RESTRICTED
WORLD TRADE S/WPPS/1
30October 1996
ORGANIZATION
(96-4582)
Working Party onProfessional Services
ACTIVITIES OFTHE WORKING PARTY ONPROFESSIONAL SERVICES
Report totheCouncil forTrade inServices
Theattached textincorporates comments andsuggestions made bydelegations atanumber
ofmeetings oftheWorking Party heldduring October. Inthelightoftheproposals andofconsultations
heldbythechairperson, thereport issubmitted totheCouncil forTrade inServices onthechairperson 's
responsibility.
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1. Since starting work inJuly1995, theWPPS hasheldseven meetings. Itsdeliberations have
focused onthethree setsofissues intheaccountancy sector laiddown inparagraph 2oftheDecision
onProfessional Services .These issues are:(a)thedevelopment ofmultilateral disciplines toensure
thatdomestic regulatory requirements arebased onobjective andtransparent criteria andarenotmore
burdensome thannecessary; (b)theuseofinternational standards and(c)theestablishment of
guidelines fortherecognition ofqualifications.
(a) Development ofmultilateral disciplines
2. Theactivities oftheWorking Party have focused ontheestablishment ofanextensive
information baseonregulation intheaccountancy sector andonprioritizing andaddressing specific
issues withaviewtothedevelopment ofmultilateral disciplines particularly inthissector.
3. TheWorking Party hasdevoted considerable timeandeffort tothecollection andanalysis of
dataandstudies ofdomestic regulation intheaccountancy sector. Aseminar wasorganized atwhich
theInternational Federation ofAccountants (IFAC) presented theresults ofamajor international survey
ontheregulation andstructure ofaccountancy services, explained itsroleandthatoftheInternational
Accounting Standards Committee (IASC) insetting international standards insuchareas asauditing,
education foraccountants andfinancial reporting, andintroduced astatement onrecognition of
accountancy qualifications. Briefings werealsoreceived fromtheOECD andUNCTAD, bothofwhich
havecarried outextensive workonaccountancy services. TheOECD presented theresults ofitssurvey
onregulations onaccess forprofessional services andthecategorized inventory ofmeasures affecting
trade inprofessional services. UNCTAD, through itsInter-governmental Working Group ofExperts
onInternational Accounting Standards ofAccounting andReporting (ISAR), explained itsmainactivities
inpromoting international harmonization ofcorporate accounting andreporting practices.
4. Inorder tocomplete theinformation thathadbeenmade available bytheabove organizations
ontheregulatory regimes ofMembers affecting theaccountancy sector, asupplementary questionnaire
onspecific aspects ofdomestic regulation wascirculated toWPPS Members. Twenty-three responses
havebeenreceived todate.
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5. With respect toissues, Members drew upanon-exhaustive listofpriority issues, based on
delegations 'submissions andstatements, which define insome detail thepolicy areas forwhich the
Working Party isdeveloping multilateral disciplines. Theissues proposed forconsideration comprise:
qualificationrequirementsandprocedures;licensingrequirements(otherthanqualificationrequirements)
and procedures; regulations governing theestablishment ofacommercial presence;
nationality/citizenship/residency requirements; professional liability andethics; regulations governing
entry andtemporary stayofnatural persons forthepurpose ofsupplying accountancy services. The
tworemaining issues, relating toguidelines forrecognition ofqualifications anduseofinternational
standards, aredealtwithbelow.
6. AmongtheseissuesMembershaveconcentratedinitiallyonlicensingrequirementsandprocedures
intheaccountancy sector. Inthisregard, theWorking Party hasstarted toexamine theapplicability
oftheconcepts andapproaches taken intheTechnical Barriers toTrade (TBT) Agreement astheyapply
tolicensing requirements andtheother measures covered byGATS Article VI.4. Similarly, theWPPS
hasbegun toexamine therelevance ofthedisciplines intheImport Licensing Agreement totheneed
toensure thatlicensing procedures intheaccountancy sector donotinthemselves restrict trade.
(b) Useofinternational standards
7. Themain roleoftheWorking Party inthisareaistokeeptrack ofwork going onelsewhere
andencourage cooperation withrelevant international organizations. Inafurther seminar members
oftheWorking Party received briefings onthedevelopment ofinternational standards bytheIASC
andtheInternational Auditing Practices Committee (IAPC), andontheir co-operation with the
International Organization ofSecurities Commissions (IOSCO).
(c) Establishment ofnon-binding guidelines formutual recognition agreements orarrangements
intheaccountancy sector
8. TheWorking Party hasalsoworked onthedevelopment ofnon-binding guidelines forthe
negotiation ofmutual recognition agreements orarrangements, which arepermitted under theconditions
laiddown inArticle VIIoftheGATS. Thepurpose ofsuchguidelines, which would constitute a
roadmaporchecklist, would betoassist onavoluntary basisthenegotiation andconclusion ofmutual
recognition agreements orarrangements among WTO Members andtoensure theirtransparency. At
itsseventh meeting, theWorking Party tooknotethatadraftpaper entitled Guidelines forMutual
Recognition Agreements orArrangements intheAccountancy Sector hadbeenprepared andisunder
discussion.
Future work
9. TheWorking Party onProfessional Services should aimtocomplete itsworkontheaccountancy
sector bytheendof1997. Itshould alsopursue work onvoluntary guidelines formutual recognition
agreements orarrangements andontheArticle VI.4work programme asitrelates toprofessional
services, examining, asappropriate, bothhorizontal aspects ofthiswork andspecific issues related
toparticular services withdueconsideration forthediversity ofprofessional services. Itshould also
cooperate withandencourage theefforts oftherelevant international organizations asdefined bythe
GATS, including theInternational Accounting Standards Committee andtheInternational Organization
ofSecuritiesCommissions,toformulateinternationalaccountingandauditingstandardswhichareaimed
atachieving greater comparability infinancial statements andfacilitating theeffective liberalization
ofaccountancy services. Itshould alsofollow therelevant work ofUNCTAD.