of Grievances).  Article 31 of the Procedural 
Rules before the Board of Grievances explicitly provides for written notice of decisions to the 
litigants.  Decision No. 1207, as well as Article 61 of the GCC Common Customs Law, provided that the importer should be informed in writing of the decision taken by the Committee concerning his complaint.  As regarded the point raised on Article  12, regarding publication of the laws, regulations 
and judicial decisions, the representative of Saudi Arab ia stated that it had been already clarified in 
paragraph 159, above, that the requirements of Article  12 had been satisfied by Article 71 of the Basic 
Law of Governance, which required that such in formation be published in the official gazette Umm 
Al-Qura .  Moreover, Decree No. 162 issued by the Council of Ministers on 17.6.1423H 
(28 August 2002) provided that the Ministry of Ju stice and Board of Grievances should compile and 
publish administrative rulings and the final rulings i ssued by the courts and the decisions issued by 
competent committees.  The representative of Saudi Arabia confirmed that this would include the 
publication of administrative rulings of general a pplication giving effect to the Customs Valuation 
Agreement. 
164. The representative of Saudi Arabia confirme d that the Kingdom of Saudi Arabia would 
implement the provisions of the WTO  Agreement on Implementation of Article VII of GATT 1994 
(concerning customs valuation) in full from the date  of accession to the WTO, without recourse to any 
transitions.  He also confirmed that Saudi Arabia  would implement paragraph 2 of Decision 4.1 on the 
Valuation of Carrier Media Bearing Software for Data Processing Equipment.  The GCC Common 
Customs Law and Implementing Regulations, which came into effect on January 1, 2003, substantially implemented the provisions of the Cu stoms Valuation Agreement.  Deficiencies in the 
law and regulations identified by members had b een remedied in Ministerial Decision No. 1207 of 
9.5.1425H (27 June 2004).  He further confirmed that the Ministerial Decision would remain in effect 
until the GCC Rules of Implementation were offici ally amended by the GCC.  The Working Party 
took note of these commitments. WT/ACC/SPEC/SAU/7 
Page 74  
 
 - Rules of Origin 
165. The representative of Saudi Arabia stated that the Kingdom did not currently have rules of 
origin for non-preferential trade, but future ru les would be implemented in accordance with the 
WTO  Agreement on Rules of Origin.  In response to requests for information, the representative of 
Saudi Arabia stated that certificates of origin i ssued by the competent authority of the exporting 
country (the concerned ministry or the chamber of commerce) were necessary for importation of 
goods from preferential sources.  Other requirements in the case of member countries of the Greater 
Arab Free Trade Area included minimum value added of 40 per cent ( see the last sentence of 
paragraph 166 , below).  From 1996, all imports of expens ive textile products had been required to 
have the origin of the goods printed or stamped th ereon with indelible print.  A textile product was 
deemed to be "expensive" depending on an analysis  of factors such as the quality, the brand name, 
texture, design and the price relative to other fabr ics.  This requirement was introduced to protect 
consumers against misleading or deceptive practices.  In response to a request from a member of the 
Working Party to review this requirement, the representative of Saudi Arabia stated that his 
government had found that it was necessary to protect consumers, as misleading marks of origin had 
been applied on paper stickers, with the result th at consumers received a misleading impression about 
the goods. 
166. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the GCC did not yet have its own rules of origin.  Rather, he stated, the GCC made 
use of the rules of international economic agreemen ts in force, i.e., the WTO Agreement on Rules of 
Origin and work thereunder.  In response to furt her questions from a member of the Working Party, 
the representative of Saudi Arabia stated that rules of  origin were currently being prepared within the 
framework of the Gulf Cooperation Council.  These ru les would be finalized in consultation with the 
WTO Secretariat and WTO Members and would be submitted for circulation to members of the 
Working Party upon completion.  These GCC provisions on rules of origin would serve as Saudi 
Arabia’s rules of origin for non-preferential trade, as well as for preferential trade among GCC 
members.  The representative further stated that, pendi ng finalization of rules of origin of the Greater 
Arab Free Trade Area, interim rules were being a pplied which provided that origin was conferred on 
wholly produced or manufactured goods in an Ar ab country and on goods in which domestic value 
added was not less than 40 per cent. 
167. The representative of Saudi Arabia stated that, from the date of accession, Saudi Arabia's laws 
and regulations for preferential and non-preferential rules of origin would comply fully with the 
WTO  Agreement on Rules of Origin.  The representa tive of Saudi Arabia confirmed that Saudi  WT/ACC/SPEC/SAU/7 
 Page 75 
 
 
 Arabia's rules of origin would be established in  law and notified to the WTO Secretariat and the 
Committee on Rules of Origin by the time of accession.  The requirements of Article 2(h) and Annex 
II, Paragraph 3(d) of the  Agreement would be fully implemented prior to accession.  He also stated 
that, from the date of accession, the Customs Au thorities would provide for an assessment of the 
origin of the import upon the request of an exporter,  importer or any person with a justifiable cause.  
Any request for such an assessment would be accepte d even before trade in the goods concerned 
began.  Any such assessment would be binding for three years.  The Working Party took note of these 
commitments. 
- Other Border Measures 
168. Members of the Working Party asked Saudi Arab ia to describe the new customs procedures, 
following the establishment of the GCC Customs Uni on, particularly as they related to goods first 
imported through other GCC member States.  One member of the Working Party observed that in 
some cases Saudi Arabia had turned back imports des tined for its market that first entered through and 
paid duties in other GCC member States.  The repr esentative of Saudi Arabia stated that all customs 
procedures (i.e., lodgement of the customs declaration, inspection of the goods, assessment and 
collection of customs duties) were conducted in th e first GCC member State where the goods entered 
from outside the GCC.  Goods destined for another GCC member State, after completion of customs formalities in the first GCC State, were allowe d to leave after affixing customs seals and were 
accompanied by a copy of the customs import declaration showing the value of the goods and 
payment of duty.  There was no further assessment and collection of duty in the country of final 
destination, with the exception of "sensitive" goods for which the remainder of the tariff rate of the 
country of origin (e.g., tariff rate of Saudi Arabia minus 5 per cent) would be collected at entry.  The 
representative said that in the absen ce of specifics and details it was difficult to say if and why the 
imports were turned back.  It might be that th e seals were not intact or the consignment was not 
accompanied by the customs declaration or, for exam ple, that the import of the goods was banned in 
Saudi Arabia but not in the GCC State of first importation (e.g., alcoholic beverages). 
169. Members of the Working Party asked Saudi Ar abia to describe how duties collected were 
apportioned to various GCC member States.  The repr esentative of Saudi Arabia explained that for the 
first three years following the establishment of the GCC Customs Union, the duties would be 
apportioned according to the final destination of th e goods.  The arrangement would be reviewed after 
the transitional period of three years.  The Working Party took note of this commitment. WT/ACC/SPEC/SAU/7 
Page 76  
 
 - Application of Internal Taxes to Imports 
170. A member of the Working Party asked whether Saudi Arabia would abide by the non-
discrimination provisions of Articles I and III of GATT 1994 in relation to internal taxation from the 
date of accession.  In response, the representative of Saudi Arabia stated that Saudi Arabia did not 
impose a value added tax (VAT), an excise tax or any other internal taxes or charges on either 
domestically produced or imported products.  
171. The representative of Saudi Arabia confirmed that , in case any internal taxes or charges were 
introduced, Saudi Arabia would apply these taxes in compliance with Articles I and III of the 
GATT 1994.  The Working Party took note of this commitment. 
- Preshipment Inspection  
172. Some members of the Working Party stated that the International Conformity Certification 
Program (ICCP) mentioned below operated as a PSI scheme.  They noted that although most of the 
requirements of the  Agreement on Preshipment Inspection app eared to have been complied with, 
some elements of the ICCP continued to raise concerns.   
173. In response to comments of various members of the Working Party regarding the role of the 
ICCP and preshipment inspection, the representative of Saudi Arabia reported that the Ministry of 
Commerce and Industry, in cooperation with SASO, had implemented the International Conformity 
Certification Program (ICCP) as a combined conformity assessment, preshipment inspection and certification scheme on the basis of which consignm ents were allowed entry into the Kingdom and 
cleared more quickly through Customs upon arrival.  He further said that the ICCP had been phased 
out pursuant to Council of Ministers Decision No. 213 of 3.8.1424H (30 September 2003) as of 
28 August 2004. 
174. The representative of Saudi Arabia stated that, from the date of accession to the WTO, 
Saudi Arabia would ensure that the requirements of the Agreement on Preshipment Inspection were 
met in full.  He further confirmed that Saudi Arabia would ensure that the operations of any 
preshipment inspection companies retained by  Saudi Arabia met the requirements of the 
WTO  Agreements, including the Agreements on Tec hnical Barriers to Trade, Sanitary and 
Phytosanitary Measures, Import Licensing Proce dures, Customs Valuation, Rules of Origin, 
Implementation of Article VI (anti-dumping), S ubsidies and Countervailing Measures, Safeguards 
and Agriculture.  The establishment of charges and f ees would be consistent with Article VIII of the 
GATT 1994, and Saudi Arabia would ensure that th e due process and transparency requirements of  WT/ACC/SPEC/SAU/7 
 Page 77 
 
 
 the WTO  Agreements, in particular Article X of th e GATT 1994, would be satisfied.  The Working 
Party took note of these commitments. 
- Anti-Dumping, Countervailing Duty and Safeguard Regimes 
175. Some members of the Working Party raised concerns regarding the law for the Protection and 
Encouragement of National Industry.  The representativ e of Saudi Arabia stated that the law would be 
reviewed to ensure consistency with WTO re quirements by the date of accession at the latest .   
176. Members also noted that Saudi Arabia did not currently have any trade remedies legislation 
permitting the imposition either of anti-dumping or c ountervailing duties or of safeguard measures.  
Those members requested that Saudi Arabia undert ake to not impose such measures until appropriate 
WTO-consistent legislation had been enacted.  The representative of Saudi Arabia confirmed that this 
was the case and informed the Working Party that a trade remedies law, which included provisions on 
Anti-Dumping, Countervailing and Safeguard Measures, had already been passed by the Shoura 
Council and had been submitted to the Council of Mini sters.  After the enactment of the Law through 
a Royal Decree, the Implementing Regulations woul d be issued.  In response to questions from 
members of the Working Party regarding to what im ports the law would be applied, the representative 
of Saudi Arabia stated that the law was not adopt ed to target specific imports and would provide 
remedies only in situations foreseen by the WTO Agreements on Anti-Dumping, Countervailing Measures and Safeguards.  Copies of the Law a nd the Implementing Regulations would be made 
available as soon as possible after their issuance.   
177. One member sought clarification as to how the GCC trade remedy laws would work in 
practice in antidumping, countervailing duty and safe guard investigations, such as whether injury 
determinations would be made in all cases with r espect to a Gulf industry as a whole, as opposed to 
determinations made in some cases with respect to a domestic industry limited to the Kingdom of Saudi Arabia.  The member also asked whethe r trade remedy measures under these laws would 
always cover imports into the Gulf countries as a whole, as opposed to measures in some cases being 
limited to covering imports into the Kingdom of Sa udi Arabia.  In response, the representative of 
Saudi Arabia stated that, as of 1 January 2004, the GCC had passed an anti-dumping and countervailing duty law and that the GCC was in th e process of developing implementing regulations.  
The representative confirmed that copies of the la w and the regulations would be submitted to the 
WTO as soon as the regulations were issued. 
178. The representative of Saudi Arabia said that Saudi Arabia would not apply any anti-dumping, 
countervailing or safeguard measures to impor ts from WTO Members until it had notified and WT/ACC/SPEC/SAU/7 
Page 78  
 
 implemented appropriate laws in confor mity with the provisions of the WTO  Agreements on the 
Implementation of Article VI, on Subsidies and Countervailing Measures and on Safeguards.  He 
confirmed that Saudi Arabia would ensure that such  legislation would be in full conformity with the 
relevant WTO provisions, including Articles VI and XIX of the GATT 1994 and the  Agreement on 
the Implementation of Article VI, the  Agreement on Subsidies and Countervailing Measures and 
the Agreement on Safeguards.  After such legisla tion was implemented, Saudi Arabia would only 
apply any antidumping duties, countervailing duties a nd safeguard measures in full conformity with 
the relevant WTO provisions.  The Working Party took note of these commitments. 
B. EXPORT REGULATIONS 
- Export Restrictions 
179. Some members of the Working Party enquired whether the Kingdom of Saudi Arabia 
maintained any export controls.  In response, the representative of Saudi Arabia stated that 
Saudi Arabia maintained no export bans, except on some items such as date seedlings, breeding 
horses and subsidized wheat and wheat flour.  He info rmed the Working Party that the legal basis of 
the bans was the authority of the Council of Minist ers and that the bases for the individual bans were 
as set out in Annex I (List of Banned Exports), i. e., GATT 1994 Article XX(a), (b), (d), (f) and (j).  
Some members of the Working Party asked whether Sa udi Arabia intended to remove those bans prior 
to its accession to the WTO.  In response, the represen tative of Saudi Arabia stated that there was no 
ban on the export of wheat and wheat flour; an export licence would be approved unless the wheat 
and wheat flour had been subsidized and the subsidy had not been repaid (i.e., if the subsidy had been 
returned to the government, the product could be e xported).  He further added that Saudi Arabia 
banned the export of date seedlings and breeding horses because the local breeds and varieties of 
these two items were pure and rare.  The representa tive indicated that a list of banned exports was 
attached to the Working Party Report at Annex I; a list of exports subject to authorization/licensing 
was attached at Annex J.  In reply to ques tions from a member of the Working Party, the 
representative stated that any trader or manufactur er could apply for an export licence, for which no 
fees were charged.  He further said that there were no activity licensing requirements and that the 
application for the licence had to be submitted to the concerned ministry, i.e., the Ministries of 
Commerce and Industry, Agriculture, Health, Interi or or Petroleum and Mineral Resources.  He 
reported that the licenses were either automatic or non-automatic as indicated in Annex J and that the 
time period for obtaining the licence depended upon the nature of the exported product.  At a later 
stage, the representative of Saudi Arabia added that  Annexes I and J identified all products subject to 
export bans or export licensing, some of which we re discussed below in response to questions from  WT/ACC/SPEC/SAU/7 
 Page 79 
 
 
 members of the Working Party.  In response to a question from a member of the Working Party, the 
representative of Saudi Arabia stated that expor t traders needing licenses were required to have 
commercial registration.  He added that inform ation on export licensing procedures was available on 
the website of the Ministry of Commerce and Industr y.  He further added that the list of products 
subject to export licensing was presently not published but that, prior to accession, it would be published in the official gazette.  He added that upda tes on export restrictions will also be published.  
The Working Party took note of these commitments. 
180. A member of the Working Party commented that food imported into Saudi Arabia could not 
be re-exported without approval,  and receiving approval involved a time-consuming process.  The 
member requested that all prior approval require ments for the re-exportation of imported food be 
abolished by the date of accession.   
181. In response to a question from a member of the Working Party regarding the export ban on 
scrap metal, the representative of Saudi Arabia c onfirmed that, prior to accession, this measure would 
be lifted.  The Working Party took note of this commitment. 
182. The representative of Saudi Arabia confirmed that from the date of accession Saudi Arabia 
would ensure that its laws, regula tions and requirements relating to the right to export and all fees, 
charges or taxes levied on such rights would be in  full conformity with its WTO obligations, including 
Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws 
and regulations in full conformity with these ob ligations.  The Working Party took note of these 
commitments.   
183. The representative of Saudi Arabia also confirmed that any export control requirements 
remaining in place on the date of accession would be fully consistent with WTO provisions, including 
those contained in Articles XI, XVII, XX and XXI of  the GATT 1994.  In this regard, the requirement 
of approval to re-export food w ould be abolished as from the date of accession and re-export of 
subsidized food items would be subject to repaymen t of the amount of subsidy.  The Working Party 
took note of this commitment. 
- Export Duties 
184. Some members of the Working Party requested information on export duties applied by 
Saudi Arabia.  Those members noted that the export duties applied by Saudi Arabia appeared to be 
imposed only for revenue purposes and would have trade-distorting effects.  In response, the 
representative of Saudi Arabia stated that Article XI of the GATT 1994 expressly permitted the WT/ACC/SPEC/SAU/7 
Page 80  
 
 imposition of export duties, and did not restrict the right to impose such duties.  Export duties applied 
only to un-tanned hides and skins, falling under HS  Nos. 4101, 4102 and 4103.  The rate of export 
duty was SAR 2000/ton (roughly 20 per cent).  The re presentative of Saudi Arabia confirmed that 
Saudi Arabia would not impose export duties on iron and steel scrap.  The Working Party took note of 
this commitment. 
- Export Subsidies 
185. Members of the Working Party asked for information regarding export incentives and 
subsidies.  In response, the representative of Saudi Ar abia stated that Saudi Arabia neither maintained 
nor had any intention to provide any pr ohibited export incentives or subsidies. 
186. The representative of Saudi Arabia confirmed th at Saudi Arabia did not maintain subsidies 
including export subsidies that met the definition of  a prohibited subsidy, within the meaning of 
Article 3 of the  Agreement on Subsidies and Countervailing Measures and that it would not introduce 
such prohibited subsidies in the future.  Th e Working Party took note of this commitment. 
C. INTERNAL POLICIES AFFECTING TRADE IN GOODS 
- Industrial Policy, Including Subsidies 187. In response to requests for information concer ning interest-free loans provided by the Saudi 
Industrial Development Fund (SIDF), the representativ e of Saudi Arabia stated that wholly-owned 
foreign companies, like Saudi-owned companies, were also eligible for a loan of up to 50 per cent of 
the project cost.  The representative of Saudi Arab ia stated that, under the loan programme conducted 
by SIDF, loans were not contingent upon export pe rformance, nor were they contingent upon the use 
of domestic over imported goods.  The decision to provide a loan was made on the basis of the facts appropriate to that particular case within the para meters of the SIDF Law.  Article 2 of the Law 
provided that the Fund could provide medium- or l ong-term loans to:  (1) new industrial enterprises 
established in Saudi Arabia; and (2) existing privat e industrial enterprises for the extension of their 
activities or the replacement of their equipment and introduction of modern methods thereto.  
Article 4 of the Law stated that the Fund should carry  out a full evaluation of the economic benefits of 
the enterprise required to be financed, taking into  consideration the soundness of its management in 
order to ascertain the benefit of the industrial enterprise from economic, financial and technical 
aspects.  In addition, the Fund was required to ex amine whether the financing required for the whole 
of the enterprise had been reasonably obtained and whether the volume of the Fund's aid represented a  WT/ACC/SPEC/SAU/7 
 Page 81 
 
 
 reasonable percentage of the total financing needs of the enterprise; the Fund was required to obtain 
sufficient financial guarantees for the financing given by the Fund.   
188. In response to questions from members of the Working Party, the representative of 
Saudi Arabia stated that no WTO-inconsistent s upport or subsidies had been  approved or sanctioned 
for projects involving the creation of production cap acity for refined petroleum and petrochemical 
products. 
189. The representative of Saudi Arabia confirme d that any subsidy programmes would be 
administered in conformity with the  Agreement on Subsidies and Countervailing Measures and that 
all necessary information on programmes would be notified to the Committee on Subsidies and Countervailing Measures in accordance with Article 25 of the  Agreement upon entry into force of 
Saudi Arabia's Protocol of Accession.  The Working Party took note of this commitment. 
- Technical Barriers to Trade 
190. The representative of Saudi Arabia provided th e Working Party with information on Saudi 
voluntary standards, Saudi mandatory standard s (technical regulations) and Saudi Arabia's 
International Conformity Certification Progra mme (ICCP) in documents WT/ACC/SAU/15, 16, 21, 
26, 29, 34, 36 and 37 (Revised Comprehensive Pr ocedures and Guidelines concerning the ICCP); 41 
(Action Plan for the Implementation of the TBT  Agreement); 45 (ICCP); 48 (Communication on the 
SASO Technical Directive); and 52 (Communicati on on the ICCP).  The representative of Saudi 
Arabia stated that, under Saudi law, "mandatory standard" was the same as the WTO term "technical 
regulation". 
- Description of Saudi Regime
 
191. The representative of Saudi Arabia further in formed members of the Working Party that 
Saudi Arabia had established and was implementing th e TBT regime.  This had been done by issuing 
and implementing the SASO Technical Directive (having the force of law) on 18 July 2000, and 
amended on 19 July 2005.  The major features of the system were: 
i. All SASO standards, mandatory standa rds (technical regulations) and conformity 
assessment procedures were intended to be fully compatible with the 
TBT Agreement. 
ii. SASO had established a single contact point for information (Enquiry Point) pursuant 
to Part Four of the Technical Directive.  It also would provide relevant documents 
upon request. 
iii. The Ministry of Commerce and Industry was the authority responsible for making 
notifications to the WTO. WT/ACC/SPEC/SAU/7 
Page 82  
 
 iv. Item 2 of Part Four of the Technical Directive required a non-discriminatory and cost-
based fee structure. 
v. Items 4/5/1 of Part Two of the Technical Directive required publication of notices of 
proposed technical regulations, standards and conformity assessment procedures in the journal issued by SASO. 
vi. Items 3/3/1 and 4/5/4 of Part Two of the Technical Directive provided for a 60-day 
comment period and non-discriminatory consideration of comments in the preparation of final regulations. 
vii. Item 4/8 of Part Two of the Technical Directive provided for a reasonable period of 
time between the final publication and entry into force of a technical regulation. 
viii. Item 2/1 of Part Two of the Technical Directive stated that SASO would follow the 
Code of Good Practice for the preparation,  adoption and application of standards. 
ix. Item 2/3 of Part Two of the Technical Directive and Item 2 of Part Three of the 
Technical Directive provided for national treatment and non-discrimination with respect to products in the context of de velopment and application of technical 
regulations and conformity assessment procedures. 
x. Item 2/4 of Part Two of the Technical Directive stated "Saudi voluntary and 
mandatory standards shall not create unnecessary barriers to international trade except what violates the Islamic legislation (e.g., requirements for halal meat and labelling requirements for 'alcohol free'  malt beverages), national security 
requirements, prevention of deceptive practices, and the protection of human health 
or safety, animal or plant life or health or the protection of environment".   
xi. Item 4/9 of Part Two of the Technical Directive provided for on-going review of 
technical regulations to ensure they are a ppropriate to achieve the desired legitimate 
objectives. 
xii. Items 3/1 and 4/1 of Part Two of the T echnical Directive required SASO to consider 
relevant international standards as a basis for preparing Saudi technical regulations 
and standards unless these international standard s or their parts are ineffective or an 
inappropriate means for achieving the inte nded, legitimate objectives.  This, for 
example, could be due to their inconsiste ncy with Islamic law or due to climate, 
geographical factors or basic technical problems. 
xiii. According to Items 3/2 and 4/4 of Part Two of the Technical Directive, technical 
regulations and standards should be prep ared on the basis of product performance 
requirements rather than in terms of  design or descriptive characteristics. 
xiv. Item 4/3 of Part Two of the Technical Directive required SASO to consider 
equivalent technical regulations of othe r Members unless they were ineffective or 
inappropriate for achieving the intended legitimate objectives. 
xv. Item 2 of Part Three of the Technical Directive required SASO to accept the results of 
conformity assessment procedures conducted by bodies in exporting Member countries provided that relevant Saudi Arab ian national deviations  were taken into 
account. 
192. In response to questions from some members of the Working Party, the representative of 
Saudi Arabia stated that SASO is the sole sta ndardization body in Saudi Arabia.  Its Board of 
Directors consisted of representatives from all con cerned Ministries, Government Agencies and the 
private sector.  There was coordination between SASO and other Saudi authorities on issuing any 
regulations that might affect trade between Saudi Ar abia and other countries.  He said that technical 
committees made recommendations to SASO on wh ether a standard should be voluntary or a 
mandatory (i.e., a technical regulation, in WTO terms).  (A list of the technical committees was  WT/ACC/SPEC/SAU/7 
 Page 83 
 
 
 attached to the Working Party Report at Annex K.)  In response to a question by a member of the 
Working Party, he reported that the criteria for adopting a standard as mandatory (as a technical 
regulation) would be based on the fulfilment of legitimate objectives as provided in the 
TBT  Agreement, such as protection of health, safety,  national security, Islamic Law, the environment 
and prevention of deceptive practices.  In reply to  a question whether guidelines and/or criteria would 
be developed to assist in determining whether an existing mandatory standard (technical regulation) 
should remain mandatory when it was reviewed, the representative of Saudi Arabia stated that the 
criteria for adopting mandatory standards (technical regulations) would also apply to a review of 
existing mandatory standards (technical regulations ).  He noted that the development of Saudi 
voluntary standards and mandatory standards (tec hnical regulations) would proceed in accordance 
with SASO's General Outline of the Measures for Dr afting Saudi Standards.  All parties concerned 
with the subject matter of the draft mandatory standards (technical regulations) were normally 
represented on the relevant "technical committees"  as active members; they included pertinent 
governmental, academic, industry and trade sectors.  Fo r this reason, only one draft circulation period 
was necessary to provide adequate opportunity for comme nts by other interested parties.  In case of 
development of draft mandatory standards (technical  regulations) by the SASO technical staff, the 
first draft circulation period provided the opportunity for comments raised by all concerned parties to 
be taken into consideration in the preparation of  the second draft.  He also provided the Working 
Party with a copy of the procedures for the deve lopment of SASO mandatory standards (technical 
regulations) in Annex IV to document WT/ACC/SAU/29. 
193. In response to additional questions from a member  of the Working Party, the representative of 
Saudi Arabia reported that SASO had reviewed the Technical Directive and the changes discussed 
below had been made as of 19 July 2005.  The refere nce in the Technical Directive to "ISO Code of 
Good Practice" had been changed to "TBT Code of  Good Practice" and statements such as "whenever 
possible" or "as much as possible" had been remove d from the Technical Directive.  Also, Part III of 
the Technical Directive had been changed to refl ect the Ministerial Decision withdrawing the ICCP 
by deleting ICCP from Part III of the Technical Dir ective.  The representative further stated that, to 
make all of the procedures more transparent, they  had been placed on the Ministry of Commerce and 
Industry website ( www.commerce.gov.sa ), and they were available from the Chambers of Commerce.   
194. Members of the Working Party asked Saudi Arabia to confirm that the Saudi Conformity 
Assessment Program (SCAP) would comply with WTO rules and that any fees charged for assessing 
the conformity of the products originating in th e territories of other Members were equitable in 
relation to any fees chargeable for assessing the conf ormity of like products of national origin or 
originating in any other country, as foreseen in the TBT  Agreement.  At a later stage, the WT/ACC/SPEC/SAU/7 
Page 84  
 
 representative of Saudi Arabia stated that SASO ha d discontinued SCAP in light of the phase out of 
the ICCP and that SCAP had been removed from th e third part of the Technical Directive.  In 
response to a question from members of the Working Party, the representative of Saudi Arabia noted 
that a list of "Items Subject to Mandatory Certif ication" had been attached to the Working Party 
Report at Annex H.  The representative later assure d the members that the list was up to date and 
complete, and would be reviewed and revised by the ICCP Replacement Committee. 
195. In response to questions from members of the Wo rking Party, he noted that Saudi Arabia was 
a member of the International Standardization Or ganization (ISO), the International Electrotechnical 
Commission (IEC), the International Organization for Legal Metrology (OIML) and the Codex 
Alimentarius Commission (CAC).  All Saudi voluntar y standards and mandatory standards (technical 
regulations) were notified to all other members of  those international organizations.  He further 
reported that, as noted in Saudi Arabia's Technical Directive, Saudi Arabia would comply with all 
relevant provisions of the TBT Agreement, includi ng the Code of Good Practice, as from the date of 
accession.  Certain Saudi mandatory standards (tec hnical regulations) had a corresponding ISO or IEC 
equivalent which was indicated in the publishe d list of SASO mandatory standards (technical 
regulations); a high percentage of Saudi voluntar y standards and mandatory standards (technical 
regulations) used international standards and othe r widely accepted national standards as references.  
He provided members of the Working Party with a list of SASO voluntary standards and mandatory 
standards (technical regulations) that had been  based upon CODEX standards, together with a 
complete list of the 2,338 Saudi voluntary standards and mandatory standards (technical regulations), 
including a cross-reference to the international st andards adopted in their entirety as SASO voluntary 
standards and mandatory standards (technical regulations) (in document WT/ACC/SAU/59/Add.5, 
which replaced WT/ACC/SAU/34 and WT/ACC/SAU/15) .  The percentage changes constantly as 
Saudi Arabia adopts pre-existing international st andards.  Some members of the Working Party 
requested a list of the standards deemed to be e quivalent to Saudi mandatory standards (technical 
regulations).  In response, the representative of Sa udi Arabia stated that SASO had published the list 
of mandatory standards (technical regulations), and in this connection referred to the information in 
document WT/ACC/SAU/59/Add.5.  
196. The representative of Saudi Arabia stated that  the ICCP had been eliminated pursuant to 
Council of Ministers Decision No. 213 of 3.8.1424H  (30 September 2003) and no longer operated as 
from 28 August 2004 when the period specified in then -current contracts had expired.  An ICCP 
Replacement Committee had been formed consisting of members representing the Ministries of Commerce and Industry, Finance and Economy and Pl anning.  The Committee, which is chaired by  WT/ACC/SPEC/SAU/7 
 Page 85 
 
 
 the Ministry of Commerce and Industry, was charged with establishing the following replacement 
mechanism:  
i. Using private laboratories as an alternative mechanism for certifying the conformity 
of imported goods to established standards, after the private laboratories have been 
approved for examination purposes. 
ii. During a transitional period, the conformity certificate should be issued by an entity 
authorized by the competent official ag ency in the country of origin.  Such 
conformity certificates should accompany all consignments of imported goods 
certifying their conformity to the established mandatory standard (technical 
regulation).  The certificate should confirm that these goods were subjected to regular 
laboratory examination under supervision of the competent control agency in the country of origin.  The entity should be fu lly responsible for the contents of this 
certificate.  The producing company should assume full responsibility for all damages happening as a result of using such goods.  Random samples may be taken from the 
imported consignments on their arrival in the Kingdom’s ports in order to ascertain 
the veracity of the certificate. 
The new "Conformity Certificate for the Goods Expor ted to the Kingdom of Saudi Arabia" applied to 
all products, including domestic products, except those subject to the Kingdom’s sanitary and 
phytosanitary regulations.  Certification was not required when documentation had been provided for 
purposes of assuring conformity to Islamic religious requirements (rulings of Islamic Shari’a).  There 
were no fees for this certificate.  Detailed guidan ce on how to comply with the new requirements was 
available on the website of the Ministry of Commerce, which was the oversight authority. 
197. Some members of the Working Party requested additional information on the purpose and 
operational details of the new Conformity Certificat e mechanism.  The representative of Saudi Arabia 
stated that the purpose of the new Certificate w as to provide Saudi authorities with a basis for 
conducting post-market surveillance to ensure pr oduct conformity to specified requirements and 
would be done through random sampling or risk-based compliance checks during the transitional 
period.  The new mechanism allowed the entity submitting the Conformity Certificate (i.e., a 
conformity assessment body, an accredited body, an independent third party or a manufacturer) to declare compliance with the appropriate technical re gulation or standard.  Such entity was responsible 
for the information contained in the Certificate.  The mechanism recognized technical regulations or 
standards that were in conformity with an approve d SASO technical regulation.  In the absence of a 
relevant, approved SASO technical regulation, information should be provided to identify whether the 
product meets a technical regulation of another gove rnment authority, SASO standard or relevant 
international standard, or other standard.  Informa tion should also be provided to identify who did the 
testing.  The Conformity Certificate would not be  needed once Saudi Arabia had established sufficient 
in-country capabilities for testing imported and dom estic products through random sampling or risk-WT/ACC/SPEC/SAU/7 
Page 86  
 
 based compliance checks.  The re presentative of Saudi Arabia further clarified that there was no 
geographic or nationality limitation for conformity assessment or accreditation bodies.  The Working 
Party took note of these commitments. 
198. Some members of the Working Party requested  Saudi Arabia to confirm that access to the 
SASO Quality Mark would be on a non-discriminatory basis and without distinction to the origin of 
the product.  In response, the representative of Saudi  Arabia stated that access to Saudi Quality Mark, 
a voluntary program, would be on a non-discriminatory basis, without distinction as to the origin of 
the products.  In response to an additional question,  he confirmed that domes tic and foreign suppliers 
could apply to obtain the Quality Mark for importe d products.  Use of the Quality Mark would be 
granted in a non-discriminatory fashion to tho se domestic and foreign suppliers that met the 
requirements of the program.  The Certificate of Conformity was voluntary and applicable to specified 
consignments of certain products when the or ganization submitted application for obtaining a 
conformity certificate according to standards pertaining to such product; this certificate of conformity might be applied to domestic, exported and imported products.  This would help in the 
implementation of such standards and facilitate the commercial exchange.  This certificate was 
granted for consignments conforming to standards when the conditions mentioned in paragraph 5 of 
the Third Part of the Technical Directive were fulfilled.  The "Quality Mark" was applicable for 
factories, while the Certificate of Conformity were for consignments.  The representative of Saudi Arabia confirmed that any fees charged in connection with the "quality mark" and "certificate of 
conformity" would be based on the cost of the services rendered. 
199. A member of the Working Party requested Saudi Arabia to explain its rice labelling 
requirement that information be printed on at least 50 per cent of the surface of the rice package.  In 
response, the representative of Saudi Arabia stated  that this requirement no longer existed, as the 
Kingdom had withdrawn it. 
200. A member of the Working Party inquired as to the rationale for the application of different 
emission standards to new and used heavy vehicles.  The representative of Saudi Arabia replied that 
new heavy vehicles were subject to more demandi ng standards because they could meet them; he 
reported that the Kingdom was unaware of any inst ance of non-compliance and that the standard was 
not, in practice, a bar to imports.  A lower standard had been set for used heavy vehicles, he reported, 
because otherwise used heavy vehicles would not be able to be operated absent significant and 
extremely costly modifications.  Concerning a furthe r question regarding the application of different 
emission standards, the representative stated that  there were no Saudi standards for heavy-duty 
gasoline engines and three Saudi standards for heavy-duty diesel engines, as follows:  WT/ACC/SPEC/SAU/7 
 Page 87 
 
 
 i. SASO 672/1991 "Motor Vehicles – Allowable Limits of Pollutants Emitted to the 
Atmosphere from Heavy Duty Diesel Engine Vehicles"; 
ii. SASO 673/1991 "Motor Vehicles – Methods of Testing for Pollutants Emitted from 
Heavy Duty Diesel Engine Vehicles – Part  1: Determination of Exhaust Gaseous 
Pollutants"; and 
iii. SASO 674/1991 "Motor Vehicles – Methods of Testing for Pollutants Emitted from 
Heavy Duty Diesel Engine Vehicles – Part 2: Determination of Smoke Density". 
The standards had been implemented since 14 November 1992.  SASO had not received any 
comments or complaints regarding them from any vehicle manufacturer. 
201. In response to inquiries by members of the Working Party relating to shelf-life of food 
products, the representative of Saudi Arabia confirme d that Saudi Arabia had re-examined its shelf-
life requirements.  A technical committee from different Government Ministries (Ministry of Commerce and Industry, Ministry of Health, Ministry of Agriculture, Ministry of Municipalities, Universities and SASO) had reviewed Saudi sta ndards on the shelf-life of food products (SASO 
457/2000 and SASO 702/1993) according to the requi rements of the SPS and TBT Agreements, 
Codex Alimentarius Commission, international scien tific papers and research and field scientific 
studies carried out in the Kingdom of Saudi Arabia or abroad.  The revised Saudi standard, which incorporated the deletion of the statement of  not allowing any food product which had overpassed 
more than half of its shelf-life, including perishable food.  The revised standard also incorporated that 
shelf-life for food products would be voluntary except for select perishable food (i.e., fresh or chilled 
meat and poultry, fresh milk and fresh milk-based  products, margarine, fresh fruit juice and fresh 
table eggs) and baby foods.  With the excep tion of these products, Saudi Arabia would accept 
manufacturer-determined use-by dates for products.  The revised standard had been circulated for 
comments for a period of 90 days and would be im plemented from the date of approval of SASO 
Board of Directors.  The Working Party took note of this commitment.  
202. The representative of Saudi Arabia stated that to allow members and appropriate stakeholders 
to better understand how Saudi Arabia will implem ent the revised standards, Saudi Arabia will 
provide written technical guidance as soon as possible but no later than 90 days before the revised 
shelf life requirements are implemented.  This guida nce will be attached as an annex to the revised 
standards and will include the following language: 
i. These revised standards will be effective as of their approval by the SASO Board of 
Directors, not later than the end of 2005.   Until this date, SASO Standards 457/2000 
and 702/1993 (shelf-life for food products) w ill be implemented.  Products that are 
not in compliance with the current or re vised standards can be returned to the 
originating country if requested and will not be  destroyed or held at port indefinitely.   
ii. The expiration date as defined in Section 4.1 represents that last viable date for the 
product to be consumed.  Produc ts that remain on the shelf beyond the expiration date WT/ACC/SPEC/SAU/7 
Page 88  
 
 may be pulled or destroyed.  For products that have voluntary shelf-life, the exact 
date of expiration is determin ed solely by the manufacturer 
iii. Where not elsewhere defined, suitable containers under Types of Packaging under 
Section 4.4.1. Mandatory Expiration Periods of Food Products shall be defined as any 
appropriate container as long as the packag ing has not been compromised (e.g., free 
from significant tears, damage, etc.).  
iv. Products that do not fall under Section 4. 4.1. Mandatory Expiration Periods of Food 
Products shall be considered to fall under S ection 4.4.2. Voluntary Expiration Periods 
of Food Products, unless these products are peri shable, as specified in paragraph 201.  
Types of packaging for products under Section 4.4.2. shall be defined as any 
appropriate container as long as the packag ing has not been compromised (e.g., free 
from significant tears, damage, etc.).  
v. All requests for more information about th e revised standards should be submitted to 
the Food Department at SASO; Telephone No. 966-1-4520-166.  The Ministry of Commerce and Industry is responsible for monitoring and administering the 
application of the revised standards and w ill also be responsible for resolving any 
discrepancies or disputes involving the application of standards.   
 
- Transparency 
203. Some members of the Working Party requested that the Government of Saudi Arabia publish 
draft technical regulations in a single official jour nal or other publication that was available to the 
general public, and other interested parties.  The representative of Saudi Arabia stated that draft 
technical regulations would be  available on SASO website:  www@saso.org.sa
.  He confirmed that 
Saudi Arabia would notify the Secretariat when th e new website (including an English version) was 
complete and that this would be by the end of 2005.  He confirmed that all Saudi draft technical 
regulations were still announced in all Saudi newspapers and circulated to all foreign embassies in 
Saudi Arabia.  The Working Party took note of these commitments. 
- Implementation of TBT  Agreement Obligations 
204. In response to the above explanations and cl arifications provided by the representative of 
Saudi Arabia, members of the Working Party requested  that Saudi Arabia provide a description of the 
steps being taken to ensure full implementation of the  Agreement on Technical Barriers to Trade.  In 
response, the representative of Saudi Arabia provided the Working Party with the Technical Directive, 
which implemented TBT  Agreement.  In response to a comment of a member of the Working Party, 
the representative referred to the statement at item x of paragraph 191, above.  The SASO Technical 
Directive of July 2000, amended 19 July 2005, incorpor ated the substance of the TBT Agreement.  In 
response to a question from a member of the Work ing Party, the representative of Saudi Arabia 
reported that the Saudi Arabian Standards Or ganization (SASO) (P.O. Box 3437, Riyadh 11471,  WT/ACC/SPEC/SAU/7 
 Page 89 
 
 
 Saudi Arabia; tel: 966-1- 452-0000; fax: 966-1-452-0086; www.saso.org.sa ) was the operational 
enquiry point for issues relating to the TBT Agreement. 
205. The representative of Saudi Arabia committed that Saudi Arabia would comply with all 
obligations under the WTO  Agreement on Technical Barriers to Trade from the date of accession 
without recourse to any transition period.  The Working Party took note of this commitment. 
- Sanitary and Phytosanitary Measures 
206. The representative of Saudi Arabia stated that  one of the legal bases for SPS requirements in 
Saudi Arabia was Royal Decree No. M/10 of 3. 3.1392H (16 April 1972), which established SASO, 
the competent standardization body in Saudi Arab ia.  He noted that SPS measures were enforced 
through Council of Ministers Decision No. 85 of 1. 4.1412H (4 July 2000) and Ministerial Decision 
No. 943 of 2.5.1424H (1 July 2003).  In response to further questions from members of the Working 
Party, the representative of Saudi Arabia stated that the SASO Technical Directive implemented 
Saudi Arabia's obligations under the TBT Agr eement, while the Saudi Unified SPS Procedures 
implemented Saudi Arabia's obligations under the SPS Agreement.   
207. The representative of Saudi Arabia stated that Saudi standards covered sanitary and 
phytosanitary measures by means of at least one of the following: 
i. Measures following the standards and guidelines and recommendations of the Codex 
Alimentarius Commission, the World Organization for Animal Health (OIE), and the 
International Plant Protection Convention. 
ii. Measures not covered by the standard s and guidelines and recommendations of these 
organizations would be based on the provisions of the SPS Agreement.   
The Working Party took note of these commitments. 
208. Some members of the Working Party requested  that Saudi Arabia identify all areas of 
inconsistency and provide a timetable for bringing th e Saudi Arabian regime into conformity with the 
requirements of the SPS  Agreement.  In response, the representa tive of Saudi Arabia stated that an 
internal review had already been commenced into  Saudi Arabia's SPS regime guided by the comments 
of the WTO Working Party in this respect.  At a later stage, the representative of Saudi Arabia 
provided members of the Working Party with a comprehensive Action Plan for the Implementation of the SPS  Agreement in document WT/ACC/SAU/42.  Still la ter, he informed the Working Party that 
the Action Plan had been fully implemented by issuance of Council of Ministers Decision No. 85 
of July 2000 and Ministerial Decision No. 943 of 2.5.1424H (1 July 2003) on SPS law titled "Sanitary 
and Phytosanitary Unified Procedures".  In reply to  questions from some Working Party members, the 
representative of Saudi Arabia stated that the new SPS law also incorporated revisions of the WT/ACC/SPEC/SAU/7 
Page 90  
 
 "Agricultural Quarantine Regulations" and the "Sta tutory Instruments of Veterinary Quarantine", 
ensuring conformity with the requirements of the SPS  Agreement.  He reported that the main 
provisions of the new Saudi Law include the following: 
i. Saudi Arabia shall apply SPS measures c onsistently with the provisions of the 
WTO Agreement on SPS Measures (Article 2.1 of Saudi Arabia's SPS Law). 
ii. SPS measures shall be limited to the extent necessary to protect human, animal or 
plant life or health (Art. 2.2 of Saudi Arabia's SPS Law). 
iii. SPS measures shall be based on scientific rules and principles and shall not be 
maintained without sufficient scientific evidence (Art. 2.2 of Saudi Arabia's SPS 
Law). 
iv. There will be no unjustified discriminati on between WTO Members and Saudi Arabia 
where identical or similar conditions prevail (Art. 2.3 of Saudi Arabia's SPS Law).   
v. SPS measures shall not be applied in a way that constitutes a disguised restriction on 
international trade (Art. 2 of Saudi Arabia's SPS Law).   
vi. SPS measures taken by Saudi Arabia sha ll be based on international standards, 
guidelines or recommendations, except where th ere is a scientific justification for a 
measure resulting in a higher level of protec tion (Arts. 3.1 and 3.3 of Saudi Arabia's 
SPS Law). 
vii. Saudi Arabia shall accept the SPS measures deemed appropriate by other WTO 
Members as equivalent where those measures achieve the protection level of Saudi Arabia (Art. 4.1 of Saudi Arabia's SPS Law). 
viii. Article 5 of Saudi Arabia's SPS Law follo ws the provisions of Article 5 of the WTO 
SPS Agreement. 
ix. Article 6 of Saudi Arabia's SPS Law fo llows the provisions of Article 6 of the 
SPS Agreement. 
x. Articles 7 and 8 of Saudi Arabia's SPS La w follow the provisions of Articles 7 and 8 
of the SPS Agreement. 
A member of the Working Party was of the view th at, in some instances, not all provisions of the SPS 
Agreement had been taken over in Saudi Arabia’s  national legislation and key words had been 
changed or omitted.  That left the legislation open to interpretation and might lead to legal 
uncertainty.  The representative of Saudi Arabia stat ed that the problem would be taken care of in a 
Ministerial Circular amending the Unified SPS Pr ocedures.  Members welcomed Saudi Arabia’s 
statement that it would reconcile inconsistencies be tween its domestic legisla tion and regulations and 
procedures implementing the WTO SPS Agreement, so that all of Saudi Arabia’s laws, regulations, 
procedures and other requirements for importation we re consistent with the provisions of the WTO 
SPS Agreement.  The Working Party took note of this commitment. 
209. In addition, the representative of Saudi Arabia stated that the veterinary quarantine bylaw 
issued pursuant to Council of Ministers Deci sion No. 109 of 30.4.1424H (30 June 2003) covered 
sanitary and veterinary requirements and measur es pertaining to animals and animal products 
conforming to the ruling of the International Zoosanitary Code specifying the regulations 
recommended for international trade with regard to animals and animal products issued by the World  WT/ACC/SPEC/SAU/7 
 Page 91 
 
 
 Organization for Animal Health (OIE).  He noted al so that the agricultural qua rantine bylaw issued by 
Council of Ministers Resolution No. 207 of 26.1. 1396H (28 January 1976) set out requirements and 
phytosanitary measures conforming to the rul es issued from IPPC initially based on FAO 
publications.  The representative of Saudi Arabia  added that the Unified Plant Quarantine Law 
(UPQL) for the Gulf Cooperation Council (GCC) had been promulgated in 2003 and new unified 
quarantine pests lists had been issu ed.  Since then, regular meetings  had been held under the auspices 
of the GCC Secretariat General to establish pr ocedures and policies for a strong agricultural 
quarantine system in the GCC region.   
210. The representative of Saudi Arabia stated that , pursuant to Council of Ministers Decision No. 
85, a Standing Committee on SPS Measures had been created.  The Standing Committee was reviewing all existing SPS measures to ensure consistency with the requirements of the SPS 
Agreement.  Whenever, as a result of this review, a measure was determined to be inconsistent, the 
Standing Committee would issue a recommendation to th e relevant agency, such as the Ministry of 
Agriculture for livestock and fresh fruits, vegetabl es and grains, and the Ministry of Commerce and 
Industry for processed foods and other foodstuffs.  Wh en the agency concerned determined that the 
measure was inconsistent with the SPS Agreement,  the agency would conform the measure to the 
requirements of the SPS Agreement.  Also, when a WTO Member identified a specific measure, the 
Standing Committee would review that particular m easure forthwith.  The Working Party took note of 
these commitments.  
211. In response to requests for further informati on regarding the role of the GCC and Saudi 
Arabia's quarantine system, the representative of Saudi  Arabia stated that the Council of Ministers had 
issued Decision No. 109 of 30.4.1424H (30 June 2003) .  Through Decision No. 109, Saudi Arabia had 
adopted the veterinary quarantine system applicable  to GCC countries.  (He reported that a revised 
plant quarantine system was still under considerati on.)  The representative noted that the Customs 
Union of the GCC countries had adopted a system of  one port of entry for all goods imported to GCC 
countries.  According to the system, any item that was allowed to enter any GCC port was allowed to 
enter all GCC countries and customs procedures such  as inspection, laboratory analysis and customs 
fees were handled in the first port of entry.  T hus, the quarantine system in all GCC countries was 
unified.  However, a transition period of three years from 1 January 2003 was provided for the GCC 
quarantine system’s fuller implementation.  He assu red the members that this transitional period did 
not and would not affect Saudi Arabia's commitmen ts regarding operation of its quarantine system.   
212. A member of the Working Party asked how Saudi  Arabia would ensure that measures applied 
by Saudi Arabia would meet the requirements of Article 5 of the SPS  Agreement (i.e., that the WT/ACC/SPEC/SAU/7 
Page 92  
 
 measures applied in each member were not more rest rictive than necessary to d eal with the risks faced 
by that particular member).  The representative of  Saudi Arabia explained that, because there was free 
movement of goods between GCC countries due to the establishment of the customs union, it was not 
feasible to restrict imports in one GCC country and to allow imports in other GCC countries.  Some members of the Working Party indicated that this could result in Saudi Arabia applying a ban on imports even though those imports did not pose a disease risk in Saudi Arabia, simply as a result of 
another GCC country imposing such a ban.  Those members were of the view that this may be 
inconsistent with the requirements of Article 5 of  the SPS Agreement.  In response, the representative 
of Saudi Arabia assured the members that Saudi Arab ia was aware of this concern and that any bans 
would be applied only in a manner consistent with Article 5 of the SPS Agreement as of the date of 
accession.  He stated that, accordingly, existing arra ngements would be reviewed in consultation with 
GCC countries and appropriately amended by the date of accession to ensure that an SPS measure 
could not be applied at any Saudi port to any produc t intended for final sale in Saudi Arabia unless the 
SPS measure was based on relevant international standards, guidelines and recommendations or, in 
any other case, based on science consistent with the relevant provisions of the SPS Agreement.  The 
Working Party took note of these commitments. 
213. The representative of Saudi Arabia further re ported that Saudi Arabia earlier had issued 
sanitary and quarantine measures administered by th e Ministry of Agriculture, as well as the Ministry 
of Health and the Ministry of Municipalities.  Wh en no approved internationa l standards applied to 
these products, the Kingdom of Saudi Arabia would implement SPS measures based on science 
consistent with the relevant provisions of the SPS Agreement.   
214. Saudi Arabia was a permanent and active member  in the international organizations on plant 
and animal regulations, including FAO, the C odex Alimentarius Commission (CAC), the World 
Organization for Animal Health (OIE) and the In ternational Plant Protection Convention (IPPC).  
Saudi Arabia's SPS measures did not arbitrarily or unjustifiably discriminate between different 
countries where identical or similar conditions prev ail.  Such measures also did not discriminate 
between the territory of Saudi Arabia and othe r countries where identical or similar conditions 
prevailed.  Saudi Arabia's SPS measures were not applied in a manner which constituted a disguised 
restriction on international trade. 
215. In response to requests for information on the transparency of Saudi Arabia's SPS measures, 
the representative of Saudi Arabia stated that Sa udi Arabia's SPS measures were published in advance 
of their application.  The Kingdom of Saudi Arabia had an established system for informing governments and other standards organizations of  changes.  Saudi Arabia's SPS measures and  WT/ACC/SPEC/SAU/7 
 Page 93 
 
 
 requirements were notified to the Embassies in the Kingdom and to Saudi Chambers of Commerce.  
In response to a comment by a member of the Wo rking Party, the representative noted that, as with 
TBT standards, Saudi food draft standard s will be available on SASO website:  www@saso.org.sa , in 
order to increase transparency and provide notificati on of future changes to SPS import requirements.  
(All Saudi SPS measures would continue to be dissem inated as described above.)  In addition, he 
noted that full sets of guidelines detailing all require ments were freely available to any interested 
parties.  Furthermore, information regarding Sa udi Arabia's SPS regime, including its SPS measures, 
would be disseminated on the internet through a website accessible through the homepage operated by the Ministry of Commerce and Industry.  The webs ite would be fully operational by the date of 
accession and offer a comprehensive service to users.  The representative confirmed that Saudi Arabia 
would provide notification of future changes to  import requirements relating to SPS matters.  The 
Working Party took note of these commitments. 
216. Members of the Working Party asked Saudi Arab ia to identify any additional steps taken to 
implement obligations in the SPS Agreement re garding transparency.  The representative of 
Saudi Arabia stated that SPS obligations had been implemented by recent decisions by the Council of 
Ministers.  In particular, he noted that Council of Ministers Decision No. 85 of 1.4.1421H 
(4 July 2000) included a number of provisions implementing obligations of the SPS  Agreement.  First, 
Decision No. 85 required the Ministry of Commerce and Industry to notify the WTO and all WTO Members of all actions relating to SPS issues and to respond to any inquiries regarding the same.  
Second, under the Decision, a Technical Standing Committee was established to monitor Saudi SPS 
measures and ensure that they are implemented in  accordance with Saudi Arabia's WTO obligations.  
The Technical Standing Committee comprised repr esentatives from the Ministry of Commerce and 
Industry, the Ministry of Agriculture, the Ministry of Health, SASO and the Customs Department.  Third, Decision No. 85 required the Ministry of Co mmerce and Industry to prepare a list of all Saudi 
SPS measures; this list is attached as Annex L (List of SPS Measures Maintained by the Kingdom of 
Saudi Arabia).  In response to a question by a member of the Working Party, the representative 
assured the member and confirmed that Saudi Arabia  would strictly follow the provisions of Council 
of Ministers Decision No. 85 and would notify the WTO and all WTO Members of all proposed SPS 
measures and actions relating to SPS issues and respond to any inquiries regarding the same.  The 
Working Party took note of these commitments. 
217. Some members of the Working Party stated that the information on Saudi Arabia's SPS 
measures gave a good overview of the regime.  They sought confirmation that measures were based on risk assessments carried out in acco rdance with Article 5 of the SPS  Agreement.  In response, the 
representative of Saudi Arabia confirmed that Saudi Arabia's SPS measures conformed to all WT/ACC/SPEC/SAU/7 
Page 94  
 
 standards, guidelines or recommendations issued by  the international bodies specifically designated 
by the SPS  Agreement, i.e., the Codex Alimentarius Commission, the World Organization for Animal 
Health (OIE) and the International Plant Prot ection Conventions, and so, in accordance with 
Article 3.2 of the SPS  Agreement, such SPS measures were pr esumptively consistent with the SPS 
Agreement.  (Saudi Arabia was a member of all three organizations.)  For remaining SPS measures not covered by the above three organizations (s uch as microbiological risks and shelf life of food 
products), Saudi Arabia relied on scientific studies,  guidelines and recommendations issued either by 
specialized internationally accepted research institu tes, universities or scientific references or, in 
limited cases, by itself.  In cases where Saudi Arabia decided that measures which provide a level of protection higher than that provided for in guidelin es and recommendations issued by internationally 
recognized bodies are necessary to meet its appropriate  level of protection, application of such 
measures would be based on scientific principles;  only to the extent necessary to protect human, 
animal or plant life or health; and taking full account of the objectives of minimizing negative trade effects.  He confirmed that Saudi Arabia's SPS measures were based on risk assessment in accordance 
with Article 5 of the SPS  Agreement. 
218. Some members of the Working Party identified certain possible areas of inconsistency with 
the requirements of the SPS  Agreement, such as the requirement in Article 6 of Council of Ministers 
Resolution No. 207 of 26.1.1396H (28 January 1976), "Agricultural Quarantine Regulations", that 
products be free of all weed seeds, regardless of wh ether such weed seeds were  quarantine significant, 
in accordance with relevant international guidelines.   Some members also noted that Article 3 of 
Council of Ministers Decision No. 109 of 30.4.1424H (30 June 2003), "The Statutory Instrument of 
the Veterinary Quarantine", stated that "no anim al may be admitted ... from any country that was 
infected with any epidemic disease ...."  These member s were of the view that this requirement was 
inconsistent with Article 6 of the SPS  Agreement and national treatment provisions.  In response, the 
representative of Saudi Arabia stated that, upon accession, the Kingdom of Saudi Arabia would revise 
Resolution No. 207 and Decision No. 109 to ensure co mpliance with the relevant WTO obligations.  
In response for further information concerning the im portation of seeds, he noted that there was no fee 
charged for the inspection of seeds.  The seeds were fi rst subject to a visual examination to check for 
impurities and to ensure that the phytosanitary in formation in the import documents was correct.  
Thereafter, samples of the seeds were sent to laborator ies to check for aflatoxins.  The Working Party 
took note of this commitment. 
219. One member of the Working Party stated that Saudi Arabia, presumably due to animal health 
concerns related to BSE, had ba nned imports of bovine semen from that country.  The representative 
of Saudi Arabia confirmed that the ban on import of bovine semen had been lifted.   WT/ACC/SPEC/SAU/7 
 Page 95 
 
 
 220. Similarly, in response to a comment from a me mber of the Working Party, the representative 
of Saudi Arabia stated that, in the view of th e Kingdom, it had not been established that West Nile 
Virus could not be transmitted to humans.  Thus , Saudi Arabia had banned certain imports in 
accordance with information provided by OIE and as a prudential measure, in conformity with Article 
5.7 of the SPS Agreement.  One member of the Work ing Party stated that Saudi Arabia’s ban on live 
birds (specifically, day-old chicks) due to concerns  about West Nile Virus was not consistent with 
international practices.  The representative of Saudi Arabia confirmed that the ban on imports of day-
old chicks from the United States had already been removed. 
221. A member of the Working Party raised the following points in relation to Annex L (List of 
SPS Measures Maintained by the Kingdom of Saudi Arabia): 
i.  With regard to BSE - Saudi Arabia only banned live bovines from Washington State in 
the United States, i.e., a regional approach was applied.  The member said there was no justification for this approach and asked th e representative of Saudi Arabia to justify it 
in the context of Article 5 of the SPS Agr eement.  The representative of Saudi Arabia 
stated that a regional approach was consiste nt with the provisions of paragraph 1 of 
Article 6 of the SPS Agreement.  The member  also stated that, according to Annex L, 
meat from the same region (Washington State) was not banned, and this was equally 
not understandable.  The reverse policy was applied by Saudi Arabia in the case of 
Sweden (which had no cases of BSE), where Saudi Arabia allowed imports of bovines but not of meat.  The representative of Saudi Arabia stated that since many cases of BSE kept appearing in various member countries of the European Union, the ban on 
meat had been applied to the EU as a whole. 
ii. Also with regard to BSE – the member said that Saudi Arabia should remove its 
restrictions on imports of embryos, as it had done for bovine semen.  According to the member, in the current OIE Code no import restrictions applied with respect to in-vivo collected embryos, following the recommendations of the Embryo Transfer Society.  The representative of Saudi Arabia stated that Saudi Arabia had no restrictions on 
imports of embryos. 
iii. With regard to Foot and Mouth Disease (FMD) – the member noted that imports from 
all European Countries were banned because of FMD.  The member said that the EU was free of FMD, and so asked why all Europ ean countries were included in this ban.  
The representative of Saudi Arabia stated that, in pursuance of Resolution No. XX of 
the International Committee of the OIE, adopted during the 72
nd general session (23-28 
May 2004), Saudi Arabia had decided to re move the ban on imports of live bovine, 
ovine and caprine animals, due to Foot and Mouth Disease, from all European countries. 
iv. With regard to Milk and Milk Products – Saudi Arabia imposed an import ban on fresh 
milk and milk products from Belgium.  The member said that, according to the OIE 
Code, these products should be traded without r estrictions and the ban should be lifted.  
The representative of Saudi Arabia stated th at Saudi Arabia and Belgium had agreed 
that the ban, which had been imposed due to Dioxin contamination on imports of dairy 
products from that country, would be lifted,  except for short-shelf-life products (fresh 
milk and liquid milk in any form, yogurt, sour milk, lebnah and cheese).  Following a 
later review, Saudi Arabia had lifted the ban entirely. 
v. With regard to Poultry Meat and Its Pr oducts and Eggs – Saudi Arabia banned imports 
from Germany although, according to the member, the nitrofin contamination crisis that WT/ACC/SPEC/SAU/7 
Page 96  
 
 led to the ban dated back to 2002 and had been over for a long time.  Further, the 
authorities had taken the appropriate measures,  and so the ban should be lifted.  The 
representative of Saudi Arabia stated th at the Saudi authorities and the German 
Embassy in Riyadh had drafted minutes of an agreement to lift the ban.  The German authorities had studied the draft minutes and responded with some comments.  The 
Saudi authorities had replied to these comments in August 2003.  Since then, nothing 
had been heard from the German authorities. 
vi. With regard to Olive Oil – the member said that import restrictions on olive oil from 
Spain had been introduced following alleged contamination of olive oil with traces of 
benzopyrene in July 2001.  Subsequent follo w up and analysis had been made and the 
analysed samples all showed negative resu lts.  The Spanish authorities had supplied 
relevant information on this issue, and so  Saudi Arabia should lift the ban.  The 
representative of Saudi Arabia stated that Saudi Arabia had lifted the import ban on all 
grades of olive oil, including pomace olive oil, from all countries, including Spain.   
 
222. Some members of the Working Party stated that  certain other laws, such as the "Approval of 
Importing Alfalfa and Vegetable Seeds from N on-Arab Countries" and "Approval of Importing 
Flower and Forage Crop Seeds from Non-Arab C ountries" appeared to only apply to "non-Arab" 
countries, which suggested problems in relation to  the consistency of these regulations with the 
principle of most-favoured-nation treatment.  Some members of the Working Party stated that the 
position appeared inconsistent with the SPS Agreem ent's requirement that, in applying SPS measures, 
WTO Members recognize "regional conditions" affecting human, animal and plant health risks.  In response, the representative of Saudi Arabia stated  that the Kingdom of Saudi Arabia would revise 
these laws to ensure compliance with relevant WTO obligations.  The Working Party took note of 
these commitments. 
223. One member of the Working Party asked as to the identity of the operational enquiry point for 
the SPS Agreement.  The representative of Saudi Arab ia reported that the Ministry of Commerce and 
Industry would serve this function (Post Offi ce Box 11162, Riyadh, Kingdom of Saudi Arabia; 
telephone number 966-1-4027-574; www.commerce.gov.sa).  He confirmed that the enquiry point 
would be fully operational by the date of accession.  The Working Party took note of these 
commitments. 
224. The representative of Saudi Arabia stated th at Saudi Arabia's sanitary and phytosanitary 
standards system would be in compliance with WTO provisions under the  Agreement on the 
Application of Sanitary and Phytosanitary Measur es as of the date of accession to the WTO, and that 
Saudi Arabia would apply all measures under the  Agreement on the Application of Sanitary and 
Phytosanitary Measures in a manner that is not more trade restrictive than required, from the date of 
accession without recourse to any transition period.  The Working Party took note of these commitments.  WT/ACC/SPEC/SAU/7 
 Page 97 
 
 
 - Trade-Related Investment Measures 
225. Some members of the Working Party congratulated  Saudi Arabia on its generally very liberal 
investment regime and asked whether there were any measures in place in Saudi Arabia that were 
inconsistent with the requirements of the  Agreement on Trade-Related Investment Measures 
(TRIMs).  In response, the representative of Saudi Arabia stated that there were no measures in place 
in Saudi Arabia that were inconsis tent with the requirements of the  Agreement on TRIMs.  He noted 
that, in particular, there were no measures in place in  Saudi Arabia that were of the kind described in 
the "Illustrative List" in the Annex to the Agr eement on TRIMs.  Some members of the Working 
Party enquired whether Saudi Arabia imposed any tr ansfer requirements in relation to technical or 
management know-how upon foreign investors.  In response, the representative stated that Saudi Arabia did not maintain any requirements on such transfers.    
226. The representative of Saudi Arabia stated that Saudi Arabia would not maintain any measures 
inconsistent with the TRIMs Agreement and woul d apply the TRIMs Agreement from the date of 
accession without recourse to any transition period.  He confirmed that, in the event that any WTO 
inconsistencies existed, Saudi Arabia would act to  ensure that Saudi law conformed to the TRIMs 
Agreement.  The Working Party took note of this commitment.   
- Free Zones 
227. In response to questions from members of th e Working Party, the representative of Saudi 
Arabia stated that, although there were no free z ones or free economic zones established or operating 
in Saudi Arabia, Articles 77-88 of the GCC Unifie d Customs Law permitted the establishment of such 
zones.  In response to a further question, the represen tative of Saudi Arabia stated that currently there 
was no separate Saudi legislation on free zones.  He reiterated that currently Saudi Arabia had no free 
zones or economic zones. 
228. The representative of Saudi Arabia stated that, if free zones or special economic zones were 
established, Saudi Arabia would administer them in compliance with WTO provisions, including 
those addressing subsidies, TRIMs and TRIPS, a nd that goods produced in these zones under tax and 
tariff provisions that exempt imports and importe d inputs from tariff and certain taxes and charges 
would be subject to normal customs formalities when entering the rest of Saudi Arabia, including the 
application of tariffs and any taxes and charges.   The Working Party took note of these commitments. WT/ACC/SPEC/SAU/7 
Page 98  
 
 - Government Procurement 
229. Some members of the Working Party requested  that Saudi Arabia undertake to accede to 
the Agreement on Government Procurement upon accession to the WTO.  The representative of 
Saudi Arabia replied that the Agreement on Govern ment Procurement was a plurilateral agreement, 
adherence to which was not a precondition for accession to the WTO.   
230. Members observed that government procurement accounted for a major part of Saudi Arabia's 
imports, and that Saudi participation in the  Agreement on Government Procurement was an important 
issue.  The benefits of joining the GPA included lower procurement costs and greater transparency.  
In particular, the transparency provisions of the  Agreement could be useful to Saudi Arabia in 
ensuring the least-cost/best-quality outcome for procur ement in covered agencies.  In response to a 
request by a member of the Working Party to subm it Saudi Arabia's procurement law and regulations, 
the representative of Saudi Arabia stated that these are being revised and would be submitted after the 
revision had been effected. 
231. The representative of Saudi Arabia confirmed that, upon accession to the WTO, Saudi Arabia 
would initiate negotiations for membership in the Agreement on Government Procurement by tabling 
an entity offer.  He also confirmed that, if the results of the negotiations were satisfactory to the 
interests of Saudi Arabia and the other parties to the Agreement, Saudi Arabia would complete 
negotiations for membership in the Agreement w ithin a year of accession.  The Working Party took 
note of these commitments. 
- Trade in Transit 
232. The representative of Saudi Arabia informed th e Working Party that goods in transit through 
Saudi Arabia received duty free treatment under Articles 69-73 of the Common Customs Law of the GCC member states, which was applicable in Sa udi Arabia.  The Kingdom's policy regarding goods 
in transit was to allow them to be transported through Saudi Arabia without any discrimination as to 
the kind of goods or their origin or destination.  He said that goods transiting Saudi Arabia bound for 
other countries were subject to the following conditions: 
i. Banned goods were prohibited to tran sit Saudi Arabia, according to the GCC 
Common Customs Law. 
ii. The types and marks of the goods should be specified in the accompanying manifest.   iii. The goods should be transported in m odular containers having only one access and 
duly equipped with a lock to allow e ffective placement of Customs seals; the 
Customs seal should not be broken. 
iv. Transit of the consignment across Saudi Ar abia must be covered by the guarantee of a 
customs broker at the port of entry.  WT/ACC/SPEC/SAU/7 
 Page 99 
 
 
 v. The consignment must exit within the period specified by the port of entry. 
233. In response to a question from a member of th e Working Party, the representative of Saudi 
Arabia stated that the guarantee of the customs broker is necessary to ensure that the goods actually 
leave Saudi Arabia; there is no fee for the guarantee.  Also, he reported that, in Saudi Arabia, transit 
does not require escort. 
234. One member of the Working Party asked for a clarification of Saudi Arabia's treatment of 
meat in sealed containers, where the meat had fi rst entered another GCC country.  The representative 
of Saudi Arabia noted that Saudi Arabia understood the importance of this issue.  At a later stage, he 
noted that Ministerial Decree No. 5618 of 15.11.1424H (8 January 2004) had been issued.  That 
Decree allowed such imported shipments to trans it third countries, including third countries with 
infectious diseases, e.g., FMD, provided that shipme nts were in refrigerated containers that were 
appropriately sealed and documented.  In response to a comment by a member of the Working Party, 
the representative of Saudi Arabia stated that a copy of Ministerial Decree No. 5618 had been 
submitted to the Working Party. 
235. In response to a question from a member of  the Working Party, the representative from 
Saudi Arabia confirmed that Saudi Arabia's law and practice governing trade in transit would be 
applied in full conformity with the provisions of the WTO  Agreements, in particular Article V of 
GATT 1994.  The Working Party took note of this commitment.   
- Agricultural Policy 
236. The representative of Saudi Arabia provided in formation on its agriculture sector, including 
tables on domestic support and export subsidies, contained in the Schedule of Concessions and 
Commitments on Goods annexed to Saudi Arabia's draft Protocol of Accession to the WTO and in 
WT/ACC/SPEC/SAU/1/Rev.10. 
237. Some members of the Working Party requested that Saudi Arabia provide detailed 
information on the role of the Saudi Arabian Agricultu ral Bank (SAAB), in particular in the area of its 
mandate with regard to providing agricultural loans and subsidies.  In response, the representative of 
Saudi Arabia stated that SAAB was founded by Royal Decree No. 58 of 3.12.1382H (28 April 1963).  
It was a government financial institution specializi ng in providing funding to the agricultural sector in 
order to assist in the development of agricultu re and improve agricultural productivity through the 
deployment of state of the art scientific and t echnical methods.  The Bank granted loans through 13 
branches, with 57 offices throughout the Kingdom, in order to facilitate provision of services to 
farmers in their regions.  The Bank granted farmers,  agricultural projects, fishermen, bee keepers and WT/ACC/SPEC/SAU/7 
Page 100  
 
 farm cooperatives two types of agricultural loans free of interest.  However, there were unseen costs 
borne by agricultural investors in order to acquire  a loan from SAAB.  These costs were reflected in 
the number and amount of loans shown in the table be low.  The time needed to process the application 
and approve the loan was long due to bureaucratic formalities.  Therefore, the opportunity costs for 
agricultural loans were very low. 
Year No. Total Amounts 
(Thousand SAR) 
1992 4374 775,150 
1993 4429 930,561 
1994 3822 670,556 
1995 2642 412,589 
1996 3065 431,708 
1997 3942 626,956 
1998 5607 897,310 
1999 6628 903,010 
2000 6147 1,112,221 
2001 8037 1,444,925 
Source:  Saudi Arabian Agricultural Bank, Annual Report No. 38, 1421H/1422H (2001). 
238. He confirmed that the total "agricultural subsidies" package had been notified under non-
product-specific support on supporting Table DS:9 of th e domestic support tables.  He added that the 
Bank had also been responsible for the disbursemen t of a package of agricultural subsidies incurred 
by the government towards reduction of agricultura l expenditures in order to increase the average 
return on agricultural production.  These subsidies included government grants to assist farmers in 
purchasing engines, irrigation pumps, agricultural machinery, poultry equipment and dairy production 
equipment; in addition, transport costs from the count ry of origin of high-breed cows imported to the 
Kingdom were also paid.  The following table shows total agricultural subsidies disbursed through the 
bank during the period 1992-2001: 
Year Total subsidies (Thousands SAR) 
(US$ 1 = SAR 3.75) 
1992 677,902 
1993 248,624 
1994 355,434 
1995 0 (no subsidies) 
1996 296,937 
1997 229,376 
1998 225,492 
1999 197,358 
2000 228,960 
2001 249,880 
Source:  Saudi Arabian Agricultural Bank, Annual Report, No: 38, 1421H/1422H (2001). 
239. In response to further questions, the representative of Saudi Arabia stated that in pursuance of 
the current Development Plan, Saudi Arabia woul d distribute land in areas where suitable quantities  WT/ACC/SPEC/SAU/7 
 Page 101 
 
 
 of water resources were available.  Investment woul d be encouraged in large agricultural projects that 
depend on renewable water resources,  using modern irrigation systems that consume low quantities of 
water.  Domestic production of vegetables and fru its grown in greenhouses would be encouraged, as 
would the fishing industry using advanced technol ogy.  As planned, wheat production was gradually 
reduced from more than 4 million tons before 1994 to 2.8 million tons in 1994, 2 million tons in 1998 
and 1.8 million tons in 2001.  The production of ba rley was also reduced from 2 million tons in 
1994-1995 to 1 million tons in 1998, and to less than  200,000 tons in 2001.  Domestically produced 
barley had been purchased by the GSFMO, and then sold to livestock producers at the fixed price of 
SAR 400/ton (US$ 107/ton).  The representative of Saudi Arabia stated that GSFMO had stopped 
receiving domestic barley according to Royal Decree No. 4/B/49434 of 8.12.1423H (10 February 2003).  The farmers were advised to c onvert to other products that consume less water. 
240. Some members of the Working Party asked whet her there was any support to the dairy sector.  
In response, the representative of Saudi Arabia stat ed that there was no specific support for the dairy 
sector, except for transportation cost of imported co ws under special conditions.  He added that the 
specific support for the dairy sector was included in the agricultural subsidies listed in paragraph 237, 
above, as well as in supporting Tables DS:7 and DS:9. 
241. In response to questions concerning the provisi on of irrigation water for crop production, the 
representative of Saudi Arabia stated that irriga tion water for crop production was provided by private 
farmers, and not by the Government.  He noted that there were no subsidies associated with the 
running of irrigation equipment. 
242. Some members of the Working Party requested th at the representative of Saudi Arabia clarify 
the role of the GSFMO in the export and subsidiza tion of wheat.  In response, the representative of 
Saudi Arabia stated that since 1995 the GSFMO had not exported wheat or barley.  Export controls 
were maintained for subsidized wheat and barley  through export licenses.  In response to further 
questions, he added that the expor tation of date palm seedlings, barley, corn, maize and soy beans was 
conditional upon the repayment of subsidies in tended for the support of domestic production. 
243. Saudi Arabia's commitments on agricultural ta riffs, domestic support and export subsidies for 
agricultural products are contained in the Sc hedule of Concessions and Commitments on Goods 
(document WT/ACC/SPEC/SAU/7/Add.1) annexed to Sa udi Arabia's draft Protocol of Accession to 
the WTO and in WT/ACC/SPEC/SAU/1/Rev.10. WT/ACC/SPEC/SAU/7 
Page 102  
 
 - Trade in Civil Aircraft 
244. Some members of the Working Party asked th at Saudi Arabia enter a commitment to accede 
to the  Agreement on Trade in Civil Aircraft from the da te of entry into force of its Protocol of 
Accession.  In response, the representative of Saudi Arabia stated that Saudi Arabia had no present 
intention to accede to the  Agreement on Trade in Civil Aircraft.  He further stated that, upon 
accession, Saudi Arabia would apply a zero rate of ta riff on imports of goods related to the Agreement 
on Trade in Civil Aircraft. 
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 
A. GENERAL 
245. The representative of Saudi Arabia confirme d that the policy objective in the area of 
intellectual property was to provide effective and ad equate protection to all categories of intellectual 
property in conformity with the provisions of the  Agreement on Trade-Related Aspects of Intellectual 
Property Rights (TRIPS Agreement).  The representative of Saudi Arabia stated that, as stipulated in 
Paragraph 1 of Article 1 of the TRIPS Agreement,  Saudi Arabia would implement the provisions of 
the Agreement within its own legal system and practice.  In addition to the Memorandum on the 
Foreign Trade Regime, the representative of Saudi  Arabia provided the Working Party with a 
Supplementary Memorandum on TRIPS (WT/ACC/SAU/5).  The representative of Saudi Arabia provided the Working Party with the texts of th e Trademarks Law, the Law on Patents, Layout 
Designs of Integrated Circuits, Plant Varieties and Industrial Design (New Law on Patents) and the 
Copyrights Law (L/7645/Add.1).   
246. Some members of the Working Party congratulat ed Saudi Arabia on its generally high level 
of protection of intellectual property rights.  They noted that Saudi Arabia had taken significant steps 
towards making its trade regime fully consistent w ith the TRIPS Agreement, but that some problems 
remained.  Some members asked that Saudi Arabia  take immediate steps to address problems in its 
intellectual property regime, and asked also that Sa udi Arabia commit itself to full implementation of 
the TRIPS  Agreement without a transitional period.  In particular, some members of the Working 
Party expressed concerns in relation to the protection of copyrights; the duration of patent protection; 
protection of plant varieties; length of time befo re compulsory licensing and working requirements 
were applied; protection for sound recordings and audiovisual works; protection for broadcasts and 
satellite transmission; explicit protection for computer software programs; implementation of Articles 1-21 of the Berne Convention; and the protec tion of well-known marks.  In response, the  WT/ACC/SPEC/SAU/7 
 Page 103 
 
 
 representative of Saudi Arabia reaffirmed Saudi Ar abia's commitment to meeting the obligations of 
the TRIPS  Agreement and provided additional releva nt information as set forth below. 
- Agencies Responsible for Policy Formulation and Implementation 
247. In response to questions from members of the Working Party, the representative of 
Saudi Arabia confirmed that different Saudi ag encies were responsible for different aspects of 
intellectual property formulation and implementati on, depending on the precise nature of the issue 
involved.  For example, the Ministry of Commer ce and Industry was responsible for implementing the 
Trademarks Law and for formulating and implementing the Competition Law.  He further stated that the King Abdulaziz City for Science and Technology (KACST) was responsible for implementing the New Law on Patents.  He added that the Ministry  of Culture and Information was responsible for 
implementing the Copyrights Law. 
- Membership in International Intellectual Property Agreements 
248. In response to questions from the members of  the Working Party, The representative of 
Saudi Arabia confirmed that Saudi Arabia was a member of a number of intellectual property 
conventions, including: 
i. The Convention Establishing the World Intellectual Property Organization (WIPO). 
ii. The Berne Convention for the Protection of Literary and Artistic Works. 
iii. The Paris Convention for the Protection of Industrial Property. iv. The Universal Copyright Convention. v. The Arab Regional Copyright and Related Rights Agreement. vi. The GCC Patent Law.  
- Application of MFN and National Treatment to Foreign Nationals 
249. In response to a question from members of the Working Party, the representative of 
Saudi Arabia stated that the Kingdom provided MF N and National Treatment in accordance with the 
provisions of Articles 3 and 4 of the TRIPS  Agreement. 
- Fees and Taxes 
250. In response to a question from members of the Working Party, the representative of 
Saudi Arabia gave the following information on fees and charges: 
 i. Copyrights: 
No fees or charges. WT/ACC/SPEC/SAU/7 
Page 104  
 
  ii. New Law on Patents: 
Fees Patent Industrial 
Designs Layout 
Designs of 
Integrated 
Circuits New Plants 
Varieties 
Registration application 800 300 1000 1000 
Change or transfer of ownership 400 150 1000 1000 
Amendment or addition to the application 200 100 500 200 
Obtaining a copy of the application or certificate 100 100 100 100 
Registration of licence contracts 800 300 1000 1000 
Grant of compulsory license 8000 3000 5000 5000 
Grant and publication 1000 350 1000 1000 
Annual fees     
First year 500 300 1000 1000 
Second year 1000 300 1500 1000 
Third year 1500 600 2000 1500 
Fourth year 2000 600 2500 1500 
Fifth year 2500 900 3000 2000 
Sixth year 3000 900 3500 2000 
Seventh year 3500 1200 4000 2500 
Eighth year 4000 1200 4500 2500 
Ninth year 4500 1500 5000 3000 
Tenth year 5000 1500 5500 3000 
Eleventh year 5500   3500 
Twelfth year 6000   3500 
Thirteenth year 6500   4000 
Fourteenth year 7000   4000 
Fifteenth year 7500   4500 
Sixteenth year 8000   4500 
Seventeenth year 8500   5000 
Eighteenth year 9000   5000 
Nineteenth year 9500   5500 
Twentieth year 10000   5500 
Twenty-first year to twenty-fifth y ear (for protection of trees) 7000 
- Fees are for establishments. 
- Fees for individuals are half the above fees.  
 iii. Trademarks, including Service Marks: 
a. Application Fee:     SAR 1,000 
b. Registration Fee:     SAR 3,000 
c. Renewal of Registration:    SAR 3,000 d. Changes or Modifications to Registration:  SAR 1,000 e. Late Fee for Delayed Renewal (within 6 months): SAR 1,000  WT/ACC/SPEC/SAU/7 
 Page 105 
 
 
 B. SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING PROCEDURES 
FOR THE ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS 
- Copyrights 
251. The representative of Saudi Arabia informed Wo rking Party members that Saudi Arabia had 
enacted a new Copyrights Law (Royal Decree No. M/41 of 2.7.1424H (30 August 2003)), which Saudi Arabia believed was in full confor mity with the provisions of the TRIPS  Agreement.  The main 
features of the new Law were:  (i) more explicit protection for computer software and data bases; 
(ii) more specific protection to audio-visual wo rks and sound recordings, including protection for 50 
years after first public display or publication; (iii) legal use of foreign works such as translations and 
copying had been clarified according to the TRIPS  Agreement; (iv) duration of protection of all 
artistic and literary works had been provided accordi ng to the requirements of the Berne Convention.  
In the area of enforcement, the new Law provided in  detail for all types of infringements and piracies 
and strengthened penalties (including provisions for:  (i) imprisonment of up to six months (which can 
be doubled for repeat offenders); (ii) a maximu m fine of SAR 250,000 (which can be doubled for 
repeat offenders); and (iii) compensation for da mages and defamation due to the conduct of the 
violator) to meet the requirements of the TRIPS  Agreement.  In response to a question from a member 
of the Working Party, the representative of Saudi Arabia reported that the implementing regulations 
had been issued by the Minister of Culture a nd Information under Ministerial Decision No. 1688/1 of 
10.4.1425H (29 May 2004).  The representative of Saudi Arabia confirmed that the copyright law and 
regulations currently in force in Saudi Arabia provi ded the following:  (i) protection for news reports, 
excluding only news facts; (ii) a reproduction right to the full extent required by Berne Article 9 
(which includes digital reproduction); (iii) protection for pre-existing foreign works if they have not 
yet fallen into the public domain in the country of origin through the expiry of term of protection; 
(iv) a point of attachment for foreign sound record ings; (v) a definition of "works" that includes sound 
recordings; (vi) broadcasting and rebroadcasting ri ghts that comply fully with Berne Article 11bis; 
and (vii) parallel commercial export and import pr otection, as exportation and importation of copies 
not authorized for distribution in Saudi Arabia is deemed to be infringement. 
- Patents 
252. Concerning patents, the representative of Saudi Arabia noted that in general, patentable 
subject matter in Saudi Arabia was consistent  with the requirements of Section 5 of the 
TRIPS  Agreement.  Processes (methods of manufacturing) were patentable, and were protected from 
infringing use.  Plant varieties currently were patent able and protected by the New Patents Law.  The 
representative of Saudi Arabia stated that the pr otection of plant varieties had been provided in WT/ACC/SPEC/SAU/7 
Page 106  
 
 accordance with the provisions of Article 27(3)(b) of the TRIPS  Agreement.  Patent holders in 
Saudi Arabia had been accorded the rights mentioned in Article 28 of TRIPS.  A patent holder was no 
longer required to make full industrial use of the pa tent in Saudi Arabia within two years.  Although 
the old Patent Law conferred a term of protecti on of 15 years with the possibility of a five-year 
extension, the representative of Saudi Arabia stated  that, according to Article 19 of the New Patents 
Law, the term of protection would be 20 years.   
253. As to compulsory licensing, the representative of  Saudi Arabia stated that the amendment of 
the Patent Law would conform national law and pr actice to the requirements of Article 31 of the 
TRIPS  Agreement.  The review of the Patent Law had revealed that, in comparison with Article 27(3) 
of the TRIPS  Agreement, the exclusion of patentability contained in paragraphs (a) and (b) of 
Article 8 was in accordance with Article 27 (1) of the TRIPS  Agreement, which limits the patentable 
inventions to those which were related to products  or processes; paragraph (c) of Article (8) was in 
full compliance with subparagraph (b) of Article 27(3) of the TRIPS  Agreement, except that 
paragraph (c) did not exclude "micro-organisms" fro m "plants and animals" and did not include "non-
biological processes" as processes excluded from "bio logical processes for the production of plants 
and animals"; paragraph (d) of the Patent Law w as in full compliance with sub-paragraph (a) of 
Article 27(3) of the TRIPS  Agreement.  In response to a question of a member of the Working Party, 
the representative later added that the New Law on Pate nts had modified paragraph (c) of Article 8 of 
the old Patent Law.  Accordingly, the following we re not patentable under the New Law on Patents:  
"Plants, animals and essentially biological processes for the production of plants and animals, 
excluding micro-organisms, non-biological processes and micro-biological processes." The representative of Saudi Arabia informed Working Party members that the New Law on Patents had 
been issued under Royal Decree No. M/27 of 29.5.1425H (17 July 2004).  The implementing regulations of the New Patents Law had been issued by Ministerial Decision No. 118828/M/10 of 
14.11.1425H (26 December 2004).  A copy of the E nglish translation of the new law had been 
submitted to the WTO Secretariat for circulation to members of the Working Party.  He said that, in the view of Saudi Arabia, the New Law on Patents w as in full conformity with the provisions of the 
TRIPS  Agreement and included provisions not only on Pa tents, but also on Industrial Designs, Plant 
Varieties and Layout Designs of Integrated Circuits. 
254. In response to a comment from a member of the Working Party regarding the timing of patent 
approvals, the representative of Saudi Arabia stated  that the Kingdom had taken a number of steps to 
accelerate and improve administrative procedures regard ing the issuance of patents.  Specifically, he 
reported, new patent examiners had been hired, increasing the staff from 15 to 80 examiners.  In 
addition, training programs had been strengthened w ith regard to patent examinations and English  WT/ACC/SPEC/SAU/7 
 Page 107 
 
 
 language skills, both abroad and on the job in Saudi Ar abia.  He further reported that the examination 
procedure had been modified to use patent search and examination reports and patents issued by the 
patent offices of other countries.  This measure ha d been taken to avoid duplicative work and shorten 
the period from the date the patent application was filed to the date the patent was issued.  Saudi 
Arabia also was cooperating with the Patent Office of the Government of Germany to take advantage 
of its experience and further streamline the Saudi sy stem.  In reply to questions from some members 
of the Working Party, the representative of Saudi Arabia stated that the modified examination 
procedures were not part of the Patents Law.  Li ke the practice of many other countries, procedures 
were not included in the law but were included within  the regular practice of the Patent Office.  He 
further stated that the modified procedures were alr eady in effect and the backlog was expected to be 
cleared no later than the end of 2006.  In res ponse to a further question from a member of the 
Working Party about patents for pharmaceuticals, the representative of Saudi Arabia stated that, if a 
patent application related to a pharmaceutical we re pending with KACST, the Ministry of Health 
would not register a generic form of pharmaceutical unless there was no possibility that the patent would be granted.   
- Trademarks 
255. In response to requests for information c oncerning the protection of trademarks in 
Saudi Arabia, the representative of Saudi Arabia gave a description of various provisions of the 
existing Trademarks Law and their relationshi p to the respective provisions of the TRIPS  Agreement.  
In response to questions from Working Party member s, he stated that geographical names could not 
be registered as trademarks under Saudi Arab ia's Trademarks Law if their use caused a 
misunderstanding as to the source of products or services, or their origin.  Some members of the Working Party noted that the period of protection for a trademark when the requirement of use was 
not fulfilled was five years, two years more than the period required by Article 19 of the  Agreement 
on TRIPS.  These members noted also that the initial and renewable period of protection for 
trademarks where the requirement of use was fulfille d was ten years, three years more than the period 
required by Article 18 of the  Agreement on TRIPS.  Later, the representative of Saudi Arabia stated 
that a new WTO-consistent Trademarks Law, issu ed pursuant to Royal Decree M/21 of 29.5.1423H (7 
August 2002), would bring Saudi Arabia's trademarks regime into compliance with the provisions of 
the TRIPS  Agreement.  In response to a question, the representative confirmed that the new 
Trademarks Law superseded all earlier laws on tr ademarks.  The implementing regulations for the 
new Trademarks Law were issued on October 4, 2002, by Ministerial Order No. 1723.  The main features of the new Trademarks Law and implementing regulations are: WT/ACC/SPEC/SAU/7 
Page 108  
 
 i. Increase and impose harsher punishments, with the maximum of SAR 1,000,000; 
ii. The right of the injured party to compen sation in proportion to the damages suffered 
by the injured party due to infringement; 
iii. The right of the injured party to obtain from the Board of Grievances an attachment 
order;  
iv. The right of the party against whom an attachment order has been issued to 
compensation for the damages caused to him by a male fide  party seeking the 
attachment order;  
v. Determination of all disputes arising as a result of trademark infringements is within 
the jurisdiction of the Board of Grievances;  
vi. It is within the jurisdiction of the Inv estigation and Prosecution Panel to initiate 
punitive actions before the Board of Grievances;  
vii. The right to file an appeal before the Bo ard of Grievances against the decision of the 
Ministry of Commerce and Industry denying registration of a trademark;  
viii. The right of third parties to file a compla int before the Board of Grievances against 
the registration of a trademark; and  
ix. Protection of well-known trademarks, even if not registered.   
- Geographical Indications 
256. Members of the Working Party asked for deta ils regarding Saudi Arabia’s treatment of 
geographical indications.  In response, the repr esentative of Saudi Arabia stated that the new 
Trademarks Law also contained provisions regardi ng protection of geographical indications.  With 
regard to alcoholic beverages, the representative noted that the production, sale, consumption and 
import of alcoholic beverages were prohibited in Shar i’a and, thus, geographical indications of origin 
of wines and spirits were not protected.   
- Industrial Designs 
257. In response to requests for information con cerning the protection available for industrial 
designs, the representative of Saudi Arabia responde d that industrial designs are protected by the 
industrial designs provisions in the New Law on Pa tents, to be implemented by The King Abdulaziz 
City for Science and Technology (KACST).  In res ponse to a question from a member of the Working 
Party, the representative confirmed that, under th e new Patents Law, the conditions for obtaining 
design protection were that the design must be new,  have specific features and not be contrary to 
Shari’a (public order).  He further confirmed that th e term of protection was ten years from the date of 
filing.   
- Layout Designs of Integrated Circuits 
258. In response to requests for information concerni ng the protection available for layout designs, 
the representative of Saudi Arabia noted that protecti on of layout designs of integrated circuits was 
covered by the New Law on Patents.    WT/ACC/SPEC/SAU/7 
 Page 109 
 
 
 - Plant Variety Protection 
259. In response to questions from members of the Working Party concerning the system of 
protection for plant varieties, the representative of Saudi Arabia stated that the New Law on Patents 
provided the necessary protection.  He added that the system of protection in the New Law on Patents was adopted from the UPOV Model Law on the Protecti on of New Varieties of Plants.  According to 
the New Law on Patents, he confirmed, varieties w ould be entitled to protection if they were new, 
distinct, uniform, stable and subject to denomination. 
- Undisclosed Information 
260. Some members of the Working Party requested  information on the protection available for 
undisclosed information.  The representative of Saudi Arabia stated that, although undisclosed 
information was currently protected by the Comp anies Law, Labour Law and Banks Control Law, 
work was underway to prepare an Unfair Competition Law that would deal comprehensively with this 
issue.  That law would be implemented by the Ministry of Commerce and Industry.  He added that anti-competitive practices would be covered by the law as well.   
261. The representative of Saudi Arabia confirmed that the Council of Ministers had approved 
issuance of the Regulations for the Protection of  Confidential Commercial Information, Council of 
Ministers Decision No. 50 of 25.2.1426H (4 April 2005).  The Minister of Commerce and Industry issued these Regulations by Ministerial Deci sion No. 3218 of 25.3.1426H (4 May 2005), as amended 
by Ministerial Decision No. 431 of 1.5.1426H (8  June 2005).  These Regulations provided for 
protection of undisclosed test and other data s ubmitted to obtain approval of a pharmaceutical or 
agricultural chemical against unfair commercial use for a minimum period of five years from the date 
of obtaining the approval including the establishment of the base price.  No person other than the 
person who submitted such data c ould, without the explicit consen t of the person who submitted the 
data, rely on such data in support of an applicati on for product approval.  An y subsequent application 
for marketing approval would not be granted a mark et authorization unless the applicant submitted its 
own data, meeting the same requirements applied to th e initial applicant, or had the permission of the 
person initially submitting the data to rely on such data .  Saudi Arabia would protect such data against 
disclosure, except where necessary to protect the public , or unless steps were taken to ensure that the 
data were protected against unfair commercial use.  Any person harmed as a result of violations of the 
provisions of these Regulations may file a lawsu it to claim compensation for damages sustained. WT/ACC/SPEC/SAU/7 
Page 110  
 
 C. ENFORCEMENT 
262. Some members of the Working Party noted the steps being taken by Saudi Arabia to eliminate 
some problems in the area of enforcement, in par ticular the piracy of intellectual property.  The 
members noted that it was clear that much of th e necessary legislation was in place, but that Saudi 
Arabia was experiencing difficulty in fully im plementing and enforcing the new laws.  These 
members of the Working Party urged Saudi Arabia to work towards full conformity with 
the Agreement on TRIPS from the date of Saudi Arabia's accession to the WTO.   
263. In response to a further comment by a member  of the Working Party, the representative of 
Saudi Arabia clarified that Saudi Customs was not  directly responsible for enforcing Saudi laws 
regarding copyrights.  Rather, he said, this was enfo rced by the Ministry of Culture and Information, 
which maintained an office in each customs entry point solely for the purpose of enforcing the 
Copyrights Law.  At each point of entry, Customs would bring to the Ministry office a sample of any 
shipment subject to possible copyright infringement.  Article 22 of the Copyrights Law established a three-step procedure:  Step 1, provisional seizure; Step 2, confiscation; Step 3, destruction and imposition of penalties, if the goods were found to  violate the Copyrights Law by the Violation 
Review Committee of the Ministry of Culture and Info rmation; if the goods were deemed to be in full 
compliance, the shipment would be released and allowed into the Kingdom.   
264. In response to a request from a member of th e Working Party, the representative of Saudi 
Arabia presented the information on enforcement set  forth below under the following five headings. 
- General Obligations  
265. Regarding general obligations, the representa tive of Saudi Arabia stated that Saudi 
intellectual property laws include provisions for the enforcement of the rights they provide in compliance with the provisions of the TRIPS Agreem ent.  The Copyrights Law, the Trademarks Law 
and the New Law on Patents each contained enforcemen t provisions.  He further stated that the Law 
of the Board of Grievances (the administrative judi ciary of Saudi Arabia), the Rules and Procedures 
of the Board of Grievances and the Border Measu res Regulations related to IPR also contained 
provisions regarding enforcement.  The laws, he said, contained provisions guaranteeing fairness and 
equity, while still providing for robust enforcement.  The laws also provided for further appeal to the 
Board of Grievances to contest the decisions of  the administrative bodies.  Under these laws, he 
reported, administrative and judicial decisions were  required to be in writing and well-reasoned.  All 
administrative and judicial procedures, including the Board of Grievances procedures, were free of cost.     WT/ACC/SPEC/SAU/7 
 Page 111 
 
 
 266. In response to questions, comments and observations by a member of the Working Party on 
enforcement of intellectual property rights, the re presentative of Saudi Arabia provided the following 
information: 
i. The expressions ex parte  search orders or prejudgement attachment orders are not used 
as such in the new legislation.  However, there is a provision on protective seizures/provisional protective measures in Article 27 of the Implementing Regulations 
of Copyrights Law.  The procedures for that are described in detail in Article 27.  The 
right holder has to apply to the Violations Review Committee through the General Department of Copyright in Riyadh or its branches.  The Committee may ask the complainant to provide information lis ted in paragraph (3) of Article 27. 
ii. IPR laws of the Kingdom of Saudi Arabia have been prepared in conformity with the 
provisions of the TRIPS Agreement, including its Article 61.  The fines and 
imprisonment are imposed keeping in vi ew the circumstances of each case and the 
gravity of offence in each case and keeping in view that these have a deterrent effect.  If 
a right holder is not satisfied with the level of  fine or imprisonment, he has the right to 
file an appeal to the Board of Grievan ces to enhance the fine and/or imprisonment.
 
iii. The right holder, who has suffered damages because of an infringement of his IP right, 
would be awarded damages by the Viol ation Review Committee, which would 
determine the compensation after weighi ng the evidence and documentation submitted 
by him and the estimated amount of compensation claimed by him (Article 24 of the Implementing Regulations of the Copyrights Law).  In arriving at its decision, the Committee would keep in view that the dama ge award is adequate to compensate for 
the injury the right holder has suffered as provided in Article 22 (Four) of Saudi 
Arabia's Copyrights Law.  If the right holder is not satisfied with the decision, he has the right to submit an appeal to the Board of Grievances for enhancement of 
compensation.
 
- Civil and Administrative Procedures  
267. In addition to the material presented in the preceding paragraph, the representative of Saudi 
Arabia confirmed that, with regard to civil and administrative procedures, the laws mentioned above, 
as well as associated implementing regulations, implemented the requirements of Section 2 of Part III 
the TRIPS Agreement.  For example, he said, Article 22(iv) of the Copyrights Law and Articles 48 
and 51 of the Trademarks Law complied with TR IPS Agreement provisions regarding damages and 
compensation (Article 45 of the TRIPS Agreement). 
- Provisional Measures 
268. Regarding provisional measures, the representativ e of Saudi Arabia informed the Working 
Party that a right holder could obtain an order for precautionary and preventive measures under 
particular intellectual property laws.  Articles 49-51 of the Trademarks Law permitted a trademark 
owner to seek precautionary measures from the Boar d of Grievances based on a petition and official 
certificate of trademark registration.  Articles 22 and 24 of the Copyrights Law and Articles 27 and 28 
of the Implementing Regulations of the Copyrights Law provided for provisional measures to stop WT/ACC/SPEC/SAU/7 
Page 112  
 
 printing the infringing work, seize copies, extracts a nd printed matter as a precaution or to apply such 
other precautionary seizure that the Committee r esponsible for determining violations of the 
Copyrights Law deemed necessary to protect copyrights.  Article 34 of the Law on Patents, Layout 
Designs of Integrated Circuits, Plant Varieti es and Industrial Designs authorized the Committee 
responsible for adjudicating disputes and appeals to take such prompt measures as the Committee 
deemed necessary to avoid the damages arising from infringement.  Article 55 of the Implementing 
Regulations of this Law provided that the Committee may, upon submission of a statement of the 
case, order that precautionary and preventive measures be taken against the defendant.  In such cases, 
the plaintiff was required to submit an assurance set  by the Committee to safeguard the defendant’s 
right in the case of an invalid complaint.  Precau tionary measures were also provided for copyrights 
and trademarks in Articles 5 and 6 of the Regulations on Border Measures. 
- Special Requirements Related to Border Measures  
269. In response to comments concerning the enfor cement of border measures, the representative 
of Saudi Arabia stated that Article 22.7 of the Copyrights Law and Article 49 of the Trademarks Law 
authorized judicial or administrative bodies to issue a provisional seizure decision.  Moreover, 
Customs authorities, in coordination with the Ministry of Commerce and Industry and the Ministry of 
Culture and Information, seized consignments infri nging intellectual property rights, according to the 
applicable laws in Saudi Arabia.  In connecti on with the enforcement of border measures, Saudi 
Customs was in the process of establishing an inte rnal IPR Unit, which would create a database for 
Customs' use to assist with enforcemen t against forged and counterfeit goods.   
270. The representative of Saudi Arabia reported that the issue of special requirements related to 
border measures had been covered by the Border  Measures Regulations, which had been issued 
pursuant to Ministerial Decision No. 1277 of 15.5. 1425H (3 July 2004) and by Copyrights Law and 
the Trademarks Law.  In his view, these provisions fully complied with Section 4 of Part III of the 
TRIPS Agreement. 
- Criminal Procedures 
271. With regard to criminal procedures, the represen tative of Saudi Arabia stated that they were 
addressed by Article 22 of the Copyrights Law and Articles 43-45 of the Trademarks Law.   
272. The representative of Saudi Arabia stated that Saudi Arabia would apply fully all the 
provisions of the  Agreement on Trade-Related Aspects of Intellectual Property Rights from the date  WT/ACC/SPEC/SAU/7 
 Page 113 
 
 
 of accession to the WTO, without recourse to any transition period.  The Working Party took note of 
this commitment.   
VI. POLICIES AFFECTING TRADE IN SERVICES 
273. In addition to the Memorandum on the Foreign Trade Regime, the representative of 
Saudi Arabia provided the Working Party with info rmation on the services regime in Saudi Arabia in 
a Supplementary Memorandum on the Foreign Trade Regime (WT/ACC/SAU/5), as well as in 
supplementary background notes and informa tion in documents WT/ACC/SAU/23 and 24. 
274. Some members of the Working Party congratulated Saudi Arabia on its very liberal services 
regime.  They noted, in particular, the high numbe r of foreign workers and service providers already 
supplying services within Saudi Arabia.  
275. Some members of the Working Party requested clarification of the roles of various 
government agencies in the approval of new investme nts of foreign capital in the services sector.  In 
response, the representative of Saudi Arabia stated th at all foreign investment was to be approved by 
the newly created Saudi Arabian General Investment Authority (SAGIA) as a one-stop shop, except those activities listed in the Negative List or wher e the power to licence was assigned to an agency 
other than SAGIA, as set forth in paragraph 278, below. 
276. Some members of the Working Party requested information on the regulation of the banking 
sector and, in particular, requested informati on on the conditions under which a foreign bank could 
obtain a licence to establish a branch within Saudi Arabia.  In response, the representative of Saudi 
Arabia stated that direct branching was permitte d under Article 3 of the Banking Control Law.  He 
reported that banking firms’ activities were regulated  by the Banking Control Law.  Under Article 2 
of the Banking Control Law, a natural or legal pers on was required to have a licence to engage in a 
banking business.  Under Article 3 of the Law, the licensing requirements for a Saudi national bank or 
a joint venture bank included that it must be a public Saudi joint-stock company.  Upon the 
recommendation of the Saudi Arabian Monetary Agen cy, the Minister of Finance and the Council of 
Ministers would evaluate each recommendation to gr ant a licence for a branch of foreign bank, a 
Saudi national bank and a joint venture bank.  The licensing criteria were prudential in nature and 
dealt with issues such as capital adequacy, liquid ity, profitability and corporate governance.  The 
criteria were applied on a non-discriminatory basis.  However, there were a few differences between 
the licensing criteria for a joint venture bank or a branch of a foreign bank.  For example, a branch did not need a local Board of Directors nor did it need  two external auditors.  The Licensing procedures 
would be applied in a non-discriminatory basis for dom estic and foreign investors.  In response to a WT/ACC/SPEC/SAU/7 
Page 114  
 
 question, the representative of Saudi Arabia stated  that the Banking Control Law did not provide for 
the opening of representative offices in the Kingdom by  foreign banks.  In response to questions from 
a member of the Working Party relating to the regulatory regime for foreign bank branches, the 
representative of Saudi Arabia said that it was s till being developed, but would be in line with 
commonly accepted international practice.  For exampl e, in determining capital adequacy, the parent 
bank's capital would be relied on.  The specific cap ital requirement for a foreign bank branch would 
differ depending on its business plans in the Kingdom, which could include the full scope of business 
allowed to a Saudi bank.  All liquidity or othe r requirements would be applied to a foreign bank 
branch, Saudi national bank or a joint venture bank in a non-discriminatory basis, taking into account 
different requirements for the different legal form s of business.  The Working Party took note of these 
commitments. 
277. Some members of the Working Party raised qu estions about how foreign equity limitations 
were established and applied.  In response, the representative of Saudi Arabia explained that the 
Council of Ministers had the authority to establish, e liminate or waive foreign equity limitations, at its 
discretion.  The Council of Ministers could, for example, waive foreign equity limitations on a case-
by-case basis.  In response to a further question re garding the effect of foreign equity limitations on 
taking certain corporate decisions, the representative of  Saudi Arabia stated that, where the percentage 
of foreign equity holdings in a public joint-stock company is subject to limits set forth in Saudi 
Arabia’s Schedule on Specific Commitments in Serv ices, provisions of Saudi Arabia’s Company Law 
or the by-laws of a public joint-stock company requiring a supermajority for taking a decision shall 
not, in practice, impair the ability of foreign sh areholders to exercise operational control of the 
company when acting pursuant to those rules,  including making decisions on changes in the 
company’s capital, extension of the term of the co mpany, its dissolution, or merger with another 
company. 
278. He further added that Saudi Arabia provided for a wide range of judicial, arbitral and 
administrative procedures with respect to trade in services.  Administrative decisions affecting trade 
in services could be appealed to the Board of Grievances under the Council of Ministers Resolution 
No. 190 of 16.11.1409H (19 June 1989) Concerning Rul es and Procedures of the Board of Grievances 
and the Board of Grievances Law.  Commercial di sputes were generally covered by the Board of 
Grievances and some other standing and ad hoc  committees.  Some members of the Working Party 
asked the representative of Saudi Arabia to provide information on the review of decisions concerning 
the licensing of service providers in Saudi Arabia.  In response, the representative of Saudi Arabia 
stated that a number of Ministries and Agencies were involved in approval of the right to provide a 
service in Saudi Arabia, e.g., the Ministry of Commerce and Industry for engineers, legal  WT/ACC/SPEC/SAU/7 
 Page 115 
 
 
 practitioners, accountants and insurers; the Ministry  of Defence and Aviation for civil aviation, 
tourism and travel agents; the General Organi zation for Technical Education and Occupational 
Training for technical institutes and national occupational centres; the Ministry of Health for medical 
practitioners, pharmacists and hospitals; the Ministry  of Transportation for maritime transport; SAMA 
for banks and cooperative insurance companies; and the CITC for telecommunication services.  In all 
cases, the Ministries and Agencies involved had inte rnal standing committees of senior officials to 
review initial administrative decisions pertaining to licensing.  Decisions of standing committees 
could be appealed to the responsible Minister or  Agency head.  Administrative Decisions involving 
potential civil suits against the government coul d be brought before the Board of Grievances. 
279. He further added, in response to requests fo r information on the nature and extent of 
incentives, tax exemptions and subsidies available to service providers in Saudi Arabia, on a national 
treatment basis, the representative of Saudi Arabia  stated that no tax exemptions were provided, 
pursuant to the Foreign Investment Law of April 2000.  In response to a question from a member of 
the Working Party, the representative of Saudi Arab ia stated that no incentives or tax exemptions 
were available to service providers in Saudi Arabia. 
280. In response to requests for information concerning restrictions on the provision of 
professional services, the representative of Saudi Ar abia stated that all professional services were 
treated in the same manner.  A licence was required to provide professional services.  To be eligible 
for a licence, the company was required to be re putable and well recognized in the field of its 
profession, to have been registered and successfully pr actising in the field for at least ten years and to 
be prepared to participate in the training and the building of Saudi nationals' experience and the 
introduction of relevant technology.  In addition, the foreign company should employ or have at least 
one representative in Saudi Arabia.  That representa tive should stay in Saudi Arabia for a period not 
less than nine months per year; have at least a university degree in the field of the company 
specialization; and have not less than ten years’ successful experience.  In response to requests for 
further information concerning the conditions required to be fulfilled to be eligible for grant of a 
licence, the representative of Saudi Arabia stated that  the relevant licensing authority in Saudi Arabia 
could request information establishing the reputa tion and experience of the service provider.  A 
foreign company would be considered as reputab le, well recognized and practising in the field 
successfully if , e.g., it was registered under the companies law of its home country, was certified as 
financially viable by its bankers, produced copies of  audited balance sheets for the last two years, 
provided information establishing that the company had completed assignments for former clients on 
a satisfactory basis or, if available from a Chambe r of Commerce and Industry in the company’s home 
country, the foreign company produced a Chamber-certified list of previous contracts/assignments WT/ACC/SPEC/SAU/7 
Page 116  
 
 outside Saudi Arabia.  Concerning participation in training and the introduction of technology, the 
applicant company should give an undertaking that it would train Saudi nationals and would introduce 
the new technologies and know-how that it employed in  its home country.  He also added that existing 
foreign companies already licensed to operate in Saudi  Arabia had a period of one year to fulfil those 
conditions.  If they did not do that, the licence may be cancelled.  New companies had to fulfil the 
conditions from the beginning of their business activities.   
281. Some members of the Working Party asked whet her Saudi Arabia planned to liberalise the 
limitations placed on the participation of foreigne rs in security underwriting, commodity brokerage 
services and currency exchange operations, as well as the limitations placed on the participation of 
foreigners in land transportation and professiona l services.  In response, the representative of 
Saudi Arabia stated that, although there were lim itations on the participa tion of both foreign and 
domestic individuals in providing security underwr iting, commodity brokerage services and currency 
exchange operations, there were no such limita tions on domestic and foreign banks, except the 
requirements to be licensed.  There were no plans to liberalise those conditions.  In response to a 
question, the representative of Saudi Arabia stated that participation of foreign suppliers was not 
allowed in land transportation services. 
282. Some members of the Working Party asked wh ether there were any instances of less than 
national treatment for foreign service providers.  The representative of Saudi Arabia stated that only Saudi Arabian nationals were a llowed to participate in commerc ial agencies, customs clearance 
agencies, real estate agencies and civilian security.  Postal services and radio and television 
transmission services were reserved to the State.  He  further added that, under Article 8 of the Unified 
Economic  Agreement of the Gulf Cooperation Council, national treatment was provided for 
Gulf Cooperation Council nationals  in, among other things, freedom of movement, work and 
residence, right of ownership and freedom of exercising economic activity, including service activities 
and free movement of capital.  Saudi Arabia, t ogether with the other Gulf Cooperation Council 
members, was in the process of implementing this  agreement.  In addition, some bilateral  agreements 
signed by Saudi Arabia conferred preferred or reci procal supplier status on companies from signatory 
countries with regard to certain services.  Agreemen ts with Egypt and Jordan conferred reciprocal 
supplier status for cross-border truc k and public transportation vehicles;  agreements with Egypt and 
Tunisia granted preference to national shipping and transport modes in bilateral trade;  agreements 
with Lebanon, Syria and Turkey provided for recipro cal treatment with regard to transportation and 
transport vehicles; and an  agreement with Morocco included reciprocal airline privileges.  WT/ACC/SPEC/SAU/7 
 Page 117 
 
 
 283. In response to requests for information concer ning the rules governing temporary residence in 
Saudi Arabia by foreigners, the representative of Sa udi Arabia stated that the Law of Residency was 
enforced by the Ministry of Interior.  In addition,  the Ministry of Labour approved applications for the 
presence of foreigners who worked or were licensed to work in the private sector.  Some members of 
the Working Party requested information on the system followed for employment of foreign 
employees and investors.  The representative of Sa udi Arabia stated that, once a foreign employee 
was offered a contract, a visa would be granted.  Bu siness visitors would, however, require a letter of 
invitation or a copy of the relationship or agreement with a Saudi party. 
284. In response to questions concerning the limita tions placed upon the total number of natural 
persons employed in particular sectors, the represen tative of Saudi Arabia stated that, as a matter of 
principle, work was considered a Saudi citizen's  right.  Consequently, a foreigner would not be 
employed when doing so would displace a Saudi worker.  The Labour and Workers Regulations 
required that any enterprise, Saudi or foreign owned,  would ensure that the percentage of the Saudi 
workers engaged by the employer should not be less than 75 per cent of the total workforce.  
However, the Regulations also permitted the Minister  of Labour to reduce the required percentage in 
circumstances where qualified Saudi workers were not  available.  Foreign workers, including those 
falling under Saudi Arabia’s Mode 4 commitments, were required to obtain work permits from the 
Ministry of Labour.  The representative of Saudi Arabia  clarified that this paragraph would not in any 
way reduce the commitments made by Saudi Arabia  in Mode 4.  All service providers' activities, 
regardless of ownership, were obliged to reser ve certain positions for Saudis, including personnel 
officers, recruitment officers, receptionists, cash iers, civilian security guards and transaction follow-
up clerks to government departments. 
285. Some members of the Working Party requested clarification of the qualification requirements 
and procedures for approval of natu ral persons serving as foreign service providers.  In response, the 
representative of Saudi Arabia stated that different  categories of services required different types of 
approval.  For example, for medical services, the service provider should have a medical degree from a recognized institution, i.e., a college or univers ity.  For educational services, the service provider 
should have adequate academic qualifications in th e relevant disciplines from a recognized institution, 
i.e., a college or university.  A provider of accounting and auditing services should be a certified 
accountant from an institute certified by the host government.  The representative of Saudi Arabia 
stated these requirements referred to natural pers ons.  In addition, all foreign companies should 
possess the necessary technical expertise, financ ial capabilities and occupational proficiency. WT/ACC/SPEC/SAU/7 
Page 118  
 
 286. In response to questions concerning restri ctions placed on government procurement of 
business inputs (i.e., business entities providing business services) from foreign service providers, the 
representative of Saudi Arabia stated that all non-Saudi contractors must assign not less than 
30 per cent of the work included in their contract to  wholly-owned Saudi companies.  All contractors 
were obliged to purchase the tools and equipment that  they procure for performance of their contracts 
from Saudi agents for these tools and equipment in Sa udi Arabia.  Contractors were required to obtain 
the following services from local Saudi establishments: transportation services for goods and services 
within Saudi Arabia (if the contractor did not perform this service by itself directly with equipment owned by the business and with personnel direc tly employed by the business); banking services; 
services for the leasing and purchase of land and buildings; and catering services and supply of foodstuffs.  The representative of Saudi Arabia stated that these requirements applied only to 
government procurement, and not private procurement, of services. 
287. Some members of the Working Party asked whether permission for a foreign-owned service 
provider to own real property was automatic on ce the licence to engage in business activities as a 
foreign establishment in Saudi Arabia was obtained.  In response, the representative of Saudi Arabia 
stated that foreign establishments authorized to carry on their activities in the Kingdom under the 
Foreign Investment Law may own real estate only for a specific use related to the licensed project, in 
accordance with the rules on foreign ownership of real  estate.  The concerned Minister's approval of a 
request to own real estate was a prerequisite before  its review by a Ministerial Committee headed by 
the Minister of Interior. 
288. In response to a question from a member of the Working Party regarding telecommunications 
frequency usage and availability, the representative of Saudi Arabia confirmed that this information 
would be made available in the National Frequenc y Plan, which would be prepared pursuant to the 
Reference Paper attached to the telecommunica tions portion of the Kingdom’s Schedule on Specific 
Commitments in Services.  The representative adde d that the National Frequency Plan was in the 
development stage; it would be published as soon as it was finalized. 
289. In response to questions from members of the Working Party, the representative of 
Saudi Arabia provided the following informati on regarding the Kingdom's insurance regime: 
1986
:  Traditional insurance is prohibited under Is lamic Shari’a.  An acceptable alternative 
insurance concept called "Cooperative Insurance"  emerged in the Saudi Insurance Market.  
The National Company for Co-operative In surance (NCCI) was established as a pilot 
company by Royal Decree No. M/5 of 17.5.1405H (18 January 1986).  No official statistics were available, but, in the past, a certain num ber of insurance companies had been operating 
in Saudi Arabia through a Saudi agent pursuant to Ministerial orders issued by the Ministry of 
Commerce and under the auspices of a Saudi commercial agent.  WT/ACC/SPEC/SAU/7 
 Page 119 
 
 
 1999 :  The Law of Cooperative Health Insuran ce was issued by Royal Decree No. M/10 of 
1.5.1420H (12 August 1999).  It was concerned prim arily with the consumption side of this 
service.  The Council of Cooperative Health Insura nce headed by the Minister of Health was 
responsible for the enforcement of this Law. 
2001 :  The Compulsory Auto Insurance Act was issued by Council of Ministers Decision No. 
222 of 12.8.1422H (29 October 2001).  Third pa rty liability insurance coverage became 
mandatory for all motor vehicles operating in the Kingdom.  The Traffic Department under the Ministry of Interior was responsible fo r the enforcement of the Compulsory Auto 
Insurance Act.  This Act was also con cerned with consumption of that service. 
2003
:  The Cooperative Insurance Companies Cont rol Law was issued by Royal Decree No. 
M/32 of 2.6.1424H (31 July 2003), to protect the insured’s rights by monitoring the financial 
health of the company and supervising th e company’s activities and those engaged in 
insurance professions, to encourage fair and eff ective competition, to enhance the stability of 
the insurance market and to enhance the insu rance sector in the Kingdom.  This law addressed 
explicitly the issue of the supply of the service. 
The relevant government entities deali ng with insurers were as follows: 
i. The Saudi Arabian Monetary Agency (SAMA):  Responsible for the regulatory 
oversight and supervision of the insuran ce industry and qualifications of insurance 
companies. 
ii. The Ministry of Commerce and Industry:  Responsible for the legal requirements of 
the Companies Law. 
iii. The Council of Cooperative Health Insuran ce, headed by the Ministry of Health:  
Responsible for the enforcement of the Law of Cooperative Health Insurance as it 
relates primarily to the consumption of the service. 
iv. The Traffic Department, headed by the Mi nistry of Interior:  Responsible for the 
enforcement of the Compulsory Auto Insu rance Act as it relates to the consumption 
of the service. 
290. The representative of Saudi Arabia stated th at Cooperative Insurance in the Kingdom was 
undertaken through licensed public joint-stock in surance companies operating in a cooperative 
manner, as provided within the articles of the Cooperative Insurance Companies Control Law, 
promulgated by Royal Decree No. M/32 of 2.6.1424H (31 July 2003) in accordance with the 
principles of Islamic Shari'a.  Cooperative insura nce operated with the purpose of maintaining an 
efficient, fair, safe and stable insurance market for the benefit and protec tion of policyholders and 
shareholders.  Cooperative insurance aimed to stre ngthen values like cooperation and social solidarity 
(takaful) among the insured by indemnifying tho se among them who sustain losses insured against as 
well as by sharing equitably the amount of such  losses among themselves.  The representative of 
Saudi Arabia further stated that cooperative in surance companies offered both policyholders and 
shareholders the opportunity to benefit from th eir contributions and investments through the 
distribution of the surplus of insurance operations between the shareholders and policyholders in the 
ratio of 90/10 (90 per cent for the shareholders and 10 per cent for the policyholders).  To facilitate a 
clear accounting for the distribution of the surplus,  the insurance and re-insurance operations accounts WT/ACC/SPEC/SAU/7 
Page 120  
 
 were kept separate from the shareholders’ invest ment accounts.  Insurance operations accounts were 
maintained separately from the contributions paid to  the company by policyholders and were reserved 
for payments of claims and expenses of the comp any's operation.  Policyholders were entitled to a 
percentage of the surplus from the income generate d from the operations and the return on investment 
from the policyholders' contributions at the end of th e year in the form of reduction of premium or by 
monetary distribution.  The accounting methods for th e distribution of surplus were transparent, as set 
forth in the Law’s Implementing Regulations. 
291. The Implementing Regulations of this Law were issued by the Finance Minister, pursuant to 
Ministerial Decision No. 1/596 of 1.3.1425H (20 April 2004) and specified the insurance activities covered in this Law.  The implementing regulations :  (i) provided transparency by making public all 
rules and regulations affecting the insurance and re insurance industry; (ii) promoted competition in 
the market place; and (iii) provided consumer and pr ivate-sector protection.  In response to a question 
from a member of the Working Party, the repr esentative of Saudi Arabia acknowledged that these 
regulations would need further refinement in light of Saudi Arabia’s accession commitments.   
292. A member of the Working Party requested a clear and detailed definition of "cooperative 
joint-stock insurance company," including an explana tion of its ownership, any requirements to float 
shares on the public stock exchange, and an explanati on of how "surplus" is cal culated and distributed 
between shareholders and policy holders.  In res ponse, the representative of Saudi Arabia provided 
the following clarifications.  In establishing a new locally incorporated public joint-stock cooperative 
insurance company, a forei gn insurance company must go through the following steps: 
i. Obtain a licence from SAMA, in accord ance with Articles 4 through 11 of the 
Cooperative Insurance Companies Control Law and its implementing regulations; 
ii. Obtain approval from SAGIA; 
iii. Apply, with a minimum of five founders, to the Ministry of Commerce and Industry, 
in accordance with the Companies Law; 
iv. Obtain approval of the Council of Ministers, enacted through a Royal Decree; and v. Receive SAMA authorization for conducting business. 
The capital requirement and capitalization is required upon receipt of the application in the form of a 
bank guarantee, and paid-up capital is required upon the issuance of the Royal Decree.  Article 6 of 
the Cooperative Insurance Companies Control La w implementing regulations requires that new 
applications be processed within 90 days.  After approval of its application by the Ministry of 
Commerce and Industry, the company shall float the re quired percentage of shares (currently set at a 
minimum of 30 per cent under the Capital Market Au thority's implementing regulations) on the Saudi 
stock market in an initial public offering (IPO) in  accordance with the Capital Market Law and its 
implementing regulations.  The Capital Market Au thority (CMA) implementing regulations require  WT/ACC/SPEC/SAU/7 
 Page 121 
 
 
 that every issue be underwritten, and that CMA revi ew the prospectus within 45 days of receiving all 
information and documentation required.  
293. Subject to the provisions of the Cooperativ e Health Insurance Law, promulgated by 
Royal Decree M/10 of 1.5.1420H (13 August 1999), the Cooperative Insurance Companies Control 
Law granted the Saudi Arabian Monetary Agen cy (SAMA), through a clear, transparent and 
consistent regulatory and supe rvisory process, the powers to: 
i. Review applications for licenses and issue recommendations for licensing, after 
which the application is referred to the Ministry of Commerce and Industry for 
approval under the Companies Law. 
ii. Authorize suspension and withdrawal of regulatory permission. iii. Approve board members of locally in corporated public joint-stock cooperative 
insurance and reinsurance compani es, and their external auditors. 
iv. Monitor solvency of insurance and re insurance companies through the establishment 
of general rules to ensure credit worthi ness, capital adequacy, soundness of assets and 
technical provisions and ability to m eet obligations to policyholders. 
v. Inspect records directly or through auditors and request regulatory information. vi. Approve mergers and acquisitions of insurance and reinsurance companies. 
vii. Regulate and approve rules of investme nt in insurance and reinsurance operations. 
viii. Establish minimum deposit limits and the amount of funds to be deposited in local 
banks to exercise each insurance activity. 
ix. Approve policy forms. x. Establish investment policy for in surance and reinsurance companies. 
xi. Intervene following violations of the rules, including requiring liquidations. 
xii. Establish the pre-conditions for gran ting licenses to provide insurance-related 
services, in particular:  insurance brokers, insurance consultants, inspectors and loss 
adjusters, experts in settling insurance claims and actuaries. 
294. The representative of Saudi Arabia stated that , according to Article 3(2) of the Cooperative 
Insurance Companies Control Law, the main object of the insurance and re insurance companies was 
to engage in insurance and reinsurance activiti es, not to undertake any other activities unless they 
were complementary or necessary.  Insurance and reinsurance companies could not directly own 
brokerage companies or establishments.  Rein surance companies could not own reinsurance 
brokerage companies or establishments.  However, insurance companies could, subject to obtaining 
SAMA's approval, own companies or establishments  engaged in reinsurance brokerage activities. 
295. The representative of Saudi Arabia stated that , according to Article 3(3) of the Cooperative 
Insurance Companies Control Law, the paid-up capita l of the locally incorporated public joint-stock 
cooperative insurance company "shall" not be l ess than SAR 100,000,000 and the paid-up capital of a 
reinsurance company or an insu rance company engaged in underwriting reinsurance activities for 
non-affiliated companies "shall" not be less than  SAR 200,000,000.  The minimum capital "shall" not 
be altered without SAMA's appr oval and in accordance with the provisions of the Companies Law WT/ACC/SPEC/SAU/7 
Page 122  
 
 relating to the locally incorporated cooperativ e insurance and reinsurance public joint-stock 
companies. 
296. Some members of the Working Party requested clarification and modification of a number of 
requirements in the current Saudi regulatory regime that have an impact on foreign insurance service 
providers.  For example, members noted that cap italization requirements appeared to be excessive, 
given that foreign insurance companies are required to operate on a cooperative basis; and there is a 
separate 20 per cent statutory reserve requirement that effectively doubles this capitalization 
requirement.  Furthermore, current Saudi regulati ons require a 10-15 per cent statutory bank deposit, 
the interest on which does not accrue to the compan y, but is instead retained by the regulator 
(SAMA).  Restrictions on the investment of assets currently require that 50 per cent of investment must be in Saudi riyal vehicles.  In additi on, regulations permitted the imposition of unnecessary 
reinsurance requirements.  The representative of Sa udi Arabia confirmed that the necessary regulatory 
reforms, including those for implementation of Royal Decree No. 3120/MB permitting branching, would be completed before May 2006, and would implement the commitments for all subsectors set 
out in Saudi Arabia’s Schedule on Specific Commitments  in Services.  He further explained that such 
regulatory reforms would be developed with the goa l of promoting investment and the creation of 
meaningful commercial opportunities in the Saudi c ooperative insurance market.  Such reforms would 
be consistent with internationa lly recognized insurance industry standards and principles, including 
the standards of the International Association of Insurance Supervisors (IAIS), the financial services 
transparency code of the IMF and the OECD’s "Detailed Principles for the Regulation and 
Supervision of Insurance Markets in Emerging Economies."  The Working Party took note of these commitments. 
297. A member of the Working Party asked if forei gn legal or natural pers ons were allowed to 
invest directly in the Saudi stock market.  The re presentative of Saudi Arabia explained that foreign 
legal or natural persons were not allowed to invest directly in the Saudi stock market, except through 
mutual funds.  He further explained that the transfer of significant shareholding (five per cent or more) in a bank or cooperative insurance compan y was only permitted with the approval of SAMA. 
298. In response to a question from a member of the Working Party concerning the ability of 
foreign insurance service suppliers to open and opera te branches in Saudi Arabia, the representative of 
Saudi Arabia confirmed that foreign insuran ce companies were permitted to open and operate 
branches in Saudi Arabia pursuant to Royal Decree No. 3120/MB of 4.3.1426H (13 April 2005).  He further explained that existing foreign insurance service suppliers operating in Saudi Arabia as of 13 
April 2005, were permitted a three-year transition period, beginning 13 April 2005, to comply with  WT/ACC/SPEC/SAU/7 
 Page 123 
 
 
 the Cooperative Law on Insurance and to establish as e ither a locally incorporated public joint-stock 
cooperative insurance company or as a direct branch (as a cooperative insurance provider).  As set out 
in paragraph 296, above, the representative of Saudi  Arabia confirmed that the necessary regulatory 
reforms for implementation, set out in Royal Decree No. 3120/MB permitting branching, would be completed before May 2006, and w ould be consistent with intern ationally recognized insurance 
industry standards and developed with the goal of promoting investment and the creation of 
meaningful commercial opportunities in the Saudi c ooperative insurance market.  Such reforms would 
be in line with the internationally recognized standa rds of the International Association of Insurance 
Supervisors (IAIS) and the financial services transpar ency code of the IMF.  He confirmed that, 
subject to prudential considerations  that would be reflected in future implementing regulations and in 
conformity with internationally recognised insu rance industry standards, branches of foreign 
insurance companies operating in Saudi Arabia were not subject to economic needs tests or numerical 
limitations, that such branches were permitted to ope rate on the global capital of the parent company, 
taking account of prudential consid erations against insufficient local capital investment, and that 
deposit requirements would be set in accordance with local liability and consiste nt with international 
norms.  He explained that the regulations impl ementing Royal Decree No. 3120/MB had not yet been 
published, but confirmed that, subject to the cond itions stated in the previous sentence, multiple 
licenses would be permitted for branches, and that it would not be necessary to apply for and receive 
separate licenses for non-life and protection and savings insurance.  The Working Party took note of 
these commitments. 
299. A member of the Working Party asked for clar ification concerning licensing of operations and 
new insurance products in general and in particular during the thr ee-year transition period provided 
for in Royal Decree No. 3120/MB.  The member was particularly concerned regarding the following issues: 
i. whether foreign insurance services suppliers, including those operating during the 
three-year transition period, would be pe rmitted a full scope of operations and would 
not be required to apply for separate licenses to supply non-life and protection and savings insurance services; 
ii. whether foreign insurance suppliers woul d not be required to supply protection and 
savings insurance services through, or in conjunction with, a bank; 
iii. whether foreign insurance suppliers, incl uding those operating in Saudi Arabia during 
the three-year transition period provided in Royal Decree No. 3120/MB, were 
permitted to offer new insurance produc ts and service new clients; and  
iv. whether applications for such new pr oducts would be review ed and responded to 
within three months of receipt of the completed documentation and whether applications for products already approved for other financial institutions would be 
reviewed and responded to within 15 days of receipt of completed documentation. WT/ACC/SPEC/SAU/7 
Page 124  
 
 In response, the representative of Saudi Arabia stated that foreign insurance service suppliers 
operating in Saudi Arabia during the three-year tran sition period would be able  to offer new products 
and service new clients, as set forth in the Saudi Schedule on Specific Commitments in Services.  He 
confirmed that it was the ongoing intent of the Ki ngdom of Saudi Arabia to further expedite and 
streamline the general approval procedures for new a nd existing products.  He further confirmed that 
the necessary regulatory reforms, including those for implementation of Royal Decree No. 3120/MB 
permitting branching, would be completed befo re May 2006, and would be consistent with 
internationally recognized insurance industry sta ndards and developed with the goal of promoting 
investment and the creation of meaningful commercial opportunities in the Saudi cooperative insurance market.  Such reforms would be in line w ith the internationally recognized standards of the 
International Association of Insurance Supervisors (IAIS) and the financial services transparency code 
of the IMF.  All rate formulae, policy clauses, insurance application forms and other relevant 
materials required by SAMA and other relevant government agencies such as the Cooperative Health 
Insurance Council and the Traffic Department, and amendments to such items, may be filed with 
SAMA for recordation prior to their use and may be used thereafter unless SAMA disapproves within 
45 days after receipt in the case of products that have already been approved for other financial 
institutions or within 120 days after receipt in the case of new products.  The Working Party took note 
of these commitments. 
300. Following the completion of bilateral negotia tions with WTO Members, the Schedule on 
Specific Commitments in Services of Saudi Arabia w ould be reproduced in Part II of the Annex to the 
Protocol of Saudi Arabia. 
VII. TRANSPARENCY 
301. Some members of the Working Party requested information on Saudi Arabia's 
implementation of the transparency requirements pr escribed in Article X of the GATT, Article III of 
the GATS and other WTO  Agreements.  They asked whethe r a legal obligation existed in 
Saudi Arabia to publish in an official journa l all laws, regulations, judicial decisions and 
administrative orders or rulings of general applica tion or other measures having similar effect relating 
to trade or economic policy "in such a manner as to enable governments and traders to become 
acquainted with them"; to what extent publication o ccurred prior to entry into force; and whether any 
such measures could enter into force without being published in Umm Al-Qura , the Official Journal. 
302. In response, the representative of Saudi Arabia  stated that Article 71 of the Basic Law 
required that all laws be published in Umm Al-Qura , the Official Journal, before they entered into 
effect, and that laws become effective on the date of publication unless a later date was specified.  He  WT/ACC/SPEC/SAU/7 
 Page 125 
 
 
 added that the Umm Al-Qura  also is the official journal for publication of regulations, implementing 
regulations, decrees, decisions, Mi nisterial orders, international  agreements and concessions, which 
also could not come into effect prior to publicati on there.  Pursuant to Decree No. 162 issued by the 
Council of Ministers on 17.6.1423H (28 August 2002), th ese rules extended to administrative orders.  
He further added that Article 47 of the Board of Grievances Law required the publication of judicial 
decisions.  There were no other requirements for publi cation or notification currently in effect.  He 
also confirmed that his government has set up a single operational enquiry point -- the Ministry of 
Commerce and Industry (Post Office Box 11162, Riyadh, Kingdom of Saudi Arabia; telephone 
number 966-1-402-7574; www.commerce.gov.sa) -- in conformity with the requirements of Article III of the General Agreement on Trade in  Services and the WTO Agreements on TBT and 
SPS. 
303. A member stated that timely review of legislation published in Umm Al-Qura  was difficult, as 
copies were not immediately available to the ge neral public and many private-sector entities were 
unable to obtain copies of laws and regulations with  sufficient time to become acquainted with their 
provisions prior to the date of implementation.  Th is member suggested that Saudi Arabia consider 
posting the Umm Al-Qura  on the internet to improve access by the public to laws, regulations, judicial 
decisions and administrative rulings of general app lication, and welcomed any other practical steps 
taken by Saudi Arabia to ensure prompt and accessi ble publication of legislation and regulations in 
the Official Journal. 
304. A member raised the issue of publishing notice of proposed measures and providing an 
opportunity for members and interested persons to provide comments and views on such measures prior to their adoption and implementation.  Pr oviding such an opportunity was required under some 
WTO Agreements and provided useful information that could facilitate the acceptance and operation 
of measures.  This member noted the Saudi government’s practice of circulating information on 
proposed and adopted measures through Chambers of Commerce in the Kingdom and requested 
information on Saudi Arabia’s plans to provide oppor tunities for members and interested persons and 
associations to obtain information and provide comments on proposed measures.  
305. The representative of Saudi Arabia confirmed that from the date of accession his government 
would fully implement Article X of the GATT 1994, Article III of the GATS and the other WTO 
transparency requirements, including those requiring notification, prior comment and publication.  As such, all laws, regulations, decrees, judicial decisions  and administrative rulings of general application 
pertaining to or affecting customs issues, trade in  goods, services, intellectual property and the control 
of foreign exchange would be published promptly in the Umm Al-Qura  in a manner that fulfils the WT/ACC/SPEC/SAU/7 
Page 126  
 
 WTO requirements and no such law, regulation or  other normative act or measure would become 
effective or be enforced prior to such publication.  He further confirmed that the government also had 
decided to expand the transparency provided with regard to legislation and measures having similar 
effect in the areas of trade and investment.  In th is regard, Saudi Arabia would, from the date of 
accession, establish or designate an official website (a nd possibly a supplemental official journal or an 
expanded Umm Al-Qura ), updated on a regular basis and readily available to WTO Members, 
individuals, associations and enterprises, dedicated to the publication of all regulations, decisions, 
orders, administrative rulings of general applicati on, and other measures pertaining to or affecting 
trade in goods, services and TRIPS prior to enactment.  The publication of such regulations and other 
measures would include, as appropriate, the names of the authorities (including contact points) responsible for implementing a particular measure and the effective date of the measure.  Also, it 
would list the products and services affected by the pa rticular measure, identified by appropriate tariff 
line and classification.  The representative of Saudi Arabia confirmed that, with respect to proposed 
measures, Saudi Arabia would provide a reasonable period, i.e., no less than 60 days, for members, 
individuals, associations and enterprises to provide  comments to the appropriate authorities before 
such measures were adopted, except for those regulations and other measures involving national 
emergency or security, or for which the publication would impede law enforcement.  He added that 
Saudi Arabia intended to post the contents of current  and past editions of the Official Journal on this 
website as well, and to keep them current.  The Working Party took note of these commitments. 
VIII. NOTIFICATIONS 
306. The representative of Saudi Arabia said that, upon entry into force of the Protocol of 
Accession, Saudi Arabia would submit all initial notifications required by any  Agreement constituting 
part of the WTO  Agreements.  Any regulations subsequently  enacted by Saudi Arabia which gave 
effect to the laws enacted to implement any  Agreement constituting part of the WTO  Agreements 
would also conform to the requirements of that  Agreement.  The Working Party took note of these 
commitments. 
IX. TRADE  AGREEMENTS 
307. In response to questions from members of the Working Party, the representative of 
Saudi Arabia submitted the text of the Unified Economic  Agreement (UEA) signed on 11 November 
1981 under the Gulf Cooperation Council (GCC).  He said that, in his view, the UEA met all the requirements of Article XXIV of GATT  Agreement 1994, including paragraphs 5(b) and 8(b).  The 
free-trade area had eliminated duties and other restrictive regulations of commerce on all trade between the members of the GCC in the products or iginating in the member states, and work was  WT/ACC/SPEC/SAU/7 
 Page 127 
 
 
 proceeding to further harmonize trade and commercial policies.  He also submitted the programme for 
the implementation of the  Agreement Facilitating and Developing Trade Exchange among Arab 
States to create a Free Trade Area and the  Agreement Facilitating and Developing Trade Exchanges 
among Arab States.  Saudi Arabia would notify these  Agreements upon becoming a WTO Member. 
308. In response to further questions, the representa tive of Saudi Arabia stated that the GCC 
Customs Union had been established and was ope rative since the beginning of January 2003.  
Saudi Arabia and other GCC member states were applying the GCC common external tariff.  The 
rates of common external tariff for more than 85 per cent of the tariff lines were 5 per cent or 
0 per cent.  He said that future plans included the application of common external tariff to all items 
and steps towards a common market and a common currency. 
309. In response to additional questions from a member  of the Working Party, the representative of 
Saudi Arabia stated that the 1981 List was the b asic document that was the foundation of the GCC.  
Further to this List, the first GCC FTA was est ablished; later, the GCC Summit took a decision on 
further economic integration and established a Customs Union (which came into force 1 January 2003).  The representative added that cust oms tariffs had been removed on all trade among 
GCC countries and that there were no exceptions.  As for treatment of imports into one member of the 
customs union when they are shipped to another,  the representative of Saudi Arabia referred to 
paragraphs 168-169, above.  He also stated that th ere were no rules of origin for the GCC Customs 
Union.  As for other restrictions, the representativ e reported that particular goods imported into one 
member of the Customs Union could not be shipped to another member if their importation into the 
other member was banned (e.g., the import ba n on alcohol and pork in Saudi Arabia). 
310. In response to a question on the liberalization of services within the GCC, the representative 
of Saudi Arabia stated that the GCC had libera lized trade in services for roughly 100 sub-sectors of 
services, including professional services, most business services, telecommunication services, banking 
and other financial services (other than insuran ce services), distribution services, education services, 
environmental services, health and related social services and tourism services.  The GCC members had agreed to progressively liberalize other services sectors and sub-sectors. 
311. In response to another question from a member of the Working Party, the representative of 
Saudi Arabia stated that the GCC Supreme Council, which met annually and comprised Heads of 
State/Heads of Governments, was the ultimate d ecision-making body in the GCC.  The Ministerial 
Council, comprising Foreign Ministers, was responsible for overall implementation and 
implementation of decisions of the Supreme Council.  A Committee consisting of the Ministers of Finance and Economy of the GCC member states was responsible for follow-up on the WT/ACC/SPEC/SAU/7 
Page 128  
 
 implementation of the Economic Agreement signed by GCC member States leaders in December 
2001, including the requirements of establishing a customs union.  Affiliated with this Committee 
were a number of specialized committees, such as the Committee comprising Customs Directors and 
Deputy Ministers of Finance and the Customs Uni on Committee.  With respect to implementation, 
decisions of the Supreme Council would be made by executive decisions by member states at a level no less than the Council of Ministers.  Follow-up on implementation was affected by decisions made 
by the concerned ministers within the framework of the Council. 
312. The representative of Saudi Arabia stated th at the Greater Arab Free Trade Area (GAFTA) 
included the following sixteen member states of the Arab League:  Bahrain, Egypt, Iraq, Jordan, 
Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi  Arabia, Sudan, Syria, Tunisia, United Arab 
Emirates and Yemen.  He added that, as of 1 January 2005, customs duties on national goods 
exchanged among the member states to the agreemen t had been removed.  Moreover, exemptions 
from customs duties accorded within  the framework of the GAFTA were limited to products of the 
member states of the Area only.  A copy of the text of the GAFTA, in English, was submitted to the WTO Secretariat for distribution to members of the Working Party.  In response to a question from a 
member of the Working Party regarding rules of orig in, the representative of Saudi Arabia stated that 
the Arab League was still preparing rules of origin .  These would be sent to the WTO once completed. 
313. The representative of Saudi Arabia noted that Saudi Arabia and other GCC member states had 
discussed with the European Communities the possibility of establishing a free trade area. 
314. The representative of Saudi Arabia stated that his Government would observe the provisions 
of the WTO, including Article XXIV of the GATT 1994 and Article V of the GATS, in its trade agreements, and would ensure that the provi sions of these WTO Agreements for notification, 
consultation and other requireme nts concerning free trade areas and customs unions of which 
Saudi Arabia was a member were met from the date of accession.  He confirmed that Saudi Arabia 
would, upon accession, submit notifications and copies of the GCC Customs Union and the Arab 
League Free Trade Area for review by the Committee on Regional Trade  Agreements (CRTA).  The 
Working Party took note of these commitments. 
CONCLUSIONS 
315. The Working Party took note of the explanations  and statements of Saudi Arabia concerning 
its foreign trade regime, as reflected in this repor t.  The Working Party took note of the commitments 
made by the Kingdom of Saudi Arabia in relation to  certain specific matters which are reproduced in 
paragraphs  33, 35, 36, 37, 52, 69, 85, 88, 103, 104, 113, 115, 122, 123, 128, 132, 142, 153, 155, 158,  WT/ACC/SPEC/SAU/7 
 Page 129 
 
 
 164, 167, 169, 171, 174, 178, 179, 181, 182, 183, 184, 186, 189, 197, 201, 203, 205, 207, 208, 210, 
211, 212, 215, 216, 218, 222, 223, 224, 226, 228, 231, 235, 272, 276, 296, 298, 299, 305, 306 and 314 
of this Report.  The Working Party took note th at these commitments had been incorporated in 
paragraph 2 of the Draft Protocol of Accession of Saudi Arabia to the WTO. 
316. Having carried out the examination of the foreign trade regime of Saudi Arabia and in the 
light of the explanations, commitments and concessi ons made by the representative of Saudi Arabia, 
the Working Party reached the conclusion that  Saudi Arabia be invited to accede to the 
Marrakech Agreement Establishing the WTO under the provisions of Article XII.  For this purpose, 
the Working Party has prepared the draft Deci sion and Protocol of Accession reproduced in the 
Appendix to this report, and takes note of Saudi Arabia's Schedule of Concessions and Commitments 
on Goods WT/ACC/SPEC/SAU/7/Add.1 and its Sche dule of Specific Commitments on Services 
WT/ACC/SPEC/SAU/7/Add.2 that are annexed to the Protocol.  It is proposed that these texts be 
adopted by the General Council when it adopts the repor t.  When the Decision is adopted, the Protocol 
of Accession would be open for acceptance by Saudi Arabia which would become a Member thirty 
days after it accepts the said Protocol.  The Working Party agreed, therefore, that it had completed its 
work concerning the negotiations for the accession of Saudi Arabia to the Marrakech  Agreement 
Establishing the WTO.] WT/ACC/SPEC/SAU/7 
Page 130  
 
 ANNEXES 
Annex A: List of Goods and Services Subject to Price and Profit Controls 
Annex B: Comparison of the Provisions of th e Old 1979 and the New 2000 Foreign Investment 
Laws 
Annex C: Negative List Annex D: Summary of the Provisions of the Capital Market Law Annex E: List of Products Subject to Non-Automatic Import Licensing Requirements 
Annex F: List of Banned Imports 
Annex G: Seed Specifications Annex H: List of Items Subject to Mandatory Certification Annex I: List of Banned Exports Annex J: List of Exports Subject to Authorization/Licensing 
Annex K: List of Technical Committees 
Annex L: List of SPS Measures Maintained by the Kingdom of Saudi Arabia  WT/ACC/SPEC/SAU/7 
 Page 131 
 
 
 ANNEX A 
List of Goods and Services Subject to Price and Profit Controls  
Annex A-1:  Goods Subject to Price Regulation  
HS Classification Current Regulated Price Item No. 
11010010 SAR 20/21 per 40 kg  Wheat Flour   1. 
27101140 6–12 Halalas/Litre Fuel Oil  2. 
27101121 90 Halalas/Litre Gasoline  3. 
27101130-3 37 Halalas/Litre Diesel  4. 
27101129 43.5 Halalas/Litre Kerosene  5. 
271110 72 Halalas/Litre Liquefied Petroleum Gas (LPG) 
(Cooking Gas)  6. 
 
27111200 27111300 
27101114  
Pursuant to Council of Ministers Resolution No. 260* Natural Gas Liquids 
-Propane -Butane 
-Natural Gasoline  7. 
2714 300 SAR/Metric Ton Asphalt  8. 
271111 281 Halalas/MMBTU Natural Gas (Ethane and Methane)  9. 
2709 10 Halalas/Litre Crude Oil (Used as Fuel) 10. 
Chapter 30 10, 15 or 20 per cent profit 
margin, as set out in Annex A-2, 
depending on the export price 
(CIF) to Saudi Arabia Pharmaceuticals 11. 
(1 SAR = 100 Halalas) 
* See the discussion of NGL pricing in the Working Party Report, in particular, paragraphs 29–32. WT/ACC/SPEC/SAU/7 
Page 132  
 
 Annex A-2: List of Goods Subject to Profit Regulation
 
No. Item Current Profit Controls Legal Basis HS Code 
Export to 
SA (CIF)* Wholesale 
Margin Retail 
Margin 
Less than 50 SAR 15% 20% 
SAR 50-
200 10% 15% 1. Pharmaceuticals 
More than 
SAR 200 10% 10% Royal Decree No. 
M/31 of 1.6.1425H (July 19, 2004) Ch. 30 
* The export price is established at the time of regist ration, as explained in paragraph 35 of the Working 
Party Report.  WT/ACC/SPEC/SAU/7 
 Page 133 
 
 
 Annex A-3 
Government Price Regulation in Services Sectors  
No. Services Current Regulated Price 
1. Energy Transportation Services, including 
Pipeline Transportation Services Tariffs are established based on the cost of 
services provided and ar e administered in a non-
discriminatory manner.  The single pipeline tariff 
currently in place is SAR 539 Per 1,000 barrels. 
2. Port-General Cargo SAR 35 Per Ton or Part Thereof 
3. Port-Vehicles and Equipment SAR 35 Per Ton or Part Thereof 
4. Port-Bagged Cargo and Foodstuff SAR 20 Per Ton or Part Thereof 
5. Port-Bagged Cement SAR 10 Per Ton or Part Thereof 
6. Port-Bulk Cargo (including bulk handled at the 
cement silos, grains, oils or similar; excluding 
crude oil, gas and liquefied petroleum products) SAR 6 Per Ton or Part Thereof 
7. Port-Exported Bulk Cement and Clinker SAR 3 Per Ton or Part Thereof 
8. Port-Container 20 Feet Long or Less SAR 270 Per Unit 
9. Port-Container Over 20 Feet Long SAR 415 Per Unit 
10. Port-Sheep/Goat SAR 2 Per Head 
11. Port-Other Livestock SAR 5 Per Head 
12. (a) Electricity Consumption for Houses & 
Commercial Purposes from 1 – 4000 Kilowatt Per Hour on a Monthly Basis 
(b) Electricity Consumption for Houses & 
Commercial Purposes from 4001 – 6000 Kilowatt Per Hour on a Monthly Basis 
(c) Electricity Consumption for Houses & 
Commercial Purposes from 6001 and more Kilowatt Per Hour on a Monthly Basis 5 Halalas Per 1 Kilowatt 
  
10 Halalas Per 1 Kilowatt 
  
 
15 Halalas Per 1 Kilowatt 
13. Water Consumption or Sewer Services 15 Halalas Per 1 Cubic Meter 
 
- The Council of Ministers is the responsible legal authority. WT/ACC/SPEC/SAU/7 
Page 134  
 
 ANNEX B 
Comparison of the Provisions of the Old 1979 and the 
 
New 2000 Foreign Investment Laws  
 
The old Foreign Capital Investment  Law was enacted in 1979.  The new Foreign Investment Law was 
enacted pursuant to Royal Decree No. M/1 of 5.1. 1421H (9 April 2000) to replace the 1979 Law.  
Under the old Law, the licensing authority for fo reign investment was the Foreign Investment 
Secretariat of the Ministry of Industry and Electri city.  Under the new Law, the licensing authority 
was the Saudi Arabian General Investment Aut hority (SAGIA).  The primary other differences 
between the old and the new Laws were as follows: 
Authorities Providing Services to and Regulating Investors  
Old Law:  Several Ministries and Government Agencies. 
New Law:  Saudi Arabian General Investment Authority (SAGIA) Investor Service Centres 
(One-Stop-Shop).  (SAGIA comprises representatives from nine investment-
related ministries.) 
Investment Fields Open to Foreign Investors  
Old Law:  The Old Law required that the pr oject be a development project approved under 
the National Development Plan and that the project be accompanied by foreign 
technical skills and expertise to facilitate  technology transfer and be approved as 
viable by the Foreign Investment Bureau. 
New Law:  All fields are open for investment, except those on the Negative List. 
Period for Taking a Decision on an Investment Application  
Old Law:  Not specified. 
New Law:  Maximum 30 days. Possibility of Obtaining More Than One License
 
Old Law:  Restricted, had to be in the same activity. 
New Law:  The foreign investor may obtain more than one licence in diverse activities. Type of Foreign Investment
 
Old Law:  The Old Law favoured joint ventures over 100 per cent foreign-owned projects. 
New Law:  100 per cent foreign-owned projects are allowed by the New Law, in addition to 
joint ventures.  WT/ACC/SPEC/SAU/7 
 Page 135 
 
 
 Incentives  
Old Law:  Foreign capital enjoyed the in centives offered to national capital only in 
manufacturing industries.  The Saudi share in ownership had to be 25 per cent or 
greater. 
New Law:   The foreign investment project en joys all of the incentives and privileges offered 
to local projects. 
Investment Guarantees  
Old Law:  None were specified.  No expropriation cases since 1957. 
New Law:  The foreign investor has the right to transfer his share derived from selling his 
equity or profits out of the Kingdom, as well as any amounts required for the 
settlement of contractual obligations pertai ning to the project.  Investments related 
to the foreign investor shall not be confiscated without a court order.  They may not be subject to expropriation except for th e public interest and in exchange for an 
equitable compensation according to regulations. 
Real Estate Ownership
 
Old Law:  Foreign ownership of real-estate by foreign investors was prohibited. 
New Law:  The foreign facility licensed under th e Foreign Investment Act is entitled to any 
real-estate for practicing the licensed activ ity and for the housing of staff.  Also, 
the Real-Estate Regulation allows foreign investment in real-estate worth SAR 30 million or more. 
Penalties for Violations
 
Old Law:  The Kingdom could cancel the li cence or deny incentives after the investor 
received warning from the Ministry of Industry and Electricity to correct the violation within a certain period.  I nvestors could appeal to the Board of 
Grievances within 30 days. 
New Law:  A petition against any penalty may be brought by the investor before the Board of 
Grievances.  Possible penalties include: 
- Withholding incentives offered to the foreign investor. 
- Imposing a fine not exceeding SAR 500,000. 
- Cancelling the licence, in case of a continuing violation after a written 
notification to rectify the violation within a certain period specified by 
SAGIA. WT/ACC/SPEC/SAU/7 
Page 136  
 
 Tax Exemption
 
Old Law:  Industrial and agricultural projects we re offered a ten-year tax holiday and other 
projects a five-year holiday, provided that the local share formed 25 per cent of the 
project capital.  The tax on profits was up to 45 per cent. 
New Law:  Taxes on profits were reduced to 20 per cent and losses may be transferred to 
coming years. 
Sponsorship  
Old Law: Foreign investors had to be sponsored by a Saudi citizen. 
New Law:  The requirement of the old law was removed.  The foreign investor and his non-
Saudi staff shall be sponsored by the licensed investment project.  WT/ACC/SPEC/SAU/7 
 Page 137 
 
 
 ANNEX C 
Negative List  
 
I. Industrial Sectors  
a. Oil exploration, drilling and production,  except the services related to the mining 
sector listed at 5115 and 883 in Interna tional Industrial Classification Codes. 
b. Manufacturing of military equipment, devices and uniforms. 
c. Manufacturing of civilian explosives. 
II. Services Sectors  
a. Catering to military sectors. 
b. Security and detective services. c. Real estate investment in Makkah and Madina. 
d. Tourist orientation and guidance services related to Hajj and Umrah. 
e. Recruitment and employment services, including local recruitment offices. f. Real estate brokerage. 
g. Printing and publishing, except the following activities:  
- Pre-printing services (CPC 88442) 
- Printing presses (CPC 88442) 
- Drawing and calligraphy (CPC 87501) 
- Photography (CPC 875) 
- Radio and television broad casting studios (CPC 96114) 
- Foreign media offices and correspondents (CPC 962) 
- Promotion and advertising (CPC 871) 
- Public relations (CPC 86506) 
- Publication (CPC 88442) 
- Press services (CPC 88442) 
- Production, selling and renting of computer software (CPC 88) 
- Media consultancies and studies (CPC 853) 
- Typing and copying 
h. Distribution services, wholesale and retail trade, including medical retail services and 
private pharmacies, and commercial agenci es, except franchise rights listed at CPC 
8929, with foreign ownership not exceedi ng 49 per cent, and the granting of one 
franchise to each area. 
i. Audio-visual and media services. 
j. Telecommunications services, except the following activities: 
- Mobile telephone services 
- Telex services (CPC 7523) 
- Telegraph services (CPC 7522) 
- Electronic data interchange (CPC 7523) 
- Enhanced/Value-Added facsimile services, including storing, forwarding and 
retrieving (CPC 7523) 
- VSAT services (CPC 75291) 
- Fax services (CPC 7529 and 7521) 
- GMPCS services (CPC 75299) WT/ACC/SPEC/SAU/7 
Page 138  
 
 - Internet Service Provider services (CPC 75299) 
- Electronic mail (CPC 7523) 
- Provision of online information a nd database retrieval (CPC 7523) 
- Information provision and online retrieva l and/or processing, including transaction 
processing (CPC 843) 
k. Land and air transport. 
l. Satellite transmission services. m. Services provided by midwives, nurses, physiotherapists and paramedics 
(CPC 93191). 
n. Fisheries. 
o. Blood banks, poison centres and quarantines.  WT/ACC/SPEC/SAU/7 
 Page 139 
 
 
 ANNEX D 
Summary of Provisions of the Capital Market Law  
 Chapter 1 sets out the definitions of the terms u sed in the law.  The Capital Market Authority 
(CMA) has rule-making authority to further define what will or will not be deemed a security.  This 
assures necessary flexibility and certainty.  The CMA is formally created in Chapter 2, which also sets 
forth the CMA's extensive rule-making powers, orga nizational structure and duty to report annually to 
the President of the Council of Ministers.  Chapte r 3 creates the Saudi Arabian Securities Exchange as 
a joint-stock company and empowers it to adopt by-laws for the purpose of establishing and enforcing 
high professional and ethical standards for brokers .  The CMA is also required to establish and 
maintain a Securities Violation Tribunal with jurisdiction over all disputes. 
 Chapter 4 requires the Exchange to establish the Securities Deposit Centre, which will be the 
exclusive organization for clearing, settling and re gistering ownership of securities traded on the 
Exchange.  Chapter 4 provides that the records of the centre are conclusive evidence of ownership for 
securities traded on the Exchange and authorizes the Exchange to adopt rules necessary to assure 
efficient and reliable clearance, settlement and regi stration.  Under Chapter 5, brokers must be 
licensed.  Licensing requirements are established and administered by the Exchange, but the actual 
issuing of licenses is by the CMA, based on a r ecommendation by the Exchange.  Chapter 6 provides 
that, commencing in 2005, the CMA has the authority to adopt rules regulating enumerated aspects of 
the activities of investment funds, collective trusts, investment managers and investment advisers.   
 The disclosure procedures for public offers of securities and the on-going disclosure 
requirements for the issues of publicly traded securiti es are set forth in Chapter 7.  No sales through a 
public offer of a security can occur until a prosp ectus is published and the CMA has approved the 
prospectus.  Such approval is granted upon the CMA being satisfied that the prospectus fulfils the 
disclosure requirements as set forth in the CMA's re gulations.  Chapter 8 authorizes the CMA to issue 
rules defining what constitutes manipulation, as well as insider trading and tipping of inside information. 
 Advance notice of a possible takeover is the subject of Chapter 9; anyone who increases his 
ownership of a class of equity security listed on the Exchange so that he will own 10 per cent or more 
of a company must file certain information about  himself and such other information as the CMA's 
regulations require.  These provisions are similar to early-warning disclosures in other countries.  
Chapter 9 authorizes the CMA to adopt a range of s ubstantive protections for the shareholders of the 
firm that is the target of a takeover.  Chapter 10 is the final chapter of the Capital Market Law.  It sets 
forth the CMA and private investor action that can be  brought for violations of any provision, rule or 
regulation of the Capital Market Law.
 WT/ACC/SPEC/SAU/7 
Page 140  
 
 ANNEX E 
 
List of Products Subject to Non-Auto matic Import Licensing Requirements
 
S. No. HS Code Description WTO Justification Authority 
1. 01 01 10 10 Arabian breed, pure-bred horses GATT Art. XI:2(b) EC 
2. 01 01 10 20 Arabian breed, pure-bred horses GATT Art. XI:2(b) EC 
3. 01 01 90 10 Arabian breed, pure-bred horses GATT Art. XI:2(b) EC 
4. 01 01 90 20 Arabian breed, pure-bred horses GATT Art. XI:2(b) EC 
5. 06 02 20 10 Date palm, and seedlings thereof GATT Art. XX(b) MOA 
6. 23 09 90 50 Preparations for the animal 
forage GATT Art. XX(b) MOA 
7. Chapters 28 and 29 Chemicals GATT Art. XXI PSD for the 
chemicals used in 
explosives.  MOCI, MOH or 
MEPA for the 
chemicals falling within their 
competence and 
supervision other than those stated 
above. 
8. ex 30.03 Medicines, for veterinary use GATT Art. XX(b) MOA 
9. ex 30.04 Medicines, for veterinary use GATT Art. XX(b) MOA 
10. 25 01 00 30 Sodium chloride GATT Art. XXI AED  
11. 27.12, except 
27 12 10 00 Paraffine, Vaseline GATT Art. XXI AED  
12. 31 02 30 00 GATT Art. XXI AED  
13. 31 02 50 00  AED  
14. 36 01 00 00  AED  
15. 36 02 00 00  AED  
16. 36 03 00 10  AED  
17. 36 03 00 90  AED  
18. 25 01 00 30  AED  
19. 35 03 00 10  AED  
20. 38 05 10 00  AED  
21. 39 06 10 00  AED  
22. 39 12 20 00  AED  
23. 76 03 20 00  AED  
24. 81 04 30 00 Explosives, fireworks, 
gunpowder, propellent powders, 
prepared explosives, detonating fuses, percussion or detonating 
caps, igniters, electric detonators, 
safety fuses, sulphate turpentine oils; polymethyl methacrylate; 
cellulose nitrates; aluminium 
powders and flakes; magnesium powder and flakes 
 
  
  AED  
25. 31.02 Chemical fertilizers GATT Art. XXI MOA 
26. 31.03 Chemical fertilizers GATT Art. XXI MOA 
27. 31.04 Chemical fertilizers GATT Art. XXI MOA 
28. 31.05, except 
31 02 30 00 and 
31 02 50 00 Chemical fertilizers GATT Art. XXI MOA 
29. 36 04 10 00 Lighting fireworks for occasions  GATT Art. XXI AED  
30. 36 04 90 00   AED  
31. 38 08 30 00 Herbicides, anti-sprouting 
products, plant-growth regulators GATT Art. XX(b) MOA  WT/ACC/SPEC/SAU/7 
 Page 141 
 
 
 S. No. HS Code Description WTO Justification Authority 
32. ex 58 07 10 00 Competent 
Military Agency  
33. ex 58 07 90 00 Competent 
Military Agency 
34. ex 61 01 Competent 
Military Agency 
35. ex 61 03 Competent 
Military Agency 
36. ex 62 01 Competent 
Military Agency 
37. ex 62 03 Military uniforms, military 
badges, etc.  
 GATT Art. XXI 
Competent 
Military Agency 
38. 65 05 90 94 Peak caps GATT Art. XXI Competent 
Military Agency 
39. 65 06 10 30 Helmets, for military use GATT Art. XXI Competent 
Military Agency 
40. ex 73 26 90 99 Other items of iron and steel, for 
military use GATT Art. XXI  Competent 
Military Agency 
41. ex 90 05 10 00 Night vision binoculars  GATT Art. XXI Competent 
Military Agency 
42. 83 01 40 20 Security equipment such as 
security surveillance  GATT Art. XXI PSD  
43. 85 25 40 00 Security cameras, CTV systems, 
anti-theft alarm systems GATT Art. XXI PSD  
44. 85 43 89 20 Metal detectors not for use in 
civil aircraft GATT Art. XXI PSD  
45. 85 31 10 00 Magnetic card or thumb 
impression operated GATT Art. XXI PSD  
46. 90 22 19 90 Access/exit doors and equipment, 
metal  GATT Art. XXI PSD  
47. 90 22 19 10 Detecting doors and equipment, 
baggage screening equipment GATT Art. XXI  PSD  
48. 84 19 40 00 Distillation equipment GATT Art. XX(a) MOCI 
49. 84 59 61 00 Key cutting, copying and 
repairing machines and instruments of any type GATT Art. XX(d) PSD  
50. 84 59 69 00 Key cutting, copying and 
repairing machines and 
instruments of any type GATT Art. XX(d) PSD  
51. 84 72 30 00 Postage franking machines GATT Art. XX(d) GDP 
52. 85 25 20 11 Transmission apparatus for 
military purposes GATT Art. XXI CITC, for 
wireless sets 
imported by 
companies and individuals.  The 
concerned 
Minister is 
whoever is acting 
for him for the wireless sets 
imported by the 
Government sector. 
53. 85 25 20 19 Transmission apparatus 
whose  operation requires a 
frequency assignment from CITC GATT Art. XXI CITC WT/ACC/SPEC/SAU/7 
Page 142  
 
 S. No. HS Code Description WTO Justification Authority 
54. 85 25 20 30 Transmission apparatus 
whose  operation requires a 
frequency assignment from CITC GATT Art. XXI (Same as above) 
55. 85 25 20 40 Transmission apparatus 
whose  operation requires a 
frequency assignment from CITC GATT Art. XXI (Same as above) 
56. 85 25 20 50 Transmission apparatus 
whose  operation requires a 
frequency assignment from CITC GATT Art. XXI (Same as above) 
57. 85 25 20 60 Transmission apparatus 
whose  operation requires a 
frequency assignment from CITC GATT Art. XXI (Same as above) 
58. 85 25 20 90 Video boosters whose operation 
requires a frequency assignment from CITC GATT Art. XXI (Same as above) 
59. 85.26 in addition to 
any other relevant 
heading Transmission apparatus 
whose operation requires a 
frequency assignment from CITC GATT Art. XXI (Same as above) 
60. 85 42 10 00 Mobile telephone chips and 
prepaid mobile phone cards GATT Art. XX(d) (Same as above) 
61. ex 87.03 Armoured vehicles GATT Art. XXI MOI 
62. 89 02 00 00 Fishing vessels GATT Art. XXI BS  
63. Chapter 93 Arms and ammunitions GATT Art. XXI AED  
64. Different headings Wild animals and products 
thereof, according to CITES GATT Art. XX(b) NCWCD  
65. Different headings Cultural and archaeological 
property GATT Art. XX(f) GDAM 
66. Different headings Products containing currency 
pictures, models or wrappers in 
shape of currency or otherwise GATT Art. XX(d) SAMA 
67. Different headings Items imported for display in 
trade fairs GATT Art. XX(d) MOCI 
68. 84 24 81 10 
84 24 81 20 
84 24 81 30 84 24 81 90 Irrigation Equipment GATT Art. XX(d) MOA 
69. 82.01 Agricultural Tractors GATT Art. XX(d) MOA 
70. 84 13 19 
84 13 19 90 
84 13 80 84 38 11 00 
84 38 20 00 Water Pumps GATT Art. XX(d) MOA 
71. 84 32 10 00 
84 32 21 00 
84 32 29 00 Plowing Machinery GATT Art. XX(d) MOA 
72. 84 32 30 00 
84 32 40 00 84 32 80 00 Seeders GATT Art. XX(d) MOA 
73. 84 33 11 00 
84 33 20 00 
84 33 30 00 84 33 40 00 
84 33 51 00 
84 33 52 00 84 33 59 00 
84 33 60 00 Harvesting Machinery GATT Art. XX(d) MOA  WT/ACC/SPEC/SAU/7 
 Page 143 
 
 
 Abbreviations Used in Annex E  
 AED  =  Arms & Explosives Department, Public Security Department, Ministry of Interior 
BS  =  Border Security, Ministry of Interior 
CITC  =  Communication & Information Technology Commission EC  =  Equestrian Club 
GDAM  =  General Directorate of Archaeology & Museums  
GDP  =  General Directorate of Posts 
MEPA  =  Meteorological Environmental Protection Agency 
MOA  =  Ministry of Agriculture MOCI  =  Ministry of Commerce & Industry 
MOH  =  Ministry of Health 
MOI  =  Ministry of Interior NCWCD  =  National Commission for Wildlife Conservation & Development 
PSD  =  Public Security Department, Ministry of Interior   
 WT/ACC/SPEC/SAU/7 
Page 144  
 
  
ANNEX F 
List of Banned Imports
 
S. No. HS Code Description WTO Justification 
1. 01.03  
2. 02 09 00 10 
3. 02 06 30 00 
4. 02 06 41 00 
5. 02 06 49 00 
6. 02.03  
7. 05 02 10 00 
8. 02 10 11 00 
9. 02 10 12 00 
10. 02 10 19 00 
11. 15 01 00 30 
12. 16 02 41 00 
13. 16 02 42 00 
14. 16 02 49 00 
15. 41 03 30 00 
16. 15 03 00 11 
17. 15 03 00 21 
18. 15 03 00 91 
19. 16 01 00 31 
20. 16 01 00 21 
21. 16 01 00 11, in 
addition to other relevant 
headings 
22. 41 03 31 00 
23. 41 06 31 00 
24. 41 06 32 00 
25. 41 13 20 00 Live swine, meat, fat, hair, blood, guts, limbs  
and all other products of swine GATT Art. XX(a) 
26. 01 06 19 40 Dogs, other than hunting dogs, guard dogs or 
guide dogs for the blind, accompanied with a certificate from a competent authority in the 
country of exportation duly qualified by the 
Saudi Arabian embassy stated therein that the 
dog to be admitted is a hunting dog, guard 
dog or guide dog for the blind, in addition to submitting to the veterinary quarantine GATT Art. XX(a) 
27. 02 08 20 00 Frog meat GATT Art. XX(a) 
28. 09 08 10 00 Narcotics of all types, forms and descriptions GATT Art. XX(b) 
29. 09 08 20 00   
30. 12 07 91 00   
31. 12 07 99 10   
32. 12 07 99 20   
33. 12 11 30 00   
34. 12 11 40 00   
35. 12 11 90 20   
36. 12 11 90 60   
37. 13 02 11 00   
38. 13 02 19 10    WT/ACC/SPEC/SAU/7 
 Page 145 
 
 
 S. No. HS Code Description WTO Justification 
39. 29 39 91 10, in 
addition to other relevant 
headings    
40. 31.01 Animal or vegetable raw natural organic 
fertilizer GATT Art. XX(b) 
41. 12 11 90 90 Goro nut GATT Art. XXI 
42. 12 11 90 90 Betel GATT Art. XX(b) 
43. 
44. 
45. 46. 22.03 
22.04 
22.05 22.06 Alcoholic beverages and intoxicants of all 
kinds, including those containing alcohol  
in any intoxicating proportion GATT Art. XX(a) 
47. 22 07 20 90 
48. 22.08, except 22 
08 90 11 and  
22 08 90 19   
49. 24 03 99 20 Tobacco snuff – Tobacco "sawika" GATT Art. XX(b) 
50. 25 24 00 00 Asbestos and products thereof GATT Art. XX(b) 
51. ex 29.31 Sarin toxic gas GATT Art. XX(b) 
52. 30 06 80 00 Industrial waste an d hazardous refuse GATT Art. XX(b) 
53. 36 04 10 00 Fireworks of the kind used by children such as 
snaps, rockets, sulfuric jitters and night stars, 
etc., falling within this scope GATT Art. XX(b) 
54. 40.12, except 
40 12 90 00 Used and rethreaded tyres GATT Art. XX(b) 
55. 49 01 99 10 The Holy Quran GATT Art. XX(a) 
56. 49 07 00 11 Saudi Arabian stamps GATT Art. XX(d) 
57. 49 09 00 20 Greeting cards w ith electric circuit GATT Art. XXI 
58. 49 11 10 90 Coupons of Hadi (sacrificial animals) GATT Art. XX(d) 
59. 49 11 10 90 Blank invoices of foreign companies abroad GATT Art. XX(d) 
60. 85 12 30 00 Security car radar detection equipments GATT Art. XXI 
61. 85 28 12 99 Satellite inte rnet receiver GATT Art. XXI 
62. 85 29 10 00 Satellite inte rnet receiver GATT Art. XXI 
63. 85 31 80 90 Apparatus releasing sounds of police car 
sirens or of some animals GATT Art. XXI 
64. 
65. 66. 
67. 
68. 69. ex 87.01 
ex 87.02 ex 87.03 
ex 87.04 
ex 87.05 ex 87.09 Damaged vehicles, and right-hand drive 
vehicles GATT Art. XX(b) 
70. ex 87.11 Two, three and four wheeler children's motor 
cycles or vehicles GATT Art. XX(b) 
 
71. 90 13 10 00 Binoculars in which electric circuit is used 
and it directly projects red light on the target GATT Art. XXI 
72. 
73. 
74. 93 02 00 00 
93 04 00 90 
93 07 00 90 Revolvers and pistols in the shape of mobile 
phones, lighters, pagers, pens or other pistols GATT Art. XXI 
75. 95 03 80 00 Remote control airplanes and parts thereof GATT Art. XXI 
76. 95 03 90 00 Noise-making pistols and guns, and toy 
pistols similar in shape to real pistols GATT Art. XXI 
77. 97 05 00 00 Mummified animals GATT Art. XX(a) 
78. Different 
Headings All foodstuff containing animal blood in their 
manufacturing GATT Art. XX(a) WT/ACC/SPEC/SAU/7 
Page 146  
 
 S. No. HS Code Description WTO Justification 
79. Different 
Headings Drink having description of Zamzam GATT Art. XX(a) 
80. Different 
Headings All types of machines, equipment and tools 
for gambling or games of chance GATT Art. XX(a) 
81. Different 
Headings Kuwait and Iraq war leftover equipment and 
machinery GATT Art. XXI 
82. Different 
Headings Publicity material for cigarettes of any kind GATT Art. XX(b) 
83. Different 
Headings Products polluted by radiation or nuclear dust 
(e.g., watches of trademark Trophy) GATT Art. XX(b) 
  WT/ACC/SPEC/SAU/7 
 Page 147 
 
 
 ANNEX G 
 
Seed Specifications  
 
1. Seed must be true to type, from the first generation certified and produced directly from 
registered seed and the product of the preceding growing season.   
 2. Each consignment must include a certificate indicating the following: 
 
- Date and place of production (name of country, state or province and city) 
- Purity percentage 
- Germination percentage 
- Vitality of the seeds 
- Inert matter percentage 
- Weed seeds (including number of seeds and varieties in a sample of 2 kg) 
- Barley seeds (include number of seeds in a sample of 2 kg wheat seeds) 
- Moisture percentage 
 The certificate must be from a national lab or an authorized government lab (including a state lab if the seeds are imported from the US). 
For seeds imported from Canada or Europe, the ISTA (International Seed Testing 
Association), Orange Certificate must be presented. 
 3. The seeds must be treated with either
:  
- fungicide Triadimenol (commercially known as Baytan) (15 - 30 per cent); or 
- a mixture of Triadimenol 7.5 per cent and Imazalil 3 per cent at the rate recommended by 
the US EPA; or   
- fungicide Brochlora 10 per cent and Carb endazim 40 per cent (commercially known as 
Prelude) at the rate of 2 kg/ton of seed; or 
- fungicide Carboxin 17 per cent and Thiram 17 per cent (commercially known as Vitavax 
200) at the rate of 2.5 kg/ton of seed. 
 
4. All growing seeds must be red in colour and homogeneously treated in order to differentiate 
them from consumption seeds. 
 5. Markings on the containers of treated seeds must be clear in the En glish and Arabic languages 
and must specify that the seed was treated with poisonous chemicals and is not fit for human 
or animal consumption.  The skull and cro ss-bones danger sign must be printed on the seed 
containers (bags, cans, etc. ) 
 Conditions and Requirements
 
 1. The release of any consignment or shipment depends on the result of the analysis of a random 
sample taken by the technician of MOA at the arrival port.  The MOA technician will 
determine the fitness of the seeds. 
 2. Each consignee must submit the following documents: 
a) Complete name and address of the importer 
b) Name and address of the seed exporter WT/ACC/SPEC/SAU/7 
Page 148  
 
 c) Name of the seed variety(ies) 
d) Quantity imported (net weight) e) Price CIF arrival port 
 
3. The consignee also must submit the following certificates: 
a) Field inspection certificate from the authoriti es in the country of origin indicating that 
the fields were inspected and determined to be fit for seed production. 
b) Certificate of origin issued by the government authorities in the exporter's country. c) In case of chemical treatment of seeds, if  a pesticide has been used, it is only necessary 
to indicate the name and registration number.  
 
4. The importer may not use or sell the seeds unl ess it receives a letter from MOA's Director of 
Research including the results of the analys is performed pursuant to paragraph 1, above. 
5. A seed consignment must be inspected befo re shipment to confirm that it fulfils the 
specifications and conditions for importation.  This can be done by sending a representative 
from the importing company or through an independent lab.   
6. A letter of credit must be opened at a bank in Saudi Arabia. 7. The last date for the arrival of a seed shipment  to Saudi ports is within the time frame of the 
importing licence.   
8. No seed consignment shall be  released without a letter issued by the Director of Plant 
Quarantine stating that the above conditions have been satisfied. 
Conditions for Rejection of a Shipment
 
 
1. Any shipment imported without prior permission from MOA, or not fulfilling the 
specifications and conditions set out in the previ ous section, will be rejected.  The importer of 
the seeds will be fully responsible for all necessary actions, including the re-export of the 
seeds to his country. 
2. Any consignment will be rejected if the percentage of the following is less than 
recommended: 
a) Purity percentage less than 98 per cent 
b) Germination percentage less than 92 per cent c) Inert matter percentage not more than 1 per cent 
d) Moisture percentage not more than 12 per cent 
e) Barley seeds percentage (in shipments of wheat seed) – not more than five kernels of 
barley in a 2 kg sample. 
 3. Any shipment that contains weed seeds that  are especially difficult to control, such as 
Avenaspp – lollium, phalaris spp, or parasitic  herbs such as cuscuta spp obanche spp, striga 
spp, or bromus spp, shall be rejected. 
4. Any shipment in which the total weed seeds (o ther than those mentioned above) is more than 
five seeds per kg of wheat or barley will be rejected. 
  WT/ACC/SPEC/SAU/7 
 Page 149 
 
 
 5. Any shipment will be rejected unless the la b test shows it is free from the following diseases: 
a) Ergot attack of wheat and barley caused by fungus claviceps puprpurea. 
b) Karnal bunt attack of wheat and caused by fungus neovossia indica. c) Southern blight attack of wheat caused by sclerotium rolfsii. d) Loose smut attack of wheat caused by ustilago tritici, and of barley caused by ustilage 
nuda. 
e) Semi-loose smut attack of barley caused by ustilago nigra. f) Flag smut attack of wheat caused by urocystis agropyri. g) Cover smut attack of wheat caused by tilletia spp and in barley caused by ustilago 
hordia. 
h) eptoria leaf and glume blotch attack of wheat and barley caused by septoria spp. 
i) Helminthosporium spot blotch attack of wheat and barley caused by 
helminthosporium satirium. 
j) Barley scald attack of barley caused by rhynihosporium secalis. k) Net blotch attack of wheat caused by helminthosporium teres. 
l) Barley stripe attack of barley caused by helmunthosporium granineum. 
m) Scab or head blight attack of wheat and barley caused by Fusarium spp. n) Take all attack of wheat and barley caused by gacumannomyces graninis vartriaci. o) Snow mold attack of wheat caused by fusarium nivale. p) Black point attack of wheat caused by alternaria, helminthosporium and fusarium spp. 
 
Bacterial Diseases
 
 
a) Bacterial leafstreak or black chaff attack  of wheat and barley caused by bacteria 
xanthomonas translucens. 
b) Bacterials leaf blight attack of wheat and barley caused by bacteria pseudomonas 
syrinag. 
c) Bacterial spike blight attack of wheat a nd barley caused by bacteria corynebacteriaum 
tritici. 
d) Bacterial basal glume rot attack of wheat and barley caused by pseudomonas 
atrofaciens. 
 
Viral Diseases  
 
a) Barley stripe mosaic virus. 
 
Nematodes Diseases  
 
a) Ear cockle caused by Anguina tritici.  
6. In addition, a shipment can be rejected if  there is evidence of a ttack by any other seed 
transmission diseases where the number of attack seeds is at least 5 seeds/kg. 
 
7. A shipment or consignment can be rejected if there is evidence of attack by any kind of 
insects at any stage. WT/ACC/SPEC/SAU/7 
Page 150  
 
 ANNEX H 
List of Items Subject to Mandatory Certification
 
Item Harmonised System Commodity Codes 
Group I – Toys 
Toys, incl.  video games and other electronic toys 8712.00 / 9501 / 9502 / 9503 / 9504.10 / 9504.90 / 9505 / 
From 9506.99 / 
Playground, amusement and fairground equipment 9508 / From 3407  
 
Group II - Electrical and Electronics 
Air conditioning systems up to 60,000 btu (5 tons) 8415.10.20 / 8415.81.20 / 8415.82.20 / 8415.83.20 
Combined function audio and/or video systems 
(non professional) 8518.30 / 8518.50 / 8520.30 /Combinations of II-03, II-
04, II-41, II-43 
Non professional stand-alone audio products 
(except radio receivers) 8518.21 / 8518.22 / 8518.29 / 8518.40 / 8519.21 / 
8519.29 / 8519.31 / 8519.39 / 8519.92 / 8519.93 / 
8519.99 / 8520.20 / 8520.90 
Video playing and recording systems (non 
professional)  8521.10 / 8521.90 / 8525.40 /  
Generator sets up to 12 kw  8502.11 / 8502.20  
Motors up to 12kw  8501.10 / 8501.31 / 8501.32 / 8501.40 / 8501.51 / 8501 
Fax and telex machines 8517.21 / 8517.22 
Household cooking appliances  8516.60 / 8516.72 
Clothes washing machines up to 10 kg and 
household dish-washing machines 8450.11 / 8450.12 / 8450.19 / 8422.1 
Clothes drying machines up to 10 kg 8451.21 
Electric irons, ironers and clothes steamers 8451.30 / 8516.40 / 8516.32 
Domestic electromechanical kitchen appliances 
incl. food processors, meat choppers and grinders 8509.40 / 8509.80 
Personal care/grooming appliances (shavers, hair 
clippers, hair-removal devices and massagers)  8510.10 / 8510.20 / 8510.30 / 9019.10  
Lift and elevator systems 8428.10 / 8431.31 
Household microwave ovens 8516.50 
Electric ovens up to 10 kw  8516.60 
Copy machines and accessories 9009.11 / 9009.12 / 9009 .30 / 9009.21 / 9009.22 / 
9009.90 
Personal computers (desktops/portables), storage 
units, peripherals and other input/output devices 8471.41 / 8471.49 / 8471.50 / 8471.60 / 8471.70 / 
8473.30 
Power transformers and distribution transformers up to 1000 kva 8504.21 / 8504.22 / 8504.31 / 8504.32 / 8504.33 / 
8504.34 
Household refrigerators and freezers up to 40 cu ft 
incl. Household refrigerating display cabinets  8418.10 / 8418.21 / 8418.22 / 8418.29 / 8418.30 / 
8418.40 / 8418.50 
Telephone sets, incl.mobile, cordless telephones, 
and modems  8517.11 / 8517.19 / 8517.50 / 8525.20  
Electric wires and cables up to 1000v 8544.51 / 8544.59 
Non-industrial vacuum cleaners, water suction 
appliances and shampooers  8509.10 / 8509.80  
Household electric fires and heaters  8516.29 / 8516.21  
Drinking water coolers and fountains 8418.69.10 
Evaporative air coolers (desert coolers and 
humidifiers) up to 1.5 kw 8415.10.10 / 8415.82.10 / 8415.82.90 / 8415.83.10 / 
8415.83.90 
Domestic electric fans 8414.51 / 8414.60 
Compressors for cooling units up to 60,000 btu 8414.30 
Tea and coffee brewing appliances, and 
appliances for heating liquids 8516.71  WT/ACC/SPEC/SAU/7 
 Page 151 
 
 
 Item Harmonised System Commodity Codes 
Incandescent, fluorescent and discharge 
luminaires, fixtures and lampholders 9405.10 / 9405.20 / 8536.61  
Manually operated household switches, circuit 
breakers and fuses up to 40a  8536.10 / 8536.20 / 8536.50 
Incandescent, fluorescent and discharge lamps  8539.21 / 8539.22 / 8539.29 / 8539.31 / 8539.32 
Ballasts for discharge type lamps (including 
tubular fluorescent lamps) 8504.10 
Starters for discharge type lamps (including 
tubular fluorescent lamps)  8532.10 
General use mains plugs, socket outlets and mains 
configuration adapters  8536.69 
Luminaires for road and street lighting 9405.40 
Batteries, including rechargeable and automotive 8506.10 / 8506.30 / 8506.40 / 8506.50/ 8506.60 / 
8506.80 / 8507.10 / 8507.30 / 8507.40 
Immersed swimming pool luminaries 9405.40 
Hair care equipment (hand-held hair dryers, hair curlers, waving apparatus and curling tong 
heaters)  8516.31, 8516.32 
Water pumps up to 12 kw 8413.70 
TV sets (colour/black and white) 8528.12 / 8528.13 
General use mains voltage converters, power 
supplies and battery chargers  8504.40  
Stand alone radio receivers 8527.12 / 8527.13 / 8527 .19 / 8527.2 1 / 8527.29 
Storage and instant type water heaters up to 200 
litres 8516.10 
Watt hour meters 9028.30 
Household sewing machines  8452.10  
Group III – Automotive 
Passenger automobiles, trucks, buses and multi-
purpose vehicles (new) 8701 / 8702 / 8703 / 8704 / 8705 
Passenger automobiles, trucks, buses and multi-
purpose vehicles (used) 8701 / 8702 / 8703 / 8704 / 8705 
Automotive glass (windshield, side and rear glass) 7007.21 
Vehicle spare parts (new),  including radiators and 
hoses, brakes and parts, lights, filters, silencers 
and exhaust pipes, clutches and parts, child restraints, spark plugs, wiper blades and motors, 
safety belts, fuel tanks, mirrors, bumpers, door 
locks and hinges, tyre tubes, and v-belts, gauges, rims and steering rods. 40.09 / 4010.22 / 4013.10, 4013.90 / 70.09 / 8301.20 / 
8302.30 / 8421.23 / 8421.31 / 8501.10 / 8511.10 / 
8512.20 / 8512.40 / 8539.10 / 8708.10 / 8708.70 / 8708.21 / 8708.29 / 8708.91/ 8708.92 / 8708.93 / 
8708.94 / 8708.99 / 9026.20 / 9026.80 / 9401.20 
New tyres for passenger automobiles, trucks, buses and multi-purpose vehicles 4011.10 / 4011.20 
Group IV – Chemical 
Engine, transmission, hydraulic, turbine, and 
transformer oils, brak e fluid and anti-freeze/ 
coolant 2710.00.52 / 2710.00.53 / 2710.00.54 / 2710.00.55 / 
2710.00.94 /2710.00.95 / 2710.00.96 / 38.19 / 38.20 
Paints All 3208 / All 3209 
Perfumes and cosmetics 3302.90 / All 33 03 / All 3304 / All 3305 / All 3306 / 
3307.10 / 3307.20 / 3307.30 / 3307.49.10 / 3307.90.10 / 3401.1 
Domestic-use pesticides and insecticides  3808 
Group V – Others 
Aluminium and aluminium alloy products for 
architectural application 7604 / 7606 / 7608 / 7609 / 7610 / 7616 
Steel and iron alloy pipes 7304 / 7305 / 7306 / 7307 WT/ACC/SPEC/SAU/7 
Page 152  
 
 Item Harmonised System Commodity Codes 
Gold and silver jewellery (including gemstones) 7113.11 / 7113.19 / 7113.20 / 7114.11 / 7114.19 / 
7114.20 / 7116.10 / 7116.21 
Head dress for men - cotton shemagh and ghutras  6505.90.10 / 6505.90.30 
Fire extinguishers up to 24kg 8424.10 
Cement 2523.21 / 2523.29.10 / 2523.29.20 
Safety matches 3605.00 
Low pressure regulators and pressure cookers  8481.10 / 7323.93 / 7323.99 
Toilet paper and facial tissues, paper towels and 
serviettes 4818.10 / 4818.20 / 4818.30 
Cigarettes only 2402.20 
Household and camping gas appliances, including 
heaters, cookers, barbecues and lamps 7321.11 / 7321.81 / 9405.50 
  WT/ACC/SPEC/SAU/7 
 Page 153 
 
 
 ANNEX I 
List of Banned Exports  
S. No. HS Code Description WTO Justification 
1. ex 01 01 10 10 Arabian breed, pure-bred horses, females GATT Art. XX(b) 
2. ex 01 01 10 20 Arabian breed, pure-bred horses, females GATT Art. XX(b) 
3. ex 01 01 90 10 Race ho rses, females GATT Art. XX(b) 
4. ex 01 01 90 20 Ponies, females GATT Art. XX(b) 
5. ex 01 02 Bovine animals, females GATT Art. XX(b) 
6. ex 01 04 Sheep and goats, females GATT Art. XX(b) 
7. ex 01 06 19 11 Camels, females GATT Art. XX(b) 
8. 0602 2010 Date palm seedlings of following types: Khalas, 
Nabut Saif, Munifi, Safri, Magfizi, Barhi, 
Sukkari, Shalabi, Safari, Barni, Ajwa, Ambara, 
Hulwa and Rothana GATT Art. XX(b) 
9. 12 14 Green fodder and hay GATT Art. XX(b) 
10. ex 22 01 90 10 Zamzam water GATT Art. XX(a) 
11. 44 01 10 00 Wood GATT Art. XX(j) 
12. 72 04 Scrap iron GATT Art. XX(d) 
13. 97 06 Antiques and archaeological and historical items GATT Art. XX(f) 
 WT/ACC/SPEC/SAU/7 
Page 154  
 
 ANNEX J 
List of Exports Subject to Authorization/Licensing
 
 
S. No. HS Code Description WTO Justification Authority 
1. 01 01 10 10 Horses, pure-bred GATT Art. XI: 2(b) Equestrian Club 
2. 01 01 10 20 Horses, pure-bred GATT Art. XI: 2(b) Equestrian Club 
3. 01 01 90 10 Horses, pure-bred GATT Art. XI: 2(b) Equestrian Club 
4. 01 01 90 20 Horses, pure-bred GATT Art. XI: 2(b) Equestrian Club 
5. 10 01 Wheat GATT Art. XX (d) Gen Silo & Mills Org 
6. 10 03 00 00 Barley GATT Art. XX (d) Ministry of Finance  
7. 10 05 90 10 Golden corn GATT Art. XX (d) Ministry of Finance 
8. 10 05 90 20 White corn GATT Art. XX (d) Ministry of Finance 
9. 11 01 00 10 Wheat flour GATT Art. XX (d) Ministry of Finance 
10. 12 01 Soya beans GATT Art. XX (d) Ministry of Finance 
11. 19 01 10 10 Milk-based infant food GATT Art. XX (d) Ministry of Finance 
12. 19 01 10 20 Milk-based infant food GATT Art. XX (d) Ministry of Finance 
13. 25 05 Sand GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
14. 25 06 21 10 Sand mixed aggregates GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
15. 25 06 21 20 Sand mixed aggregates GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
16. 25 15 11 00 Marble GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
17. 25 17 Stone mixtures GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
18. 25 22 Limestone GATT Art. XX (i) Ministry of Petroleum & 
Mineral Resources 
19. 27 09 Crude oil  Automatic Licensing Ministry of Petroleum & 
Mineral Resources 
20. 27 10, 
except Naptha  Fuels Automatic Licensing Ministry of Petroleum & 
Mineral Resources 
21. 27 11 Gases, including 
liquefied gases Automatic Licensing Ministry of Petroleum & 
Mineral Resources 
22. 27 14 Asphalt Automatic Licensing Ministry of Petroleum & 
Mineral Resources 
23. 28 44 Radioactive materials GATT Art. XX (b) Ministry of Interior  
24. 28 45 Radioactive materials GATT Art. XX (b) Ministry of Interior 
25. 90 22 19 10 Radioactive materials GATT Art. XX (b) Ministry of Interior 
26. 90 22 19 90 Radioactive materials GATT Art. XX (b) Ministry of Interior 
27. 
28. 
29. 29 03 19 10 
29 03 45 
29 03 49 Ozone depleting 
materials GATT Art. XX (b) Meteorological & 
Environmental 
Protection Agency 
30. 30 03 Medicines GATT Art. XX (b) Ministry of Health  
31. 30 04 Medicines GATT Art. XX (b) Ministry of Health 
32. 73 11 00 30 Filled gas cylinders GATT Art. XXI Ministry of Petroleum & 
Mineral Resources  WT/ACC/SPEC/SAU/7 
 Page 155 
 
 
 S. No. HS Code Description WTO Justification Authority 
33. 
34. 35. 
36. 
37. 
38. 
39. 40. 
41. 
42. 43. 
44. 
45. 84 07 90 00 
84 08 80 00 84 11 
84 12 80 00 
84 13 50 00 
84 13 60 00 
84 13 70 00 84 13 81 00 
84 32 
84 33 87 01 10 00 
87 01 30 00 
87 01 90 00 Agricultural machinery GATT Art. XX (d) Saudi Agricultural Bank 
46. 85 48 10 00 Scraps of batteries, etc. GATT Art. XX (b) Meteorological & 
Environmental 
Protection Agency 
47. Different 
Headings Wild fauna and flora, 
and products thereof GATT Art. XX (g) Nat. Org of Wild Life 
 
Note:  Procedures for issuing automatic export licenses for specific products will be issued consistent with 
Saudi Arabia’s WTO obligations. WT/ACC/SPEC/SAU/7 
Page 156  
 
 ANNEX K 
List of Technical Committees
 
1. Agriculture and Food Products General Committee 
a. Food Safety 
b. Meat and Fish 
c. Dairy and Dairy Products 
d. Cereals and Legumes Products e. Confectionary f. Fruits, Vegetables, Condiments and Spices and their Products 
2. Construction and Building Materials General Committee 
a. Tiles 
b. Sanitary Ware c. Cement and Concrete d. Doors and Windows e. Pipes 
f. Glass  
g. Construction Sectors 
3. Electrical and Electronic Products General Committee 
a. Household Appliances and their Accessories 
b. Cables and their Accessories c. Electronics and Communications Sets 
d. Luminaires and their Accessories 
e. Electrical Systems and Accessories f. Power Generation, Transmission and Distribution  g. Medical Appliances and Supplies 
4. Mechanical and Metal Products General Committee 
a. Motor Vehicles 
b. Pressure Vessels and Steam Boilers c. Air Conditioning and Refrigeration d. Metal and Wooden Kitchens e. Office and School Furniture f. Water Pump and Irrigation Systems 
g. Steel Cans Used for Canning  
h. Amusement Park Devices 
5. Chemical and Petroleum Products General Committee 
a. Petroleum Products 
b. Detergents and Hygienic and Cosmetic Products 
c. Plastics 
d. Chemicals e. Paints and Varnishes  WT/ACC/SPEC/SAU/7 
 Page 157 
 
 
 6. Textile Products General Committee 
a. Textile Products 
7. Measurement and Calibration General Committee 
a. Physical Measurements 
b. Mechanical Measurements 
c. Electrical and Electronic Measurements  
 WT/ACC/SPEC/SAU/7 
Page 158 ANNEX L 
List of SPS Measures Maintained by the Kingdom of Saudi Arabia  
H.S. No. Description of product Natu re of SPS Measure Justification  WTO Members and non-Member Country(ies) 
0101 
 
0102 
 
010410 
 
010420 Live Equine Animals 
 
Live Bovine Animals 
 
Live Sheep  
 
Live Goats  
 
Banned because of Screw Worm  
 
Article 5 of SPS Agreement  
 
Panama 
0102 Live Bovine Animals Banned because of BSE (Bovine 
Spongiform Encephalopathy) Article 5 of SPS Agreement Spain, Portugal, Italy, Germany, France, Greece, Austria, 
Belgium, Switzerland, Holland,  Denmark, Finland, Slovenia, 
Luxembourg, Ireland, Czech  Republic, Slovak Republic, 
Poland, Canada (Alberta Province), United Kingdom, USA 
(Washington State) 
0102 Live Bovine Animals Banned because of FMD (Foot 
and Mouth Disease) Article 5 of SPS Agreement Uruguay, Syria 
0102 
 
010410 
 
010420 Live Bovine Animals 
 
Live Sheep  
 
Live Goats   
Banned because of FMD (Foot 
and Mouth Disease) Article 5 of SPS Agreement All African Countr ies other than South Africa, South Africa 
(Northern Province and Mpumal anga, Northern Cape, North 
West and Kwazulu-Natal), Chin a, India, Malaysia, Yemen, 
Iran, Iraq, Chinese Taipei , Pakistan, Turkey, Lebanon 
0201 Live Bovine Animals Banned because of Render Pest Article 5 of SPS Agreement All African Countries (except South Africa), Pakistan, Iran, 
Afghanistan, Mongolia 
0201 
0202 
02060200 
02062100 
02066200 
02062900 
15020010 
16025010 
16025090 
16029010 
16029021 
16029029 
16029030 
16030010 All types of Bovine Meat and 
its Products Banned because of BSE (Bovine 
Spongiform Encephalopathy) Article 5 of SPS Agreement All EU count ries, Switzerland, Japan, Canada   
  WT/ACC/SPEC/SAU/7
 Page 159H.S. No. Description of product Natu re of SPS Measure Justification  WTO Members and non-Member Country(ies) 
 0201 
0202 
020602000 
02062100 
02066200 
02062900 
15020010 
16025010 
16025090 
16029010 16029021 
16029029 
16029030 
16030010  All types of Bovine Meat and 
its Products Banned because of Render Pest Article 5 of SPS Agreement All African Countries (except South Africa), Pakistan, Iran, 
Afghanistan, Mongolia 
0201 0202 
020602000 
02062100 
02066200 
02062900 
15020010 
16025010 
16025090 
16029010 
16029021 
16029029 
16029030 
16030010   All types of Bovine Meat and 
Its Products Banned because of FMD (Foot 
and Mouth Disease) Article 5 of SPS Agreement All African Countr ies (except South Africa), All European 
Countries, China, Malaysia, Yemen, Iran, Iraq, Jordan, Chinese 
Taipei, Pakistan, Lebanon  
0204 
02068010 
02068090 
02069011 
02069012 
02069019 
02069090 All types of Sheep and Goat 
Meat and Their Products Banned because of FMD (Foot 
and Mouth Disease) Article 5 of SPS Agreement All African Countrie s (except South Africa, Sudan, Ethiopia ), 
All European Countries, China, Malaysia, Yemen, Iran, Iraq, 
Jordan, Chinese Taipei, Lebanon   
0207 
0407 Poultry Meat and Its Products Banned because of Avian 
Influenza Article 5 of SPS Agreement USA, Canada, Japa n, Korea, Vietnam, China, Thailand, Hong 
Kong China, Laos, Cambodia, Pa kistan, Indonesia, Malaysia 
0105 Live Birds Banned be cause of West Nile 
Fever Article 5 of SPS Agreement USA (the ban has been lifted on poultry, one-day chicks and 
hatching eggs)  
 WT/ACC/SPEC/SAU/7 
Page 160 H.S. No. Description of product Natu re of SPS Measure Justification  WTO Members and non-Member Country(ies) 
0101 
 
0105 
01063100 
01063200 
01063910 
01063920 Live Equine Animals 
 
Live Birds 
 
 
 Banned because of West Nile 
Fever 
Banned because of West Nile 
Fever 
 Article 5 of SPS Agreement 
 
Article 5 of SPS Agreement Oman, Morocco, USA (New York only; only Horses) 
 
Oman, Morocco 
0105 01063100 
01063200 
01063910 
01063920 
 
04070011  
 
Live Birds  
 
 
 
Hatching Eggs Banned because of Avian 
Influenza Article 5 of SPS Agreement USA, Canada, Japa n, Korea, Vietnam, China, Thailand, Hong 
Kong China, Laos, Cambodia, Chinese Taipei, Pakistan, 
Indonesia, Malaysia 
0105 
01063100 
01063200 
01063910 
 
04070011 Live Birds 
 
 
 
 
Hatching Eggs Banned because of ILT Article 5 of SPS Agreement Egypt, Syria, Lebanon 
0207 
0407 
 
0408 Poultry Meat and Its Products 
 
 
Eggs Banned due to Contamination 
with Nitrofin (Carcinogenic 
Herbicide) Article 5 of SPS Agreement Germany 
0302 
0303 
0304 
0306 
0307 Fish (Fresh, Chilled, Frozen) Cholera - Related Article 5 of SPS Agreement Infected Areas (defin ed by WHO Circulation Report) 
04029110 
04029120 
04029410 
04031000 
04039020 
0404 Fresh Milk and Milk Products 
(Short Shelf Life) Cholera - Related Article 5 of SPS Agreement Infect ed Areas (defined by WHO Circulation Report)  
  WT/ACC/SPEC/SAU/7
 Page 161H.S. No. Description of product Natu re of SPS Measure Justification  WTO Members and non-Member Country(ies) 
07039000 
07041000 
07042000 
07049000 
07051100 
07051900 
07097000 
07099050 
077099060 
07103000 Leafy Vegetables Cholera – Related Article 5 of SPS Agreem ent Infected Areas (defined by WHO Circulation Report) 
08011100 
08011900 Coconuts, fresh or dried, 
whether or not shelled or 
peeled   Banned because of C.C.C Viroid Article 5 of SPS Agreement Solomon Islands, Guam 
Philippines (ban only on unshaven  fresh coconut) 
0207 
0407 Poultry Meat and its Products Banned due to Contamination 
with Chloramphinicole Article 5 of SPS Agreement Certain companies from China, USA 
0302 
0303 
0304 
0306 
0307 
01605 Fish (Fresh, Chilled, Frozen) 
and other Sea Products Banned due to Contamination 
with Chloramphinicole and 
Nitrofuran Article 5 of SPS Agreement China,  
Certain Companies from Banglade sh, Philippines, Indonesia, 
Singapore, Thailand (i.e., those which do not possess the 
appropriate certifi cation attesting to absence of 
chloramphinicole and nitrofuran). 
0409 Natural Honey Banned due to Contamination 
with Chloramphinicole Article 5 of SPS Agreement China 
21032000 Soy sauce and soy products Banned due to Contamination 
with 3-MCPD Article 5 of SPS Agreement Chinese Taipei, Malaysia 
 
 
 
  
 
  WT/ACC/SPEC/SAU/7 
Page 162  
 
 APPENDIX 
DRAFT DECISION 
ACCESSION OF THE KINGDOM OF SAUDI ARABIA 
Decision of  [...] 
 The General Council, 
 Having regard  to paragraph 2 of Article XII and para graph 1 of Article IX of the Marrakesh 
Agreement Establishing the World Trade Organiza tion (the "WTO Agreement"), and the Decision-
Making Procedures under Articles IX and XII of th e WTO Agreement agreed by the General Council 
(WT/L/93). 
 Conducting  the functions of the General Council in th e interval between meetings pursuant to 
paragraph 2 of Article IV of the WTO Agreement, 
 Taking note of the application of the Kingdom of Saudi Arabia for accession to the WTO 
Agreement dated 21 December 1995, 
 Noting the results of the negotiations directed toward the establishment of the terms of 
accession of the Kingdom of Saudi Arabia to the WTO Agreement and having prepared a Protocol on the Accession of the Kingdom of Saudi Arabia, 
 Decides  as follows: 
1.  The Kingdom of Saudi Arabia may accede to the WTO Agreement on the terms and 
conditions set out in the Protoc ol annexed to this Decision. 
_______________  WT/ACC/SPEC/SAU/7 
 Page 163 
 
 
 PROTOCOL 
ON THE ACCESSION OF THE KINGDOM OF SAUDI ARABIA 
Preamble  
 The World Trade Organization (hereinafter referred to as the "WTO"), pursuant to the 
approval of the General Council of the WTO accorded under Article XII of  the Marrakesh Agreement 
Establishing the World Trade Organization (hereinaft er referred to as the "WTO Agreement"), and the 
Kingdom of Saudi Arabia,  
 Taking note  of the Report of the Working Party on the Accession of the Kingdom of Saudi 
Arabia to the WTO Agreement reproduced in document WT/ACC/SPEC/SAU/7, dated 21 October 
2005  (hereinafter referred to as the "Working Party Report"), 
 Having regard  to the results of the negotiations on the accession of the Kingdom of Saudi 
Arabia to the WTO Agreement,  
 Agree  as follows: 
PART I - GENERAL 1.  Upon entry into force of this Protocol pursu ant to paragraph 8, the Kingdom of Saudi Arabia 
accedes to the WTO Agreement pursuan t to Article XII of that Agreement and thereby becomes a 
Member of the WTO.  
2.  The WTO Agreement to which the Kingdom  of Saudi Arabia accedes shall be the WTO 
Agreement, including the Explanatory Notes to that  Agreement, as rectified, amended or otherwise 
modified by such legal instruments as may have entere d into force before the date of entry into force 
of this Protocol.  This Protocol, which shall include the commitments referred to in paragraph  [...] of 
the Working Party Report, shall be an integral part of the WTO Agreement. 
3.  Except as otherwise provided for in paragraph  [...] of the Working Party Report, those 
obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be 
implemented over a period of time starting with the entry into force of that Agreement shall be 
implemented by the Kingdom of Saudi Arabia as if it had accepted that Agreement on the date of its entry into force. 
4.  The Kingdom of Saudi Arabia may maintain a measure inconsistent with paragraph 1 of 
Article II of the GATS provided that such a measure was recorded in the list of Article II Exemptions 
annexed to this Protocol and meets the cond itions of the Annex to the GATS on Article II 
Exemptions. 
PART II - SCHEDULES 5.  The Schedules reproduced in Annex I to th is Protocol shall become the Schedule of 
Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 
(hereinafter referred to as the "GATT 1994") and th e Schedule of Specific Commitments annexed to 
the General Agreement on Trade in Services (herei nafter referred to as "GATS") relating to the 
Kingdom of Saudi Arabia.  The staging of the c oncessions and commitments listed in the Schedules 
shall be implemented as specified in the re levant parts of the respective Schedules. WT/ACC/SPEC/SAU/7 
Page 164  
 
 6.  For the purpose of the reference in paragra ph 6(a) of Article II of the GATT 1994 to the date 
of that Agreement, the applicable date in resp ect of the Schedules of Concessions and Commitments 
annexed to this Protocol shall be the date  of entry into force of this Protocol. 
PART III - FINAL PROVISIONS 7.  This Protocol shall be open for acceptance, by signature or otherwise, by the Kingdom of 
Saudi Arabia until 31 December 2005 . 
8.  This Protocol shall enter into force on th e thirtieth day following the day upon which it shall 
have been accepted by the Kingdom of Saudi Arabia.  
9.  This Protocol shall be deposited with the Director-General of the WTO.  The Director-
General of the WTO shall promptly furnish a certifie d copy of this Protocol and a notification of 
acceptance by the Kingdom of Saudi Arabia thereto pursuant to paragraph 9 to each Member of the 
WTO and to the Kingdom of Saudi Arabia.  
 This Protocol shall be registered in accord ance with the provisions of Article 102 of the 
Charter of the United Nations.  
 Done at Geneva  this [date of month in full]  day of [month and year in full]  in a single copy 
in the English, French and Spanish languages, each text being authentic, except that a Schedule 
annexed hereto may specify that it is authentic in only one of these languages. 
_______________ 
  WT/ACC/SPEC/SAU/7 
 Page 165 
 
 
 ANNEX I 
SCHEDULE CLVIII - THE KINGDOM OF SAUDI ARABIA 
Authentic only in the English language. 
(Circulated in document WT/ACC/SPEC/SAU7/Add.1)  
_______________ 
SCHEDULE OF SPECIFIC COMMITMENTS ON SERVICES 
LIST OF ARTICLE II EXEMPTIONS 
Authentic only in the English language. 
(Circulated in document WT/ACC/ SPEC/SAU/7/Add.2)  
__________