Proposal for a COUNCIL DECISION concerning the conclusion of the results of the Uruguay Round of Multilateral Trade Negotiations (1986-1994)
Date: 1994-04-15
Institutions: European Commission
Subjects: EU competence, Uruguay, beef, international agreement, international organisation, trade agreement

COMVIISSION  OF  THE EUROPEAN  COMVIUNITIES 

COM(94) 143 final 
Brussels,  15.04,1994 

94/0114  (AVC) 

Proposal  for a 

COUNCIL  DECISION 

Concerning  the conclusion of  the results of  the 
Uruguay  Round  of Multilateral  Trade Negotiations  (1986-9.H) 

(presented  by  the  Commission) 

EXPLANATORY MEMORANDUM 

At  its 1726th meeting (13-15 December 1993) the Council gave its broad 
approval  to the overall package agreed by the Trade Negotiations committee 
in Geneva, representing the results of the Uruguay Round (Ref: PV/CONS89). 
The Council decision was taken on the basis both of a series of written 
reports submitted by Sir Leon Brlttan on behalf of the Commission, which 
gave a general positive evaluation of the results from the Community's point 
of view, and of oral presentations in the meeting. 

It is now necessary, following the signature in Marraicesh of the definitive 
texts of the agreements incorporated  in the Final Act, for the Council to 
adopt the results of the Round in formal terms.  This would also enable the 
Community, subject to the assent of the European Par 11ament, to indicate in 
Geneva that  it was ready to accept these agreements. 

The negotiations were substantially concluded  last December, and the 
Commission report submitted then covered the major part of the results.  As 
regards matters which were left pending at that time, some issues (e.g. 
certain service sectors, trade in civil aircraft and procurement) were 
explicitly set aside for further negotiation during 1994 and 1995, and these 
will be pursued as necessary;  others (e.g. the schedules of tariff 
commitments - market access - and of  initial specific commitments in the 
services area) were to be the subject of  limited further discussion and 
submitted to a verification process in the period before the Marraicesh 
meet i ng. 

The outcome of this process as regards market access and service commitments 
was reported to Member States at the 1735th Council meeting (7-8 March) and 
a further analysis is set out  in the additional report to be submitted to 
the Council.  In overall terms the marlcet access picture has not altered in 
any significant way, even if modifications of detail have been made in 
certain sectors (mostly adjustments of offers to a less ambitious  level). 
On bananas the schedule constitutes an agreement reached with most of the 
GATT suppliers in the context of the Uruguay Round. It also concludes the 
Art. XXVI II negotiations and consultations on bananas with these countries. 
For services the schedules of specific commitments and  lists for MFN 
exemptions have been verified and significantly clarified, which has 
improved the quality of the bindings.  The substantive outcome has remained 
the same, although participants offered some further  liberalization by 
removing restrictive measures and adding some sectoral activities. 

In the meantime the Commission's report of  last December has been sent to 
the European Parliament and preliminary discussions have been undertaken 
with the relevant EP Committees to prepare the way for a formal assent 
procedure when the final texts are available.  It Is now extremely urgent 
that a Commission proposal to conclude the results of the negotiations be 
sent to the Council for transmission to the Parliament so that this 
procedure can be finalized at the May session. 

-y a.  -

- 2  Ô L_ 

One  remaining  issue will  also have  to be addressed  in the Council's 
discussions.  Reference  has been made above  to the  fact  that  further 
negotiations  are  to continue on  trade  in civil  aircraft,  and on  specific 
agreements  to  improve  the  level  of  liberalization commitments  in certain 
service  sectors.  The Commission's  view  is that  these matters, which  are 
covered  either  by  the mandate  for  negotiations on  aircraft  with  the US or by 
the original  declaration  adopted  in Punta  del  Este  In  1986, are still  to be 
considered  as an  integral  part of  the Uruguay  Round, even  though  the final 
solutions have yet  to be agreed.  In consequence  the Commission  intends to 
participate  In these sectoral  negotiations on  the basis of  the existing 
guidelines agreed upon  in the Council, and  to make  further  progress  reports 
and  seek additional  guidance  as necessary. 

Attached  is a short  proposal  covering  the reasons  for  the choice of  a  legal 
basis  for  the adoption of  the results of  the Uruguay  Round,  as well  as the 
text  of  a draft  decision of  the Council.  The  latter  text  Is  in the standard 
format  for  conclusion of  trade agreements  and  designate  the  person/persons 
who will  either  sign or  deposit  the  instruments of  acceptance. 

The substance of  this proposal  corresponds  to  the position set  out  by  the 
Commission  in  its application  to the Court  of  Justice  for  an opinion under 
Article  228(6) CE. The Commission  therefore  reserves  the  right  to amend  its 
proposal  In the  light of  the Court's opinion  in order  to ensure, whatever 
the outcome, the coherence of the Community's action within the WTO. 

CONCLUSION OF AND ARRANGEMENTS FOR PARTICIPATION 
IN THE AGREEMENTS 

A.  Legal  basis for decisions to be taken bv the Council 

In the Commission's  view the Community  has the requisite  overall  competence 
to undertake  the international  commitments  enshrined  in the instruments the 
Council  is being  asked  to adopt. 

Its competence  derives  from Article  113 of the EC Treaty,  in conjunction 
with Article 95 of the ECSC Treaty  where  ECSC  products are concerned. 

While  some of the Instruments do have  implications  for other  areas as well, 
their  purpose and content  is to regulate  various aspects of  international 
trade and this  Is indubitably  an area for which  the Community  has sole 
competence  by virtue of the commercial  policy. 

To cover  products  falling within  the scope of the ECSC Treaty  the Commission 
believes  that  Article 95 of that  Treaty  should  be used  for adoption of the 
results and for conclusion of the bilateral  arrangement  with  Australia on 
coa I. 

Article 95 ECSC was used as the basis for conclusion of the 1982 and 1989 
steel  arrangements  with  the United  States and for the advance  implementation 
of  the trade  provisions  for ECSC products under  the  Interim  Agreements  with 
Central  and Eastern  European  countries. 

Conclusion  is by decision of the Commission  acting as High  Authority  with 
the assent  of the Council  after  consultation of the Advisory  Committee.  This 
procedure  Is the subject  of the attached  proposal  for a statement  to be 
entered  In the Council  minutes. 

B.  Commission  recommendation  for a decision  to be adopted  bv the Council 

The Commission  recommends  that  the Council  adopt  the attached  decision 
concerning  the conclusion of the results of the Uruguay  Round of 
Multilateral  Negotiations. 

OL  -

This  includes adoption of: 

1  the multilateral  instruments  set  out  in the  Final  Act,  i.e.: 

the Agreement  Establishing  the World  Trade Organization  (WTO 
Agreement); 
Annexes  1, 2 and  3  to that  Agreement; 
the ministerial  declarations  and  decisions  and  the Understanding  on 
Commitments  in Financial  Services; 

2  the plurilateral  agreements  set  out  in Annex  4 of  the WTO  Agreement; 

3  the bilateral  agreements  and  arrangements  negotiated  in parallel  with  the 

Uruguay  Round,  i.e.  the Agreement  with  Uruguay  on  Bovine  Meat. 

The ministerial  decisions  and  declarations  in the  Final  Act  and  the 
Understanding  on  Financial  Services  should  be  formally  adopted.  Despite 
their  identical  format,  their  legal  effects  are  different.  Some  are  legally 
binding  while others  include only  political  commitments.  Since  non-binding 
decisions  do not  take on  any  legal  force  just  because  they  have  been 
formally  adopted,  it would  be preferable  if Parliament  and  the Council 
adopted  all  such  texts  together  so as  to maintain  the Single  Undertaking 
stance  adopted  in negotiations  in respect  of  third  countries. 

C.  Arrangements  for  participation  In the  agreements 

The  Final  Act  provides  for  the setting-up of  a World  Trade Organization 
which  In turn  incorporates  various councils,  committees  and other  bodies. 
Under  the aegis of  the WTO  these committees  will  administer  the  multilateral 
agreements  In Annex  IV to  the  Final  Act. 

The Commission  proposes  that  not  only  the Community  but  all  its Member 
States should  be members  of  the WTO  and  its subordinate  bodies, 

However,  it considers  that  Community  and Member  State  participation  in the 
WTO  and  subordinate  bodies  should  follow existing  practice within GATT,  and 
in particular: 

-  that  the Member  States  should  take  part  in  the  proceedings  of  WTO  bodies 
in accordance  with  arrangements  allowing  them  to be  identified  within  the 
Community  delegation; 

< / --

-  that  the position  taken by the Community  in WTO bodies  should be worked 

out  in the usual  way at preliminary  coordination  meetings;  should 
insurmountable differences of opinion  emerge  in the course of the 
coordination  meetings, Community  spokesmen  would  reserve  their  position 
within  the bodies concerned  pending the working out of a solution  in the 
Article  113 Committee,  the Permanent  Representatives Committee or if 
necessary  the Council; 

-  that  the Community  position  should be expressed  within WTO bodies by the 
Commission;  Member  States directly  and specifically  affected  by the 
Issue under  consideration could be given permission by the Community to 
take the floor  In appropriate  cases, keeping  within the previously  agreed 
common  position to support  and expand on it. 

If a vote  Is to be taken the Commission  will  cast  a block  vote on behalf of 
the  twelve Community  voting members  for the option which  corresponds  to the 
Community  position. 

It  Is our understanding  that  Member  State participation  in the WTO alongside 
the Community  gives  rise to no obligation  between  those  parties under the 
WTO Agreement  and its Annexes.  It would  be a good  idea to communicate  this 
interpretation to our trading  partners by means of a formal  declaration. 

Similarly,  it  is important  for the WTO Agreement  and its annexes not to have 
a  direct  effect,  that  is one whereby  private  individuals who are natural or 
legal  persons could  invoke  it under  national  law. It  is already  known  that 
the US and many other of our trading  partners will  explicitly  rule out any 
such  direct  effect. Without  an express  stipulation of such  exclusion  in the 
Community  instrument  of adoption, a major  imbalance would  arise  in the 
actual  management  of the obligations of the Community  and other  countries. 

D. Continuing negotiations 

One of the most  important  results  secured  by the Community  last  December 
in Geneva was the formal  undertaking  by our trading  partners, embodied in 
the Final  Act, to continue, using an agreed  schedule and working 
programme,  negotiations on: 

- 

firm commitments  to liberalize major  parts of the services  sector, 
i.e. basic  telecommunications,  financial  services,  shipping  and the 
movement  of people; 

civil  aviation. 

•à Ô-  -

This commitment  was  vital  since  the outcome  for  the  relevant  sectors  as it 
appeared  on  15 December  was not  acceptable  to  the  Community. 

It will  only  be  fruitful,  however,  if the Community  complies  with  the  agreed 
ground  rules. Consequently, such  continuity, particularly  as  regards  the 
objectives  of, and  arrangements  for,  these  negotiations should  be  recorded 
in the Council  minutes using  the proposed  guidelines  attached. 

k> o< — 

COUNCIL  DECISION 
Of  ... 

Concerning  the conclusion  of  the  results of  the 
Uruguay  Round of Multilateral  Trade  Negotiations  (1986-9.H) 

THE COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to  the Treaty  establishing  the  European  Community,  and  in 
particular  Article  113 and  the second  subparagraph  of  Article  228(3) 
thereof, 

Having  regard  to  the Recommendation  from  the  Commission, 

Having  regard  to  the  assent  of  the  European  Parliament, 

Whereas  the multilateral  trade  negotiations  opened  under  the GATT,  pursuant 
to  the Declaration  by Ministers  adopted  at  Punta  del  Este  on 
20 September  1986, have  led  to the  Final  Act  embodying  the  results of  the 
Uruguay  Round  of multilateral  trade  negotiations; 

Whereas  the  reciprocal  concessions  and  commitments  negotiated  by  the 
Community  and  the countries  party  to the negotiations  as embodied  in  the 
multilateral  agreements  in the Final  Act  represent  a satisfactory  outcome 
overa 11 ; 

Whereas  a number  of  the  reciprocal  concessions  and  commitments  negotiated  by 
the Community  and  certain countries party  to  the  negotiations  are  set  out  in 
the special  plurilateral  agreements  in Annex  IV to  the  Agreement 
establishing  the World  Trade  Organization-, 

Whereas  some of  these  concessions  and  commitments  were  negotiated 
bilaterally  in parallel  to the Uruguay  Round; 

Whereas  these  are  intergovernmental  agreements  and  it  is therefore  necessary 
to ensure  that  they  cannot  be  directly  invoked  in Member  State  or  Community 
courts  by  private  individuals  who  are national  or  legal  persons, 

HAS DECIDED  AS  FOLLOWS: 

A r t i c le  1 

1. The  following  multilateral  agreements  and  acts  are  hereby  approved  on 

behalf  of  the  European  Community: 

-  the Agreement  establishing  the World  Trade  Organization, 
-  the Agreements  In Annexes  1, 2 and  3  to  the Agreement  establishing  the 

World  Trade  Organization, 

-  the ministerial  decisions  and  declarations  and  the Understanding  on 
Commitments  in Financial  Services  in the Uruguay  Round  Final  Act. 

7-

2. The  texts of  the agreements  and  acts  referred  to  in this Article  are 

attached  to this  Decision. 

3. President  of  the Council  is hereby  authorized  to designate  the  person 

empowered  to take  the measure  provided  for  by Article XIV of  the 
agreement  establishing  the World  Trade Organization  in order  to bind  the 
Community. 

Article  2 

1. The plurilateral  agreements and  arrangements  In Annex  4  to the  Agreement 
establishing  the World  Trade Organization  are  hereby  approved  on  behalf 
of  the European  Community. 

2. The  texts of  the agreements  referred  to  in this Article  are attached  to 

this  Decision. 

3. The President  of  the Council  is hereby  authorized  to designate  the person 
empowered  to take  the measures  provided  for  by  the agreements  referred  to 
in this Article  in order  to bind  the  Community. 

Article  3 

1. The Agreement  on Bovine Meat  concluded  with  Uruguay  is hereby  approved  on 

behalf of  the European  Community. 

2. The  text  of  the said Agreement  is attached  to  this  Decision. 

3. The President  of  the Council  is hereby  authorized  to designate  the person 

empowered  to sign  the Agreement  in order  to bind  the  Community. 

Done  at  Brussels, 

For  the CounclI 
The  President 

«8  © .-

Draft statements to be entered  in the Council minutes 

ECSC products 

"The Council  takes note that the Commission, following the opinion of the 
ECSC Consultative Committee and with the assent of the Council, intends to 
adopt on behalf of the Community the results of the Uruguay Round which fal 
within the scope of the ECSC Treaty and the bilateral  arrangement on coal 
with Australia." 

Further negotiations 

"The Council notes that the Commission, on behalf of the Community, is 
continuing negotiations on liberalization commitments in certain areas of 
the service sector and in the civil sector  in accordance with the same 
objectives and arrangements as before." 

3 *~ 

MULTILATERAL  TRADE 

NEGOTIATIONS 

THE  URUGUAY  ROUND 

Trad*  Negotiations CommittM 

FINAL ACT EMBODYING  THE RESULTS OF THE 
URUGUAY  ROUND OF MULTILATERAL  TRADE  NEGOTIATIONS 

MARRAKESH,  15 APRIL 19?4 

Page 2 

Page  3 

TABLE  OF  CONTENTS 

FINAL ACT 

AGREEMENT  ESTABLISHING  THE WORLD TRADE ORGANIZATION 

ANNEX  1 

ANNEX  1A: MULTILATERAL  AGREEMENTS  ON TRADE IN GOODS 
*  General  Agreement  on Tariffs  and Trade  1994 

Understanding on the Interpretation of Article n.-i(b) of the General Agreement on 

Tariffs  and Trade  1994 

Understanding  on the Interpretation of  Article xvn  of  the General  Agreement  on 

Tariffs  and Trade  1994 

Understanding  on  Balance-of-Pavments  Provisions  of  the General  Agreement  on 

Tariffs  and Trade  1994 

Understanding on the Interpretation of Article xxrv  of the General Agreement  on 

Tariffs  and Trade  1994 

Understanding in Respect of Waivers of Obligations under the General Agreement 

on Tariffs  and Trade  1994 

Understanding on the Interpretation of Article xxvm of the General Agreement on 

Tariffs  and Trade  1994 

Marrakesh Protocol  to the General  Agreement  on Tariffs  and Trade  1994 

Agreement  on Agriculture 
Agreement  on the Application of  Sanitary and Phytosanitary  Measures 
Agreement  on Textiles  and Clothing 
Agreement  on Technical  Barriers to Trade 
Agreement  on Trade-Related  Investment  Measures 
Agreement  on Implementation of Anicle vi of the General Agreement  on Tariffs and 

> 

Trade  1994 

5 

9 

21 

21 
23 

25 

27 

29 

.  33 

37 

39 
41 
43 
69 
85 
117 
139 

145 

Agreement  on Implementation of Anicle vn of the General Agreement on Tariffs and 

Trade  1994 

ANNEX  IB  General  Agreement  on Trade  in Services 
ANNEX ic  Agreement  on Trade-Related  Aspects of  Intellectual  Property  Rights 

Agreement  on  Preshipmem  Inspection 
Agreement  on  Rules  of Origin 
Agreement  on  Import Licensing  Procedures 
Agreement  on  Subsidies  and Countervailing  Measures 
Agreement  on Safeguards 

171 
199 
209 
221 
229 
273 
283 
. . ..  319 
ANNEX 2  Understanding on Rules and Procedures Governing the Settlement  of  Disputes  353 
379 
ANNEX  3  Trade  Policy  Review  Mechanism 
383 
ANNEX 4 
383 
383 
383 
383 

Agreement  on Trade in Civil  Aircraft 
Agreement  on Government  Procurement 
International  Dairy  Agreement 
International  Bovine  Meat  Agreement 

Plurilateral  Trade Agreements 

Page  4 

MINISTERIAL  DECISIONS  AND  DECLARATIONS 

Decision  on Measures  in Favour of  Least-Developed  Countries 
Declaration on the Contribution of the World Trade Organization to Achieving  Greater 

Coherence-  in Global  Economic  Policymaking 

Decision  on Notification  Procedures 
Declaration on the Relationship  of the World Trade Organization with the International 

Monetary  Fund 

Decision on Measures Concerning the Possible Negative Effects of the Reform Programme 

on Least-Developed  and Net  Food-Imponing  Developing  Countries 

Decision on Notification of First Integration under Anicle 2.6 of the Agreement on Textiles 

385 

387 
389 

393 

395 

and Clothing 

-  397 

Decisions  Relating  to the Agreement  on Technical  Barriers to Trade 

Decision  on Proposed  Understanding  on wro-iso  Standards Information  System  .  .  .  399 
400 
Decision  on Review  of the iso/mc  Information  Centre  Publication 

Decisions and Declaration Relating to the Agreement on Implementation of Anicle  vi  of 

the General  Agreement  on Tariffs  and Trade 1994 
Decision  on Anti-Circumvention 
Decision on Review of Anicle  17.6 of the Agreement on Implementation of Anicle  vi 

of  the General  Agreement  on Tariffs  and Trade  1994 

Declaration on  Dispute  Settlement  Pursuant to the Agreement  on Implementation  of 
Anicle  VI of  the  General  Agreement  on Tariffs  and Trade  1994 or  Pan  v  of the 
Agreement  on  Subsidies  and Countervailing  Measures 

Decisions  Relating  to  the  Agreement  on  Implementation  of  Anicle  VII  of  the  General 

Agreement  on Tariffs  and Trade 1994 
Decision  Regarding  Cases  where Customs  Administrations  Have  Reasons  to  Doubt 

401 

402 

403 

the Truth or Accuracy  of  the Declared Value 

: .  405 

Decision  on Texts  Relating  to  Minimum  Values  and  Imports  by  Sole  Agents.  Sole 

Distributors  and Sole  Concessionaires 

Decisions  Relating  to the General  Agreement  on Trade  in Services 

Decision  on  Institutional  Arrangements  for  the  General  Agreement  on  Trade  in 

Services 

Decision on Cenain Dispute Settlement Procedures for the General Agreement on Trade 

in Services 

Decision  on Trade  in Services  and the Environment 
Decision on  Negotiations  on Movement  of  Natural  Persons 
Decision  on Financial  Services 
Decision  on  Negotiations  on  Maritime  Transport  Services 
Decision  on  Negotiations  on  Basic Telecommunications 
Decision  on Professional  Services 

Decision  on Accession to the Agreement  on Government  Procurement 
Decision on the Application and Review of the Understanding  on Rules and Procedures 

Governing  the Settlement  of  Disputes 

UNDERSTANDING  ON  COMMITMENTS  IN FINANCIAL  SERVICES 

406 

407 

408 
409 
410 
411 
412 
414 
415 
417 

419 

4 21 

r-

FINAL ACT EMBODYING  THE RESULTS OF THE 
URUGUAY  ROUND OF MULTILATERAL  TRADE NEGOTIATIONS 

Marrakesh,  15 April  1994 

Page 6 

FINAL  ACT  EMBODYING  THE  RESULTS  OF  THE 
URUGUAY  ROUND  OF MULTILATERAL  TRADE  NEGOTIATIONS 

Page 7 

1. 
Having  met  in  order  to  conclude  the  Uruguay  Round  of  Multilateral  Trade  Negotiations, 
representatives of the governments and of the European Communities, members of the Trade Negotiations 
Committee,  agree  that the Agreement  Establishing the World Trade Organization (referred to in this 
Final Act as the "WTO Agreement"), the Ministerial Declarations and Decisions, and the Understanding 
on Commitments  in Financial  Services,  as annexed  hereto,  embody  the results  of their  negotiations 
and form  an integral  pan of  this  Final  Act. 

2. 

By  signing  the present  Final  Act,  the representatives  agree 

(a) 

to submit, as appropriate, the WTO Agreement for the consideration of their respective 
competent authorities with a view to seeking approval of the Agreement in accordance 
' with  their procedures:  and 

(b) 

to adopt the  Ministerial  Declarations  and  Decisions. 

3 
The  representatives  agree  on  the desirability  of  acceptance  of  the  WTO  Agreement  by  all 
participants  in  the  Uruguay  Round  of  Multilateral  Trade  Negotiations  (hereinafter  referred  to  as 
participants" ) with a view to its entry into force by 1 January  1995, or as early as possible thereafter. 
Not  later than late  1994. Ministers will meet,  in accordance with the final  paragraph of the Punta del 
Este  Ministerial  Declaration,  to decide  on the  international  implementation of the results,  including 
the timing  of their entry  into force. 

The representatives agree  that the WTO Agreement  shall be open for acceptance as a whole, 
4. 
by  signature  or otherwise,  by  all  participants  pursuant  to  Anicle  XIV  thereof.  The acceptance and 
entry  into force of a Plurilateral  Trade Agreement  included  in Annex 4 of the WTO Agreement  shall 
be governed  by the provisions  of  that Plurilateral  Trade  Agreement. 

5 
Before  accepting  the WTO  Agreement,  participants  which  are not contracting parties to the 
General  Agreement  on Tariffs  and Trade must  first  have  concluded  negotiations  for their  accession 
to  the  General  Agreement  and  become  contracting  parties  thereto.  For participants  which  are not 
contracting  parties  to the General  Agreement  as of  the date of  the Final  Act,  the Schedules  are not 
definitive  and  shall  be  subsequently  completed  for  the  purpose  of  their  accession  to  the  General 
Agreement  and acceptance  of  the WTO Agreement. 

.  This  Final  Act  and the texts annexed  hereto shall  be deposited  with the Director-General  to 
6 
the CONTRACTING  PARTIES to the General Agreement on Tariffs  and Trade who shall promptly, 
furnish  to each participant  a certified  copy  thereof. 

DONE at Marrakesh this  fifteenth  day of  April one thousand nine hundred and ninety-four, 

in a single  copy,  in the English,  French and Spanish  languages, each text being authentic. 

[List  of  signatures to be  included  in the treaty copy  of the Final  Act for  signature] 

Page 8 

Page  9 

AGREEMENT  ESTABLISHING  THE 
WORLD  TRADE  ORGANIZATION 

The Parties  to this  Agreement, 

Recognizing that their relations in the field of trade and economic endeavour should be conducted 
with a view to raising standards of living, ensuring full employment and a large and steadily growing 
volume of real income and effective  demand, and expanding the production of and trade in goods and 
services, while allowing for the optimal use of the world's resources in accordance with the objective 
of sustainable development, seeking both to protect and preserve the environment  and to enhance the 
means for doing so in a manner consistent with their respective needs and concerns at different  levels 
of  economic  development. 

Recognizing  further that there is need for positive efforts  designed to ensure that developing 
countries, and especially the least developed among them, secure a share in the growth in international 
trade commensurate  with the needs of  their economic  development. 

Being desirous  of  contributing  to  these  objectives  by  entering  into  reciprocal  and  mutually 
advantageous arrangements  directed to the substantial  reduction of  tariffs  and other barriers to trade 
and to the elimination  of  discriminatory  treatment  in international  trade relations. 

Resolved..therefore, to develop an integrated, more viable and durable multilateral trading system 
encompassing the .General Agreement on Tariffs and Trade, the results of past trade liberalization efforts. 
and all  of the  results  of  the  Uruguay  Round  of  Multilateral  Trade  Negotiations. 

Determined  to. preserve  the  basic  principles  and  to  further  the  objectives  underlying  this 

multilateral  trading  system. 

Agree  as  follows: 

Article  / 

Establishment of the  Organization 

The World Trade Organization (hereinafter  referred to as  "the WTO") is hereby  established. 

Article II 

Scope of the WTO 

1. 
The WTO shall provide the common institutional framework for the conduct of trade relations 
among  its Members  in maners related to the agreements and associated  legal  instruments  included in 
the  Annexes  to this  Agreement. 

2. 
The agreements and associated  legal  instruments included in Annexes  1. 2 and 3  (hereinafter 
referred to as  "Multilateral  Trade  Agreements") are integral parts of this Agreement,  binding  on all 
Members. 

3. 
The agreements  and associated  legal  instruments  included  in Annex 4  (hereinafter  referred 
to as  "Plurilateral  Trade Agreements") are also pan of this Agreement  for those Members  that have 

Page  10 

accepted them, and are binding  on  those Members.  The Plurilateral Trade Agreements do not create 
either obligations  or rights  for  Members  that have not  accepted  them. 

The General Agreement on Tariffs and Trade 1994 as specified  in Annex  1A (hereinafter referred 
4. 
to  as  "GATT  1994")  is  legally  distinct  from  the  General  Agreement  on  Tariffs  and  Trade,  dated 
30  October  1947, annexed  to the  Final  Act  Adopted at the Conclusion  of the  Second  Session  of  the 
Preparatory Committee of the United Nations Conference on Trade and Employment,  as subsequently 
rectified,  amended  or modified  (hereinafter  referred  to as  "GATT  1947"). 

Article III 

Functions of the WTO 

The  WTO shall  facilitate  the  implementation,  administration  and operation,  and  further  the 
1. 
objectives,  of  this  Agreement  and of  the  Multilateral  Trade  Agreements,  and shall  also  provide  the 
framework  for the implementation, administration and operation of the Plurilateral Trade Agreements. 

The  WTO  shall  provide  the  forum  for  negotiations  among  its  Members  concerning  their 
2. 
multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement. 
The  WTO  may  also  provide  a forum  for  further  negotiations among  its  Members  concerning  their 
multilateral .trade relations, and a framework  for the implementation of the results of such negotiations, 
as  may  be decided  by  the  Ministerial  Conference. 

3. 
The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement 
of  Disputes  (hereinafter  referred  to as the  "Dispute  Settlement  Understanding" or  "DSU")  in Annex 
2  to this  Agreement. 

The  WTO  shall  administer  the Trade  Policy  Review  Mechanism  (hereinafter  referred  to  as 

4. 
the  "TPRM") provided  for  in Annex  3 to this  Agreement. 

5. 
With a view to achieving greater coherence in global economic policy-making, the WTO shall 
cooperate, as appropriate,  with the Internationa] Monetary  Fund and with the International  Bank  for 
Reconstruction  and  Development  and  its affiliated  agencies. 

Anicle  IV 

Structure of the WTO 

1. 
There shall be a Ministerial Conference composed of representatives of air the Members, which 
shall  meet  at  least  once  even  two  years.  The  Ministerial  Conference  shall  carry put  the  functions 
of the WTO and take actions necessary to this effect.  The Ministerial Conference shall have the authority 
to  take decisions  on all  matters  under any  of  the  Multilateral  Trade Agreements,* if .so requested  by 
a  Member,  in accordance  with the specific  requirements  for decision-making  in this Agreement  and 
in the  relevant  Multilateral  Trade  Agreement. 

2. 
There shall be a General Council composed of representatives of all the Members, which shall 
meet  as appropriate.  In the intervals  between  meetings  of  the Ministerial  Conference,  its  functions 
shall  be conducted  by  the General  Council.  The General  Council  shall  also carry out the  functions 
assigned to it by this Agreement.  The General Council shall establish its rules of procedure and approve 
the  rules of  procedure  for  the Committees  provided  for  in paragraph  7. 

Page  11 

3. 
The General Council shall convene as appropriate to discharge the responsibilities of the Dispute 
Settlement Body provided for in the Dispute Settlement Understanding.  The Dispute Settlement Body 
may have  its own chairman and shall  establish such rules of procedure as it deems  necessary for the 
fulfilment  of those  responsibilities. 

4. 
The General Council shall convene as appropriate to discharge the responsibilities of the Trade 
Policy  Review  Body provided  for  in the TPRM.  The Trade Policy  Review  Body  may have  its own 
chairman and shall establish such rules of procedure as it deems necessary for the fulfilment  of those 
responsibilities. 

There shall  be a Council  for Trade in Goods, a Council  for Trade in Services and a Council 
5. 
for Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the  "Council  for 
TRIPS"),  which shall  operate under the general  guidance of  the General  Council.  The Council  for 
Trade in Goods shall oversee the functioning of the Multilateral Trade Agreements in Annex  1A.  The 
Council  for  Trade  in Services  shall  oversee  the functioning  of  the General  Agreement  on  Trade  in 
Sen-ices (hereinafter  referred to as "GATS").  The Council for TRIPS shall oversee the  functioning 
of  the  Agreement  on  Trade-Related  Aspects  of  Intellectual  Property  Rights  (hereinafter  referred  to 
as the "Agreement on TRIPS").  These Councils shall carry out the functions assigned to them by their 
respective  agreements  and  by  the  General  Council.  They  shall  establish  their  respective  rules  of 
procedure subject to the approval of the General Council.  Membership in these Councils shall be open 
to representatives of all -Members.  These Councils shall meet as necessary to carry out their functions. 

The Council  for Trade in Goods, the Council for Trade in Services and the Council for TRIPS 
6 
shall  establish subsidiary  bodies as required.  These subsidiary bodies shall establish their respective 
rules  of  procedure  subject  to the approval  of their respective Councils. 

The Ministerial Conference shall establish a Committee on Trade and Development, a Committee 
7. 
on Balance-of-Payments Restrictions and a Committee on Budget, Finance and Administration,  which 
shall  earn,  out  the  functions  assigned  to  them  by  this  Agreement  and  by  the  Multilateral  Trade 
Agreements, and any additional functions assigned to them by the General Council, and may establish 
such additional Committees  with such functions as it may deem appropriate.  As pan of its functions, 
the  Committee  on  Trade  and  Development  shall  periodically  review  the  special  provisions  in  the 
Multilateral  Trade  Agreements  in favour  of the least-developed  country  Members  and  report  to the 
General Council for appropriate action.  Membership in these Committees shall be open to representatives 
of  all  Members. 

8. 
The bodies provided for under the Plurilateral Trade Agreements shall carry out the functions 
assigned  to them under those  Agreements and shall  operate within the institutional  framework  of the 
WTO  These  bodies  shall  keep the General  Council  informed  of their activities  on a regular basis. 

Article V 

Relations  *ith  Other  Organizations 

The General Council shall make appropriate arrangements for effective cooperation with other 

1. 
intergovernmental  organizations  that have responsibilities  related to those of the WTO. 

The  General  Council  may  make appropriate arrangements  for  consultation  and  cooperation 

2. 
with  non-governmental  organizations  concerned with matters related to those of the WTO. 

Page  12 

Article VI 

The Secretariat 

There shall  be a Secretariat of the WTO (hereinafter  referred  to as "the Secretariat") headed 

1. 
by  a Director-General. 

The  Ministerial  Conference  shall appoint the Director-General and adopt  regulations  setting 

2. 
out  the powers,  duties,  conditions  of service  and term of  office  of  the  Director-General. 

3. 
The Director-General  shall appoint the members of the staff of the Secretariat and determine 
their  duties  and  conditions  of  service  in  accordance  with  regulations  adopted  by  the  Ministerial 
Conference. 

The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively 
4. 
international  in character.  In the discharge  of their duties,  the Director-General  and the  staff  of the 
Secretariat shall  not seek or accept  instructions from any government  or any other authority  external 
to  the WTO.  They  shall  refrain from  any action which might  adversely  reflect  on their position  as 
international officials.  The Members of the WTO shall respect the international character of the respon 
sibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them 
in the discharge  of their duties. 

Article VII 

Budget and Contributions 

The Director-General  shall present to the Committee  on Budget,  Finance and Administration 
1. 
the annual  budget estimate and financial  statement  of the WTO.  The Committee  on Budget,  Finance 
and Administration  shall  review the annual  budget estimate  and the financial  statement  presented  by 
the Director-General and make recommendations  thereon to the General Council.  The annual budget 
estimate  shall  be subject  to approval  by the General  Council. 

The Committee  on Budget,  Finance and Administration shall propose to the General Council 

2. 
financial  regulations  which shall  include provisions  setting  out: 

(a ) 

the scale of contributions apportioning the expenses of the WTO among its Members : 
and 

(b) 

the measures  to be taken in respect  of  Members  in arrears. 

The  financial  regulations  shall  be  based,  as  far  as  practicable,  on  the  regulations  and  practices  of 
GATT  1947. 

The General  Council  shall  adopt  the financial  regulations  and the annual budget estimate  by 

3. 
a  two-thirds majority  comprising  more than half of  the  Members  of  the WTO. 

Each  Member  shall  promptly  contribute  to the WTO  its  share  in the expenses  of  the  WTO 

4. 
in accordance  with the financial  regulations  adopted  by the General  Council. 

Page  13 

Article  VIII 

Status of the WTO 

The WTO  shall  have legal  personality,  and shall  be accorded  by each of  its  Members  such 

1. 
legal  capacity  as may  be necessary  for the exercise of  its  functions. 

The WTO shall  be accorded  by each of  its Members  such privileges  and immunities  as are 

2. 
necessary  for  the exercise  of  its  functions. 

3. 
The officials  of the WTO and the representatives of the Members shall similarly be accorded 
by each of its Members such privileges and immunities as are necessary for the independent  exercise 
of  their functions  in connection  with the WTO. 

The privileges and immunities to be accorded by a Member to the WTO, its officials,  and the 
4. 
representatives  of  its  Members  shall  be  similar  to  the  privileges  and  immunities  stipulated  in  the 
Convention  on the Privileges and Immunities  of the Specialized  Agencies,  approved by the General 
Assembly  of the  United  Nations  on 21  November  1947. 

5. 

The WTO may  conclude  a headquarters agreement. 

Article IX 

Decision-Making 

The  WTO  shall  continue  the  practice  of  decision-making  by  consensus  followed  under 
1. 
GATT  1947.'  Except as otherwise provided, where a decision cannot be arrived at by consensus, the 
matter at issue shall be decided by voting.  At meetings of the  Ministerial Conference and the General 
Council,  each Member of the WTO shall have one vote.  Where the European Communities  exercise 
their right to vote, they shall have a number of votes equal to the number of their member States2 which 
are  Members  of  the WTO.  Decisions  of  the Ministerial  Conference  and the General  Council  shall 
be taken by a majority of the  votes cast, unless otherwise provided in this Agreement or in the relevant 
Multilateral  Trade  Agreement.3 

The Ministerial Conference and the General Council shall have the exclusive authority to adopt 
2. 
interpretations  of  this  Agreement  and  of  the  Multilateral  Trade  Agreements. 
In  the  case  of  an 
interpretation  of  a Multilateral  Trade  Agreement  in Annex  1,  they  shall  exercise  their authority  on 
the basis  of  a  recommendation  by  the Council  overseeing  the  functioning  of  that  Agreement.  The 
decision  to adopt an interpreution shall  be taken by a three-fourths  majority  of  the Members.  This 
paragraph shall not be used in a manner that would undermine the amendment provisions in Article  X. 

3. 
In exceptional  circumstances,  the Ministerial  Conference  may decide to waive an obligation 
imposed on a Member by this Agreement  or any of the  Multilateral Trade Agreements, provided that 

The  body concerned shall be deemed  to have decided by consensus on a matter submitted for  hs consideration, if no 

Member,  present at the  meeting  when  the decision  is taken,  formally  objects to the proposed  decision. 

The  number of votes of the European Communities and their member Sûtes shall in no case exceed the number of the 

member  Sûtes of the  European  Communities. 

'Decisions by the General  Council  when  convened as the Dispute  Settlement Body  shall  be ttken only  in accordance 

with the provisions  of paragraph 4 of Ankle  2 of the Dispute  Settlement  Understanding. 

Page  14 

any  such decision  shall  be taken by  three fourths4 of  the Members  unless  otherwise provided  for  in. 
this paragraph. 

(a) 

(b) 

A request for a waiver concerning this Agreement shall be submitted to the Ministerial 
Conference for consideration pursuant to the practice of decision-making by consensus. 
The Ministerial  Conference  shall  establish a time-period,  which shall not exceed  90 
days, to consider the request.  If consensus is not reached during the time-period, any 
decision to grant a waiver shall be taken by three fourths4 of the Members. 

A request for a waiver concerning the Multilateral  Trade Agreements  in Annexes  1A 
or  IB or  1C and their annexes shall  be submitted  initially  to the Council  for Trade 
in Goods, the Council  for Trade in Services or the Council  for TRIPS,  respectively, 
for consideration  during  a time-period  which  shall  not exceed  90 days.  At  the end 
of  the  time-period,  the  relevant  Council  shall  submit  a  report  to  the  Ministerial 
Conference. 

4 
A  decision  by  the  Ministerial  Conference  granting  a  waiver  shall  state  the  exceptional 
circumstances justifying the decision, the terms and conditions governing the application of the waiver, 
and the date on which the waiver shall  terminate.  Any waiver granted for a period of more than one 
year  shall  be  reviewed  by  the Ministerial  Conference  not  later than one year after  it  is granted, and 
thereafter annually until the waiver terminates.  Ineach review, the Ministerial Conference shall examine 
whether  the  exceptional  circumstances  justifying  the  waiver  still  exist  and  whether  the  terms  and 
conditions attached to the waiver have been met.  The Ministerial Conference, on the basis of the annual 
review,  may  extend,  modify  or terminate  the waiver. 

Decision:,  under a  Plurilateral  Trade  Agreement,  including  any decisions  on  interpretations 

5. 
and  waivers,  shail  be governed  by the provisions  of  that  Agreement. 

Article X 

Amendments 

Any  Member  of the WTO may  initiate a proposal  to amend the provisions of this Agreement 
1 
or  the  Multilateral  Trade  Agreements  in  Annex  1 by  submitting  such  proposal  to  the  Ministerial 
Conference.  The  Councils  listed  in paragraph  5  of  Article  IV  may  also submit  to  the  Ministerial 
Conference  proposals  to amend  the provisions  of the corresponding  Multilateral  Trade  Agreements 
in  Annex  1 the  functioning  of  which  they oversee.  Unless the  Ministerial  Conference  decides on a 
longer  period.  for a period  of 90 days after  the proposal  has been tabled formally  at the  Ministerial 
Conference  ruv  decision  by  the  Ministerial  Conference  to  submit  the  proposed  amendment  to  the 
Members  for  :*^rptance shall  be taken by consensus.  Unless  the provisions  of  paragraphs  2,  5  or 
6 appi). that decision shall specify whether the provisions of paragraphs 3 or 4 shall apply.  If consensus 
is reached, the Ministerial Conference shall forthwith submit the proposed amendment to the Members 
for  acceptance.  If  consensus  is  not  reached  at a meeting  of  the  Ministerial  Conference  within  the 
established  period,  the Ministerial  Conference  shall decide by a two-thirds majority of the Members 
whether  to  submit  the proposed  amendment  to the  Members  for acceptance.  Except  as provided  in 
paragraphs 2.  5 and 6.  the provisions of paragraph 3 shall apply to the proposed amendment,  unless 
the  Ministerial  Conference  decides by a three-fourths majority  of the Members that the provisions of 
paragraph 4  shall  apply. 

4 A decision to grant a waiver in respect of any obligation subject to a transition period or a period for staged tmplemenuiion 

•it the requesting  Member  has not performed  by the end of the  relevant period  shall be uken  only  by consensus. 

Amendments  to the provisions of this Article and to the provisions of the following  Articles. 

2. 
shall  take effect  only  upon acceptance  by all  Members : 

Page  15 

Article  IX of  this  Agreement: 
Articles  I and II of  GATT  1994; 
Anicle  11:1 of GATS; 
Article 4  of the Agreement  on TRIPS. 

3. 
Amendments  to  provisions  of  this  Agreement,  or  of  the  Multilateral  Trade  Agreements  in 
Annexes  1A and  1C, other  than those  listed  in paragraphs 2 and 6,  of a nature that would  alter the 
rights and obligations of the Members, shall take effect for the Members that have accepted them upon 
acceptance  by two thirds of the Members and thereafter  for each other Member  upon acceptance by 
it.  The  Ministerial  Conference  may  decide  by  a  three-fourths  majority  of  the  Members  that  any 
amendment  made effective  under this paragraph is of such a nature that any Member  which has not 
accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw 
from  the WTO or to remain a Member  with the consent of  the Ministerial  Conference. 

4. 
Amendments  to  provisions  of  this  Agreement  or  of  the  Multilateral  Trade  Agreements  in 
Annexes  1A and  1C. other than those  listed  in paragraphs  2 and 6,  of  a nature that would  not alter 
the rights and obligations  of the Members,  shall take effect  for all Members upon acceptance by two 
thirds of  the Members. 

Except as provided in paragraph 2 above, amendments to Parts I, II and III of GATS and the 
5. 
respective annexes shall take effect  for the Members that have accepted them upon acceptance by two 
thirds  of  the  Members  and  thereafter  for  each  Member  upon  acceptance  by  it.  The  Ministerial 
Conference may decide by a three-fourths majority of the Members that any amendment made effective 
under the preceding  provision  is of  such a nature that any Member which has not accepted  it within 
a period specified  by the Ministerial  Conference in each case shall be free to withdraw from the WTO 
or  to  remain  a Member  with the consent  of the  Ministerial  Conference.  Amendments  to Parts IV, 
V and VI of GATS and the respective annexes shall take effect  for all Members upon acceptance by 
two  thirds  of  the  Members. 

6. 
Notwithstanding the other provisions of this Article, amendments to the Agreement on TRIPS 
meeting  the  requirements  of  paragraph  2  of  Article 71  thereof  may  be  adopted  by  the  Ministerial 
Conference  without  further  formal  acceptance process. 

7. 
Any Member accepting an amendment to this Agreement or to a Multilateral Trade Agreement 
in  Annex  1 shall  deposit  an instrument  of  acceptance  with the Director-General of  the WTO within 
the period  of  acceptance  specified  by the Ministerial  Conference. 

8. 
Any Member of the WTO may initiate a proposal to amend the provisions of the Multilateral 
Trade  Agreements  in Annexes 2  and 3  by submitting  such proposal  to the Ministerial  Conference. 
The decision to approve amendments  to the Multilateral Trade Agreement in Annex 2 shall be made 
by consensus and these amendments shall take effect for all Members upon approval by the Ministerial 
Conference.  Decisions to approve amendments to the Multilateral Trade Agreement in Annex 3 shall 
take effect  for all  Members  upon approval  by the Ministerial  Conference. 

9. 
The  Ministerial  Conference,  upon the request of the Members  parties to a trade agreement, 
may decide exclusively by consensus to add that agreement to Annex 4.  The Ministerial  Conference, 
upon the request of the Members parties to a Plurilateral Trade Agreement, may decide to delete that 
Agreement  from  Annex  4. 

Page  16 

Amendments  to a Plurilateral  Trade Agreement  shall  be governed by the provisions  of that 

10. 
Agreement. 

Article XI 

Original Membership 

1. 
The contracting  parties to GATT  1947 as of the date of  entry  into force  of this  Agreement. 
and the European Communities,  which accept this Agreement and the Multilateral Trade Agreements 
and for which Schedules of Concessions and Commitments  are annexed to GATT  1994 and for which 
Schedules of Specific Commitments are annexed to GATS shall become original Members of the WTO. 

2- 
The least-developed countries recognized as such by the United Nations will only be required 
to undertake commitments and concessions to the extent consistent with their individual  development. 
financial  and trade needs or their administrative  and institutional  capabilities. 

Article XII 

Accession 

Any State or separate customs territory possessing full autonomy in the conduct of its external 
1. 
commercial relations and of the other matters provided for in this Agreement and the Multilater:  Trade 
Agreements  may  accede  to this  Agreement,  on terms  to  be agreed  between  it and the WTG  Such 
accession  shall  apply  to this Agreement  and the Multilateral  Trade Agreements  annexed  thereto. 

2. 
Decisions on accession shall be taken by the Ministerial Conference.  The Ministerial Conference 
shall  approve  the agreement  on the terms  of  accession  by  a two-thirds  majority  of  the  Members  of 
the WTO 

Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agree-

3. 
ment. 

ArticleXIII 

Non-Application of Multilateral  Trade Agreements 
benveen Particular Members 

1. 
This  Agreement  and the Multilateral  Trade  Agreements  in Annexes  1 and 2  shall  not  apply 
as between any Member and any other Member  if either of the Members,  at the time either becomes 
a  Member,  does  not consent  to such application. 

2. 
Paragraph  1 may be invoked between original Members of the WTO which were contracting 
parties to GATT  1947 only where Article  XXXV of that Agreement had been invoked earlier and was 
effective as between those contracting parties at the time of entry into force for them of this Agreement. 

Paragraph  1 shall  apply  between a Member  and another  Member  which  has  acceded  under 
3. 
Article  XII  only  if  the  Member  not  consenting  to  the  application  has  so  notified  the  Ministerial 
Conference before the approval of the agreement on the terms of accession by the Ministerial Conference. 

Page  17 

The Ministerial  Conference  may review the operation of this Article in particular cases at thé 

4. 
request  of  any  Member  and make  appropriate  recommendations. 

Non-application  of  a Plurilateral  Trade  Agreement  between  parties  to  that  Agreement  shall 

5. 
be governed  by  the provisions  of  that  Agreement. 

Article XIV 

Acceptance,  Entry into Force and  Deposit 

This Agreement shall be open for acceptance, by signature or otherwise, by contracting parties 
1. 
to GATT  1947,  and the  European Communities,  which are eligible  to become  original  Members  of 
the  WTO  in  accordance  with  Article  XI  of  this  Agreement.  Such  acceptance  shall  apply  to  this 
Agreement and the Multilateral Trade Agreements annexed hereto. This Agreement and the Multilateral 
Trade  Agreements  annexed  hereto  shall  enter  into  force  on  the  date  determined  by  Ministers  in 
accordance  with  paragraph  3  of  the  Final  Act  Embodying  the  Results  of  the  Uruguay  Round  of 
Multilateral Trade Negotiations and shall remain open for acceptance for a period of two years following 
that date unless the Ministers decide otherwise.  An acceptance following  the entry  into force of this 
Agreement  shall  enter  into  force  on the 30th day following  the date of  such  acceptance. 

2. 
A Member which accepts this Agreement  after its entry into force shall  implement  those con 
cessions and obligations in the Multilateral Trade Agreements that are to be implemented over a period 
of  time  starting  with  the entry  into  force  of  this  Agreement  as  if  it  had accepted  this  Agreement  on 
the date of  its entry  into  force. 

Until  the entry  into force of this Agreement, the text of this Agreement  and the Multilateral 
3. 
Trade  Agreements  shall  be deposited  with  the Director-General  to the CONTRACTING  PARTIES 
to GATT  1947.  The  Director-General  shall promptly furnish  a certified  true copy of this  Agreement 
and the Multilateral Trade Agreements, and a notification of each acceptance thereof, to each government 
and the European Communities having accepted this Agreement.  This Agreement and the Multilateral 
Trade  Agreements,  and any amendments  thereto, shall,  upon the entry  into force of  this Agreement, 
be deposited  with  the  Director-General  of  the WTO 

The acceptance and entry  into force of a Plurilateral  Trade  Agreement  shall  be governed  by 
4. 
the provisions  of  that  Agreement.  Such Agreements  shall  be deposited  with the  Director-General  to 
the CONTRACTING  PARTIES  to GATT  1947.  Upon the entry into force of  this Agreement,  such 
Agreements  shall  be deposited  with the  Director-General  of  the WTO. 

Article XV 

Withdrawal 

1. 
Any  Member may  withdraw  from this Agreement.  Such withdrawal  shall  apply both to this 
Agreement and the Multilateral Trade Agreements and shall take effect upon the expiration of six months 
from the date on which written notice of withdrawal  is received by the Director-General  of the WTO. 

Withdrawal  from a Plurilateral Trade Agreement  shall  be governed by the provisions of that 

2. 
Agreement. 

Article XVI 

Page 18 

Miscellaneous Provisions 

1. 
Except  as otherwise provided  under  this Agreement  or the  Multilateral  Trade  Agreements, 
the WTO  shall  be  guided  by  the  decisions,  procedures  and  customary  practices  followed  by  the 
CONTRACTING PARTIES to GATT 1947 and the bodies established in the framework of GATT 1947. 

2. 
To the extent practicable, the Secretariat  of GATT  1947 shall become the Secretariat  of the 
WTO, and the Director-General  to the CONTRACTING  PARTIES to GATT  1947, until such time 
as the  Ministerial  Conference  has appointed  a Director-General  in accordance  with  paragraph  2 of 
Article VI of this Agreement,  shall serve as Director-General  of the WTO. 

In the event of a conflict between a provision of this Agreement and a provision of any of the 
3. 
Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict. 

Each Member shall ensure the conformity of its laws, regulations and administrative procedures 

4. 
with  its obligations as provided  in the annexed Agreements. 

5. 
No reservations may be made  in respect  of any provision of this Agreement.  Reservations 
in respect of any of the provisions of the Multilateral Trade Agreements may only be made to the extent 
provided  for  in  those  Agreements.  Reservations  in  respect  of  a provision  of  a  Plurilateral  Trade 
Agreement  shall  be governed  by the provisions of that  Agreement. 

This  Agreement  shall  be reg 

6. 
Charter  of the  United  Nations. 

r~d  in accordance with the provisions  ..-; Article  102 of the 

DONE at  Marrakesh this fifteenth  day of April one thousand nine hundred and  ninety-four, 

in a single copy, in the English.  French and Spanish languages, each text being authentic. 

Explanatory  Notes 

The terms *ctiunir> " or "countries" as UNCI! in this Agreement and the Multilateral Trade Agreements are to be understood 

to include any  separate customs territory  Member of the WTO. 

In the  case  ot  a separate  customs  territory  Member  of  the  WTO.  where  an expression  in this  Agreement  and the 
•Multilateral Trade  Agreements  is qualified  by the term "national", such expression  shall  be read as pertaining to that customs 
territory,  unicsv otherwise  specified 

Page  19 

LIST  OF  ANNEXES 

ANNEX  1 

ANNEX  1A:  Multilateral  Agreements  on Trade in Goods 

General  Agreement  on Tariffs  and Trade 1994 
Agreement  on  Agriculture 
Agreement  on the Application of  Sanitary and Phytosanitary  Measures 
Agreement  on Textiles  and Clothing 
Agreement  on Technical  Barriers to Trade 
Agreement  on Trade-Related  Investment  Measures 
Agreement on Implementation of Anicle VI of the General Agreement on Tariffs and Trade  1994 
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade  1994 
Agreement  on  Preshipment  Inspection 
Agreement  on Rules  of  Origin 
Agreement  on  Import  Licensing  Procedures 
Agreement  on  Subsidies  and Countervailing  Measures 
Agreement  on  Safeguards 

ANNEX  IB:  General  Agreement  on Trade  in Services and  Annexes 

ANNEX  IC:  Agreement  on  Trade-Related  Aspects of  Intellectual  Property  Rights 

ANNEX  2 

Inderstandinc  on  Rules  and  Procedures  Governing  the Settlement  of  Disputes 

Trade  Polic\  Review  Mechanism 

ANNEX  3 

ANNEX  4 

Plurilateral  Trade  Agreements 

Agreement  on Trade  in Civil  Aircraft 
Agreement  on Government  Procurement 
Internationa]  Dairy  Agreement 
International  Bovine  Meat  Agreement 

Page 20 

Page 21 

ANNEX1 

ANNEX 1A 

MULTILATERAL  AGREEMENTS  ON TRADE IN GOODS 

General interpretative note to Annex I A: 

In the event of conflict between a provision of the General Agreement on Tariffs and Trade  1994 
and a provision of another agreement  in Annex  1A to the Agreement  Establishing  the World  Trade 
Organization (referred to in the agreements in Annex  1A as the "WTO Agreement"),  the provision 
of the other agreement  shall prevail to the extent of the conflict. 

Page 22 

GENERAL  AGREEMENT  ON TARIFFS AND TRADE  1994 

Page 23 

1. 

The General Agreement  on Tariffs  and Trade  1994 ("GATT  1994") shall consist  of: 

(a) 

the provisions in the General Agreement on Tariffs and Trade, dated 30 October  1947, 
annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee 
of the United Nations Conference on Trade and Employment  (excluding the Protocol of Provisional 
Application), as rectified, amended or modified by the terms of legal instruments which have entered 
into force  before the date of entry into force of the WTO Agreement; 

(b) 

the provisions of the legal instruments set forth below that have entered into force under 

the GATT  1947 before  the date of entry into force of the WTO Agreement: 

(i) 

protocols and certifications  relating  to tariff  concessions; 

(ii) 

protocols of accession (excluding  the provisions  (a) concerning  provisional 
application and withdrawal of provisional  application and (b) providing that 
Part II of GATT 1947 shall be applied provisionally  to the fullest  extent not 
inconsistent  with legislation existing on the date of the Protocol); 

(iii) 

-decisions on waivers granted under Article XXV of GATT  1947 and still in 
force  on the date of entry into force of the WTO Agreement'; 

(iv) 

other decisions of the CONTRACTING  PARTIES to GATT 1947; 

(c) 

the  Understandings set forth below: 

(i) 

( ii ) 

Understanding on the Interpretation of Article II: 1(b) of the General Agreement 
on Tariffs  and Trade 1994; 

Understanding on the Interpreution of Article XVII of the General Agreement 
on Tariffs  and Trade 1994; 

(iii »  Understanding on Balance-of-Paymcnts Provisions of the General Agreement 

on Tariffs  and Trade 1994; 

( i v) 

Understanding on the Interpretation of Article XXIV of the General Agreement 
on Tariffs  and Trade 1994; 

(vi 

( vi) 

Understanding  in  Respect  of  Waivers  of  Obligations  under  the  General 
Agreement on Tariffs  and Trade 1994; 

Understanding on the Interpretation of Article XXVTJJ of the General Agreement 
on Tariffs  and Trade  1994; and 

'The  waivers covered  by this provision are listed  in footnote  7 on pages  11 and  12 in Pan II of document MTNflFA of 
IS December  1993 and in MTN/FA/Corr.6 of 21 March 1994.  The Ministerial Conference  shall esablish at its first session 
a revised list of waivers covered by this provision that adds any waivers granted under GATT  1947 after  IS December  1993 
and before the date of entry into force of the WTO Agreement, and deletes the waivers which will have expired by that time. 

Page 24. 

(d) 

the Marrakesh  Protocol  to GATT  1994. 

, 2. 

Explanatory  Notes 

(a) 

The references to "contracting party " in the provisions of GATT  1994 shall be deemed 

to read  "Member".  The references  to "less-developed contracting parry" and  "developed  contracting 
party" shall be deemed to read "developing country Member" and "developed country Member".  The 
references  to  "Executive  Secretary" shall  be deemed to read  "Director-General  of  the WTO". 

(b) 

The references to the CONTRACTING PARTIES acting jointly in Articles XV: 1, XV:2. 
XV:8.  XXXVIII  and the Notes Ad Article XII and XVIII;  and in the provisions on special  exchange 
agreements  in Articles  XV:2,  XV:3,  XV:6.  XV:7 and XV:9  of  GATT  1994 shall  be deemed  to be 
references  to  the  WTO.  The  other  functions  that  the  provisions  of  GATT  1994  assign  to  the 
CONTRACTING  PARTIES  acting jointly  shall  be allocated  by the Ministerial  Conference. 

(c). 

(i) 

The  text  of  GATT  1994 shall  be authentic  in English,  French  and  Spanish. 

(ii) 

The  text  of  GATT  1994  in  the  French  language  shall  be  subject  to  the 

rectifications  of  terms  indicated  in Annex  A to document  MTN.TNC/41. 

(iii) 

The  authentic  text  of  GATT  1994  in  the  Spanish  language  shall  be  the  text 
in  Volume  IV  of  the  Basic  Instruments  and Selected  Documents  series,  subject  to  the  rectifications 
of  terms  indicated  in Annex  B ro document  MTN.TNC/41. 

(a) 

3. 
The provisions of Part II of G ATT  1994 shall not apply to measures taken by a Member 
under specific  mandatory  legislation,  enacted  by that  Member  before  it became  a contracting  party 
to GATT  1947,  that  prohibits  the use,  sale or lease of  foreign-built  or foreign-reconstructed  vessels 
in commercial  applications  between points in national waters or the waters of an exclusive  economic 
zone.  This exemption applies to:  (a) the continuation or prompt renewal of a non-conforming  provision 
of  such  legislation;  and (b)  the amendment  to a non-conforming  provision of  such  legislation  to the 
extent that the amendment does not decrease the conformity of the provision with Pan II of GATT  1947. 
This  exemption  is  limited  to  measures  taken under legislation  described  above  that  is  notified  and 
specified prior to the date of entry into force of the WTO Agreement.  If such legislation is subsequently 
modified  to decrease  its conformity  with Pan II of GATT  1994, it will no longer qualify  for coverage 
under this paragraph 

(b) 

The Ministerial  Conference shall review this exemption not later than five years after 
the date of entry  into force  of  the WTO Agreement and thereafter  every two years for  as long  as the 
exemption is  in force  for the purpose of examining whether the conditions which created the need for 
the  exemption  still  prevail. 

(c) 

A Member whose measures are covered by this exemption shall annually submit a detailed 
statistical  notification  consisting  of  a five-year  moving  average  of  actual  and  expected  deliveries  of 
relevant  vessels  as well  as additional  information  on the use.  sale,  lease or repair of  relevant  vessels 
covered  by  this  exemption. 

(d) 

A  Member  that considers that this exemption operates  in such a manner as to justify' 
a reciprocal  and proportionate  limitation on the use, sale,  lease or repair of vessels constructed  in the 
territory  of  the  Member  invoking  the exemption  shall  be  free  to  introduce  such  a limitation  subject 
to prior  notification  to the  Ministerial  Conference. 

(e) 

This  exemption  is  without  prejudice  to solutions  concerning  specific  aspects  of  the 

legislation  covered  by  this  exemption  negotiated  in sectoral  agreements  or  in other  fora. 

UNDERSTANDING  ON  THE  INTERPRETATION  OF  ARTICLE  II:l(b) 
OF  THE  GENERAL  AGREEMENT  ON  TARIFFS  AND TRADE  1994 

Page 25 

Members  hereby agree  as  follows: 

1. 
In order to ensure transparency of the legal rights and obligations deriving from paragraph  1 (b) 
of  Anicle  II, the  nature and  level  of  any  "other duties  or charges"  levied  on bound  tariff  items,  as 
referred to in that provision, shall be recorded in the Schedules of concessions annexed to GATT  1994 
against the tariff  item to which they apply.  It is understood  that such recording does not  change  the 
legal  character  of  "other duties  or charges". 

2. 
The date as of which  "other duties or charges" are bound, for the purposes of Article  II. shall 
be  15 April  1994.  "Other duties or charges" shall therefore be recorded in the Schedules at the levels 
applying  on  this  date.  At  each  subsequent  renegotiation  of  a  concession  or  negotiation  of  a  new 
concession the applicable date for the tariff item in question shall become the date of the incorporation 
of  the  new  concession  in the appropriate  Schedule.  However,  the  date of  the  instrument  by  which 
a concession on any particular tariff item was first  incorporated into GATT  1947 or GATT  1994 shall 
also  continue  to be recorded  in column  6 of  the  Loose-Leaf  Schedules. 

3. 

"Other duties  or charges" shall  be recorded  in respect  of  all  tariff  bindings. 

Where a tariff  item has previously been the subject of a concession, the level  of  "other duties 
4. 
or  charges" recorded  in the appropriate  Schedule  shall  not  be  higher  than the  level  obtaining  at the 
time  of  the first  incorporation  of  the concession  in that Schedule.  It will  be open to any  Member  to 
challenge the existence of an "other duty or charge", on the ground that no such "other duty or charge" 
existed  at the  time  of  the  original  binding  of  the  item  in question,  as well  as  the consistency  of  the 
recorded  level  of  any. "other duty  or charge"  with the previously  bound  level,  for  a period  of  three 
years after the date of entry  into force of the WTO Agreement  or three years after the date of deposit 
with the  Director-General  of the WTO of the  instrument  incorporating  the Schedule  in question  into 
GATT  1994,  if that  is a later date. 

5.  * 
The  recording  of  "other  duties  or  charges"  in  the  Schedules  is  without  prejudice  to  their 
consistency  with rights and obligations under GATT  1994 other than those affected  by paragraph 4. 
All  Members retain the right to challenge, at any time,  the consistency  of any  "other duty or charge" 
with  such  obligations. 

For the purposes of this Understanding, the provisions of Articles XXII and XXIII of GATT  1994 

6. 
as  elaborated  and applied  by  the  Dispute  Settlement  Understanding  shall  apply. 

7. 
"Other duties  or charges" omitted  from  a Schedule  at the  time  of  deposit  of  the  instrument 
incorporating -the Schedule in question into GATT  1994 with, until the date of entry into force of the 
WTO Agreement, the Director-General to the CONTRACTING PARTIES to GATT 1947 or, thereafter, 
with the  Director-General  of the WTO. shall  not subsequently  be added to it and any  "other duty or 
charge" recorded  at a level  lower  than that prevailing  on the applicable  date shall  not be  restored  to 
that  level  unless  such additions  or changes are made  within six  months  of  the date of deposit  of .the 
instrument. 

8. 
The decision in paragraph 2 regarding the date applicable to each concession for the purposes 
of  paragraph  1(b) of  Anicle  II of  GATT  1994 supersedes  the decision  regarding the applicable date 
taken on 26  March  1980 (BISD 27S/24). 

Page 26 

UNDERSTANDING  ON  THE  INTERPRETATION  OF ARTICLE  XVH 
OF  THE  GENERAL  AGREEMENT  ON  TARIFFS  AND TRADE  1994 

Page  27 

Members, 

Noting that Article  XVII provides  for obligations  on Members  in respect  of the activities  of 
the  state  trading  enterprises  referred  to  in paragraph  1 of  Article  XVII,  which.are  required  to  be 
consistent  with the general  principles of non-discriminatory treatment prescribed  in GATT  1994  for 
governmental  measures  affecting  imports  or exports by private traders; 

Noting further  that Members  are subject to their GATT  1994 obligations  in respect  of those 

governmental  measures  affecting  state trading enterprises; 

Recognizing mat this Understanding is without prejudice to the substantive disciplines prescribed 

in  Anicle  XVII; 

Hereby  agree  as  follows: 

1 
In order to ensure the transparency of the activities of state trading enterprises, Members shall 
notify  such enterprises to the Council  for Trade in Goods,  for review by the working party to be set 
up under paragraph 5.  in accordance  with the following  working  definition: 

"Governmental  and  non-governmental  enterprises/including  marketing  boards,  which  have 
been  granted  exclusive  or  special  rights  or  privileges,  including  statutory  or  constitutional 
powers,  in the exercise  of which they  influence  through their purchases or sales the level  or 
direction  of  imports  or exports." 

This  notification  requirement  does  not  apply  to  imports  of  products  for  immediate  or  ultimate 
consumption  in governmental  use or in use by an enterprise as specified above and not otherwise  for 
resale  or use  in the production of goods  for sale. 

2 
Each Member shall conduct a review of its policy with regard to the submission of notifications 
on state trading enterprises to the Council  for Trade in Goods, taking account of the provisions of this 
Understanding.  In carrying out such a review, each Member should have regard to the need to ensure 
the maximum transparency possible in its notifications so as to permit a clear appreciation of the manner 
of  operation  of  the enterprises  notified  and the effect  of their operations on international  trade. 

. Notifications  shall  be made in accordance with the questionnaire on state trading adopted on 

3. 
24  May  1960(BISD  9S/184-185), it being understood that Membersshall notify the enterprises referred. 
to  m paragraph  )  whether or not  imports or exports have  in fact taken place. 

4. 
Any  Member  which  has  reason to believe that  another  Member  has not  adequately  met  its 
notification obligation may raise the matter with the Member concerned.  If the matter is not satisfactorily 
resolved  it may make a counter-notification  to the Council  for Trade in Goods, for consideration by 
the working  party set up under paragraph 5,  simultaneously  informing  the Member  concerned. 

5. 
A  working  party  shall  be  set  up.  on  behalf  of  the  Council  for  Trade  in Goods,  to  review 
notifications and counter-notifications.  In the light of this review and without prejudice to paragraph 4(c) 
of Anicle  XVII, the Council for Trade in Goods may make recommendations with regard to the adequacy 
of notifications and the need for further information.  The working party shall also review, in the light 
of the notifications  received, the adequacy of the above-mentioned questionnaire on state trading and 
the coverage of sute trading enterprises notified under paragraph 1.  It shall also develop an illustrative 

Page  28 

list showing the kinds of relationships between governments and enterprises, and the kinds of activities, 
engaged in by these enterprises, which may be relevant for the purposes of Article XVQ. It is understood 
that the Secretariat will  provide a general  background paper for the working  party on the  operations 
of state trading enterprises as they relate to international trade.  Membership of the working party shall 
be  open  to all  Members  indicating  their  wish to serve -on it.  It shall  meet  within a year  of  the date 
of entry into force of the WTO Agreement and thereafter at least once a year.  It shall report annually 
to the Council  for Trade in Goods.1 

The  activities of this working party shall be coordinated with those of the working group provided for in Section  m 

of the Ministerial Decision on Notification Procedures adopted on  15 April  1994. 

UNDERSTANDING  ON THE  BALANCE-OF-PAYMENTS  PROVISIONS 
OF THE  GENERAL  AGREEMENT  ON TARIFFS AND TRADE  1994 

Page 29 

Members, 

Recognizing the provisions of Articles XII and XVIII.B of GATT  1994 and of the Declaration 

on  Trade  Measures  Taken  for  Balance-of-Payments  Purposes  adopted  on  28  November  1979 
(BISD 26S/205-209, referred to in this Understanding as the "1979 Declaration") arid in order to clarify 
such provisions1; 

Hereby agree as follows: 

Application of Measures 

1. 
Members confirm their commitment to announce publicly, as soon as possible, time-schedules 
for the removal of restrictive import measures taken for balance-of-payments purposes.  It is understood 
that such time-schedules may be modified as appropriate to take into account changes in the balance-of-
payments situation.  Whenever a time-schedule is not publicly announced by a Member, that Member 
shall provide justification  as to the reasons  therefor. 

Members confirm their commitment to give preference to those measures which have the least 
2. 
disruptive effect.on trade.  Such measures (referred to in this Understanding as "price-based measures") 
shall be understood to include import surcharges, import deposit requirements or other equivalent trade 
measures with an impact  on the price of imported  goods.  It is understood  that, notwithstanding  the 
provisions of Article II, price-based measures taken for balance-of-payments purposes may be applied 
by a Member  in excess of the duties  inscribed  in the Schedule of that  Member.  Furthermore,  that 
Member shall indicate the amount by which the price-based measure exceeds the bound duty clearly 
and separately  under the notification  procedures of this  Understanding. 

3. 
Members  shall seek to avoid  the imposition of  new quantitative  restrictions  for  balance-of-
payments purposes unless, because of a critical balance-of-payments situation, price-based  measures 
cannot arrest a sharp deterioration in the external payments position.  In those cases in which a Member 
applies quantitative restrictions, it shall provide justification as to the reasons why price-based measures 
are not an adequate instrument to deal with the balance-of-payments situation.  A Member maintaining 
quantitative  restrictions  shall  indicate in successive consultations  the progress made  in  significantly 
reducing  the incidence and  restrictive effect  of such measures.  It  is understood  that  not more than 
one type of restrictive import measure taken for balance-of-payments  purposes may be applied on the 
same product. 

Members confirm that restrictive import measures taken for balance-of-payments purposes may 
4. 
only be applied to control the general level of imports and may not exceed what is necessary to address 
the balance-of-payments situation.  In order to minimize any incidental protective effects,  a Member 
shall administer  restrictions in a transparent manner.  The authorities of the importing Member shall 
provide adequate justification as to the criteria used to determine which products are subject to restriction. 
As provided  in paragraph 3 of Anicle XII and paragraph  10 of Article XVIII, Members may,  in the 
case of certain essential products, exclude or limit the application of surcharges applied across the board 

'Nothing in this Undersunding is intended to modify the rights and obligations of Members under Anicles  XII or XVD1:B 
of GATT  1994.  The provisions of Anicles XXII and XXIT1 of GATT  1994 as elaborated and applied by the Dispute Settlement 
Undersunding  may be invoked with respect to any matters arising from the application of restrictive import measures uken 
for  balance-of-payments  purposes. 

Page  30 

or other measures  applied for balance-of-payments  purposes.  The term  "essential products" shall be 
understood to mean products which meet basic consumption needs or which contribute to the Member's 
effort to improve its balance-of-payments situation, such as capital goods or inputs needed for production. 
In the administration of quantitative restrictions, a Member shall use discretionary licensing only when 
unavoidable and shall phase it out progressively.  Appropriate justification shall be provided as to the 
criteria  use.  ;o determine  allowable  import  quantities  or values. 

Procedures for  Balance-of~Payments  Consultations 

5. 
The Committee on Balance-of-Payments Restrictions (referred to in this Understanding as the 
"Committee")  shall  carry  out consultations  in order to  review  all  restrictive  import  measures  taken 
for balance-of-payments purposes.  The membership of the Committee is open to all Members indicating 
their wish to serve on it.  The Committee shall follow the procedures for consultations on balance-of-
payments restrictions approved on 28  April  1970 (BISD  18S/48-53, referred to in this Understanding 
as  "full  consultation procedures"),  subject to the provisions  set out below. 

6. 
A Member applying new restrictions or raising the general level of its existing restrictions by 
a substantial  intensification  of the measures shall enter into consultations with the Committee  within 
four  months  of  the adoption of  such  measures.  The  Member  adopting  such measures  may  request 
that a consultation  be held  under paragraph 4(a) of Anicle  XII  or paragraph  12(a) of  Anicle  XVIII 
as  appropriate.  If no  such  request  has been made,  the Chairman  of  the Committee  shall  invite the 
Member to hold such a consultation.-  Factors that may be examined in the consultation would include, 
inter  alia,  the  introduction  of  new types  of  restrictive measures  for  balance-of-payments  purposes, 
or an increase  in the  level  or product coverage of  restrictions. 

All  restrictions  applied for balance-of-payments purposes shall be subject to periodic  review 

7. 
in the Committee under paragraph 4(b) of Article XII or under paragraph  12(b) of Article XVIII, subject 
to the possibility of altering the periodicity of consultations in agreement with the consulting Member 
or pursuant  to any specific  review procedure that may  be recommended  by the General  Council. 

8 
Consultations  may  be held under the simplified  procedures approved on  19 December  1972 
(BISD  20S/47-49,  referred  to  in this  Understanding  as  "simplified  consultation  procedures")  in the 
case  of  least-developed  country  Members  or in the case  of developing  country  Members  which are 
pursuing liberalization efforts  in conformity with the schedule presented to the Committee  in previous 
consultations  Simplified  consultation procedures may  also be used when the Trade Policy  Review 
of  a developing  country  Member  is  scheduled  for  the  same  calendar  year  as  the date  fixed  for  the 
consultations.  In such cases  the decision as to whether full  consultation procedures  should  be used 
will  be made on the basis of the factors enumerated  in paragraph 8 of the  1979 Declaration.  Except 
in the case  of  least-developed country  Members,  no more than two successive  consultations may  be 
held  under simplified  consultation procedures. 

Notification and  Documentation 

9. 
A  Member  shall  notify  to  the  General  Council  the  introduction  of  or  any  changes  in  the 
application  of  restrictive  import  measures  taken  for  balance-of-payments  purposes,*as  well  as  any 
modifications  in time-schedules  for the removal  of  such measures as announced under paragraph  1. 
Significant  changes  shall  be notified  to  the General  Council  prior to or not  later than 30 days  after 
their  announcement.  On  a  yearly  basis,  each  Member  shall  make  available  to  the  Secretariat  a 
consolidated notification, including all changes in laws, regulations, policy statements or public notices, 
for examination  by  Members.  Notifications  shall  include  full  information,  as far as possible, at the 
tariff-line  level,  on the type  of  measures  applied, the criteria used  for their administration,  produa 
coverage  and trade flows  affected. 

Page 31 

10. 
At the request of any Member .-notifications may be reviewed by the Committee.  Such reviews 
would be limited to the clarification of specific issues raised by a notification or examination of whether 
a  consultation  under paragraph 4(a)  of  Article XII or paragraph  12(a)  of  Article  XVIII  is  required. 
Members  which have reasons to believe that a restrictive import measure applied by another Member 
was taken for balance-of-payments  purposes may bring the matter to the attention of the Committee. 
The  Chairman  of  the  Committee  shall  request  information  on the  measure  and make  it available  to 
all  Members.  Without  prejudice  to the  right  of any  member  of  the Committee  to  seek  appropriate 
clarifications  in the course of consultations, questions may be submitted  in advance for  consideration 
by  the consulting  Member. 

11. 
The consulting Member shall prepare a Basic Document for the consultations which, in addition 
to any other information considered to be relevant, should include:  (a) an overview of the balance-of-
payments situation and prospects, including a consideration of the internal and external factors having 
a bearing on the balance-of-payments situation and the domestic policy measures taken in order to restore 
equilibrium on a sound and lasting basis;  (b) a full description of the restrictions applied for balance-of-
payments purposes, their legal basis and steps taken to reduce incidental protective effects;  (c) measures 
taken since the last consultation to liberalize  import restrictions, in the light of the conclusions  of the 
Committee; 
(d)  a  plan  for  the  elimination  and  progressive  relaxation  of  remaining  restrictions. 
References  may be made, when relevant, to the information provided in other notifications  or reports 
made  to  the  WTO.  Under  simplified  consultation procedures,  the  consulting  Member  shall  submit 
a written statement  containing essential  information  on the elements covered by the Basic  Document. 

The Secretariat  shall,  with a view to facilitating  the consultations  in the Committee,  prepare 
12 
a factual background paper dealing with the different  aspects of the plan for consultations.  In the case 
of developing country Members, the Secretariat document shall include relevant background and analytical 
material  on  the  incidence  of  the  external  trading  environment  on  the  balance-of-payments  situation 
and  prospects  of  the  consulting  Member.  The  technical  assistance  services  of  the  Secretariat  shall, 
at  the  request  of  a  developing  country  Member,  assist  in  preparing  the  documentation  for  the 
consultations. 

Conclusions of Balance-of-Payments  Consultations 

1 ? 
.  The Committee shall report on its consultations to the General Council.  When full consultation 
procedures  have  been  used,  the  repon  should  indicate the Committee's  conclusions  on the  different 
elements of the plan for consultations, as well as the facts and reasons on which they are based.  The 
Committee  shall  endeavour  to  include  in  its  conclusions  proposals  for  recommendations  aimed  at 
promoting the implementation of Articles XII and XVIII:B, the 1979 Declaration and this Understanding. 
In those  cases  in which  a time-schedule  has been presented  for  the  removal  of  restrictive  measures 
taken  for  balance-of-payments  purposes,  the General  Council  may  recommend  that,  in  adhering  to 
such a time-schedule, a Member shall be deemed to be in compliance with its GATT  1994 obligations. 
Whenever  the  General  Council  has  made  specific  recommendations,  the  rights  and  obligations  of 
Members  shall be assessed in the light of such recommendations.  In the absence of specific proposals 
for recommendations by the General Council, the Committee's conclusions should record the different 
views expressed in the Committee.  When simplified consultation procedures have been used, the report 
shall  include a summary of the main elements discussed  in the Committee  and a decision on whether 
full  consultation  procedures are required. 

Page 32 

UNDERSTANDING  ON  THE  INTERPRETATION  OF  ARTICLE  XXTV 
OF  THE  GENERAL  AGREEMENT  ON TARIFFS  AND TRADE  1994 

Page  33 

Members, 

Having  regard  to the provisions  of  Article  XXIV  of GATT  1994; 

Recognizing  that  customs  unions  and free  trade areas have greatly  increased  in number and 
importance  since the establishment  of GATT  1947 and today cover a significant  proportion of  world 
trade; 

Recognizing  the  contribution  to  the  expansion  of  world  trade  that  may  be  made  by  closer 

integration  between  the economies  of  the parties to such agreements; 

Recognizing  also that such contribution is increased if the elimination between the constituent 
territories of duties and other restrictive regulations of commerce extends to all trade, and diminished 
if  any major  sector  of trade  is excluded; 

Reaffirming that  the  purpose  of  such  agreements  should  be  to  facilitate  trade  between  the 
constituent  territories  and  not  to  raise  barriers  to the trade of  other  Members  with  such  territories; 
and that  in their  formation  or enlargement  the parties to them should  to the greatest  possible  extent 
avoid  creating  adverse effects  on the trade of other Members; 

Convinced also of  the need to reinforce  the effectiveness  of the role of the Council  for Trade 
in Goods in reviewing agreements notified under Article XXIV. by clarifying the criteria and procedures 
for the assessment  of new or enlarged agreements, and improving the transparency of all Article XXIV 
agreements; 

Recognizing  the  need  for  a  common  understanding  of  the  obligations  of  Members  under 

paragraph  12 of  Anicle  XXIV; 

Hereby  agree  as  follows: 

Customs unions, free-trade areas, and interim agreements leading to the formation of a customs 
1. 
union or free-trade  area, to be consistent  with Anicle  XXIV, must satisfy,  inter alia,  the  provisions 
of  paragraphs  5.  6.  7 and 8 of  that  Anicle. 

Article  XXIV.5 

2. 
The  evaluation under paragraph 5(a) of  Article XXIV  of  the general  incidence  of  the duties 
and other regulations of commerce  applicable before and after the formation of  a customs union shall 
in respect of duties and charges be based upon an overall assessment of weighted average tariff  rates 
and of  customs  duties  collected.  This  assessment  shall be based on  import  statistics  for a previous 
representative  period  to  be  supplied  by  the  customs  union,  on  a tariff-line  basis  and  in values  and 
quantities, broken down by WTO country of origin.  The Secretariat shall compute the weighted average 
uriff  rates and customs  duties  collected  in accordance with the methodology  used  in the assessment 
of uriff  offers  in the Uruguay Round of Multilateral Trade Negotiations.  For this purpose, the duties 
and charges to be uken  into consideration shall be the applied rates of duty.  It is recognized that for 
the purpose  of  the  overall  assessment  of  the  incidence  of  other  regulations  of  commerce  for  which 
quantification and aggregation aretufficult. the examination of individual measures, regulations, products 
covered  and trade  flows  affected  may  be required.. 

Page  34 

3. 
The  "reasonable length of time" referred to in paragraph 5(c) of Article  XXTV should exceed 
10 years only in exceptional  cases.  In cases where Members  parties to an interim agreement  believe 
that  10 years  would  be  insufficient  they shall  provide a full  explanation to the Council  for Trade  in 
Goods  of  the need  for a longer period. 

Article  XXIV:6 

Paragraph 6 of Article XXIV esublishes the procedure to be followed when a Member forming 
4. 
a customs union proposes to increase a bound rate of duty.  In this regard Members  reaffirm  that the 
procedure set forth in Anicle  XXVIII, as elaborated  in the guidelines adopted on  10 November  1980 
(BISD 27S/26-28) and in the Understanding on the Interpretation of  Anicle  XXVIII of GATT  1994, 
must be commenced before tariff concessions are modified or withdrawn upon the formation of a customs 
union or an interim agreement leading  to the formation  of a customs  union. 

5. 
These  negotiations  will  be  entered  into  in  good  faith  with  a  view  to  achieving  mutually 
satisfactory compensatory adjustment.  In such negotiations, as required by paragraph 6 of Article XXTV, 
due account  shall  be uken  of  reductions of duties on the same uriff  line made by other constituents 
of  the  customs  union  upon  its  formation.  Should  such  reductions  not  be  sufficient  to provide  the 
necessary* compensator)' adjustment,  the customs  union  would  offer  compensation,  which may  take 
the form  of  reductions of duties on other tariff  lines.  Such an offer  shall be uken  into consideration 
by  the  Members  having  negotiating  rights  in the binding being modified  or withdrawn.  Should the 
compensatory adjustment remain unacceptable, negotiations should be continued.  Where, despite such 
efforts,  agreement  in negotiations  on  compensatory  adjustment  under  Article  XXVIII  as  elaborated 
by the Understanding on the Interpretation of Article  XXVIII of GATT  1994 cannot be reached within 
a  reasonable period  from the initiation of negotiations, the customs union shall,  nevertheless, be free 
to modify  or withdraw the concessions;  affected Members shall then be free to withdraw substantially 
equivalent  concessions  in accordance  with  Article  XXVIII. 

6. 
GATT  1994 imposes no obligation on Members benefiting from a reduction of duties consequent 
upon the formation of a customs union, or an interim agreement leading to the formation of a customs 
union,  to provide  compensatory' adjustment  to its constituents. 

Review  of  Customs  Unions and  Free-Trade Areas 

All notificatioas made under paragraph 7(a) of Article XXIV shall be examined by a worVing 
7. 
party in the light of the relevant provisions of GATT  1994 and of paragraph  1  of this Undersu*.^.';r,g. 
The working party shall submit a report to the Council for Trade in Goods on its findings in this regard. 
The Council for Trade in Goods may make such recommendations to Members as it deems appropriate. 

In  regard  to  interim  agreements,  the  working  party  may  in  its  report  make  app*r; ^?te 
8 
recommendations  On the proposed  time-frame  and on  measures  required to complete  the  for:- 
;>n 
of the customs union or free-trade area  It may if necessary provide for further review of the agreement. 

9. 
Members parties to an interim agreement shall notify substantial changes in the plan and schedule 
included  in that agreement  to the Council  for Trade in Goods and, if so requested, the Council  shall 
examine  the changes. 

10. 
Should an interim agreement notified under paragraph 7(a) of Anicle XXIV not include a plan 
and  schedule,  contrary  to  paragraph  5(c)  of  Anicle  XXIV.  the  working  party  shall  in  its  report 
recommend  such  a plan and  schedule..  The parties  shall  not mainuin  or put  into force,  as the case 
may be, such agreement if they are not prepared to modify  it in accordance with these recommendations. 
Provision  shall  be made  for subsequent  review of the  implementation  of the  recommendations. 

Page  35 

Customs  unions  and constituents  of  free-trade  areas  shall  report periodically  to the Council 
11. 
for Trade in Goods, as envisaged by the CONTRACTING PARTIES to GATT 1947 in their instruction 
to the GATT 1947 Council concerning reports on regional agreements (BISD 18S/38), on the operation 
of  the  relevant  agreement.  Any  significant  changes  and/or  developments  in the  agreements  should 
be  reported  as they occur. 

Dispute  Settlement 

12. 
The provisions of  Articles  XXII and XXIII of GATT  1994 as elaborated and applied  by the 
Dispute Settlement Undersunding may be invoked with respect to any maners arising from the application 
of those provisions of Article  XXIV relating to customs unions, free-trade areas or interim agreements 
leading  to the formation  of  a customs  union or free-trade  area. 

Article  XXIV.I2 

Each Member  is fully  responsible under GATT  1994 for the observance of all provisions  of 

13. 
GATT  1994. and shall take such reasonable measures as may be available to it to ensure such observance 
by  regional  and local  governments  and authorities within  its territory. 

The provisions  of  Anicles  XXII  and XXIII of GATT  1994  as elaborated  and applied  by the 
14. 
Dispute Settlement Undersunding may be invoked in respect of measures affecting its observance taken 
by regional  or local  governments  or authorities within the territory of a Member.  When the Dispute 
Senlement Body has ruled that a provision of GATT  1994 has not been observed, the responsible Member 
shall take such'reasonable measures as may be available to it to ensure its observance.  The provisions 
relating  to compensation  and suspension  of concessions  or other obligations  apply  in cases  where it 
has  not  been possible  to secure such observance. 

15. 
Each Member undertakes to accord sympathetic consideration to and afford adequate opportunity 
for consultation regarding any representations made by another Member concerning measures affecting 
the operation  of  GATT  1994 uken  within the territory  of the  former. 

Page  36 

UNDERSTANDING  IN RESPECT  OF WAIVERS OF  OBLIGATIONS 
UNDER  THE  GENERAL  AGREEMENT  ON TARIFFS  AND TRADE 1994 

Page 37 

Members hereby agree as follows: 

1. 
A request for a waiver or for an extension of an existing waiver shall describe the measures 
which the Member proposes to take, the specific policy objectives which the Member seeks to pursue 
and the reasons which prevent the Member from achieving its policy objectives by measures consistent 
with  its obligations under GATT  1994. 

Any waiver in effect  on the date of entry into force of the WTO Agreement  shall terminate, 
2. 
unless extended in accordance with the procedures above and those of Anicle IX of the WTO Agreement, 
on  the  date  of  its  expiry' or  two years  from  the  date  of  entry  into  force  of  the  WTO Agreement, 
whichever  is earlier. 

Any Member considering that a benefit accruing to it under GATT  1994 is being nullified  or 

3. 
impaired  as a result of 

(a) 

the  failure  of  the  Member  to whom  a waiver  was  granted  to observe  the  terms  or 
conditions of the waiver, or 

(b) 

the application of a measure consistent with the terms and conditions of the waiver 

may  invoke thé provisions of Anicle XXIII of GATT  1994 as elaborated and applied by the Dispute 
Settlement  Understanding. 

Page 38 

UNDERSTANDING  ON  THE  INTERPRETATION  OF  ARTICLE  XXVIII 
OF  THE  GENERAL  AGREEMENT  ON  TARIFFS  AND  TRADE  1994 

Page  39 

Members hereby agree  as follows: 

1. 
For the purposes of modification  or withdrawal  of a concession,  the Member  which has the 
highest  ratio of  exports  affected  by the concession  (i.e.  exports  of  the product  to the market  of  the 
Member modifying or withdrawing the concession) to its total exports, shall be deemed to have a principal 
supplying interest if it does not already have an initial negotiating right or a principal supplying interest 
as provided  for  in paragraph  1 of  Article  XXVIII.  It is however  agreed that this paragraph will  be 
reviewed  by the Council  for Trade in Goods five years from the date of entry into force of the WTO 
Agreement  with  a  view  to  deciding  whether  this  criterion  has  worked  satisfactorily  in  securing  a 
redistribution of negotiating rights in favour of small  and medium-sized  exporting Members.  If this 
is  not  the case,  consideration  will  be given to possible  improvements,  including,  in the  light  of  the 
availability  of adequate data, the adoption of a criterion based on the ratio of exports affected  by the 
concession  to exports  to all  markets  of  the product  in question. 

Where a Member considers that it has a principal  supplying interest in terms of paragraph  1, 
2 
it  should  communicate  its  claim  in writing,  with supporting  evidence,  to the  Member  proposing  to 
modify  or  withdraw  a concession,  and at the same time  inform  the  Secreuriat.  Paragraph 4  of  the 
"Procedures for Negotiations under Article XXVIH" adopted on 10 November 1980 (BISD 27S/26-28) 
shall  apply  in these cases. 

3 
In the determination of which Members have a principal supplying interest (whether as provided 
for  in paragraph  1 above or  in paragraph  1 of  Article XXVIII) or substantial  interest,  only  trade in 
the affected product which has taken place on an MFN basis shall be uken into consideration.  However, 
trade  in the  affected  product  which  has  taken place under non-contractual  preferences  shall  also  be 
taken into account  if the trade in question has ceased to benefit from such preferential treatment, thus 
becoming MFN trade, at the time of the negotiation for the modification or withdrawal of the concession, 
or  will  do  so  by the conclusion  of  that negotiation. 

4 
When a tariff concession is modified or withdrawn on a new product (i.e. a product for which 
three years' trade statistics are not available) the Member possessing  initial negotiating  rights on the 
tariff line where the product is or was formerly classified shall be deemed to have an initial negotiating 
right m the concession in question.  The determination of principal supplying and substantial interests 
and the calculation of compensation shall take into account, inter alia, production capacity and investment 
in the affected  product  in the exporting Member and estimates of export growth, as well as  forecasts 
of demand for the product in the importing Member.  For the purposes of this paragraph, "new product" 
is  understood  to include  a uriff  item created  by means of  a breakout  from  an existing  tariff  line. 

Where a Member  considers that it has a principal supplying or a substantial  interest in. terms 
5. 
of paragraph 4.  it should communicate  its claim in writing, with supporting evidence, to the Member 
proposing to modify or withdraw a concession, and at the same time inform the Secreuriat.  Paragraph  4 
of the above-mentioned  "Procedures for Negotiations under Anicle XXVIH" shall apply in these cases. 

6. 
When an unlimited uriff concession is replaced by a uriff rate quota, the amount of compensation 
provided should exceed the amount of the trade actually affected by the modification of the concession. 
The basis  for the calculation of compensation  should be the amount by which future trade prospects 

Page  40 

exceed  the  level  of  the quou.  It is understood  that the  calculation  of  future  trade prospects  should 
be based  on the greater  of: 

(a) 

the average annual trade in the most recent representative three-year period, increased 
by the average annual growth rate of  imports  in that same period,  or by  10 per cent, 
whichever  is the greater;  or 

(b) 

trade in the most  recent year  increased  by  10 per cent. 

In no case shall a Member's liability for compensation exceed that which would be emailed by complete 
withdrawal  of  the concession. 

7. 
Any  Member  having  a principal  supplying  interest,  whether as provided  for  in paragraph 1 
above or in paragraph  1  of Article XXVIH,  in a concession which is modified  or withdrawn shall  be 
accorded  an  initial  negotiating  right  in  the  compensatory  concessions,  unless  another  form  of 
compensation  is agreed  by the Members  concerned. 

MARRAKESH  PROTOCOL  TO  THE 
GENERAL  AGREEMENT  ON  TARIFFS  AND  TRADE  1994 

Page 41 

Members, 

Having carried out negotiations within the framework of GATT 1947, pursuant to the Ministerial 

Declaration  on the Uruguay  Round, 

Hereby  agree as  follows: 

The  schedule  annexed  to  this  Protocol  relating  to  a  Member  shall  become  a  Schedule  to 
1. 
GATT  1994 relating to that Member on the day on which the WTO Agreement  enters into force  for 
that  Member.  Any  schedule  submitted  in accordance  with the Ministerial  Decision  on measures  in 
favour  of  least-developed  countries  shall  be deemed  to be annexed  to this  Protocol. 

2. 
The  tariff  reductions  agreed  upon by each  Member  shall  be  implemented  in five  equal  rate 
reductions, except  as may be otherwise specified  in a Member's  Schedule.  The first  such  reduction 
shall be made effective on the date of entry into force of the WTO Agreement, each successive reduction 
shall  be made  effective  on  1 January of  each of the following  years,  and the final  rate shall  become 
effective  no later than the date four years after  the date of  entry  into force  of the WTO Agreement, 
except  as may  be otherwise  specified  in that  Member's  Schedule.  Unless  otherwise  specified  in  its 
Schedule, a Member that accepts the WTO Agreement  after  its entry into force shall, on the date that 
Agreement  enters  into  force  for  it,  make  effective  all  rate  reductions  that  have  already  uken  place 
together with the reductions which it would under the preceding sentence have been obligated to make 
effective  on  1 January  of  the year  following,  and shall  make  effective  all  remaining  rate  reductions 
on the schedule specified  in the previous sentence.  The reduced rate should in each stage be rounded 
off  to  the  first  decimal.  For  agricultural  products,  as  defined  in  Article  2  of  the  Agreement  on 
Agriculture,  the  staging  of  reductions  shall  be  implemented  as specified  in the  relevant  parts of  the 
schedules. 

3. 
The implementation  of the concessions and commitments  contained  in the schedules annexed 
to this Protocol shall, upon request, be subject to multilateral examination by the Members.  This would 
be without prejudice to the rights and obligations of Members under Agreements  in Annex  1A of the 
WTO  Agreement. 

4. 
After the schedule  annexed  to this  Protocol  relating  to a Member  has become  a Schedule  to 
GATT  1994 pursuant to the provisions of paragraph  1. such Member shall be free at any time to withhold 
or to withdraw  in whole  or in part the concession  in such Schedule  with respect  to any  product  for 
which  the principal  supplier  is  any  other  Uruguay  Round  participant  the schedule  of  which  has not 
yet  become a Schedule to GATT  1994.  Such action can. however, only be taken after written notice 
of any such withholding or withdrawal of a concession has been given to the Council for Trade in Goods 
and after consulutions have been held, upon request, with any Member, the relevant schedule relating 
to  which  has become  a Schedule to GATT  1994 and  which  has  a substantial  interest  in the product 
involved.  Any concessions so withheld or withdrawn shall be applied on and after the day on which 
the  schedule  of  the  Member  which  has  the  principal  supplying  interest  becomes  a  Schedule  to 
GATT  1994. 

5. 

(a)  Without  prejudice to the provisions of paragraph 2 of  Article 4 of the Agreement  on 
Agriculture, for the purpose of the reference  in paragraphs  1 :(b) and  1(c) of  Article 
II of GATT  1994 to the date of that Agreement, the applicable date in respect of each 
product which is the subject of a concession provided for in a schedule of concessions 
annexed  to this Protocol  shall  be the date of this Protocol. 

Page 42 

(b) 

For the purpose of the reference in paragraph 6(a) of Article II of GATT  1994 to the 
•  date  of  that  Agreement,  the applicable  date  in respect  of  a schedule  of  concessions 

annexed to this Protocol  shall  be the date of this  Protocol. 

6. 
In cases of modification or withdrawal of concessions relating to non-tariff measures as contained 
in Pan HI of the schedules, the provisions of Anicle  XXVIII of GATT  1994 and the "Procedures  for 
Negotiations  under  Anicle XXVIII" adopted  on  10 November  1980 (BISD 27S/26-28) shall  apply. 
This  would  be  without prejudice to the rights and obligations of  Members  under GATT  1994. 

7. 
In each case in which a schedule annexed to this Protocol results for any product  in treatment 
less favourable than was provided for such product in the Schedules of GATT  1947 prior to the entry 
into force of the WTO Agreement, the Member to whom the schedule relates shall be deemed to have 
taken  appropriate  action  as  would  have  been  otherwise  necessary  under  the  relevant  provisions  of 
Anicle  XXVIH of GATT  1947 or 1994.  The provisions of this paragraph shall apply only to Egypt, 
Peru  South  Africa  and Uruguay. 

The  Schedules  annexed  hereto are authentic  in the  English,  French  or  Spanish  language  as 

8. 
specified  in each Schedule. 

9. 

The date  of  this Protocol  is  15 April  1994. 

(The  agreed  schedules of  participants  will  be annexed to the Marrakesh Protocol  in the treaty  copy 
of  the WTO  Agreement.) 

Page 43 

AGREEMENT  ON  AGRICULTURE 

Members, 

Having decided  to esublish  a basis  for  initiating  a process of  reform  of trade  in agriculture 

in line with the objectives of  the negotiations  as set out  in the Punta del  Este  Declaration; 

Recalling  that their  long-term  objective  as agreed at the Mid-Term  Review  of  the  Uruguay 
Round  "is to esublish a fair and market-oriented agricultural trading system and that a reform process 
should* be initiated through the negotiation of commitments on support and protection and through the 
establishment  of  strengthened and more operationally  effective  GATT rules and disciplines"; 

Recalling  further that  "the above-mentioned  long-term objective  is to provide for substantia] 
progressive reductions in agricultural support and protection sustained over an agreed period of time, 
resulting  in correcting  and preventing  restrictions  and distortions  in world agricultural  markets"; 

Committed to achieving specific binding commitments  in each of the following areas:  market 
access;  domestic  support;  export  competition;  and  to  reaching  an  agreement  on  sanitary  and 
phytosaniury  issues; 

Having agreed that in implementing  their commitments  on market access, developed country 
Members  would  take  fully  into  account  the particular  needs  and  conditions  of  developing  country 
Members  by providing for a greater improvement of opportunities and terms of access for agricultural 
products of particular interest to these Members, including the fullest liberalization of trade in tropical 
agricultural  products as agreed at the  Mid-Term  Review,  and for products of  particular  importance 
to the diversification  of production  from the growing  of  illicit  narcotic crops; 

Noting that commitments under the reform  programme  should be made  in an equitable  way 
among all Members, having regard to non-trade concerns, including food security and the need to protect 
the environment;  having regard to the agreement that special and differential  treatment for developing 
countries is an integral element of the negotiations, and taking into account the possible negative effects 
ofthe implementation of the reform programme on  least-developed and net food-importing developing 
countries; 

Hereby agree  as  follows: 

Parti 

Article  I 

Definition of Terms 

In this  Agreement,  unless the context otherwise requires: 

(a) 

"Aggregate Measurement  of Support" and "AMS" mean the annual level  of support, 
expressed  in moneury  terms,  provided  for an agricultural  product  in favour  of  the 
producers of the basic agricultural product or non-product-specific  support provided 
in  favour  of  agricultural  producers  in  general,  other  than  support  provided  under 
programmes that qualify as exempt from reduction under Annex 2 to this Agreement, 
which is: 

Page  44 

(i)  ,  with respect to support provided during the base period, specified in die relevant 
tables of supporting material incorporated by reference in Pan IV of a Member's 
Schedule;  and 

(ii) 

with respect to support provided during any yeaiof the implementation period 
and thereafter, calculated in accordance wim the provisions of Annex 3 of this 
Agreement and taking into account the consdmeritdau and methodology used 
in the tables of supporting material  incorporated  by reference  in  Pan  IV  of 
the Member's  Schedule; 

(b) 

"basic agricultural  product" in relation to domestic support commitments  is  defined 
as the product as close as practicable to the point of first sale as specified in a Member's 
Schedule and in the related supporting material; 

(c) 

"budgeury outlays" or  "outlays" includes revenue foregone; 

(d) 

(e) 

(f) 

<g ) 

(h) 

"Equivalent  Measurement  of  Support" means the annua)  level  of support, expressed 
m monetary terms, provided to producers of a basic agricultural product through the 
application of one or more measures, the calculation of which in accordance with the 
AMS methodology  is impracticable, other than support provided under programmes 
that qualify  as exempt from  reduction under Annex  2  to this Agreement,  and which 
'•is: 

•  '•' 

- 

, 

(i) 

(ii) 

with respect to support provided during the base period, specified  in the relevant 
tables of supporting material incorporated by reference in Part IV of a Member's 
Schedule;  and 

with respect to support provided during any year of the implementation period 
and thereafter, calculated in accordance with the provisions of Annex 4 of this 
Agreement and taking into account the constituent data and methodology used 
in the ubles of  supporting  material  incorporated by  reference  in Part  IV  of 
the Member's Schedule; 

"export subsidies" refers to subsidies contingent upon export performance,  including 
the export  subsidies  listed  in Article 9  of tins  Agreement; 

"implementation percad" means the six-year period commencing in the year 1995. except 
that. for the purposes of Anicle 13. it means the nine-year period commencing in 1995 : 

"market access concessions" includes all market access commitments undertaken pursuant 
to this  Agreement; 

T o ul  Aggregate  Measurement of Support" and  "Toul  AMS" mean the sum of  all 
domestic support provided in favour of agricultural producers, calculated as the su~ 
of all aggregate measurements of support for basic agricultural products, all non-produc  -
specific aggregate measurements of support and all equivalent measurements of supper : 
for agricultural  products, and which is: 

(i) 

with respect to support provided during the base period (i.e.  the "Base Toul 
AMS") and the maximum support permitted to be provided during any year 
of the implemenution period or thereafter (i.e. the "Annual and Final Bound 
Commitment  Levels*), as specified  in Pan IV of a Member's  Schedule;  and 

Page 45 

(ii) 

with respect to the level of support actually provided during any year of the 
implementation period and thereafter (i.e.  the "Current Toul AMS"), calculated 
in accordance with the provisions of this Agreement, including Article 6. and 
with  the constituent  data and  methodology  used  in the tables  of  supporting 
material  incorporated  by reference  in Part  IV of the Member's  Schedule; 

(i) 

"year" in paragraph (f) above and in relation to the specific commitments of a Member 
refers to the calendar, financial  or marketing year specified  in the Schedule relating 
to that Member. 

Article 2 

Produa Coverage 

This Agreement applies to the products listed in Annex 1 to this Agreement, hereinafter  referred 

to as agricultural products. 

Part II 

Article 3 

Incorporation of Concessions and Commitments 

1. 
The domestic support and export subsidy commitments in Part IV of each Member's Schedule 
constitute commitments  limiting subsidization and are hereby made an integral part of GATT  1994. 

Subject to the provisions of Article 6, a Member shall not provide support in favour of domestic 

2. 
producers  in excess of the commitment  levels specified  in Section I of Part  IV of its Schedule. 

3. 
Subject  to the provisions of paragraphs 2(b) and 4 of Article 9, a Member shall  not provide 
export  subsidies  listed  in paragraph  1 of  Article 9 in respect of the agricultural  products  or  groups 
of products specified  in Section II of  Pan  IV of its Schedule  in excess of the budgetary  outlay  and 
quantity  commitment  levels specified  therein and shall not provide such subsidies in respect  of any 
agricultural  product  not specified  in that  Section of its Schedule. 

Part III 

Article 4 

Market Access 

Market access concessions contained in Schedules relate to bindings and reductions of  uriffs. 

1. 
and to other market access commitments  as specified  therein. 

Page 46 

2. 
Members shall not mainuin,  reson to, or revert to any measures of the kind which have been 
required to be converted  into ordinary customs duties', except as otherwise provided for in Article 5 
and Annex  5. 

Article  5 

Special Safeguard  Provisions 

1. 
Notwithstanding  the provisions of paragraph  1(b) of Article II of GATT  1994, any Member 
may  take  recourse to the provisions of paragraphs 4 and 5 below in connection  with the  importation 
of an agricultural product, in respect of which measures referred to in paragraph 2 of Anicle 4 of this 
Agreement have been convened into an ordinary customs duty and which is designated in its Schedule 
with the symbol  "SSG" as being the subject of a concession in respect of which the provisions of this 
Article may be invoked,  if: 

(a) 

(b) 

the volume of imports of that product entering the  customs territory of the Member 
granting the concession during any year exceeds a trigger  level  which  relates  to the 
existing market access opportunity as set out in paragraph 4;  or, but not concurrently: 

the price at which imports of that product may enter the customs territory of the Member 
granting  the concession,  as determined  on the basis of the c.i.f.  import  price of the 
shipment concerned expressed in terms of its domestic currency, falls below a trigger 
price equal to the average  1986 to 1988  reference price2 for the product  concerned. 

2. 
Imports under current and minimum access commitments  esublished as part of a concession 
referred to in paragraph 1  above shall be counted for the purpose of determining the volume of imports 
required  for invoking  the provisions of subparagraph  1(a) and paragraph 4, but imports under such 
commitments  shall not be affected  by any additional duty imposed under either subparagraph  1(a) and 
paragraph 4 or subparagraph  1(b) and paragraph 5 below. 

3. 
Any supplies of the product in question which were,en route on the basis of a contract settled 
before the additional duty is imposed under subparagraph  1(a) and paragraph 4 shall be exempted from 
any  such additional duty, provided that they may be counted in the volume of imports of the product 
in question during the following year for the purposes of triggering the provisions of subparagraph 1(a) 
in that  year. 

Any additional duty imposed under subparagraph  1(a) shall only be maintained until  the end 
4 
of  the year  in which  it has been  imposed,  and  may only  be levied  at a level  which shall  not exceed 
one  third of the level  of the ordinary customs duty  in effect  in the year in which the action is taken. 
The trigger level shall be set according to the following schedule based on market access opportunities 

'These measures include quantitative import restrictions,  variable  import levies, minimum import prices, discretionary 
import licensing,  non-tariff  measures maintained through state-trading  enterprises, voluntary export restraints, md  similar 
border  measures other  than ordinary  customs  duties,  «nether or not the measures are  maintained  under country-specific 
derogations from the provisions of GATT 1947. but not measures maintained under balance-of-payments provisions or under 
other general, non-agriculture-specific provisions of GATT  1994 or of the other Multilateral Trade Agreements in Annex  1A 
to the WTO  Agreement. 

'The reference  price used to invoke the provisions of this subparagraph shall, in general, be the average c.i.f.  unit value 
of  the product concerned, or otherwise  shall be an appropriate price  in terms of the quality of the product and its stage of 
processing.  It shall. following  its initial use. be publicly specified and available to the extent necessary to allow other Members 
to assess  the additional duty  that may  be levied. 

Page  47 

defined as imports as a percenuge of the corresponding domestic consumption3 during the three preceding 
years  for  which data are available: 

(a) 

(b) 

(c) 

where such market access opportunities for a product are less than or equal to  10 per 
cent,  the base trigger  level  shall  equal  125 per cent; 

where such market access opportunities for a product are greater than 10 per cent but 
less than or equal  to 30 per cent,  the base trigger level  shall equal  110 per cent; 

where'such market  access  opportunities  for  a product  are greater than 30  per  cent, 
the base trigger  level  shall  equal  105 per cent. 

In all  cases the additional duty may  be imposed in any year where the absolute volume of imports 
of the product concerned entering the customs territory of the Member granting the concession exceeds 
the sum of (.r) the base trigger level set out above multiplied by the average quantity of imports during 
the three preceding years for which data are available and (y) the absolute volume change in domestic 
consumption of the product concerned  in the most recent year for which dau are available compared 
to the preceding year, provided that the trigger level shall not be less than 105 per cent of the  average 
quantity  of  imports  in (x) above. 

The additional  duty imposed under subparagraph  1(b) shall be set according to the  following 

5. 
schedule: 

(a) 

(b) 

(ci 

(d) 

(e) 

if  the  difference  between  the c.i.f.  import  price  of  the  shipment  expressed  in terms 
of the  domestic currency (hereinafter referredto as the "import price") and the trigger 
price  as defined  under  that subparagraph  is  less  than or equal  to  10 per cent  of  the 
trigger price,  no additional  duty shall  be imposed; 

if the difference  between  the import price and the trigger price (hereinafter  referred 
to as the "difference") is greater than 10 per cent but less than or equal to 40 per cent 
of the trigger price, the additional duty shall equal 30 per cent of the  amount by which 
the difference  exceeds  10 per cent; 

if  the difference  is  greater  than 40 per cent  but  less  than or equal  to 60 per cent  of 
the trigger price, the additional  duty shall  equal 50 per cent of the amount  by which 
the difference  exceeds 40 per cent, plus the additional  duty allowed under (b); 

if the difference  is greater than 60 per cent but less than or equal to 75 per cent, the 
additional duty shall equal 70 per cent of the  amount by which the difference  exceeds 
60 per cent of the trigger price, plus the additional duties allowed under (b) and (c); 

if the difference  is greater  than 75 per cent  of  the trigger price,  the additional  duty 
shall  equal  90 per cent of  the amount  by  which the difference  exceeds  75 per cent, 
plus the additional  duties allowed  under (b),  (c) and (d). 

For perishable  and seasonal  products,  the conditions  set  out above shall  be applied  in such 
6. 
a manner as to uke account of the  specific characteristics of such products.  In particular, shorter time 
periods under subparagraph 1 (a) and  paragraph 4 may be used in reference to the corresponding periods 
in  the  base  period  and  different  reference  prices  for  different  periods  may  be  used  under 
subparagraph  1(b). 

'Where  domestic  consumption  is not uken  into account,  the base trigger  level  under subparagraph  4(a)  shall  apply. 

Page  48 

7. 
The operation of the special safeguard shall be carried out in a transparent manner.  Any Member 
taking action under subparagraph  1(a) above shall give notice in writing,  including  relevant dau,  to 
the Committee on. Agriculture as far in advance as may be practicable and in any event within  10 days 
of the implemenution of such action.  In cases where changes in consumption volumes must be allocated 
to individual uriff lines subject to action under paragraph 4, relevant dau shall include the information 
and methods used to allocate these changes.  A Member taking action under paragraph 4  shall  afford 
any interested Members the opportunity to consult with it in respect of the conditions of  application 
pf such action.  Any Member taking action tinder subparagraph 1(b) above shall give notice in writing, 
including relevant dau, to the Comminee on Agriculture within 10 days of the implemenution of the 
first  such action or,  for perishable and seasonal  products,  the first  action  in any period.  Members 
undertake, as  far as practicable,  not to take recourse to the provisions  of subparagraph  1(b)  where 
the volume of imports of the products concerned are declining.  In either case a Member taking such 
action shall afford any interested Members the opportunity to consult with it in respect of the conditions 
of  application of such action. 

Where measures are taken in conformity with paragraphs  1 through 7 above, Members undertake 

8. 
not to have recourse, in respect of such measures, to the provisions of paragraphs  1(a) and 3 of Article 
XIX  of GATT  1994 or paragraph 2  of  Article 8 of the Agreement  on  Safeguards. 

The provisions  pf this Article shall remain in force for the duration of the reform process as 

9. 
determined  under Article 20. 

.  Part IV 

Article  6 

Domestic  Support Commitments 

The  domestic  support  reduction  commitments  of  each  Member  contained  in  Part  IV  of  its 
1. 
Schedule shall  apply to all  of  its domestic support measures  in.favour of agricultural  producers  with 
the exception of domestic  measures which are not sub*??! ÎQ reduction in terms of the criteria set out 
in this Article and in Annex  2 to this Agreement.  TK  ^:»inmitments are expressed  in terms of Total 
Aggregate Measurement  of  Support and  "Annual an J final  Bound Commitment  Levels". 

2. 
In accordance with the Mid-Term Review Agreement that government measures of assistance. 
whether direct or indirect, to encourage agricultural and rural development  are an integral part of the 
development programmes of developing countries, investment subsidies which are generally available 
to agriculture  in developing  country Members and agricultural  input subsidies generally available to 
low-income or resource-poor producers in developing country Members shall be exempt from domestic 
support reduction commitments that would otherwise be applicable to such measures, as shall domestic 
support to producers in developing country Members to encourage diversification from growing illicit 
narcotic crops.  Domestic  support  meeting the criteria of  this paragraph shall  not be  required  to be 
included  in a Member's calculation of  its Current Toul  AMS. 

A  Member  shall  be  considered  to  be  in  compliance  with  its  domestic  support  reduction 
3. 
commitments  in any year in which its domestic support in favour of agricultural producers expressed 
in terms of Current Toul  AMS does not exceed the corresponding annual or final bound commitment 
level  specified  in Part IV of the  Member's  Schedule. 

4. 

(a) 

A Member shall not be required to include in tne calculation of its Current Toul  AMS 
and shall  not be required to reduce: 

Page  49 

(i) 

(ii) 

product-specific  domestic  support which would  otherwise  be required to be • 
included  in a Member's calculation of  its Current  AMS  where such  support 
does  not  exceed  5 per cent  of  that Member's  toul  value  of  production  of a 
basic agricultural  product during the relevant  year;  and 

non-product-specific  domestic support which would otherwise be required to 
be included in a Member's calculation of its Current AMS where such support 
does  not  exceed  5 per cent  of  the value  of  that  Member's  toul  agricultural 
production. 

(b) 

(a) 

For developing country Members, the de minimis percenuge under this paragraph shall 
be  10 per cent. 

Direct  payments  under  production-limiting  programmes  shall  not  be  subject  to  the 
commitment  to reduce domestic  support  if: 

(i) 

such payments are based on fixed  area and yields;  or 

(ii) 

such payments are made on 85 per cent or less of the base level of production; 
or 

(iii) 

livestock  payments are made on a fixed  number  of head. 

(b) 

The exemption from the reduction commitment for direct payments meeting the above 
criteria shall  be reflected  by the exclusion of the value of those direct  payments  in a 
Member's  calculation of  its Current  Toul  AMS. 

Article  7 

General Disciplines  on Domestic  Support 

1. 
Each Member shall ensure that any domestic support measures in favour of agricultural producers 
which are not subjea to reduaion commitments because they quality' under the criteria set out in Annex  2 
to this  Agreement  are maintained  in conformity  therewith. 

2. 

(a) 

Any  domestic  support  measure  in  favour  of  agricultural  producers,  including  any 
modification  to such measure,  and any measure that is subsequently  introduced that 
cannot be shown to satisfy  the criteria in Annex  2 to this Agreement  or to be exempt 
from reduction by reason of any other provision of this Agreement  shall.be  included 
in the Member's  calculation of  its Current Toul  AMS. 

(b)  Where  no  Toul  AMS  commitment  exists  in  Part  IV  of  a  Member's  Schedule,  the 
Member shall  not provide support to agricultural producers in excess  of the relevant 
de  minimis level  set out  in paragraph 4  of  Article  6. 

Page  50 

PartV 

Article  8 

Export  Competition Commitments 

Each Member  undertakes not to provide export  subsidies  otherwise  than in conformity  with 

this  Agreement  and with the commitments  as specified  in that Member's  Schedule. 

Article  9 

Expon  Subsidy Commitments 

1. 

The following  export subsidies are subject to reduction commitments  under this Agreement: 

(a) 

(b) 

(c) 

<d) 

the provision by gov?  nments or their agencies of direct subsidies, including payments-
in-kind,  to  a  firm  o  an  industry,  to  producers  of  an  agricultural  product,  to  a 
cooperative or othe : association of such producers, or to a marketing board, contingent 
on export  performance; 

the sale or disposal  for export by governments  or their agencies  of non-commercial 
stocks of agricultural  products at a price lower than the comparable price charged for 
the like product  to buyers  in the domestic  market; 

payments  on  the  export  of  an  agricultural  produa  that  are  financed  by  virtue  of 
governmental  action,  whether  or  not  a  charge  on  the  public  account  is  involved, 
including  payments  that  are  financed  from  the  proceeds  of  a  levy  imposed  on  the 
agricultural  product concerned or on an agricultural product from which the exported 
product  is derived; 

the  provision  of  subsidies  to  reduce  the  costs  of  marketing  exports  of  agricultural 
products (other than widely available export promotion and advisory services) including 
handling, upgrading and other processing costs, and the costs of international transport 
and  freight; 

(e) 

internal transport and freight charges on expon  shipments, provided or mandated by 
governments,  on terms more  favourable  than for domestic  shipments; 

(f) 

subsidies on agricultural products contingent on their incorporation in exported produa: 

2. 

(a) 

Except as provided in subparagraph (b), the export subsidy commitment levels for eac 
year of  the  implementation  period,  as specified  in a  Member's  Schedule,  represer 
with respea  to the export  subsidies  listed  in paragraph  1 of this Article: 

(i) 

(ii) 

in the case of  budgetary outlay  reduction commitments,  the maximum  level 
of expenditure for such subsidies that may be allocated or incurred in that year 
in respect of the agricultural product,  or group of products, concerned; and 

in the case of export quantity reduaion commitments,  the maximum qu  v.ity 
of an agricultural product, or group of products, in respect of which such export 
subsidies may  be granted  in that year. 

Page 51 

(b) 

In any of the second through fifth years of the implemenution period, a Member may 
provide export subsidies  listed in paragraph  1 above in a given year in excess  of the 
corresponding annual commitment levels in respect of the products or groups of products 
specified  in Part IV of the Member's  Schedule,  provided that: 

(i) 

(ii) 

(iii) 

(iv) 

the  cumulative  amounts  of  budgetary  outlays  for  such  subsidies,  from  the 
beginning of the implemenution period through the year in question, does not 
exceed the cumulative amounts that would have resulted from full  compliance 
with the relevant annual outlay commitment  levels specified  in the Member's 
Schedule by more than 3 per cent of the base period level of such budgetary' 
outlays; 

the cumulative  quantities exported with the benefit  of such export subsidies, 
from the beginning of the implemenution period through the year in question, 
does not exceed the cumulative quantities that would have resulted from  full 
compliance  with the relevant annual quantity commitment  levels  specified  in 
the Member's Schedule by more than 1.75 per cent of the base period quantities; 

the toul  cumulative  amounts  of budgetary  outlays  for such export  subsidies 
and  the  quantities  benefiting  from  such  export  subsidies  over  the  entire 
implementation period are no greater than the totals that would have resulted 
from  full  compliance  with  the  relevant  annual  commitment  levels  specified 
in the  Member's  Schedule;  and 

the  Member's  budgetary  outlays  for  export  subsidies  and  the  quantities 
benefiting from such subsidies, at the conclusion of the implemenution period, 
are no greater than 64 per cent and 79 per cent of the  1986-1990 base period 
levels, respectively.  For developing country Members these percentages shall 
be 76 and 86 per cent,  respectively. 

Commitments  relating to limitations on the extension of the scope of export subsidization are 

3. 
as  specified  in Schedules. 

During  the  implemenution  period,  developing  country  Members  shall  not  be  required  to 

4. 
undertake commitments in respect of the export subsidies listed in subparagraphs (d) and (e) of paragraph 
1 above, provided that these are not applied in a manner that would circumvent reduction commitments. 

Article  10 

Prevention of  Circumvention  of Export Subsidy  Commitments 

Export .subsidies not listed in paragraph  1  of Article 9 shall not be applied in a manner which 

1. 
results in, or which threatens to lead to, circumvention of export subsidy commitments;  nor shall non 
commercial  transactions  be used to circumvent  such commitments. 

2. 
Members  undertake to work toward the development  of internationally  agreed disciplines  to 
govern the provision of export credits, export credit guarantees or insurance programmes  and,  after 
agreement  on  such  disciplines,  to  provide  export  credits,  export  credit  guarantees  or  insurance 
programmes  only  in conformity  therewith. 

Page  52 

Any Member  which claims  mat any quantity exported  in excess of a reduaion  commitment 
3. 
level  is not subsidized must establish mat no export subsidy, whether listed in Article  9  or not,  has 
been granted in respect of the quantity of ertports in question. • 

4. 

'  Members  donors of  international  food aid shall ensure: 

(a) 

(b) 

mat the provision of international food aid is not tied directly or indirealy to commercial 
exports of agricultural  products to recipient countries; 

that international food aid transaaions, including bilateral food aid which is monetized, 
shall be carried out in accordance with the FAO  "Principles of  Surplus Disposal and 
Consultative Obligations", including, where appropriate, the system of Usual Marketing 
Requirements  (UMRs);  and 

(c) 

•  that such aid shall be provided to the extent possible  in fully  grant form or on terms 
no  less  concessional  than  those  provided  for  in  Article  IV  of  the  Food  Aid 
Convention  1986. 

Article 11 

Incorporated Products 

In no case may the per-unit subsidy paid on an incorporated agricultural primary produa exceed 

the per-unit export subsidy  that would be payable on exports of the primary  product  as such. 

Part VI 

Article  12 

1  Disciplines  on Export Prohibitions and  Restrictions 

Where  any  Member  institutes  any  new  export  prohibition  or  restriction  on  foodstuffs  in 
1. 
accordance with paragraph 2(a) of Anicle  XI of GATT 1994, the Member shall observe the following 
provisions: 

(a) 

(b) 

the Member instituting the export prohibition or restriction shall give due consideration 
to the effects of such prohibition or restriction on importing Members' food security; 

before any Member institutes an export prohibition or restriction, it shall give notice 
' in writing, as far in advance as practicable, to the Committee on Agriculture comprising 
such information  as the nature and the duration of  such measure, and shall  consult, 
upon request, with any other Member having a substantial interest as an importer with 
respect to any maner related to the measure in question.  The Member instituting such 
export  prohibition  or  restriction shall  provide,  upon  request,  such  a  Member  with 
necessary  information. 

2. 
The provisions of this Anicle shall not apply to any developing country Member,  unless the 
measure is taken by a developing country Member which is a net-food exporter of the specific  foodstuff 
concerned. 

(4 

Page  53 

Part  Vil 

Article  13 

Due Restraint 

During  the  implementation  period,  notwithstanding  the  provisions  of  GATT  1994  and  the 
Agreement  on Subsidies  and Countervailing  Measures  (referred  to  in this  Article  as  the  "Subsidies 
Agreement"): 

(a) 
Agreement  shall  be: 

-

domestic  support  measures  that conform  fully  to  the provisions  of  Annex  2  to  this 

(i) 

non-actionable  subsidies  for purposes  of countervailing  duties4: 

(ii) • 

exempt from actions based on Article XVI of GATT  1994 and Part  III of the Subsidies 
Agreement;  and 

(iii) 

exempt from actions based on non-violation nullification or impairment  of the benefits 
of uriff  concessions accruing to another Member under Article II of GATT  1994. in 
the sense  of  paragraph  1(b) of  Article  XXIII  of  GATT  1994; 

(b) 

domestic  support measures  that conform  fully  to  the  provisions  of  Article  6  of  this 
Agreement  including  direct  payments  that  conform  to  the  requirements  of  paragraph  5  thereof,  as 
reflected  in each  Member's  Schedule,  as  well  as domestic  support  within de  minimis .levels  and  in 
conformity  with paragraph  2 of  Article 6.  shall  be: 

(i) 

(ii) 

(iii) 

exempt from the imposition of countervailing duties unless a determination of injury 
or threat  thereof  is  made  in  accordance  with  Article  VI  of  GATT  1994  and  Part V 
of  the  Subsidies  Agreement,  and  due  restraint  shall  be  shown  in  initiating  any 
countervailing  duty  investigations; 

exempt from actions based on paragraph  1 of Article  XVI of GATT 1994 or Articles  5 
and 6 of the Subsidies Agreement, provided that such measures do not grant support 
to  a specific  commodity  in excess  of  that decided  during  the  1992  marketing  year; 
and 

exempt from actions based on non-violation nullification or impairment of the benefits 
of uriff  concessions accruing to another Member under Article II of GATT  1994,  in 
the  sense  of  paragraph  1(b)  of  Article  XXIII  of  GATT  1994,  provided  that  such 
measures do not grant support to a specific commodity  in excess of that decided during 
the  1992 marketing  year; 

(c) 

export subsidies that conform  fully  to the provisions of Part V of this Agreement,  as 

reflected  in each  Member's  Schedule, shall be: 

(i) 

subjea  to countervailing  duties only upon a determination of  injury or threat thereof 
based on volume, effect on prices, or consequent impact in accordance with Article VI 
of GATT 1994 and Part V of the Subsidies Agreement, and due restraint shall be shown 
. in initiating  any countervailing  duty  investigations;  and 

"Countervailing  duties" where  referred  to in this Anicle  are those covered  by  Article  VI of  GATT  1994 and Part V 

of  the  Agreement  on  Subsidies  and  Countervailing  Measures. 

Page  54 

(ii) 

exempt  from  acne  based on Article  XVI  pf GATT  1994 or Articles  3,  5  and 6  of 
the Subsidies  Agreement. 

Part  VIII 

Article  14 

Sanitary and  Phytosanitary  Measures 

Members agree to give effect to the Agreement on the Application of Sanitary and Phytosanitary 

Measures. 

Part DC 

Article  15 

Special and Differential Treatment 

In keeping with the recognition that differential  and more favourable treatment for developing 
1. 
country  Members  is an integral  part of  the negotiation,  special  and differential  treatment  in respect 
of commitments shall be provided as set out in the relevant provisions of this Agreement and embodied 
in the  Schedules  of  concessions  and commitments. 

2. 
Developing country Members shall have the flexibility  to implement  reduaion commitments 
over a period of up to 10 years.  Least-developed country Members shall not be required to undertake 
reduction  commitments. 

Part X 

Article  16 

Least-Developed  and Net Food-Importing Developing  Countries 

1.  • 
Developed  country  Members  shall take such aaion  as is provided for within the  framework 
of the Decision on Measures Concerning the Possible Negative Effects  of the Reform Programme, on 
Least-Developed  and  Net  Food-Importing  Developing  Countries. 

2. 

The Committee  on Agriculture shall monitor, as appropriate, the follow-up to this Decision. 

Part XI 

Article  17 

Committee on  Agriculture 

A  Committee  on Agriculture  is hereby  established. 

Page 55 

Article  18 

Review of the Implementation of Commitments 

Progress in the implemenution  of commitments  negotiated under the Uruguay Round reform 

1. 
programme  shall  be reviewed  by the Committee  on Agriculture. 

The review process shall  be undertaken on the basis of notifications  submitted  by  Members 
2. 
in relation to such maners and at such intervals as shall be determined, as well as on the basis of such 
documentation as the Secreuriat may be requested to prepare in order to faciliute the review process. 

In addition to the notifications to be submitted under paragraph 2, any new domestic support 
3. 
measure, or modification of an existing measure, for which exemption from reduction is claimed shall 
be  notified  promptly.  This notification  shall  contain deuils  of the new or modified  measure  and its 
conformity  with the agreed  criteria as set out either  in Article 6 or in Annex 2. 

In the review process Members shall give due consideration to the influence of excessive rates 

4- 
of  inflation  on the ability  of any  Member  to abide by  its domestic  support commitments. 

5 
Members  agree  to  consult  annually  in the  Comminee  on  Agriculture  with  respect  to  their 
participation  in the  normal  growth  of  world  trade  in agricultural  products  within the  framework  of 
the  commitments  on export  subsidies  under this  Agreement. 

The review process shall provide an opportunity for Members to raise any matter relevant to 

6 
the  implementation  of  commitments  under the reform  programme  as set out in this  Agreement. 

Any Member  may bring to the attention of the Comminee  on Agriculture any measure which 

it considers  ought  to have been notified  by another Member. 

Article  19 

Consultation and Dispute Settlement 

The provisions of  Articles  XXII and XXIII of GATT  1994, as elaborated and applied by the 
Dispute  Settlement  Undersunding.  shall  apply  to consultations and the settlement  of disputes under 
this  Agreement. 

Part XII 

Article  20 

Continuation  of the Reform Process 

Recognizing  that the long-term objective of substantial progressive reduaions in support and 
protection  resulting  in fundamenul  reform  is an ongoing  process.  Members  agree that  negotiations 
for continuing the process will be initiated one year before the end of the implemenution period, taking 
into account: 

(a) 

the experience  to that date from  implementing  the reduaion  commitments; 

(b) 

the effects  of the reduction commitments  on world trade in agriculture; 

Page  56 

(c) 

non-trade concerns, special and differential treatment to developing country Members, 
and the objective to establish a fair and market-oriented agricultural  trading system] 
and the other objectives and concerns mentioned in the preamble to this  Agreement; 
and 

(d) 

what  further  comniitments  are necessary  to achieve  the above mentioned  long-term 
objectives. 

Part XIII 

Article  21 

Final Provisions 

The provisions  of  GATT  1994 and of other Multilateral  Trade Agreements  in Annex  1A to 

1. 
the WTO Agreement  shall  apply subjea  to the provisions of this  Agreement. 

2. 

The  Annexes to this Agreement are hereby made an integral  part of this  Agreement. 

Page  57 

ANNEX  1 

PRODUCT  COVERAGE 

1. 

This  Agreement  shall  cover  the following  products: 

(i) 

(ii) 

HS  Chapters  1 to 24 

less  fish and fish products, plus* 

HSCode 

HSCode 

HS  Heading 

HS  Headings 

HSCode 

HSCode 

HS  Headings 

HS  Heading 

HS  Headings 

HS  Headings 

HS  Headings 

HS  Heading 

HS  Heading 

2905.43 

2905.44 

33.01 

(mannitol) 

(sorbitol) 

(essential  oils) 

35.01  to  35.05 

(albuminoidal  subsunces.  modified 
starches,  glues) 

3809.10 

3823.60 

(finishing  agents) 

(sorbitol  n.e.p.) 

41.01  to 41.03 

(hides and  skins) 

43.01 

(raw  furskins) 

50.01  to 50.03 

(raw silk  and silk  waste) 

51.01  to 51.03 

(wool  and animal  hair) 

52.01  to 52.03 

(raw cotton,  waste and cotton carded 
or combed) 

53.01 

53.02 

(raw  flax) 

(raw hemp) 

The  foregoing  shall  not  limit  the product coverage of  the Agreement  on the  Application  of 

2. 
Sanitary  and  Phytosaniury  Measures. 

•The product descriptions  in round brackets are not necessarily  exhaustive. 

Page  58 

ANNEX  2 

DOMESTIC  SUPPORT  THE BASIS  FOR  EXEMPTION  FROM 
THE REDUCTION  COMMITMENTS 

1. 
Domestic support measures for which exemption from the reduction commitments  is claimed 
shall meet the fundamenul  requirement that they have no, or at most minimal, trade-distorting  effects 
or effects  on production.  Accordingly,  all  measures  for  which  exemption  is claimed  shall  conform 
to the  following  basic criteria: 

(a) 

the  support  in  question  shall  be  provided  through  a  publicly-funded  government 
programme  (including  government  revenue  foregone)  not  involving  transfers  from 
consumers;  and. 

(b) 

the support in question shall not have the effect-of providing price support to producers; 

plus policy-specific  criteria and conditions  as set out  below. 

Government Service  Programmes 

2. 

General service:» 

Policies in this category involve expenditures (or revenue foregone) in relation to programmes 
which provide services or benefits to agriculture or the rural community.  They shall not involve direct 
payments  to producers or processors.  Such programmes,  which  include but are not restricted  to the 
following list, shall meet the general criteria in paragraph 1 above and policy-specific conditions where 
set  out  below. 

(a) 

(b) 

research,  including  general  research,  research  in  connection  with  environmental 
programmes,  and research programmes  relating  to particular products; 

pest and disease control, including general and product-specific pest and disease control 
measures,  such as early-warning  systems,  quarantine and eradication; 

(O 

training  services,  including  both general  and specialist  training  facilities; 

(d) 

extension  and  advisor)'  services,  including  the  provision  of  means  to  faciliute  the 
transfer of  information  and the results of  research to producers and consumers; 

(e) 

inspection services, including general inspection services and the inspection of particular 

.  products  for health,  safety,  grading or standardization purposes; 

(0 

(g) 

marketing and promotion serv  ~  :  . including market information, advice and promotion 
relating to particular products  :..  excluding expenditure for unspecified purposes that 
could be used by sellers to reduce their selling price or confer a direct economic benefit 
to purchasers; and 

infrastructural  services,  including: electricity  reticulation,  roads and other means  of 
transport, market and port facilities, water supply facilities, dams and drainage schemes, 
and infrastructural works associated with environmental programmes.  In all cases the 
expenditure  shall  be directed  to the provision or construction of  capital  works  only, 
and  shall  exclude  the  subsidized  provision  of  on-farm  facilities  other  than  for  the 

Page  59 

reticulation of generally available public utilities.  It shall not include subsidies to inputs 
or operating costs, or preferential  user charges. 

3. 

Public stockholding for food security purposes5 

Expenditures  (or revenue foregone)  in relation to the accumulation and holding  of  stocks of 
products which form an integral part of a food security programme  identified  in national  legislation. 
This may  include government  aid to private storage of products as part of  such a programme. 

The volume and accumulation of such stocks shall correspond to predetermined targets 
related solely to food security.  The process of stock accumulation and disposal shall 
be financially transparent.  Food purchases by the government shall be made at current 
market  prices  and sales  from  food  security  stocks  shall  be made  at no less  than the 
current domestic market price for the product and quality  in question. 

4. 

Domestic  food aid6 

Expenditures (or revenue foregone) in relation to the provision of domestic food aid to sections 

of  the population in need. 

Eligibility  to  receive the food  aid shall  be subjea  to clearly-defined  criteria related 
to nutritional  objectives.  Such aid shall be in the form of direct provision of food  to 
those concerned or the provision of means to allow eligible recipients to buy food either 
at market or at subsidized prices.  Food purchases by the government shall be made 
at  current  market  prices  and  the  financing  and  administration  of  the  aid  shall  be 
transparent. 

5. 

Direct  payments .to producers 

Support provided through direct payments (or revenue foregone,  including payments in kind) 
to producers for which exemption from reduction commitments  is claimed shall meet the basic criteria 
set out  in paragraph  1 above, plus specific  criteria applying to individual  types of direct payment  as 
set out in paragraphs 6 through 13 below.  Where exemption from reduction is claimed for any existing 
or new type of direct payment other than those specified  in paragraphs 6 through  13, it shall  conform 
to criteria  (b) through  (e)  in paragraph 6,  in addition to the general  criteria set out  in paragraph  1. 

6. 

Decoupled  income support 

(a) 

Eligibility  for such payments shall  be determined  by clearly-defined  criteria such as 
income, sums as a producer or landowner, faaor use or production level in a denned 
and fixed  base period. 

'For die purposes of paragraph 3 of this Annex, governmental stockholding programmes for food  security purposes in 
developing countries whose operation is transparent and conducted in accordance with officially  published objective criteria 
or  guidelines shall be considered  to be in conformity  with the provisions of this paragraph,  including  programmes  under 
which  stocks of foodstuffs for food  security purposes are acquired and released at administered  prices,  provided  that the 
difference  between  die acquisition  price  and the external  reference  price  is accounted for in the  AMS. 

'**For the purposes of paragraphs  3 and 4 of this Annex, the provision of foodstuffs  at subsidized prices with the objective 
of meeting  food  requirements of urban and rural poor in developing countries on a regular basis at reasonable prices  shall 
be  considered  to be in conformity  with the  provisions of this paragraph. 

Page  60 

(b) 

(c) 

(d) 

The amount  of such payments in any given year shall not be related to,  or based on, 
the type or volume of production (including livestock units) undertaken by the producer 
in any year after  the base period. 

The amount of such payments  in any given year shall not be related to, or based on, 
the prices,  domestic  or  international,  applying  to any production undertaken  in any 
year after the base period. 

The amount  of such payments in any given year shall not be related  tc,  or based on, 
the factors  of production employed  in any year after  the base period. 

(e) 

No production  shall  be required  in order to receive  such payments. 

7. 

Government  financial  participation  in income  insurance and income  safety-net  programmes 

(a) 

'  . Eligibility for such payments shall be determined by an income loss, taking into account 
only  income  derived  from  agriculture,  which  exceeds  30 per  cent  of  average  gross 
income or the equivalent in net income terms (excluding any payments from the same 
or similar  schemes)  in the preceding three-year period or a three-year average based 
on the preceding  five-yea:  period,  excluding  the highest  and the lowest  entry.  Any 
producer meeting  this condition shall be eligible  to receive the payments. 

(b) 

The  amount  of  such  payments  shall  compensate  for  less  than  70 per  cent  of  the 
. producer's  income  loss  in  the  year  the  producer  becomes  eligible  to  receive  this 

assisunce. 

(c) 

The amount of any such payments shall  relate solely  to income;  it shall  not relate to 
the type or volume of production (including livestock units) undertaken by the producer: 
or to the prices, domestic or international, applying to such production; or to the factors 
of  production employed. 

(d)  Where a producer receives in the same year payments under this paragraph and under 
paragraph  8 (relief from natural disasters), the toul of such payments shall be less than 
100 per cent  of the producer's total  loss. 

8. 

Payments (made either direaly or by way of government financial  participation in crop insurance 
schemes)  for  relief  from  natural  disasters 

(a) 

(b) 

(c) 

Eligibility  for  such  payments  shall  arise  only  following  a  formal  recognition  by 
government authorities that a natural or like disaster (including disease outbreaks, pest 
infestations,  nuclear accidents,  and war on  the territory  of  the  Member  concerned) 
has occurred  or  is  incurring;  and shall  be determined  by  a production  loss  which 
exceeds  30 per ces.  y  the average  of  production  in the prec?v:ng three-year period 
or a three-year average based on the preceding five-year period, excluding the highest 
and the lowest  entry. 

Payments made following a disaster shall be applied only in respect of losses of income, 
livestock (including payments in connection with the veterinary treatment of animals), 
land or other production faaors  due to the natural disaster  in question. 

Payments  shall  compensate  for not more  than the toul  cost  of  replacing  such  losses 
and shall  not  require or specify  the type or quantity of future production. 

Page 61 

(d) 

Payments  made  during  a disaster  shall  not  exceed  the  level  required  to  prevent  or 
alleviate  further  loss as defined  in criterion (b) above. 

(e)  Where a producer receives in the same year payments under this paragraph and under 
paragraph 7 (income insurance and income safety-net  programmes),  the toul  of such 
payments  shall  be less  than  100 per cent  of the producer's  total  loss. 

9. 

Structural  adjustment  assistance provided through producer  retirement  programmes 

(a) 

(b) 

Eligibility for such payments shall be determined by reference to clearly defined criteria 
in programmes designed to faciliute the retirement of persons engaged  in marketable 
agricultural  production, or their movement  to non-agricultural  activities. 

Payments shall be conditional upon the toul and permanent retirement of the recipients 
from  marketable  agricultural  production. 

10. 

Structural  adjustment  assistance  provided through  resource  retirement  programmes 

(a) 

(b) 

(c) 

(d) 

Eligibility for such payments shall be determined by reference to clearly defined criteria 
in programmes designed to remove land or other resources, including livestock,  from 
marketable  agricultural  production. 

Payments shall be conditional upon the retirement of land from marketable agricultural 
• produaion for a minimum of three years, and in the case of livestock on -its slaughter 
or definitive  permanent  disposal. -

Payments shall not require or specify any alternative use for such land or other resources 
which  involves  the production of marketable agricultural  products. 

Payments shall not be related to either the type or quantity of production or to the prices, 
domestic  or international, applying to production undertaken using the land or other 
resources  remaining  in production. 

11. 

Structural  adjustment  assistance provided  through  investment  aids 

(a) 

(b) 

(c) 

Eligibility for such payments shall be determined by reference to clearly-defined criteria 
in government  programmes  designed to assist the financial  or physical  restructuring 
of  a  producer's  operations  in  response  to  objectively  demonstrated  structural 
disadvantages.  Eligibility for such programmes may also be based on a clearly-defined 
government  programme  for the reprivatization of  agricultural  land. 

The amount of such payments  in any given year shall  not be related to, or based on, 
the type or volume of produaion (including livestock units) undertaken by the producer 
in any year after the base period other than as provided for under criterion (e) below. 

The amount of such payments  in any given year shall  not be related to,  or based on, 
the prices,  domestic  or international,  applying  to any production  undertaken  in any 
year after  the base period. 

(d) 

The payments shall be given only for the period of time necessary  for the realization 
of  the  investment  in respect of which they are provided. 

Page  62 

(e) 

(f) 

The payments shall  not mandate or in any way designate the agricultural products to 
be produced by the recipients except to require them not to produce a particular product. 

The payments shall be limited to the amount required to compensate for the structural 
disadvantage. 

12. 

Payments  under environmental  programmes 

(a) 

Eligibility for such payments shall be determined as part of a clearly-defined government 
environmental or conservation programme and be dependent on the fulfilment of specific 
conditions under the government programme, including conditions related to production 
methods  or inputs. 

(b) 

The amount of payment shall be limited to the extra costs or loss of income  involved 
in complying  with the government  programme. 

13. 

Payments  under  regional  assistance  programmes 

(a) 

(b) 

(c) 

(d ) 

(e) 

(0 

Eligibility  for such payments shall be limited to producers in disadvanuged  regions. 
Each  such  region  must  be a clearly  designated  contiguous  geographical  area with a 
definable  economic  and administrative  identity,  considered  as disadvanuged  on the 
basis of neutral and objective criteria clearly spelt out in law or regulation and indicating 
-that the  region's  difficulties  arise out of more than temporary  circumstances. 

The amount  of such payments  in any given year shall not be related to, or based on, 
the type or volume of production (including livestock units) undertaken by the producer 
in any year after  the base period other than to reduce that produaion. 

The amount  of such payments in any given year shall not be related to, or based on, 
the prices,  domestic  or  international,  applying  to any produaion  undertaken  in any 
year after  the base period. 

Payments shall be available only to producers in eligible regions, but generally available 
to all  producers  within such regions. 

Where related to production factors, payments shall be made at a degressive rate above 
a threshold  level  of  the  factor concerned. 

The  payments  shall  be  limited  to  the  extra  costs  or  loss  of  income  involved  in 
undertaking  agricultural  produaion  in the prescribed area. 

Page  63 

ANNEX  3 

DOMESTIC  SUPPORT:  CALCULATION  OF AGGREGATE  MEASUREMENT  OF  SUPPORT 

1. 
Subject to the provisions of Article 6, an Aggregate Measurement  of Support (AMS) shall be 
calculated on a product-specific basis for each basic agricultural product receiving market price support, 
non-exempt direct payments, or any other subsidy not exempted from the reduction commitment  ("other 
non-exempt policies").  Support which is non-product specific  shall be totalled into one non-product-
specific  AMS  in total  monetary terms. 

Subsidies  under paragraph  1 shall  include both  budgetary  outlays and revenue  foregone  by 

2. 
governments  or their agents. 

3. 

4. 

Support  at both the  national  and sub-national  level  shall  be  included. 

Specific  agricultural  levies or fees  paid by producers  shall  be deducted  from  the AMS. 

The  AMS calculated as outlined below for the base period shall constitute the base level  for 

5. 
the  implementation  of the  reduction commitment  on domestic  support. 

For each  basic  agricultural  product, a specific  AMS  shall  be esublished,  expressed  in  toul 

6 
monetary  value terms. 

7 
The  AMS  shall  be  calculated  as  close  as  practicable  to  the  point  of  first  safe  of  the  basic 
agricultural  product concerned.  Measures directed at agricultural processors shall be included to the 
extent  that such measures  benefit  the producers of the basic agricultural  products. 

8 
Market price support:  market price support shall be calculated using the gap between a fixed 
external  reference  price  and the applied  administered  price multiplied  by the quantity  of  production 
eligible  to  receive  the applied  administered  price.  Budgetary  payments  made  to mainuin  this gap, 
such  as buying-in or storage  costs,  shall  not be included  in the AMS. 

9 
The fixed external reference price shall be based on the years  1986 to 1988 and shall generally 
be the average f.o.b.  unit value for the basic agricultural product concerned in a net exporting country 
and the average c.i.f  unit value for the basic agricultural product concerned in a net importing country 
in the base period.  The fixed reference  price may be adjusted  for  quality differences  as  necessary. 

Non-exempt direct  payments:  non-exempt direct payments  which are dependent  on a price 

10. 
gap shall be calculated either using the gap between the fixed reference price and the applied administered 
price  multiplied  by  the  quantity  of  production  eligible  to  receive  the  administered  price,  or  using 
budgetary  outlays. 

The fixed reference price shall be based on the years  1986 to  1988 and shall generally be the 

11. 
actual  price used for determining  payment rates. 

Non-exempt  direct  payments  which  are based on faaors  other than price shall  be  measured 

12. 
using  budgetary  outlays. 

13. 
Other non-exempt measures, including input subsidies arri ouro measure suc± as marktting-cost 
reduaion measures:  the value of such measures shall be measured using government budgetary outlays 
or,  where the use of budgetary  outlays does not reflea  the full  extent  of the subsidy concerned,  the 
basis for calculating the subsidy shall  be the gap between the price of the subsidized good or service 

Page  64 

and a represenutive market price for a similar good or service multiplied  by the quantity of the good 
or  service. 

Page 65 

ANNEX  4 

POMESTIC  SUPPORT: 
CALCULATION  OF  EQUIVALENT MEASUREMENT  OF SUPPORT 

1. 
Subject to the provisions of Article 6, equivalent measurements  of support shall be calculated 
in respect of all basic agricultural  products where market price support as defined  in Annex  3 exists 
but for which calculation of this component of the AMS is not practicable.  For such products the base 
level for implemenution of the domestic support reduction commitments shall consist of a market price 
support component expressed in terms of equivalent measurements of support under paragraph 2 below. 
as well  as any  non-exempt  direct payments  and other non-exempt  support,  which shall  be  evaluated 
as  provided  for  under paragraph  3  below.  Support  at both  national  and  sub-national  level  shall  be 
included. 

The-equivalent  measurements  of support  provided  for  in paragraph  1 shall  be  calculated  on 
2. 
a product-specific  basis for all basic agricultural  products as close as practicable to the point  of first 
sale receiving market price support and for which the calculation of the market price support component 
of the AMS is not praaicable.  For those basic agricultural products, equivalent measurements of market 
price support shall be made using the applied administered price and the quantity of produaion eligible 
to receive that price or, where this is not practicable, on budgetary outlays used to maintain the producer 
price. 

Where basic agricultural products falling under paragraph  1 are the subject of non-exempt direct 
3. 
payments or any other product-specific subsidy not exempted from the reduaion commitment, the basis 
for  equivalent  measurements  of  support  concerning  these  measures  shall  be  calculations  as  for  the 
corresponding  AMS  components  (specified  in paragraphs  10 through  13 of  Annex  3). 

4. 
Equivalent  measurements  of support shall be calculated on the amount of subsidy  as close  as 
practicable  to the point of first sale of  the basic agricultural  product  concerned.  Measures  directed 
at agricultural  processors  shall  be included to the extent  that such measures  benefit  the producers  of 
the basic agricultural  products.  Specific agricultural  levies or fees paid by producers shall  reduce the 
equivalent  measurements  of  support  by a corresponding  amount. 

Page  66 

SPECIAL TREATMENT  WITH RESPECT  TO PARAGRAPH  2  OF ARTICLE  4 

ANNEX  5 

Section  A 

The provisions of paragraph 2 of Article 4 shall not apply with effea  from the entry into force 
1. 
of the WTO Agreement to any primary agricultural product and its worked and/or prepared products 
("designated  products")  in respect  of  which the  following  conditions  are complied  with  (hereinafter 
referred  to as  "special treatment"): 

(a) 

imports of  the designated products  comprised  less  than 3 per cent of  corresponding 
domestic  consumption  in the base period  1986-1988  ("the  base period"); 

(b)  * . no export subsidies have been provided since the beginning of the base period for the 

designated products; 

(c) 

effective production-restricting measures are applied to the primary agricultural produa; 

(d) 

(e) 

such products are designated with the symbol  "ST-Annex 5" in Section I-B of  Part I 
of a Member's Schedule annexed to the Marrakesh Protocol, as being subject to special 
treatment  reflecting  factors  of  non-trade  concerns,  such  as  food  security  and 

*  environmental  protection;  and 

minimum  access  opportunities  in respect  of  the designated  products  correspond,  as 
specified  in Section I-B of Part I of the Schedule of the Member concerned, to 4 per cent 
of  base period domestic  consumption of the designated products from the beginning 
of  the  first  year  of  the  implemenution  period  and,  thereafter,  are  increased  by 
0.8  per cent of  corresponding domestic  consumption in the base period per year for 
the  remainder  of  the  implemenution  period. 

2. 
At the beginning of any year of the implemenution period a Member may cease to apply  special 
treatment  in respect of  the designated products by complying  with the provisions  of paragraph 6.  In 
such a case, the Member concerned shall maintain the minimum access opportunities already in effect 
at such time and increase the minimum access opportunities by 0.4  per cent of corresponding domestic 
consumption  in the base period per year for the remainder of the implemenution  period.  Thereafter, 
the  level  of  minimum  access  opportunities  resulting  from  this  formula  in  the  final  year  of  the 
implementation  period  shall  be maintained  in the Schedule  of  the Member  concerned. 

3. 
Any negotiation on the question of whether there can be a continuation of the special treatment 
as set out in paragraph  1  after the end of the implementation period shall be completed within the time 
frame  of  the  implementation  period  itself  as  a part  of  the  negotiations  set  out  in Article  20  of  this 
Agreement,  uking  into account  the  (; r.ors of  non-trade concerns. 

If  it  is  agreed  as  a result  of  me  negotiation  referred  to  in paragraph  3  that a  Member  may 
4. 
continue to apply the special treatment, such Member shall confer additional and acceptable concessions 
as determined  in that negotiation. 

Where  the special  treatment  -: not to be continued  at the end of the  implementation  period, 
5. 
the  Member  concerned shall  implern 
the provisions of paragraph 6.  In such a case, after the end 
of  the implemenution  period the minimum  access opportunities  for the designated  products shall  be 

Page  67 

maintained at the level of 8 per cent of corresponding domestic consumption in the base period in the 
Schedule  of  the Member  concerned. 

6. 
Border measures  other than ordinary customs duties maintained  in respect of  the designated 
products shall become subjea to the provisions of paragraph 2 of Article 4 with effect from the beginning 
of the year in which the special treatment ceases to apply.  Such products shall be subject to ordinary 
customs duties,  which  shall  be bound  in the Schedule  of  the  Member  concerned  and applied,  from 
the beginning of the year in which special treatment ceases and thereafter, at such rates as would have 
been applicable had a reduction of at least 15 per cent been implemented over the implemenution period 
in equal annual  instalments.  These duties shall be esublished  on the basis of uriff  equivalents to be 
calculated  in accordance  with the guidelines prescribed  in the atuchment  hereto. 

Section B 

7. 
The provisions of paragraph 2 of Article 4 shall also not apply with effect  from the entry into 
force of  the WTO Agreement  to a primary agricultural  product that is the predominant  staple  in the 
traditional diet ôf a developing country Member and in respect of which the following  conditions, in 
addition to those specified  in paragraph  1(a) through  1(d), as they apply to the products  concerned, 
are complied  with: 

(a) 

minimum  access opportunities  in respect  of  the products  concerned,  as  specified  in 
Section 1-B of  Part.I of  the Schedule of the developing  country Member  concerned, 
correspond to 1 per cent of base period domestic consumption of the products concerned 
from  the beginning of  the first year of the  implemenution  period  and are  increased 
in equal annual  instalments to 2 per cent of corresponding  domestic  consumption  in 
the base period at the beginning of the fifth year of the implemenution period.  From 
the  beginning  of  the  sixth  year  of  the  implemenution  period,  minimum  access 
opportunities  in  respect  of  the  products  concerned  correspond  to  2 per cent  of 
.  corresponding domestic consumption in the base period and are increased in equal annual 
instalments to 4  per cent of corresponding domestic  consumption  in the base period 
until  the  beginning  of  the  10th  year.  Thereafter,  the  level  of  minimum  access 
opportunities  resulting  from this formula  in the  10th year shall  be maintained  in the 
Schedule  of  the developing  country  Member  concerned; 

(b i 

appropriate market access opportunities have been provided for in other products under 
this  Agreement. 

8 
„ Any negotiation on the question of whether there can be a continuation of the special treatment 
as set out m paragraph 7 after trie end of the  10th year following the beginning of the  implemenution 
period  shall  be  initiated  and  completed  within  the  time-frame  of  the  10th year  itself  following  the 
beginning  of  the implemenution  period. 

If  it  is  agreed  as  a result  of  the  negotiation  referred  to  in paragraph  8  that a Member  may 
9 
continue to apply the special treatment, such Member shall confer additional and acceptable concessions 
as determined  in that negotiation. 

In the event that special  treatment  under paragraph 7  is not to be continued beyond the  10th 
10. 
year  following  the beginning  of  the implemenution  period,  the products  concerned  shall  be subject 
to ordinary customs duties, esublished on the basis of a uriff equivalent to be calculated in accordance 
with the guidelines prescribed  in the atuchment  hereto, which shall be bound in the Schedule of the 
Member  concerned.  In other respects, the provisions of  paragraph 6 shall  apply as modified  by the 
relevant special and differential treatment accorded to developing country Members under this Agreement. 

Page 68 

Atuchment  to Annex 5 

Guidelines for the Calculation of Tariff 
Equivalents for the Specific  Purpose  Specified in 
Paragraphs 6 and  10 of this Annex 

The  calculation of the uriff  equivalents,  whether expressed as ad valorem or specific  rates, 
1. 
shall be made using the actual difference between internal ar& external prices in a transparent manner. 
Dau  used shall be for the years  1986 to 1988.  Tariff  equivalents: 

(a) 

shall  primarily  be esublished  at the four-digit  level  of the  HS; 

(b) 

(c) 

shall  be esublished  at the six-digit  or a  more  details  ;evel  of  the HS  wherever 
appropriate; 

shall generally be esublished for worked and/or prepared products by multiplying the 
specific uriff equivalent(s) for the primary agricultural product(s) by the proportion(s) 
in value terms or in physical terms as appropriate of the primary agricultural product(s) 
in the worked and/or prepared products,  and take account,  where  necessary,  of any 
additional  elements  currently providing protection to industry. 

External prices shall be, in general, actual average c.i.f. unit values for the importing country. 

2. 
Where  average c.i.f.  unit values are not available or appropriate,  external  prices shall  be either: 

(a) 

appropriate average c.i.f.  unit values of a near country;  or 

(b) 

estimated from average f.o.b. unit values of (an) appropriate major exporter(s) adjusted 
by adding an estimate of insurance,  freight  and other relevant costs to the importing 
country. 

The external prices shall generally be converted to domestic currencies using the annual average 

3. 
market  exchange  rate for the same period as the price data. 

The internal  price shall  generally be a represenutive  wholesale  price  ruling  in the  domestic 

4. 
market or an estimate  of that price  where adequate data is not available. 

The initial uriff equivalents may be adjusted, where necessary, to take account of differences 

5. 
in quality- or variety  using  an appropriate  coefficient. 

6. 
Where a tariff equivalent resulting from these guidelines is negative or lower than the current 
bound  rate, the initial  uriff  equivalent  may  be esublished  at the current  bound  rate or on the basis 
of  national  offers for that  produa. 

7. 
Where an adjustment is made to the level of a tariff equivalent which would have resulted from 
the above guidelines, the Member concerned shall afford, on request, full opportunities for consultation 
with a view  to negotiating  appropriate solutions. 

Page  69 

AGREEMENT  ON  THE  APPLICATION  OF 
SANITARY  AND PHYTOSANITARY  MEASURES 

Members, 

Reaffirming that no Member should be prevented from adopting or enforcing measures necessary 
to protect  human,  animal  or plant  life  or health,  subject  to the  requirement  that these  measures  are 
not  applied  in a manner  which  would  constitute  a means  of  arbitrary  or unjustifiable  discrimination 
between Members where the same conditions prevail or a disguised restriction on international trade; 

Desiring to improve the human health, animal health and phytosanitary situation in all Members ; 

Noting  that  saniury  and  phytosanitary  measures  are often  applied  on  the  basis  of  bilateral 

agreements  or protocols; 

Desiring  the establishment  of a multilateral  framework  of  rules  and disciplines  to guide  the 
development,  adoption and enforcement  of saniury and phytosanitary measures  in order to minimize 
their  negative  effects  on trade; 

Recognizing  the 

important  contribution  that 

international  standards,  guidelines  and 

recommendations  can make  in this regard; 

Desiring to further the use of harmonized, saniury and phytosanitary measures between Members. 
on  the  basis  of international  standards,  guideline's  and  recommendations  developed  by  the  relevant 
international  organizations,  including  the Codex  Alimentarius  Commission,  the International  Office 
of Epizootics, and the relevant international and regional organizations operating within the framework 
of the International Plant Proteaion Convention, without requiring Members to change their appropriate 
level  of  protection  of  human,  animal  or plant  life  or health; 

Recognizing that developing country Members may encounter special difficulties  in complying 
with the saniury  or phytosaniury  measures of  importing  Members,  and as a consequence  in access 
to markets, and also in the formulation and application of saniury  or phytosanitary measures  in their 
own  territories,  and desiring  to assist  them  in their endeavours  in this regard; 

Desiring therefore to elaborate rules for the application of the provisions of G ATT  1994 which 
relate to the use of saniury or phytosaniury measures, in particular the provisions of Article  XX(b)1, 

Hereby agree  as  follows: 

'In this  Agreement,  reference  to Article  XX(b)  includes also the  chapeau  of that  Anicle. 

Page  70 

Article  1 

General  Provisions 

This  Agreement  applies  to  all  sanitary  and phytosanitary  measures  which  may,  directly  or 
;oped and applied in accordance with 

1. 
indirectly, affect international trade.  Such measures shall be df 
the provisions  of this  Agreement. 

2. 

3. 

For the purposes of  this  Agreement,  the definitions  provided  in Annex  A  shall  apply. 

The  annexes are an integral  part of this  Agreement. 

Nothing in this Agreement shall affea the rights of Members under the Agreement on Technical 

4. 
Barriers to Trade  with  respect  to measures  not within the scope of  this  Agreement. 

Article  2 

Basic Rights and  Obligations 

Members have the right to take sanitary and phytosanitary measures necessary for the protection 
1. 
of  human,  animal  or  plant  life  or health,  provided  that  such  measures  are not  inconsistent  with  the 
provisions  of  this  Agreement. 

2. 
Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent 
necessary  to protect human,  animal  or plant life or health, is based on scientific  principles and is not 
maintained  without sufficient  scientific  evidence, except as provided for in paragraph 7  of Article  5. 

Members  shall  ensure  that  their  sanitary  and  phytosaniury  measures  do  not  arbitrarily  or 
3. 
unjustifiably  discriminate  between  Members  where identical  or similar conditions prevail,  including 
between  their own  territory  and that of  other  Members.  Sanitary  and phytosaniury  measures  shall 
not  be applied  in a manner  which  would constitute  a disguised  restriaion  on  international  trade. 

4. 
Sanitary or phytosanitary measures whichconform  to the relevant provisions of this Agreement 
shall  be presumed  to be  in accordance with the obligations  of  the Members  under the provisions  of 
GATT  1994 which relate to the use of saniury or phytosanitary measures, in particular the provisions 
of  Anicle  XX(b). 

Article  3 

Harmonization 

1. 
To  harmonize saniury and phytosanitary measures on as wide a basis as possible.  Members 
shall  base  their  sanitary  or  phytosanitary  measures  on  international  standards,  guidelines  or 
recommendations, where they exist, except as otherwise provided for in this Agreement, and in particular 
in paragraph  3. 

Page 71 

2. 
Saniury  or phytosaniury  measures  which  conform  to  international  standards,  guidelines or 
recommendations  shall  be deemed  to be necessary to protect  human,  animal  or plant  life  or health, 
and presumed  to be consistent with the relevant provisions  of  this Agreement  and of  GATT  1994. 

3. 
Members may introduce or mainuin saniury or phytosaniury measures which result in a higher 
level of saniury or phytosaniury proteaion than would be achieved by measures based on the relevant 
international  standards, guidelines  or recommendations,  if  there is a scientific justification,  or as a 
consequence of the level of saniury or phytosaniury proteaion a Member determines to be appropriate 
in accordance with the relevant provisions of paragraphs  1 through 8 of Article 5.2  Notwithstanding 
the above, all measures which result in a level of sanitary or phytosaniury  proteaion different  from 
that  which  would  be  achieved  by  measures  based  on  international  standards,  guidelines  or 
recommendations  shall  not be inconsistent  with any other provision of this Agreement. 

4. 
Members shall play a full part, within the limits of their resources, in the relevant international 
organizations  and  their  subsidiary  bodies,  in particular  the  Codex  Alimentarius  Commission,  the 
International  Office  of  Epizootics, and the international  and regional  organizations  operating  within 
the framework of the International Plant Protection Convention, to promote within these organizations 
the development  and periodic  review of standards,  guidelines and  recommendations  with respect to 
all  aspects of  sanitary  and phytosanitary  measures. 

5. 
The Committee  on Sanitary' and Phytosaniury  Measures provided  for in paragraphs  1 and 4 
of Article  12 {referred to in this Agreement as the "Committee") shall develop a procedure to monitor 
the  process  of  international  harmonization  and  coordinate  efforts  in  this  regard  with  the  relevant 
international  organizations. 

Article  4 

Equivalence 

Members shall accept the saniury or phytosaniury measures of other Members as equivalent, 
1. 
even if these measures differ from their own or from those used by other Members trading in the same 
product, if the  exporting Member objectively demonstrates to the importing Member that its measures 
achieve the importing  Member's  appropriate  level  of saniury  or phytosaniury  protection.  For this 
purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing 
and other relevant procedures. 

Members shall, upon request, enter into consulutions with the aim of achieving bilateral and 
2. 
multilateral agreements on recognition of the  equivalence of specified saniury or phytosanitary measures. 

'For the purposes of paragraph 3 of Article 3. there is a scientific  justification  if.  on the basis of an examination  and 
evaluation of available scientific  information n conformity  wfch ihe relevant provisions of mis Agreement, a Member determines 
mat the relevam  international  standards, guidelines or recommendations  are not sufficient  to achieve  its appropriate  level 
of  saniury  or phytosaniury  protection. 

Page  72 

Article  5 

Assessment  of Risk  and Determination  of the Appropriate  Level 
of  Sanitary  or Phytosanitary  Protection 

1. 
Members shall ensure that their saniury or phytosaniury measures are based on an assessment, 
as appropriate to the circumstances,  of the risks to human, animal  or plant life or health, taking  into 
account  risk assessment  techniques developed  by the relevant  international  organizations. 

2. 
•  In the assessment of risks. Members shall uke into account available scientific evidence;  relevant 
processes  and production methods;  relevant  inspection,  sampling  and testing  methods;  prevalence 
of  specific  diseases  or  pests;  existence  of  pest-  or  disease-free  areas;  relevant  ecological  and 
environmental  conditions; and quarantine  OT other treatment. 

In assessing the risk to animal or plant life or health and determining the measure to be applied 
3. 
for achieving  the appropriate  level  of saniury  or phytosamiary proteaion  from  such risk.  Members 
shall take into account as relevant economic factors : the potential damage in terms of loss of production 
or sales  in the event  of  the  entry,  esublishment  or spread  of a pest  or disease;  the costs  of  control 
or eradication in the territory of the importing Member;  and the relative cost-effectiveness of alternative 
approaches  to  limiting  risks. 

Members should, when determining the appropriate level of saniury or phytosaniury protection, 

4. 
take  into account the objective  of  minimizing  negative trade  effects. 

5. 
With the objective  of  achieving  consistency  in the application  of  the  concept  of  appropriate 
level  of  sanitary  or  phytosanitary  protection  against risks to human  life  or health,  or to animal  and 
plant  life  or  health,  each  Member  shall  avoid  arbitrary  or.unjustifiable  distinctions  in  the  levels  it 
considers  to  be  appropriate  in different  situations,  if  such  distinctions  result  in discrimination  or a 
disguised restriction on international trade.  Members shall cooperate in the Committee,  in accordance 
with paragraphs  1. 2 and 3 of Article  12. to develop guidelines to further the practical  implementation 
of this provision,  in developing the guidelines. the Committee shall take into account all relevant factors. 
including the exceptional character of human health risks to which people voluntarily expose themselves. 

Without prejudice  to paragraph 2 of  Article  3.  when esublishing  or maintaining  sanitary  or 
6. 
phytosanitary measures to achieve the appropriai? 1?vel of saniury or phytosanitary proteaion. Members 
shall ensure that such measures are not more trs  <  restrictive than required to achieve their appropriate 
level  of  sanitary  or phytosanitary  protection, uxing  into account  technical and economic  feasibility .• 

7. 
In cases where relevant scientific  evidence is insufficient,  a Member may provisionally  adopt 
sanitary or phytosanitary measures on the basis of available pertinent information,  including that from 
the relevant  international organizations as well as from sanitary or phytosanitary measures applied by 
other  Members.  In  such  circumstances.  Members  shall  seek  to  obtain  the  additional  information 
necessary  for  a more  objective  assessment  of risk and review the saniury  or phytosanitary  measure 
accordingly  within a reasonable period  of time. 

•For purposes of paragraph 6 of Anicle S. a measure is not more trade-restrictive than required unless there is another 
measure,  reasonably available taking  into account technical and economic  feasibility,  that achieves the appropriate  level of 
saniury  or phytosaniury  protection  and  is significantly  less  restrictive to trade. 

Page 73 

8. 
When a Member has reason to believe that a specific saniury or phytosaniury measure introduced 
or maintained  by another  Member  is constraining,  or has the potential  to constrain,  its exports  and 
the measure  is not based on the relevant  international standards,  guidelines  or recommendations,  or 
such  standards,  guidelines  or recommendations do not  exist,  an explanation of the  reasons  for  such 
saniury or phytosaniury measure may be requested and shall be provided by the Member maintaining 
the measure. 

.  Article  6 

Adaptation  to Regional Conditions, Including  Pest- or Disease-Free  Areas 
and Areas  of Low Pest or Disease  Prevalence 

1. 
Members shall ensure that their saniury or phytosanitary measures are adapted to the sanitary 
or phytosaniury characteristics of the area - whether all of a country, part of a country, or all or parts 
of  several  countries  -  from  which  the  produa  originated  and to  which  the product  is  destined.  In 
assessing  the sanitary  or phytosaniury  characteristics  of a region,  Members  shall take  into account. 
inter alia,  the level  of prevalence of specific  diseases or pests, the existence of eradication or control 
programmes, and appropriate criteria or guidelines which may be developed by the relevant international 
organizations. 

2. 
Members  shall,  in particular,  recognize the concepts of pest- or disease-free  areas and areas 
of  low  pest  or  disease  prevalence.  Determination  of  such  areas  shall  be  based  on  factors  such  as 
geography, ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary 
controls. 

. 

Exporting Members claiming  that areas within their territories are pest- or disease-free  areas 
3. 
or areas  of  low  pest  or  disease  prevalence  shall  provide  the necessary  evidence  thereof  in order  to 
objectively demonstrate to the importing  Member that such areas are, and are likely to remain,  pest-
or  disease-free  areas  or  areas  of  low  pest  or  disease  prevalence,  respectively.  For  this  purpose, 
reasonable access shall  be given,  upon request, to the importing  Member  for  inspection,  testing and 
other  relevant  procedures. 

Article  7 

Transparency 

Members  shall  notify  changes  in their saniury  or phytosaniury  measures  and shall  provide 
information on their sanitary or phytosanitary measures in accordance with the provisions of Annex  B. 

Article  8 

Control,  Inspection and Approval  Procedures 

Members shall observe the provisions of Annex C in the operation of control, inspection and 
approval procedures, including national systems for approving the use of additives or for  esublishing 
tolerances for contaminants in foods, beverages or feedstuffs, and otherwise ensure that their procedures 
are not  inconsistent  with the  provisions  of this  Agreement. 

Page  74 

Article  9 

Technical Assistance 

Members agree to facilitate the provision of technical assistance to other Members,  especially 
1. 
developing country Members, either bilaterally or through the appropriate international organizations. 
Such assisunce may be, inter alia,  in the areas of processing technologies, research and infrastructure, 
including in the establishment of national regulatory bodies, and may take the form of advice, credits, 
donations and grants, including for the purpose of seeking technical expertise, training and equipment 
to allow  such countries to adjust to, and comply  with, sanitary or phytosaniury  measures  necessary 
to  achieve  the appropriate  level  of sanitary or phytosaniury  protection  in their export  markets. 

'2. 
Where substantial investments are required in order for an exporting developing country Member 
to fulfil  the sanitary or phytosaniury  requirements of an importing Member,  the latter shall  consider 
providing such technical assisunce as will permit the developing country Member to mainuin and expand 
its market  access  opportunities  for the product  involved. 

Article  10 

Special and Differential Treatment 

1. 
In the preparation and application of saniury or phytosaniury  measures. Members shall take 
account  of the special  needs of developing country Members, and in particular of the least-developed 
country  Members. 

2. 
Where the appropriate level of sanitary or phytosanitary protection allows scope for the phased 
introduction of new sanitary or phytosaniury measures, longer time-frames for compliance should be 
accorded  on products of  interest  to developing  country  Members  so as to maintain opportunities  for 
their exports. 

With a view to ensuring that developing country Members are able to comply with the provisions 

3. 
of this Agreement, the Committee  is enabled to grant to such countries, upon request, specified, time-
limited exceptions in whole or in part from obligations under this Agreement, taking into account their 
financial,  trade and development  needs. 

4. 
in the  relevant  international  organizations. 

Members should encourage and faciliute the active participation of developing country Members 

Article 11 

Consultations and Dispute Settlement 

The provisions of  Anicles  XXII and XXIII of GATT  1994 as elaborated and applied by the 
I. 
Dispute  Settlement  Understanding  shall  apply  to consulutions.and  the  senlement  of  disputes  under 
this  Agreement,  except  as otherwise  specifically  provided herein. 

Page 75 

In a dispute under this Agreement involving scientific or technical issues, a panel should seek 
2. 
advice from experts chosen by the panel  in consultation with the parties to the dispute.  To this end, 
the panel may, when it deems it appropriate, esublish an advisory technical experts group, or consult 
the  relevant  international  organizations,  at the  request  of  either party  to  the dispute  or  on  its  own 
initiative. 

3. 
Nothing  in  this  Agreement  shall  impair  the  rights  of  Members  under  other  international 
agreements, including the right to resort to the good offices or dispute settlement mechanisms of other 
international  organizations or esublished  under any international agreement. 

Article  J2 

Administration 

1. 

A Committee on Sanitary and Phytosanitary Measures  is hereby esublished to provide a regular 
• forum for consultations.  It shall carry out the functions necessary to implement  the provisions of this 
Agreement  and  the  furtherance  of  its objectives,  in particular  with  respect  to harmonization.  The 
Committee  shall  reach its decisions  by consensus. 

2. 
The  Committee  shall  encourage  and  facilitate  ad hoc  consulutions  or  negotiations  among 
Members  on  specific  saniury  or  phytosanitary  issues.  The  Committee  shall  encourage  the use  of 
international standards, guidelines or recommendations by all Members and, in this regard, shall sponsor 
technical consultation and study with the objective of increasing coordination and integration between 
international  and  national  systems  and  approaches  for  approving  the  use  of  food  additives  or  for 
establishing  tolerances  for contaminants  in foods,  beverages or feeds tuffs. 

3. 
The Committee  shall  mainuin  close  contact with the relevant  international  organizations  in 
the field of sanitary and phytosanitary protection, especially with the Codex Alimentarius Commission, 
the International Office of Epizootics, and the Secreuriat of the International Plant Proteaion Convention, 
with the objective of securing the best available scientific  and technical advice for the administration 
of  this  Agreement  and  in order to ensure that unnecessary  duplication of effort  is avoided. 

4 
The Committee shall develop a procedure to monitor the process of international harmonization 
and the use of international standards, guidelines or recommendations.  For this purpose, the Comminee 
should,  in conjunction with  the relevant  international  organizations,  esublish  a list  of  international 
standards,  guidelines  or recommendations  relating to saniury  or phytosaniury  measures  which the 
Committee determines to have a major trade impact.  The list should include an indication by Members 
of  those  international  standards, guidelines or recommendations  which they apply  as conditions  for 
import  or on the basis of  which  imported  products conforming  to these  standards can enjoy  access 
to their markets.  For those cases in which a Member does not apply an international standard, guideline 
or recommendation as a condition for import, the Member should provide an indication of the. reason 
therefor,  and. in particular, whether it considers that the standard is not stringent enough to provide 
the appropriate level of saniury or phytosaniury proteaion.  If a Member revises its position, following 
its indication of the use of a standard, guideline or recommendation as a condition for import, it should 
provide an explanation for its change and so inform the Secreuriat as well as the relevant international 
organizations, unless such notification and explanation is given according to the procedures of Annex  B. 

Page  76 

5. 
In order to avoid unnecessary  duplication, the Committee  may decide, as appropriate, to use 
the information  generated by the procedures,  particularly  for notification,  which are in operation  in 
the relevant  international organizations. 

6. 
The Committee may, on the basis of an initiative from one of the Members, through appropriate 
channels invite the relevant  international organizations or their subsidiary bodies to examine  specific 
maners  with  respea  to  a particular  standard,  guideline  or  recommendation,  including  the  basis  of 
explanations  for non-use given according to paragraph 4. 

7. 
The Committee  shall review the operation and implemenution  of this  Agreement  three  ; ears 
after  the  date  of  entry  into  force  of  the WTO Agreement,  and thereafter  as the  need  arises.  Where 
appropriate,  the  Committee  may  submit  to the  Council  for Trade  in Goods  proposals  to  amend  the 
text  of  this  Agreement  having  regard, inter alia,  to the experience  gained  in its  implementation. 

Article  13 

Implementation 

Members  are fully  responsible under this Agreement  for the observance of all  obligations set 
forth herein.  Members shall formulate and implement positive measures and mechanisms  in support 
of the observance of the provisions of this Agreement by other than central government bodies.  Members 
shall take such reasonable measures as may be available to them to ensure that non-governmental entities 
within their territories, as well as regional bodies in which relevant entities within their territories are 
members,  comply  with  the  relevant  provisions  of  this  Agreement.  In addition.  Members  shall  not 
uke  measures which have the effect  of,  directly or indirectly, requiring or encouraging such regional 
or non-governmental  entities, or local  governmental  bodies, to act in a manner inconsistent  with the 
provisions of this Agreement.  Members shall ensure that they rely on the services of non-governmental 
entities  for  implementing  sanitary  or phytosaniury  measures  only  if these  entities  comply  with  the 
provisions  of  this  Agreement. 

Article  14 

Final Provisions 

The least-developed country Members may delay application of the provisions of this Agreement 
for a period of five years following  the date of entry into force of the WTO Agreement  with respect 
to their sanitary or phytosanitary measures affec:  ng importation or imported products. Other developing 
country  Members may delay application of the provisions of this Agreement, other than paragraph 8 
of Article 5 and Article 7. for two years following the date of entry into force of the WTO  Agreement 
with  respea  to their  existing  saniury  or phytosanitary  measures  affecting  importation  or  imported 
products, where such application is prevented by a lack of technical expertise, technical  infrastructure 
or resources. 

Page  77 

ANNEX  A 

DEFINITIONS4 

1. 

Sanitary  or phytosanitary  measure - Any measure applied: 

(a) 

(b) 

(c) 

(d) 

to protect animal or plant life or health within the territory of the  Member from  risks 
arising .from  the entry,  establishment  or  spread  of pests,  diseases,  disease-carrying 
organisms  or disease-causing  organisms; 

to protect human or animal life or health within the territory of the  Member from risks 
arising  from  additives,  contaminants,  toxins  or disease-causing organisms  in  foods, 
beverages  or  feedstuffs; 

to protect human life or health within the territory of the  Member from  risks arising 
from  diseases  carried  by  animals,  plants  or  products  thereof,  or  from  the  entry, 
establishment  or spread of pests;  or 

to prevent or limit other damage within the territory of the  Member  from the entry, 
esublishment  or spread of pests. 

Saniury or phytosaniury  measures include all  relevant laws, decrees,  regulations,  requirements and 
procedures  including,  inter alia,  end produa  criteria;  processes  and production  methods;  testing, 
inspection, certification and approval procedures; quarantine treatments including relevant requirements 
associated  with the transport of  animals  or plants, or with the materials  necessary  for their survival 
during transport;  provisions on relevant sutistical methods, sampling procedures and methods of risk 
assessment;  and packaging  and labelling  requirements  directly  related to food  safety. 

Harmonization  -  The  establishment,  recognition  and  application  of  common  sanitary  and 

2. 
phytosaniury  measures  by different  Members. 

3. 

International standards,  guidelines and recommendations 

(a) 

(b) 

(c) 

. for food safety, the standards, guidelines and recommendations esublished by the Codex 
Alimentarius  Commission  relating  to  food  additives,  veterinary  drug  and  pesticide 
residues, contaminants, methods of analysis and sampling,  and codes and guidelines 
of  hygienic  practice; 

for  animal  health  and  zoonoses,  the  standards,  guidelines  and  recommendations 
developed  under the auspices of the International  Office  of  Epizootics; 

for plant health, the  international standards, guidelines and recommendations developed 
under the auspices of the  Secreuriat of the International  Plant Protection Convention 
in  cooperation  with  regional  organizations  operating  within  the  framework  of  the 
International  Plant Protection Convention;  and 

'For the purpose of these  definitions,  'arrimai" includes fish  and wild  fauna;  "plant" includes forests  and  wild  flora; 

"pests"  include  weeds:  and "contaminants"  include  pesticide  and  veterinary  drug  residues  and extraneous  matter. 

Page  78 

(d) 

for matters not covered by the above organisions,  appropriate standards, guidelines 
and recommendations promulgated by other  relevant international organizations open 
for membership  to all  Members,  as  identified  by the Committee. 

4. 
Risk assessment  - The evaluation of the likelihood of entry,  establishment or spread of a pest 
or  disease  within  the  territory  of  an  importing  Member  according  to the  saniury  or  phytosaniury 
measures which might be applied, and of the associated potential biological and economic consequences ; 
or the evaluation of the potential for adverse effects on human or animal health arising from the presence 
of  additives,  contaminants,  toxins  or disease-causing organisms  in food,  beverages  or  feeds tuffs. 

Appropriate  level  of sanitary  or phytosanitary  protection  -  The  level  of  proteaion  deemed 
5. 
appropriate by the Member esublishing a saniury or phytosaniury measure to protect human, animal 
or plant  life  or health within  its territory. 

NOTE:  Many  Members  otherwise  refer to this concept as the  "acceptable  level  of  risk". 

6. 
Pest- or disease-free area - An area, whether all of a country, part of a country, or all or parts 
of several countries, as identified by the competent authorities, in which a specific pest or disease does 
not  occur. 

NOTE:  A pest- or disease-free area may surround, be surrounded by, orbe adjacent to an area - whether 
within part of a country or in a geographic  region which includes parts of or all of several countries -
in which a specific  pest or disease is known to occur but is subject to regional control measures  such 
as the establishment  of  proteaion.  surveillance  and buffer  zones which will  confine  or eradicate the 
pest  or disease  in question. 

7. 
Area  of low pest  or disease prevalence  - An area, whether all of a country, part of a country', 
or all or parts of several countries, as identified  by the competent authorities, in which a specific pest 
or disease  occurs  at  low  levels  and which  is  subject  to effective  surveillance,  control  or  eradication 
measures. 

Page  79 

ANNEX  B 

fRANSPARENCY  OF SANITARY  AND  PHYTOSANITARY  REGULATIONS 

Publication  of regulations 

Members shall ensure that all sanitary and phytosaniury regulations5 which have been adopted 
1. 
are published promptly  in such a manner as to enable interested Members to become acquainted with 
them. 

Except  in  urgent  circumstances,  Members  shall  allow  a  reasonable  interval  between  the 
2. 
publication of a sanitary or phytosaniury regulation and its entry into force in order to allow time for 
producers in exporting Members, and particularly in developing country Members, to adapt their products 
and methods  of  production to the requirements of the importing  Member. 

Enquiry points 

3 
Each Member shall ensure that one enquiry point exists which is responsible for the provision 
of answers to all reasonable questions from interested Members as well as for the provision of relevant 
documents  regarding: 

(a) 

any  sanitary  or phytosanitary  regulations adopted or proposed  within its territory; 

.(b) 

any control and inspection procedures, production and  quarantine treatment, pesticide 
tolerance and food additive approval procedures, which are operated within its territory; 

(c )  risk  assessment procedures, factors uken into consideration, as well as the determination 

of  the appropriate  level  of  saniury  or phytosaniury  protection; 

(d i 

the  membership  and  participation  of  the  Member,  or  of  relevant  bodies  within  its 
territory,  in  international  and  regional  saniury  and phytosaniury  organizations  and 
systems,  as well  as in bilateral  and multilateral  agreements and arrangements  within 
the scope of  this  Agreement,  and the texts of such agreements  and arrangements. 

4. 
Members  shall ensure that where copies of documents are requested by interested Members, 
they are supplied at the same price (if any),  apart from the cost of delivery,  as to the nationals6 of the 
Member  concerned. 

^Sanitary and  phytosanitary  measures  such as laws,  decrees or ordinances  which  are applicable  generally. 

•When "nationals" are referred to in this Agreement, the term shall be deemed, in the case of a separate customs territory 
Member of the WTO. to mean persons,  naniral or legal,  who are domiciled or who have a real and effeaive  industrial or 
commercial  esublishment  in that customs  territory. 

Page  80 

Notification  procedures 

5. 
Whenever an international standard, guideline or recommendation does  not exist or the content 
of  à proposed  saniury  or phytosaniury  regulation  is not substantially  the same  as the content  of an 
international standard, guideline or recommendation, and if the regulation may have a significant  effect 
on trade of  other  Members,  Members  shall: 

(a) 

(b) 

(c) 

(d) 

publish a notice at an early suge  in such a manner as to enable  interested  Members 
to become  acquainted with the proposal  to introduce  a particular  regulation; 

notify  other Members,  through the Secreuriat,  of the products to be covered  by the 
regulation together with a brief indication of the objective and rationale of the proposed 
regulation.  Such noih  étions  shall  take place  at an early  suge,  when  amendments 
can still  be introduces  and comments  uken  into account; 

provide upon request to other Members copies of the proposed regulation and, whenever 
possible,  identify  the parts which  in substance deviate  from  international  standards, 
guidelines  or recommendations; 

without discrimination, allow reasonable time for other Members to make comments 
in writing. discuss these comments upon request, and take the comments and the results 
of  the discussions  into account. 

6. 
However, where urgent problems of health proteaion arise or threaten to arise for a Member. 
that Member may omit such of the steps enumerated in paragraph 5 of this Annex as it finds necessary. 
provided  that the Member: 

(a) 

immediately notifies other Members, through the Secreuriat, of the particular regulation 
and the products covered, with a brief indication of the objective and the rationale of 
the  regulation,  including  the nature of the urgent problem(s); 

(b) 

provides,  upon request, copies of  the regulation to other  Members; 

(c) 

allows other Members to make comments  in writing, discusses these comments  upon 
request, and takes the comments  and the results  of  the discussions  into account. 

7. 

Notifications  to the Secreuriat  shall  be in English,  French or Spanish. 

8 
Developed  country  Members  shall,  if  requested  by  other  Members,  provide  copies  of  the 
documents  or.  in case of voluminous  documents, summaries  of the documents  covered by a  specific 
notification  in English.  French or Spanish. 

9. 
The Secreuriat shall promptly circulate copies of the notification to all Members and interested 
international organizations and draw the attention of developing  country Members to any notifications 
relating  to products of  particular  interest to them. 

10.  Members  shall  designate  a  single  central  government  authority  as  responsible  for  the 
implementation,  on the national level, of the provisions concerning notification procedures according 
to paragraphs  5,  6,  7  and 8 of this Annex. 

Page 81 

General  reservations 

11. 

Nothing  in this Agreement  shall  be construed  as requiring: 

(a) 

(b) 

the provision  of  particulars or copies  of drafts  or the publication  of  texts  other than 
in the  language  of the Member  except  as stated  in paragraph 8 of  this Annex;  or 

Members  to disclose  confidential  information  which  would  impede  enforcement  of 
saniury or phytosaniury legislation or which would prejudice the legitimate commercial 
interests of particular enterprises. 

Page  82 

ANNEX  C 

CONTROL,  INSPECTION  AND  APPROVAL  PROCEDURES7 

Members  shall  ensure,  with  respect to any procedure  to check  and ensure  the  fulfilment  of 

1. 
saniury  or phytosaniur  -measures, that: 

(a) 

(b) 

such  procedures  are undertaken  and completed  without  undue  delay  and  in  no  less 
favourable  manner for  imported  products than for  like domestic products; 

the standard processing  period of each procedure is published or that the anticipated 
processing period is communicated  to the applicant upon request;  when receiving an 
appliesuon,  the  competent  body  promptly  examines  the  completeness  of  the 
documentation  and  informs  the  applicant  in  a  precise  and  complete  manner  of  all 
deficiencies; 
the  competent  body  transmits  as  soon  as  possible  the  results  of  the 
procedure in a precise and complete manner to the applicant so that corrective action 
may be taken if necessary;  even when the application has deficiencies,  the competent 
body  proceeds  as  far  as practicable  with the procedure  if  the applicant  so  requests; 
and  that  upon request,  the applicant  is  informed  of  the  stage of  the procedure,  with 
any delay  being  explained; 

(c) 

. 

information  requirements  are  limited  to  what  is  necessary  for  appropriate  control, 
inspection  and approval  procedures,  including  for  approval  of  the  use  of  additives 
or for the esublishment of tolerances for contaminants in food, beverages or feedstuffs; 

(d) 

(e) 

(0 

(g) 

(h) 

the  confidentiality  of  information  about  imported  products  arising  from  or  supplied 
in  connection  with  control,  inspection  and  approval  is  respected  in  a  way  no  less 
favourable than for domestic products and in such a manner that legitimate commercial 
interests  are protected; 

any  requirements  for  control,  inspection  and approval  of  individual  specimens  of a 
product  are limited  to what  is  reasonable and  necessary; 

any  !«es  imposed  for  the procedures  on  imported  products  are equitable  in  relation 
to  any  fees  charged  on  like  domestic  products  or products  originating  in any  other 
Member  and should  be no higher than the actus! cost  of  the  service; 

the same criteria should be used in the siting oi  facilities used  in the procedures and 
the selection of samples of imported products as for domestic products so as to minimize 
the  inconvenience  to applicants,  importers,  expor?*?5 or their agents; 

whenever specifications of a produa are changed SUD >_quent to its control and inspection 
in light of the applicable regulations, the procedure for the modified produa is limited 
to what is necessary to determine whether adequate confidence exista that the product 
still  meets  the  regulations concerned;  and 

'Control,  inspection  and approval  procedures  include,  inter  alia,  procedures for sampling,  testing  and  certification. 

Page  83 

(i) 

a procedure exists to review complaints concerning the operation of such procedures 
arid to take correaive  action when a complaint  is justified. 

Where an importing  Member  operates a system  for the approval  of the use  of  food  additives  or for 
the establishment  of  tolerances for contaminants  in food,  beverages  or feedstuffs  which prohibits  or 
restricts access to its domestic markers for products based on the absence of an approval, the importing 
Member shall consider the use of a relevant international standard as the basis for access until a final 
determination  is made. 

2. 
Where  a saniury  or phytosanitary  measure  specifies  control  at the  level  of  production,  the 
Member in whose territory the production takes place shall provide the necessary assisunce to faciliute 
such control  and the work of the controlling  authorities. 

Nothing  in this  Agreement  shall  prevent  Members  from  carrying  out  reasonable  inspection 

3. 
within their own territories. 

Page 84 

AGREEMENT  ON  TEXTILES  AND  CLOTHING 

Page  85 

Members, 

Recalling that Ministers agreed at Puma del Este that  "negotiations in the area of textiles and 
clothing shall aim to formulate modalities mat would permit the eventual integration of this sector into 
GATT on the basis of strengthened GATT rules and disciplines, thereby also contributing to the objective 
of  further  liberalization  of trade"; 

Recalling  also  that  in the  April  1989 Decision  of  the Trade  Negotiations  Committee  it  was 
agreed that the process of integration should commence following the conclusion of the U ruguay Round 
of  Multilateral  Trade Negotiations  and should  be progressive  in character. 

Recalling  further  that  it  was  agreed  that  special  treatment  should  be  accorded  to  the  least-

developed  country  Members; 

Hereby agree  as  follows: 

Article 1 

This Agreement  sets out provisions to be applied by Members during a transition period  for 

1. 
the  integration  of the textiles  and clothing  sector  into GATT  1994. 

2. 
Members agree to use the provisions of paragraph 18 of Article 2 and paragraph 6(b) of Article  6 
in such  a way  as  to  permit  meaningful  increases  in access, possibilities  for  small  suppliers  and  the 
development of commercially  significant trading opportunities for new entrants in the field  of textiles 
and clothing trade.1 

Members  shall  have due  regard  to the situation  of  those  Members  which  have  not  accepted 
3. 
the Protocols extending the Arrangement Regarding International Trade in Textiles (referred to in this 
Agreement  as the  "MFA") since  1986 and, to the extent possible, shall afford  them special treatment 
in applying  the provisions  of  this  Agreement. 

Members agree that the particular interests of the cotton-producing exporting Members should, 

4. 
in consultation  with them,  be  reflected  in the implemenution  of  the provisions  of  this  Agreement. 

In order to faciliute the integration of the textiles and clothing sector into GATT 1994, Members 
5. 
should allow for continuous autonomous industrial adjustment and increased competition in their markets. 

6. 
Unless  otherwise  provided  in this  Agreement,  its provisions  shall  not  affect  the  rights  and 
obligations  of  Members  under  the  provisions  of  the  WTO  Agreement  and  the  Multilateral  Trade 
Agreements. 

7. 

The textile and doming  products to which this  Agreement  applies  are set  out  in the  Annex. 

'To the extent  possible,  exports  from  à least-developed  country  Member  may  alsa benefit  from  this  provision. 

Page  86 

Article  2 

1. 
All quantitative restrictions within bilateral agreements maintained under Article 4 or notified 
under Article  7 or 8 of the MFA in force on the day before the entry into force of the WTO Agreement 
shall, within 60 days following such entry into force, be notified in deuil, including the restraint levels, 
growth rates and flexibility  provisions, by the Members maintaining  such restrictions to the Textiles 
Monitoring  Body provided for in Article 8 (referred  to in this Agreement  as the  "TMB").  Members 
agree that as of the date of entry into force of the WTO Agreement,  all such restriaions  mainuined 
between GATT  1947 contracting parties, and  in place on the day before  such entry  into force,  shall 
be governed  by the provisions  of  this  Agreement. 

The TMB shall circulate these notifications  to all  Members  for their information.  It is open 
2. 
to any Member to bring to the attention of the TMB, within 60 days of the circulation of the notifications, 
any observations  it deems  appropriate with regard to such notifications.  Such observations shall  be 
circulated  to  the other  Members  for their  information.  The TMB  may  make  recommendations,  as 
appropriate,  to the  Members  concerned. 

3. 
When the  12-month period of restrictions to be notified  under paragraph  1 does not coincide 
with the  12-month period  immediately  preceding the date of entry into force of the WTO Agreement, 
the Members concerned should mutually agree on arrangements to bring the period of restriaions  into 
line  with .the  agreement  year,  and  to  esublish  notional  base  levels  of  such  restrictions  in order  to 
implement "the provisions of this Article.  Concerned Members agree to enter into consultations promptly 
upon request  with a view to reaching such mutual agreement.  Any such arrangements shall take into 
account, inter alia,  seasonal  patterns of shipments  in recent years.  The results of these  consulutions 
shall  be notified  to the TMB.  which shall make such recommendations  as it deems appropriate to the 
Members  concerned. 

4. 
The  restrictions  notified  under paragraph  1 shall  be deemed  to constitute the totality  of such 
restrictions  applied  by  the  respective  Members  on  the  day  before  the  entry  into  force  of  the  WTO 
Agreement.  Nr  n*w restriaions  in terms of products or Members  shall  be introduced except  under 
the provisions ov  his Agreement or relevant GATT  1994 provisions.3  Restrictions not notified within 
60  days  of  the date of  entry  into  force  of  the WTO Agreement  shall  be terminated  forthwith. 

Any unilateral  measure taken under Article  3 of the MFA prior to the date of entry into force 
5. 
of the WTO Agreement  may remain in effect  for the duration specified  therein, but not exceeding  12 
months,  if  it  has been reviewed  by the Textiles  Surveillance  Body  (referred  to in this  Agreement  as 
the  "TSB") established  under the MFA.  Should the TSB not have had the opportunity to review any 
such unilateral measure,  it shall be reviewed by the TMB in accordance with the rules and procedures 
governing Article  3 measures under the MFA.  Any measure applied under an MFA Article 4 agreement 
prior to the date of entry into force of the WTO Agreement  that  is the subject of a dispute which the 
TSB has not had the opportunity to review shall also be reviewed by the TMB in accordance with the 
MFA  rules and procedures  applicable  for such a review. 

6. 
On the date of entry into force of the WTO Agreement, each Member shall integrate into GATT 
1994 products which accounted for not less than 16 per cent of the total volume of the Member's  1990 
imports of the products in the Annex, in terms of HS lines or categories.  The products to be integrated 

The  "agreement  year" is defined  to mean a  12-month period  beginning  from the date of entry  into force  of  the WTO 

Agreement  and  at the subsequent  12-month  intervals. 

The relevant GATT 1994 provisions shall not include Article XIX in respect of products not yet integrated into GATT  1994. 

except  as  specifically  provided  in paragraph  3 of  the  Annex. 

Page  87 

shall  encompass products from each of the following  four groups:  tops and yarns, fabrics, made-up 
textile products,  and clothing. 

Full deuils of the actions to be uken pursuant to paragraph 6 shall be notified by the Members 

7. 
concerned  according to the  following: 

(a) 

(b) 

Members maintaining restriaions falling under paragraph 1 undertake, notwithstanding 
the date of entry into force of the WTO Agreement, to notify such deuils to the GATT 
Secreuriat not later than the date determined by the Ministerial  Décision of  15 April 
1994.  The GATT Secreuriat shall promptly circulate these notifications  to the other 
participants for information.  These notifications will be made available to the TMB, 
when esublished,  for the purposes of paragraph 21; 

Members which have, pursuant to paragraph  1  of Article 6,  retained the right to use 
the provisions of Article 6, shall notify such deuils to the TMB not later than 60 days 
following  the date of entry into force of the WTO Agreement, or, in the case of those 
Members  covered  by paragraph 3 of  Article  1, "not later than at the end  of  the  12th 
month that the WTO Agreement is in effect.  The TMB shall circulate these notifications 
. to the other Members for information and review them as provided  in paragraph  21. 

The remaining products, i.e. the products not integrated into GATT  1994 under paragraph  6, 

8. 
shall  be  integrated,  in terms of  HS lines or categories,  in three suges,  as  follows: 

(a)  -  on the first day of the 37th month that the WTO Agreement is in effect, products which 
.  accounted  for  not  less  than  17 per cent  of  the  toul  volume  of  the  Member's  1990 
imports of the products in the Annex.  The products to be integrated by the Members 
shall  encompass  products  from  each of  the  following  four  groups:  tops  and yarns, 
fabrics,  made-up textile products, and clothing; 

(b) 

(c) 

on the first day of the 85th month mat the WTO Agreement is in effect, products which 
accounted  for  not  less  than  18 per cent  of  the  toul  volume  of  the  Member's  1990 
imports of the products in the Annex.  The products to be integrated by the Members 
shall  encompass  products  from  each of  the following  four  groups:  tops and yarns, 
fabrics,  made-up textile products,  and clothing; 

on the first  day of the  121st month that the WTO Agreement  is in effea,  the textiles 
and clothing sector shall stand integrated into GATT  1994, all restrictions under this 
Agreement  having been eliminated. 

9. 
Members which have notified, pursuant to paragraph  l of Article 6, their intention not to retain 
the right to use the provisions of  Article 6 shall,  for the purposes of  this Agreement,  be deemed  to 
have integrated their textiles and clothing products into GATT 1994.  Such Members shall, therefore, 
be exempted  from complying  with the provisions  of paragraphs 6 to 8 and  11. 

Nothing in this Agreement shall prevent a Member wm<A has submitied an integi^on programme 

10. 
pursuant to paragraph 6 or 8 from integrating products into GATT  1994 earlier than provided for  in 
such a programme.  However, any such  integration of products shall  take effect  at the beginning  of 
an agreement  year,  and deuils  shall  be  notified  to the TMB  at  least  three months prior thereto  for 
circulation to all Members. 

11. 
The respective programmes  of  integration,  in pursuance of paragraph 8,  shall  be notified  in 
deuil  to the TMB at least  }2 months before their coming  into effect,  and circulated by the TMB  to 
all  Members. 

Page  88 

The base levels of the restrictions on the remaining products, mentioned in paragraph 8, shall 

12. 
be the restraint  levels  referred  to  in paragraph  1. 

During Suge  1 of this Agreement  (from the date of entry into force of the WTO Agreement 
13. 
to  the  36th  month  that  it  is  in  effect,  inclusive)  the  level  of  each  restriction  under  MFA  bilateral 
agreements in force for the 12-month period prior to the date of entry into force of the WTO Agreement 
shall be increased annually by not less than the growth rate esublished for the respective restrictions, 
increased  by  16 per cent. 

14. 
Except where thé Council for Trade in Goods or the Dispute Senlement Body decides otherwise 
under paragraph  12 of  Article  8,  the level  of  each remaining  restriction shall  bt  increased  annually 
during  subsequent  suges  of  this  Agreement  by not less than the  following: 

(a) 

(b) 

for  Suge  2  (from  the 37th to the 84th month that the WTO Agreement  is  in  effect. 
inclusive), the growth rate for the respective restrictions during Suge  1, increased by 

"  25  per cent; 

for Suge  3 (from the 85th to the  120th month that the WTO Agreement  is in  effect, 
inclusive), the growth rate for the respective restriaions during Suge  2,  increased by 
27 per cent. 

Nothing in this Agreement shall prevent a Member from eliminating any restriaion maintained 
15. 
pursuant to this Article, effeaive  at the beginning of any agreement year during the transition period. 
provided  the  exporting  Member  concerned  and the TMB  are notified  at least  three months  prior  to 
the elimination coming into effect.  The period for prior notification may be shortened to 30 days with 
the agreement  of the restrained Member.  The TMB shall circulate such notifications to all Members. 
In considering  the elimination of restrictions as envisaged  in this paragraph, the Members  concerned 
shall  uke  into account  the treatment  of  similar  exports from  other Members. 

Flexibility  provisions,  i.e.  swing,  carryover and carry forward,  applicable to all  restrictions 
16. 
maintained pursuant to this Article, shall be the same as those provided for in MFA bilateral agreements 
for the  12-month period prior to the entry into force of the WTO Agreement.  No quantitative  limits 
shall  be placed  or maintained  on the combined  use of  swing,  carryover and carry  forward. 

Administrative  arrangements,  as deemed  necessary  in relation  to the  implementation  of any 
17. 
provision of this Article, shall be a matter for agreement between the Members concerned.  Any such 
arrangements  shall  be notified  to the TMB. 

As regards those Members whose exports are subject to restrictions on the day before the entry 
18. 
into force  of  the WTO  Agreement  and whose  restriaions  represent  1.2 per cent  or  less  of  the total 
volume of the restrictions applied by an importing Member as of 31  December  1991 and notified under 
this  Article,  meaningful  improvement  in access  for their exports shall  be provided, at the entry  into 
force  of  the WTO Agreement  and for the duration of  this  Agreement,  through advancement  by  one 
suge  of  the growth  rates set  out  in paragraphs  13 and  14.  or through at least  equivalent changes as 
may be mutually agreed with respect to a different mix of base levels, growth and flexibility pr 
ons. 
Such  improvements  shall  be notified  to the TMB. 

In any case, during the duration of this Agreement,  in which a safeguard measure is initiated 
19. 
by a Member  under Article  XIX of GATT  1994 in respect of a particular produa during a period of 
one year  immediately  following  the integration of that produa  into GATT  1994  in accordance with 
the  provisions  of  this  Article,  the provisions  of  Article  XIX,  as  interpreted  by  the  Agreement  on 
Safeguards,  will  apply,  save as sa  out in paragraph 20. 

Page  89 

20.  Where  such a measure  is applied  using  non-tariff  means,  the  importing  Member  concerned 
shall  apply the measure in a manner  as set  forth  in paragraph 2(d) of  Article XIII of GATT  1994 at 
the request of any exporting Member whose exports of such products were subject to restrictions under 
this Agreement at any time in the one-year period immediately  prior to the initiation, of the safeguard 
measure.  The exporting  Member  concerned  shall  administer  such  a measure.  The applicable  level 
shall  not  reduce  the  relevant  exports  below  the  level  of  a recent  representative  period,  which  shall 
normally  be the average of exports from the Member concerned  in the last three representative years 
for which statistics are available.  Furthermore, when the safeguard measure is applied for more than 
one year, the applicable  level  shall be progressively  liberalized  at regular intervals during the period 
of application.  In such cases the exporting Member concerned shall not exercise the right of suspending 
substantially equivalent concessions or other obligations under paragraph 3(a) of Article XIX of GATT 
1994. 

21. 
The TMB shall keep under review the implemenution  of this Article.  It shall, at the request 
of any Member,  review any particular matter with reference  to the implemenution  of the provisions 
of this Article.  It shall make appropriate recommendations or findings within 30 days to the Member 
or Members  concerned,  after  inviting  the participation  of  such Members. 

Article  3 

1. 
Within  60  days  following  the  date  of  entry  into  force  of  the  WTO  Agreement,  Members 
maintaining restrictions4 on textile and clothing products (other than restrictions maintained under the 
MFA  and covered  by the provisions  of Article 2), whether consistent  with GATT  1994 or not,  shall 
(a)  notify  them  in deuil  to the TMB,  or (b) provide  to the TMB  notifications  with  respect  to  them 
which have been submitted to any other WTO body.  The notifications  should,  wherever applicable, 
provide information with respect to any GATT 1994 justification for the restrictions, including GATT 
1994 provisions  on which they  are based.  • 

Members maintaining restriaions falling under paragraph 1, except those justified  under a GATT 

2. 
1994 provision,  shall  either: 

(a) 

(b) 

bring them into conformity  with GATT  1994 within one year following the entry into 
force of the WTO Agreement,  and notify  this action to the TMB for  its information; 
or 

phase them out progressively  according to a programme  to be presented to the TMB 
by  the  Member  maintaining  the restrictions  not  later than six  months  after  the  date 
of  entry  into  force  of  the WTO Agreement.  This  programme  shall  provide  for  all 
restrictions  to  be  phased  out  within  a  period  not  exceeding  the  duration  of  this 
Agreement.  The TMB may make recommendations  to the Member concerned  with 
respect to such a programme. 

3. 
During the duration of this Agreement, Members shall provide to the TMB, for its information, 
notifications  submitted  to any other WTO bodies with  respect to any new  restrictions  or changes  in 
existing  restrictions on textile and clothing products, uken under any GATT  1994 provision, within 
60 days  of  their coming  into  effect. 

4. 
It shall be open to any Member to make reverse notifications to the TMB, for its information, 
in regard to the GATT 1994 justification, or in regard to any restriaions that may not have been notified 

'Restrictions denote all unilateral  quantitative  restrictions, bilateral arrangements and other measures having  a similar 

effect. 

Page  90 

under the  provisions  of  this  Article.  Actions  with respect  to  such  notifications  may  be pursued  by 
any  Member  under relevant  GATT  1994 provisions  or procedures  in the appropriate  WTO body. 

The TMB  shall  circulate  the  notifications  made  pursuant  to  this  Article  to all  Members  for 

5. 
their  information. 

Article  4 

Restrictions  referred to in Article  2, and those applied under Article 6,  shall be administered 
1. 
by the exporting  Members.  Importing  Members  shall  not be obliged  to accept shipments  in  excess 
of  the  restrictions  notified  under Article  2,  or of  restrictions  applied  pursuant to  Article  6. 

2. 
Members agree that the introduction of changes, such as changes in practices .rules, procedures 
and categorization of textile and clothing products, including those changes relating to the Harmonized 
System,  in the  implementation  or administration  of  those  restrictions  notified  or applied  under  this 
Agreement  should  not:  upset the balance of rights and obligations  between the Members  concerned 
under this Agreement;  adversely affect  the access available to a  Member;  impede the full  utilization 
of  such access;  or disrupt  trade under this  Agreement. 

3. 
If a product which constitutes only part of a restriction  is notified  for integration pursuant to 
the  provisions  of  Article  2.  Members  agree that any change  in the  level  of  that restriction  shall  not 
upset  the  balance of  rights and obligations  between the Members  concerned under this  Agreement. 

4. 
When changes mentioned  in paragraphs 2 and 3 are necessary, however. Members agree that 
the  Member  initiating  such changes  shall  inform  and,  wherever possible,  initiate consulutions  with 
the affected  Member or Members prior to the implemenution of such changes, with a view to reaching 
a mutually acceptable solution regarding appropriate and equitable adjustment.  Members further agree 
that  where consultation  prior  to  implementation  is not  feasible,  the Member  initiating  such  changes 
will,  at  the  request  of  the  affected  Member,  consult,  within  60  days  if possible,  with  the  Members 
concerned with a view to reaching a mutually satisfactory solution regarding appropriate and equitable 
adjustments.  If a mutually  satisfactory  solution  is not reached,  any Member  involved  may  refer the 
matter to the TMB  for recommendations  as provided  in Article  8.  Should the TSB not have had the 
opportunity  to  review  a dispute concerning  such changes  introduced  prior to the entry  into  force  of 
the WTO  Agreement,  it shall  be reviewed  by the TMB  in accordance with the rules and procedures 
of  the  MFA applicable  for such a review. 

Article  5 

1. 
Members agree that circumvention by transshipment, re-routing, false declaration concerning 
country  or  place  of  origin,  and  falsification  of  official  documents,  frustrates  the  implementation  of 
this Agreement  to integrate the textiles and clothing sector into GATT  1994.  Accordingly,  Members 
should establish the necessary  legal provisions  and/or administrative procedures  to address and take 
action against  such circumvention.  Members  further agree that, consistent  with their domestic  laws 
and procedures,  they  will  cooperate  fully  to address problems arising  from  circumvention. 

2. 
Should any Member believe that this Agreement  is being circumvented  by transshipment,  re 
routing, false declaration concerning country or place of origin, or falsification of official  documents, 
and that no. or inadequate, measures  are being applied to address and/or to take aaion against such 
circumvention, that Member  should consult  with the Member  or Members  concerned with a view to 
seeking a mutually satisfaaory  solution.  Such consulutions should be held promptly, and within 30 days 

Page 91 

when possible.  If a mutually  satisfactory  solution is not reached, the maner may be referred  by any 
Member  involved  to the TMB  for  recommendations. 

Members agree to take necessary aaion, consistent with their domestic laws and procedures, 
3. 
to prevent,  to  investigate  and,  where appropriate,  to take legal  and/or  administrative  aaion  against 
circumvention practices within their territory.  Members agree to cooperate fully, consistent with their 
domestic laws and procedures, in instances of circumvention or alleged circumvention of this Agreement, 
to esublish  the relevant  facts  in the places  of  import,  export and,  where applicable,  transshipment. 
It  is  agreed  that  such  cooperation,  consistent  with  domestic  laws  and  procedures,  will  include: 
investigation of circumvention practices which increase restrained exports to the Member maintaining 
such  restraints;  exchange  of  documents,  correspondence,  reports and other relevant  information  to 
the extent  available;  and faciliution of plant visits and contacts, upon request and on a case-by-case 
basis.  Members should endeavour to clarify the circumstances of any such instances of circumvention 
or alleged  circumvention,  including  the respective roles of the exporters or importers  involved.  • 

4. 
Where, as a result of investigation, there is sufficient evidence that circumvention has occurred 
(e.g.  where evidence is available concerning the country or place of true origin, and the circumstances 
of such circumvention).  Members agree that appropriate action, to the extent necessary to address the 
problem, should be taken.  Such action may include the denial of entry of goods or, where goods have 
entered,  having  due  regard to the actual  circumstances  and the  involvement  of  the country  or place 
of true origin, the adjustment of charges to restraint levels to reflect the true country or place of origin. 
Also,  where there is evidence of the involvement of the territories of the Members through which the 
goods  have  been transshipped,  such aaion may include the introduction of  restraints with respect  to 
such Members.  Any such actions, together with their timing and scope, may be uken after consulutions 
held with a view  to arriving at a mutually  satisfactory solution between the concerned Members  and 
shall  be  notified  to  the  TMB  with  full  justification.  The  Members  concerned  may  agree  on  other 
remedies  in consultation.  Any such agreement shall also be notified  to the TMB, and the TMB may 
make  such  recommendations  to  the  Members  concerned  as  it' deems  appropriate.  If  a  mutually 
satisfactory solution is not reached, any Member concerned may refer the matter to the TMB for prompt 
review  and  recommendations. 

5. 
Members  note  that  some  cases  of  circumvention  may  involve  shipments  transiting  through 
countries  or places  with no changes or alterations made to the goods contained  in such shipments  in 
the places of  transit.  They  note that it may not be generally practicable for such places of transit to 
exercise  control  over  such shipments. 

6. 
Members  agree  that  false  declaration  concerning  fibre  content,  quantities,  description  or 
classification of merchandise also frustrates the objective of this Agreement.  Where there is evidence 
that  any  such  false  declaration  has  been made  for  purposes  of  circumvention.  Members  agree  that 
appropriate measures, consistent with domestic laws and procedures, should be uken against the exporters 
or importers involved.  Should any Member believe that this Agreement is being circumvented by such 
false declaration and that no. or inadequate, administrative measures are being applied to address and/or 
to take action  against  such circumvention,  that Member  should  consult  promptly  with  the  Member 
involved  with  a view  to seeking  a mutually  satisfactory  solution.  If such a solution  is not  reached, 
the matter may be referred by any  Member involved to the TMB for recommendations.  .This provision 
is not  intended  to prevent  Members  from  making  technical  adjustments  when  inadvertent  errors  in 
declarations  have been made. 

Page  92 

Article  6 

1. 
Members  recognize that during the transition period  it may  be necessary  to apply  a  specific 
transitional  safeguard  mechanism  (referred  to  in this  Agreement  as  "transitional  safeguard").  The 
transitional safeguard may be applied by any Member to products covered by the Annex, except those 
integrated into GATT  1994 under the provisions of Article 2.  Members not maintaining  restrictions 
falling  under Article 2 shall  notify the TMB within 60 days following  the date of entry  into force  of 
the WTO Agreement,  as to whether or not they wish to retain the right to use the provisions  of  this 
Article.  Members which have not accepted the Protocols extending the MFA since  1986  shall make 
such notification within 6 months following the entry into force of the WTO Agreement.  The transitional 
safeguard  should be applied as sparingly  as possible,  consistently  with the provisions  of this  Article 
and the effeaive  implemenution  of the integration process under this  Agreement. 

2. 
Safeguard  aaion  may  be uken  under this  Anicle  when,  on the basis  of  a determination  by 
a  Member3,  it  is  demonstrated  that  a particular product  is  being  imported  into  its  territory  in  such 
increased  quantities  as  to  cause  serious  damage,  or  actual  threat  thereof,  to  the  domestic  industry 
producing  like and/or directly  competitive  products.  Serious  damage  or actual  threat  thereof  must 
demonstrably  be caused by such increased quantities in toul  imports of that product and not by such 
other factors as technological  changes or changes in consumer  preference. 

3. 
In  making  a  determination  of  serious  damage,  or  actual  threat  thereof,  as  referred  to  in 
paragraph 2, the Member shall examine the effect of those imports on the state of the particular industry, 
as reflected  in changes in such relevant economic variables as output, productivity, utilization of capacity, 
inventories, market share, exports, wages, employment, domestic prices, profits and investment; none 
of  which,  either alone or combined  with other factors,  can necessarily  give.decisive  guidance. 

Any measure invoked pursuant to the provisions of this Article shall be applied on a Member-by-
4. 
Member basis.  The Member or Members to whom serious damage, or actual threat thereof,  referred 
to  in paragraphs  2  and  3,  is attributed,  shall  be determined  on the basis  of  a sharp and  substantia] 
increase  in imports, actual  or imminent",  from such a Member  or Members  individually, and on the 
basis of the level  of imports as compared with imports  from other sources, market share, and import 
and domestic  prices  at a comparable  suge  of commercial  transaction;  none of  these  factors,  either 
alone or combined with other factors, can necessarily give decisive guidance.  Such safeguard measure 
shall not be applied to the exports of any Member whose exports of the particular product are already 
under restraint  under this  Agreement. 

5. 
The  period of  validity  of  a determination  of  serious damage  or actual  threat thereof  for the 
purpose of  invoking safeguard aaion shall  not exceed 90 days from the date of  initial notification  as 
set  forth  in paragraph 7. 

In the application of the transitional safeguard, particular account shall be uken of the interests 

6. 
of  exporting  Members  as set out below: 

'A customs  union may apply a safeguard  measure as a single  unit or on behalf of a member Sute.  When  a  customs 
union applies a safeguard  measure as a single  unit, all the requirements for the determination of  serious damage  or actual 
threat thereof under this Agreement shall be based on the conditions existing in the customs union as a whole.  When a safeguard 
measure is applied on behalf of a member Sute. all the requirements for the determination of serious damage, or actual threat 
thereof, shall be based on the conditions existing in that member Sute and the measure shall be limited to that member Sute. 

•Such an  imminent  increase  shall  be a measurable  one and shall  not be determined  to exist on the basis of  allegation, 
conjecture  or  mere possibility arising,  for example,  from  the existence  of  production capacity  in the exporting  Members. 

Page  93 

(a) 

(b) 

(c) 

(d) 

least-developed  country  Members  shall  be  accorded  treatment  significantly  more 
favourable  than  that  provided  to  the  other  groups  of  Members  referred  to  in  this 
paragraph, preferably  in all  its elements  but,  at least,  on overall  terms; 

Members  whose  total volume  of  textile and clothing  exports  is small  in comparison 
with the total volume of exports of other Members and who account for only a small 
percenuge of toul imports of that produa into the importing Member shall be accorded 
differential and more favourable treatment in the fixing of the economic terms provided 
in paragraphs 8,  13 and 14.  For those suppliers, due account will be uken, pursuant 
to paragraphs 2 and 3 of Article  1, of the future possibilities  for the development  of 
their trade and the need to allow  commercial  quantities  of  imports  from them; 

with respea to wool products from wool-producing developing country Members whose 
economy and textiles and clothing trade are dependent on the wool sector, whose total 
textile  and clothing  exports consist  almost  exclusively  of wool  products,  and whose 
volume  of  textiles  and  clothing  trade  is  comparatively  small  in the  markets  of  the 
importing  Members,  special consideration shall  be given to the export needs of  such 
Members  when considering  quou  levels,  growth  rates and  flexibility; 

more favourable treatment shall be accorded to re-imports by a Member of textile and 
clothing products which that Member has exported to another Member for processing 
.  and subsequent  reimportation,  as defined  by the laws and practices  of  the  importing 
Member,  and subject to satisfactory control and certification  procedures, when these 
products  are  imported  from  a  Member  for  which  this  type  of  trade  represents  a 
significant  proportion of  its total  exports of  textiles  and clothing. 

The Member proposing to take safeguard action shall  seek consultations  with the Member or 
7. 
Members which would be affected by such action.  The request for consultations shall be accompanied 
by specific and relevant factual information, as up-to-date as possible, particularly in regard to:  {a) the 
factors, referred to in paragraph  3, on which the Member invoking the action has based its determination 
of the existence of serious damage or actual threat thereof;  and (b) the factors, referred to in paragraph 
4.  on  the  basis  of  which  it proposes  to  invoke  the safeguard  action  with  respect  to  the  Member  or 
Members concerned.  In respect of requests made under this paragraph, the information shall be related. 
as  closely  as possible,  to  identifiable  segments  of production  and  to the  reference  period  set  out  in 
paragraph 8.  The Member  invoking the action shall  also  indicate the specific  level  at which  imports 
of  the produa  in question  from the  Member  or Members  concerned  are proposed  to  be  restrained; 
such level shall not be lower than the level referred to in paragraph 8.  The Member seeking consultations 
shall, at the same time, communicate to the Chairman of the TMB the request for consulutions, including 
all the relevant factual data outlined in paragraphs  3 and 4, together with the proposed restraint level. 
The Chairman  shall  inform the members  of the TMB of the request  for  consultations,  indicating  the 
requesting Member, the produa in question and the Member having received the request.  The Member 
or Members concerned shall respond to this request promptly and the consultations shall be held without 
delay  and normally be completed  within 60 days of  the date on which the request  was  received. 

8. 
-  If,  in the consulutions,  there is mutual understanding  that the situation calls for restraint on 
the exports of the particular product from the Member or Members concerned, the level of such restraint 
shall be fixed at a level not lower than the actual level of exports or imports from the Member concerned 
during  the  12-month  period  terminating  two  months  preceding  the  month  in  which  the  request  for 
consulution  was made. 

9. 
Deuils of the agreed restraint measure shall be communicated to the TMB within 60  days from 
the date of conclusion of the agreement.  The TMB shall determine whether the agreement  is justified 
in accordance with the provisions of this Article.  In order to make its determination,  the TMB shall 

Page  94 

have available to it the factual dau provided to the Chairman of the TMB, referred to in paragraph  7, 
as well  as any other relevant information provided by the Members concerned.  The TMB may make 
such  recommendations  as it deems  appropriate to the Members  concerned. 

10. 
If,  however, after the expiry of the period of 60 days from the date on which the request for 
consulutions  was  received, there has been no agreement between the Members,  the Member which 
proposed  to  take  safeguard  action  may  apply  the  restraint  by  date  of  import  or  date  of  export,  in 
accordance  with  the  provisions  of  this  Article,  within  30 days  following  the  60-day  period  for 
consulutions,  and at the same time  refer the maner to the TMB.  It shall  be open to either  Member 
to refer  the maner to the TMB before  the expiry of the period of 60 days.  In either case,  the TMB 
shall promptly conduct an examination of the maner,  including the determination of serious damage, 
or actual threat thereof, and its causes, and make appropriate recommendations to the Members concerned 
within 30 days.  In order to conduct such examination, the TMB shall have available to it the factual 
data provided to the Chairman of the TMB,  referred to in paragraph 7,  as well as any other relevant 
information  provided  by the Members  concerned. 

11. 
In highly  unusual and critical circumstances,  where delay would cause damage which would 
be difficult  to repair, action under paragraph  10 may be uken provisionally, on the condition that the 
request for consultations and notification to the TMB shall be effected within no more than five working 
days after taking the action.  In the case that consulutions do not produce agreement, the TMB shall 
be notified  at the conclusion  of consultations,  but in any casé no later than 60 days from the date of 
the  implementation  of  the  action.  The TMB  shall  promptly  conduct  an examination  of  the  maner, 
and make appropriate  recommendations  to the Members  concerned  within 30 days.  In the case that 
consultations do produce agreement. Members shall notify the TMB upon conclusion but, in any case, 
no  later than 90  days  from  the date of the implementation  of  the aaion.  The TMB may make such 
recommendations  as  it deems  appropriate to the Members  concerned. 

12. 
A Member may mainuin measures invoked pursuant to the provisions of this Article: (a) for 
up to three years without extension, or (b) until the product is integrated into GATT  1994, whichever 
comes  first. 

13. 
Should  the  restraint  measure  remain  in force  for a.period exceeding  one year,  the  level  for 
subsequent  years shall  be the level  specified  for the first  year increased  by a growth rate of  not  less 
than 6  per cent per annum, unless otherwise justified to the TMB.  The restraint level for the product 
concerned may be exceeded in either year of any two subsequent years by carry forward and/or carryover 
of  10 per cent of which carry forward shall not represent more than 5 per cent.  No quantiutive limits, 
shall  be placed on the combined  use of carryover, carry forward and the provision of paragraph  14. 

14.  When more than one product from another Member is placed under restraint under this Article 
by a Member, the level of restraint agreed, pursuant to the provisions of this Article, for each of these 
products may be exceeded by 7 per cent, provided that the toul exports subjea to restraint do not exceed 
the toul  of thé levels for all products so restrained under this Article, on the basis of agreec common 
units.  Where the periods of application of restraints of these products do not coincide with each other, 
this provision  shall  be applied to any overlapping  period on a pro rata  basis. 

15. 
If a safeguard aaion is applied under this Anicle to a produa for which a restraint was previously 
in place under the MFA during the 12-month period prior to the entry into force of the WTO Agreement, 
or pursuant to the provisions of Article  2 or 6, the level of the new restraint shall be the level provided 
for  in paragraph  8 unless the new  restraint comes  into force  within one year  of: 

(a) 

the date of notification  referred to in paragraph  15 of Article 2 for the elimination of 
the previous  restraint;  or 

Page  95 

(b) 

the date of  removal" of  the previous  restraint put  in place  pursuant  to the provisions 
of  this Article  or of the MFA 

in which case the level shall not be less than the higher of (i) the level of restraint for the last  12-month 
period  during  which  the  product  was  under  restraint,  or  (it) the  level  of  restraint  provided  for  in 
paragraph  8. 

16.  When a Member which is not maintaining a restraint under Article 2 decides to apply a restraint 
pursuant to the provisions  of this Article,  it shall esublish appropriate arrangements which:  (a) take 
full  account of such'factors as esublished  uriff  classification and quantitative units based on normal 
commercial practices in export and import transactions, both as regards fibre composition and in terms 
of  competing  for  the same  segment  of  its domestic  market, and (b) avoid over-categorization.  The 
request  for  consulutions  referred  to  in  paragraphs 7  or  11  shall  include  full  information  on  such 
arrangements. 

Article  7 

1. 
As pan of the integration process and with reference to the specific commitments  undertaken 
by  the  Members  as a result  of  the  Uruguay  Round,  all  Members  shall  take such actions  as  may  be 
necessary  to abide by GATT  1994  rules and disciplines  so  as to: 

(a) 

(b) 

achieve  improved  access  to markets  for  textile  and  clothing  products  through  such 
measures as uriff reductions and bindings, reduction or elimination of non-tariff barriers, 
and facilitation  of  customs,  administrative  and licensing  formalities; * 

ensure the application of policies  relating to fair and equitable trading conditions as 
regards  textiles  and  clothing  in  such  areas  as  dumping  and anti-dumping  rules and 
procedures, subsidies and countervailing measures, and proteaion of intellectual property 
rights: and 

(c) 

avoid  discrimination  against  imports  in the textiles and clothing  sector when taking 
measures  for general  trade policy  reasons. 

Such actions shall be without prejudice to the rights and obligations of Members under GATT  1994. 

2. 
Members shall  notify- to the TMB the actions referred to in paragraph 1 which have a bearing 
on the implementation  of this Agreement.  To the extent that these have been notified  to other WTO 
bodies, a summary, with reference to the original notification, shall be sufficient to fulfil the requirements 
under this paragraph.  It shall  be open to any  Member to make reverse  notifications  to the TMB. 

3 
Where  any  Member  considers that another Member  has not uken the actions  referred  to  in 
paragraph  1. and that the balance of rights and obligations under this Agreement has been upset, that 
Member may bring the matter before the relevant WTO bodies and inform the TMB.  Any subsequent 
findings or conclusions by the WTO bodies concerned shall form a part of the TMB's comprehensive 
report. 

Page  96 

Article  8 

1. 
In order  to supervise  the implemenution  of  this Agreement,  to examine  all  measures  uken 
under this Agreement and their conformity  therewith, and to take the aaions specifically  required  of 
it by this Agreement,  the Textiles Monitoring Body ("TMB")  is hereby esublished.  The TMB shall 
consist of a Chairman and 10 members.  Its membership shall be balanced and broadly representative 
of the Members and shall provide for roution of its members at appropriate intervals.  The members 
shall be appointed by Members designated by the Council  for Trade in Goods to serve on the TMB, 
discharging  their function  on an ad personam  basis. 

The TMB shall develop its own working procedures,  h is understood, however, that consensus 
2. 
within the TMB does not require the assent or concurrence of members appointed by  Members involved 
in an unresolved  issue under review by the TMB. 

The TMB shall  be considered as a standing body and shall meet as necessary to carry out the 
3. 
functions  required of it under this Agreement.  It shall rely on notifications  and information  supplied 
by  the  Members  under  the  relevant  Articles  of  this  Agreement,  supplemented  by  any  additional 
information  or necessary details  they  may  submit  or  it may  decide  to seek  from  them.  It may  also 
rely  on  notifications  to and reports  from  other WTO bodies  and from  such other sources  as  it may 
deem  appropriate. 

Members shall afford  to each other adequate opportunity for consultations with respect to any 

4. 
matters  affecting  the operation of this  Agreement. 

5. 
In the absence  of  any mutually  agreed solution  in the bilateral  consulutions  provided  for  in 
this Agreement, the TMB shall, at the request of either Member, and following a thorough and prompt 
consideration  of  the matter,  make  recommendations  to the Members  concerned. 

6. 
At the request  of  any Member,  the TMB shall  review promptly  any particular  matter  which 
that Member considers to be detrimental to its interests under this Agreement and where consultations 
between  it  and  the  Member  or  Members  concerned  have  failed  to  produce  a mutually  satisfactory 
solution.  On such maners. the TMB may make such observations as it deems appropriate to the Members 
concerned  and for the purposes of the review provided  for  in paragraph  11 

Before  formulating  its recommendations  or observations,  the TMB shall  invite participation 

7. 
of  such  Members  as may  be directly  affected  by the maner  in question. 

Whenever  the  TMB  is  called  upon  to  make  recommendations  or  findings,  it  shall  do  so. 
8! 
preferably  within a period of  30 days, unless  a different  time period  is specified  in this  Agreement. 
All  such  recommendations  or findings  shall  be  communicated  to  the Members  directly  concerned. 
All such recommendations  or findings shall also be communicated  to the Council  for Trade in Goods 
for  its  information. 

The Members shall endeavour to accept in full the recommendations of the TMB, which shall 

9. 
exercise  proper surveillance  of  the  implemenution  of such  recommendations. 

10. 
If a Member considers itself unable to conform with the recommendations of the TMB, it shall 
provide  the  TMB  with  the  reasons  therefor  not  - 
than  one  month  after  receipt  of  such 
recommendations.  Following  thorough consideration 
:.  reasons given, the TMB shall  issue any 
.  t  If, after such further recommendations, 
further recommendations  it considers appropriate fora 
the  matter  remains  unresolved,  either  Member  may  bring  the maner  before  the Dispute  Senlement 
Body and invoke paragraph 2 of Article  XXIII of GATT 1994 and the relevant provisions of the Dispute 
Settlement  Understanding. 

Page  97 

In order to oversee  the  implemenution  of  this Agreement,  the Council  for Trade  in Goods 
11. 
shall conduct a major review before the end of each suge of the integration process.  To assist  in this 
review,  the TMB shall, at least five  months before the end of each suge,  transmit  to the Council  for 
Trade in Goods a comprehensive report on the implemenution of this Agreement during the suge under 
review, in particular in maners with regard to the integration process, the application of the transitional 
safeguard  mechanism,  and relating to the application of GATT  1994 rules and disciplines  as defined 
in  Articles  2,  3,  6  and 7  respectively.  The  TMB's  comprehensive  report  may  include  any 
recommendation  as deemed  appropriate by the TMB  to the Council  for Trade  in Goods. 

12. 
In the light of its review the Council for Trade in Goods shall by consensus uke such decisions 
as it deems appropriate to ensure that the balance of rights and obligations embodied in this Agreement 
is not being impaired.  For the resolution of any disputes that may arise with respect to matters referred 
to in Article  7, the Dispute Senlement Body may authorize, without prejudice to the final  date set out 
under Article  9,  an adjustment  to paragraph  14 of Article  2,  for the suge  subsequent  to the  review, 
with respect  to any Member  found  not to be complying  with its obligations  under this  Agreement. 

Article  9 

This Agreement  and all  restrictions thereunder shall  stand terminated  on the first  day  of  the 
121st month that the WTO Agreement  is in effect,  on which date the textiles and clothing sector shall 
be  fully  integrated  into GATT  1994.  There shall  be no extension  of  this Agreement. 

Page  98 

ANNEX 

LIST OF PRODUCTS  COVERED  BY THIS  AGREEMENT 

'*  This Annex lists textile and clothing products defined by Harmonized Commodity  Description 

1. 
and Coding  System  (HS) codes  at the six-digit  level. 

Actions  under the  safeguard  provisions  in Article  6  will  be uken  with  respect  to particular 

2. 
textile  and clothing  products  and not on the basis of the HS  lines per  se. 

3. 

Actions  under the safeguard  provisions  in Article  6  of this  Agreement  shall  not apply to: 

(a) 

(b) 

developing  country  Members*  exports  of  handloom  fabrics  of  the  cottage  industry, 
or hand-made cottage industry products made of such handloom fabrics, or traditional 
folklore handicraft textile and clothing products, provided that such products are properly 
certified  under arrangements  esublished  between the  Members  concerned; 

historically traded textile products which were internationally traded in commercially 
significant  quantities  prior  to  1982,  such  as  bags,  sacks,  carpetbacking,  cordage, 
luggage, mats, mattings and carpets typically made from fibres sUch as jute, coir, sisal, 
abaca,  maguey  and henequen: 

(c) 

products  made  of  pure silk. 

For  such  products,  the  provisions  of  Anicle  XIX  of  GATT  1994,  as  interpreted  by  the  Agreement 
on  Safeguards,  shall  be applicable. 

Products within Section XI (Textiles and Textile Articles) of the 
Harmonized  Commodity Description and Coding System (HS) Nomenclature 

Page 99 

HSNo.  Product Description 

Ch. 50  Silk 
5004.00  Silk yarn (other than yarn spun from silk waste) not put up for retail sale 
5005.00  Yarn spun from silk waste, not put up for retail sale 
5006.00  Silk yarn&yarn spun from silk waste, put up f retail sale; silk-worm gut 
5007.10  Woven fabrics of noil silk 
5007.20  Woven fabrics of silk/silk waste, other than noil silk, 85%/more of such fibres 
5007.90  Woven fabrics of silk, nes 

Ch. 51  Wool, fine/coarse animal hair, horsehair yarn & fabric 
5105.10  Carded wool 
5105.21  Combed wool  in fragments 
5105.29  Wool tops and other combed wool, other than combed wool in fragments 
5105.30  Fine animal hair, carded or combed 
5106.10  Yarn of carded wool, > /=85%  by weight of wool, nt put up for retail sale 
5106.20  Yarn of carded, wool, < 85 %  by weight of wool, not put up for retail sale 
5107.10  Yarn of combed wool, > /=85%  by weight of wool, not put up for retail sale 
5107.20  Yarn of combed wool, < 85% by weight of wool, not put up for retail sale 
5108.10  Yarn of carded fine animal hair, not put up for retail sale 
5108.20  Yarn of combed fine animal hair, not-put up for retail sale 
5109.10  Yarn of wool/of fine animal hair, > /=85% by weight of such fibres, put up 
5109.90  Yarn of wool/of fine animal hair, < 85 %  by weight of such fibres, put up 
5110.00  Yarn of coarse animal hair or of horsehair 
5111.11  Woven fabrics of carded wool/fine  animal hair, > /=85 %  by weight, < /=300 g/m2 
5111.19  Woven fabrics of carded wool/fine  animal hair, > /=85 %  by weight, > 300 g/m2 
5111.20  Woven fabric of carded wool/fme animal hair, > /=85%  by wt, mixd w m-m fi 
5111.30  Woven fabric of carded wool/fme animal hair, > /=85% by wt, mixd w m-m fib 
5111.90  Woven fabrics of carded wool/fme animal hair, > /=  85% by weight, nes 
5112.11  Woven fabric of combed wool/fme animal hair, > /=85 %  by weight, < /=200 g/m2 
5112.19  Woven fabrics of combed wool/fme animal hair, > /=85 %  by weight, > 200 g/m2 
5112.20  • Woven fabrics of combed wool/fme animal hair, < 85% by wt, mixd w m-m fil 
5112.30  Woven fabrics of combed wool/fme animal hair, < 85% by wt, mixd w m-m fib 
5112.90  Woven fabrics of combed wool/fine animal hair,  <85% by weight, nes 
5113.00  Woven fabrics of coarse animal hair or of horsehair 

Ch. 52  Cotton 
5204.11  Cotton sewing thread  > /=85% by weight of cotton, not put up for retail sale 
5204.19  Cotton sewing thread, < 85 %  by weight of cotton, not put up for reuil sale 
5204.20  Cotton sewing thread, put up for reuil sale 
5205.11  Cotton yarn,>/«85%,single, uncombed,>/-714.29 dtex, nt put up 
5205.12  Cotton yarn, >/«85%,single, uncombed, 714.29  >dtex>/=232.56,  not put up 
5205.13  Cotton yarn, >/=85%,single, uncombed, 232.56>dtex>/=192.31,  not put up 
5205.14  Cotton yarn,>/=85%,single, uncombed,  192.31  >dtex>/=125,  not put up 
5205.15  Cotton yam, > /« 85%,single, uncombed, < 125 dtex, nt put up f reuil sale 
5205.21  Cotton yarn,>/«85%, single, combed,>/=714.29,  not put up 
5205.22  Cotton yarn, > /=85 % .single, combed, 714.29  > dtex > /=232.56,  not put up 
5205.23  Cotton yarn,>/«85%, single, combed, 232.56  >dtex>/= 192.31, not put up 
5205.24  Cotton yarn,>/»85%,  single, combed,  192.31  >dtex>/= 125, not put up 

Page 100 

HS No.  Product Description 

5205.25  Cotton yam, >/=85%,single,  combed, < 125 dtex, not put up for reuil sale 
5205.31  Cotton yam,>/=85%,  multi, uncombed,>/=714.29 dtex, not put up, nes 
5205.32  Cotton yarn, >/=85%,multi,  uncombed, 714.29  >dtex>/=232.56,  not put up, nes 
5205.33  Cotton yam,> /=85%,multi, uncombed, 232.56  >dtex>/= 192.31, not put up, nes 
5205.34  Cotton yam,>/=85%,multi,  uncombed,  192.31  >dtex>/*125,  nt put up, nes 
5205.35  Cotton yam,>/=85%,multi,  uncombed,  < 125 dtex, not put up, nes 
5205.41  Cotton yam,>/=85%,  multiple, combed,>/«714.29 dtex, not put up, nes 
5205.42  Cotton yam; >/=85%,multi,  combed, 714.29  >dtex>/=232.56,  nt put up, nes 
5205.43  Cotton yam, > /=85%,multi, combed, 232.56  >dtex>/= 192.31, nt put up, nes 
5205.44  Cotton yam, >/=85%,multiple,  combed,  192.31  >dtex>/=125,  not put up, nes 
5205.45  Cotton yam, > /=85%,  multiple, combed,  < 125 dtex, not put up, nes 
5206.11  Cotton yam,  <85%,  single, uncombed,>/=714.29,  not put up 
5206.12  Cotton yam,  <85%, single, uncombed, 714.29  >dtex>/=232.56,  nt put up 
5206.13  Cotton yam,  <85%, single, uncombed, 232.56  >dtex>/=192.31,  not put up 
5206.14  Cotton yam,  < 85%, single, uncombed,  192.31  >dtex> /= 125, nt put up 
5206.15  Cotton yam, < 85 % .single, uncombed, < 125 dtex, not put up for reuil sale 
5206.21  Cotton yam,  < 85%, single, combed, > /=714.29 dtex, nt put up 
5206.22  Cotton yam,  <85%, single, combed, 714.29  >dtex>/=232.56,  not put up 
5206.23  Cotton yam.  <85%, single, combed, 232.56  >dtex>/= 192.31, not put up 
5206.24  Cotton yam.' <85%,  single, combed,  192.31  >dtex>/= 125, not put up 
5206.25  Cotton yam, < 85% .single, combed, < 125 dtex, not put up for reuil sale 
5206.31  Cotton yam,  <85%, multiple, uncombed, >/=714.29,  not put up, nes 
5206.32  Cotton yarn,<85%,multiple, uncombed, 714.29  >dtex>/=232,56,  nt put up, nes 
5206.33  Cotton yam,<85%,multiple, uncombed, 232.56  >dex>/= 192.31, nt put up, nes 
5206.34  Cotton yam,<85%,multiple, uncombed,  192.31  >dtex>/=125,  nt put up. nes 
5206.35  Cotton yarn,  <85%, multiple, uncombed,  < 125 dtex, not put up, nes 
5206.41  Cotton yam,  <85%, multiple, combed,>/=714.29,  nt put up, nes 
5206.42  Cotton yam.<85%,multiple, combed, 714.29  >dtex>/=232,56,  nt put up, nes 
5206.43  Cotton yam.<85%,multiple, combed, 232.56  >dtex>/= 192.31, nt put up, nes 
5206.44  Cotton yam.<85%,multiple, combed,  192.31  >dtex>/= 125, nt put up, nes 
5206.45  Cotton yam.  <85%, multiple, combed,  < 125 dtex, not put up, nes 
5207.10  Cotton yam (other than sewing thread) >/=85%  by weight of cotton, put up 
5207.90  Cotton yam (other than sewg thread)  < 85% by wi of cotton, put up f retl sale 
5208.11  Plain weave cotton fabric, > /=85%,  not more than 100 g/m2, unbleached 
5208.12  Plain weave cotton fabric, > /=85%,  > 100 g/m2 to 200 g/m2, unbleached 
5208.13  Twill  weave cotton fabric, > /=85%. not more than 200 g/m2, unbleached 
5208.19  Woven fabrics of cotton. > /«85%,  not more than 200 g/m2, unbleached, nes 
5208.21  Plain weave cotton fabrics.>/=85%,  not more than 100 g/m2, bleached 
5208.22  Plain weave cotton fabric. > /=853,  > 100 g/m2 to 200 g/m2, bleached 
5208.23  Twill  weave cotton fabric. > /=85%. not more than 200 g/m2, bleached 
5208.29  Woven fabrics of cotton. > /=85%,  nt more than 200 g/m2, bleached, nes 
5208.31  Plain weave cotton fabric, >/=85%. not more than 100 g/m2, dyed 
5208.32  Plain weave cotton fabric, > /=85 %. > 1 OOg/m= to 200g/m=, dyed 
5208.33  Twill  weave cotton fabrics, >/«85%.  not more than 200 g/m2. dyed 
5208.39  Woven fabrics of cotton. > /=85%,  not more than 200 g/m2, dyed, nes 
5208.41  Plain weave cotton fabric.>/*85%,  not more than 100 g/m2, yam dyed 
5208.42  Plain weave conon fabrics,> /=85%.  > 100 g/m2 to 200 g/m2, yam dyed 
5208.43  Twill  weave cotton fabric,>/=85%,  not more than 200 g/m2, yam dyed 
5208.49  Woven fabrics of cotton. >/=85%,nt more than 200 g/m2, yam dyed, nes 
5208.51  Plain weave cotton fabrics, > /=85%, not more than 100 g/m2, printed 
5208.52  Plain weave cotton fabric. > /«85%,  > 100 g/m2 to 200 g/m2, printed 

Page  101 

HS  No.  Product  Description 

5208.53  Twill  weave  cotton fabric, > /=85 %, not more than 200  g/m2,  printed 
5208.59  Woven" fabrics  of  cotton, > /=85 %, not more than 200 g/m2,  printed,  nes 
5209.11  Plain weave  cotton fabric, > /=85 %, more than 200 g/m2,  unbleached 
5209.12  Twill  weave  cotton  fabric, > /=85 %,. more than 200  g/m2,  unbleached 
5209.19  Woven fabrics  of  cotton, > /=85% ,more  than 200 g/m2,  unbleached,  nes 
5209.21  Plain weave  cotton fabric, > / « 85 %, more than 200 g/m2,  bleached 
5209.22  Twill  weave  cotton fabrics, > /=85%,  more than 200 g/m2,  bleached 
5209.29  Woven fabrics of  cotton, > /=85%,  more than 200  g/m2,  bleached,  nes 
5209.31  Plain weave  cotton  fabrics, > /=85 %, more  than 200  g/m2,  dyed 
5209.32  Twill  weave  cotton  fabrics, > /=85%,  more than 200  g/m2,  dyed 
5209.39  Woven  fabrics  of  cotton, > / = 85%,  more  than 200  g/m2,  dyed,  nes 
5209.41  Plain weave cotton  fabrics, > /=85 %, more than 200 g/m2,  yarn dyed 
5209.42  Denim  fabrics  of  cotton, > /=85 %, more than 200  g/m2 
5209.43  Twill  weave  cotton fab,  other than denim, >/ = 85%,more  than 200 g/m2.  yarn dyed 
52Q9.49  Woven  fabrics  of  cotton, > /=85%,  more than 200 g/m2,  yarn dyed,  nes 
5209.51  Plain weave  cotton  fabrics, > /=85 %, more than 200 g/m2,  printed 
5209.52  Twill  weave  cotton  fabrics,>/-85%,  more  than 200 g/m2,  printed 
5209.59  Woven  fabrics  of  cotton, > /=85%,  more than 200 g/m2,  printed,  nes 
5210.11  Plain weave  cotton  fab, < 85%  mixd  w m-m  fib,  not more than 200 g/m2,  unbl 
5210.12  Twill  weave  cotton  fab, < 85%  mixd  w m-m  fib,  not more  than 200  g/m2,  unbl 
5210.19  Woven  fab of  cotton, < 85 %  mixd  with m-m  fib, < /=200  g/m2,  unbl,  nes 
5210.21  Plain weave  cotton  fab, < 85%  mixd  w m-m  fib,  not more  than 200 g/m2.  bl 
5210.22  Twill  weave  cotton  fab, < 85%  mixd  w m-m  fib,  not more than 200  g/m2,  bl 
5210.29  Woven  fabrics  of  cotton. < 85% mixd  with m-m  fib,</=200  g/m2.  bl,  nes 
5210.31  Plain  weave  cotton  fab, < 85%  mixd  w m-m  fib,  not more  than 200 g/m2,  dyd 
5210.32  Twill  weave  cotton  fab, < 85%  mixd  w m-m  fro,  not more  than 200 g/m2.  dyd 
5210.39  Woven  fabrics  of  cotton, < 85%  mixd  with m-m  fib, < / = 2 00  g/m2,  dyed,  nes 
5210.41  Plain  weave  cotton  fab, < 85%  mixd  w m-m  fib,  nt mor  thn 200g/m2,  yarn dyd 
5210.42  Twill  weave  cotton  fab, < 85%  mixd  w m-m  fib,  nt mor  thn 200g/m2,  yarn dyd 
5210.49  Woven  fabrics  of  cotton, < 85%  mixed  w m-m  fib,</=200g/m2,  yarn dyed,  nes 
5210.51  Plain  weave  cotton  fab, < 85% mixd  w m-m  fib,  nt more  thn 200 g/m2,  printd 
5210.52  Twill  weave  cotton  fab, < 85% mixd  w m-m  fib,  nt more  thn 200g/m2,  printd 
5210.59  Woven  fabrics  of  cotton, < 85% mixed  with m-m  fib,</=200g/m2,  printed,  nes 
5211.11  Plain weave  cotton  fab, < 85%  mixd  w m-m  fib,  more thn 200  g/m2,  unbleachd 
5211.12  Twill  weave  cotton  fab, < 85%  mixed  with m-m  fib,  more  than 200  g/m2,  unbl 
5211.19  Woven  fabrics  of  cotton. < 85%  mixd  w m-m  fib,  more  thn 200g/m2,  unbl,  nes 
5211.21  Plain weave  cotton  fab, < 85%  mixd  w m-m  fib,  more than 200 g/m2,  bleachd 
5211.22  Twill  weave  cotton  fab, < 85%  mixd  w m-m  fib,  more  than 200 g/m2,  bleachd 
5211.29  Woven  fabrics  of  cotton, < 85%  mixd  w m-m  fib,  more than 200 g/m2,  bl,  nes 
5211.31  Plain weave  cotton fab, < 85%  mixed  with m-m  fib,  more than 200 g/m2,  dyed 
5211.32  Twill  weave  cotton  fab, < 85% mixed  with m-m  fib,  more  than 200 g/m2,  dyed 
5211.39  Woven  fabrics  of cotton, < 85% mixd  w m-m  fib,  more  than 200  g/m2,  dyd,  nes 
5211.41  Plain weave cotton  fab, < 85 %  mixd  w m-m  fib,  more than 200 g/m2,*yarn dyd 
5211.42  Denim  fabrics of  cotton,  <85%  mixed  with m-m  fib,  more than 200  g/m2 
5211.43  Twill  weave  cotton  fab,  other than denim, < 85%  mixd  w m-m  fib, >200g/m2,  yam dyd 
5211.49  Woven  fabrics  of  cotton, < 85%  mixd  with m-m  fib, > 200 g/m2,  yam dyed,  nes 
5211.51  Plain weave cotton  fab, < 85 %  mixd  w m-m  fib,  more than 200 g/m2,  printd 
5211.52  Twill  weave  cotton  fab, < 85% mixd w  m-m  fib,  more than 200 g/m2,  printd 
5211.59  Woven fabrics  of  cotton, < 85% mixd  w m-m  fib,  mor thn 200g/m2,  printd,  nes 
5212.11  Woven  fabrics  of  cotton,  weighing  not more  than 200 g/m2,  unbleached,  nes 
5212.12  Woven  fabrics  of  cotton,  weighing  not more than 200 g/m2,  bleached,  nes 

Page 102 

HS No.  .  Product  Description 

5212.13  Woven fabrics of cotton, weighing not more than 200 g/m2, dyed, nes 
5212.14  Woven fabrics of cotton, < /=200g/m2,  of yarns of different  colours, nes 
5212.15  Woven fabrics of cotton, weighing not more than 200 g/m2, printed, nes 
5212:21  Woven fabrics of cotton, weighing more than 200 g/m2, unbleached, nes 
5212.22  Woven fabrics of cotton, weighing more than 200 g/m2,  bleached, nes 
5212.23  Woven fabrics of cotton, weighing more than 200 g/m2, dyed, nes 
5212.24  Woven fabrics of cotton,  >200 g/m2, of yarns of different  colours, nes 
5212.25  Woven fabrics of cotton, weighing more than 200 g/m2, printed, nes 

Ch. 53  Other vegetable textile fibres; paper yarn & woven fab 
5306.10  Flax yam, single 
5306.20  Flax yam, multile (folded) or cabled 
5307.10  Yam of jute or of other textile bast fibres,  single 
5307.20  Yarn of jute or of oth textile bast fibres, multiple (folded) or cabled 
5308.20  True hemp yarn 
5308.90  Yarn of other vegetable textile fibres 
5309.11  Woven fabrics, containg  85% or more by weight of flax,  unbleached or bl 
5309.19  Woven fabrics, containing  85% or more by weight of flax,  other than unbl or bl 
5309.21  Woven fabrics of flax,  containg  <85% by weight of flax,  unbleached or bl 
5309.29  Woven fabrics of flax,  containing  < 85% by weight of flax,  other than unbl or bl 
5310.10  Woven fabrics of jute or of other textile bast fibres, unbleached 
5310.90  Woven fabrics of jute or of other textile bast fibres, other than unbleached 
5311.00  Woven fabrics of oth vegetable textile fibres; woven fab of paper yam 

Ch.  54  Man-made  filaments 
5401.10  Sewing thread of synthetic filaments 
5401.20  Sewing thread of artificial  filaments 
5402.10  High tenacity yarn (other than sewg thread),nylon/oth polyamides fi,  nt put up 
5402.20  High tenacity yam (other than sewg thread),of polyester filaments,  not put up 
5402.31  Texturd yam nes. of nylon/oth polyamides fi, </=50tex/s.y.,not put up 
5402.32  Texturd yarn nes. of nylon/oth polyamides fi, > 50 tex/s.y.,not put up 
5402.33  Textured yarn nes. of polyester filaments,  not put up for reuil sale 
5402.39  Textured yam of synthetic filaments, nes, not put up 
5402.41  Yarn of nylon or other polyamides fi, single, untwisted, nes, not put up 
5402.42  Yarn of polyester filaments,  partially oriented, single, nes, not put up 
5402 43  Yam of polyester filaments, single, untwisted, nes, not put up 
. 5402.49  Yam of synthetic filaments, single, untwisted, nes, not put up 
5402.51  Yam of nylon or other polyamides fi, single,  >50  turns/m, not put up 
5402.52  Yam of polyester filaments, single.  >50 turns per metre, not put up 
5402.59  Yam of synthetic filaments,  single.> 50 turns per metre, nes, not put up 
5402.61  Yam of nylon or other polyamides fi, multiple, nes. not put up 
5402.62  Yarn of polyester filaments, multiple, nes, not put up 
5402.69  Yam of synthetic filaments, multiple, nes, not put up 
5403.10  High tenacity yam (other than sewg thread),of viscose rayon filamt,  nt put up 
5403.20  Textured yam nes, of artificial filaments, not put up for reuil sale 
5403.31  Yam of viscose rayon filaments, single, untwisted, nes, not put up 
5403.32  Yam of viscose rayon filaments, single, >  120 turns per m, nes, nt put up 
5403.33.  Yam of cellulose aceute filaments,  single, nes, not put up 
5403.39  Yam of artificial filaments, single, nes. not put up 
5403.41  Yam of viscose rayon filaments, multiple, nes, not put up 
5403.42  Yam of cellulose aceute filaments, multiple, nes, not put up 

Page  103 

HS  No.  Product  Description 

5403.49  Yam of  artificial filaments, multiple,  nes,  not put up 
5404.10  Synthetic  mono,>/=67dtex,  no cross sectional  dimension  exceeds  1 mm 
5404.90  Strip&the  like  of  syn tex material  of an apparent  width nt exceedg  5mm 
5405.00  Artificial  mono,  67  dtex,  cross-sect  >  1mm; strip of arti tex mat w  </=5mm 
5406.10  Yam of  synthetic filament (other than sewing  thread), put up for reuil  sale 
5406.20  Yam of  artificial filament (other than sewing  thread),put up for reuil  sale 
5407.10  Woven  fab of  high tenacity fi yarns of  nylon oth  polyamides/polyesters 
5407.20  Woven  fab obuind  from  strip/the  like of  synthetic  textile materials 
5407.30  Fabrics specif  in Note 9  Section XI (layers  of parallel  syn tex yam) 
5407.41  Woven  fab, > /=85%  of nylon/other polyamides filaments, unbl or bl,  nes 
5407.42  Woven  fabrics, >/=85%  of nylon/other polyamides filaments, dyed,  nes 
5407.43  Woven fab. >/=85%  of nylon/other polyamides filaments, yam dyed,  nes 
5407.44  Woven  fabrics, > /=85%  of nylon/other polyamides filaments, printed,  nes 
5407.51  Woven  fabrics, > /=85%  of textured polyester  filaments,  unbl or bl,  nes 
5407.52  Woven  fabrics, >/=85%  of textured polyester filaments, dyed,  nes 
5407.53  Woven  fabrics. > /=85%  of textured polyester filaments, yam dyed,  nes 
5407.54  Woven fabrics, > /=85%  of textured polyester filaments, printed, nes 
5407.60  Woven  fabrics, >/=85%  of non-textured  polyester filaments, nes 
5407.71  Woven  fab, > /=85%  of  synthetic filaments,  unbleached  or bleached,  nes 
5407.72  Woven  fabrics, >/=85%  of synthetic filaments, dyed,  nes 
5407.73.  Woven  fabrics, > /=85 %  of  synthetic filaments, yam dyed, nes 
5407.74  Woven  fabrics, >/=85%  of  synthetic filaments, printed, nes 
5407.81  Woven  fabrics  of  synthetic filaments, < 85%  mixd  w  cotton, unbl  o bl,  nes 
5407.82  Woven  fabrics  of  synthetic filaments, < 85%  mixed  with cotton, dyed,  nes 
5407.83  Woven  fabrics  of  synthetic filaments, < 85%  mixd  w  cotton, yam dyd,  nes 
5407.84  Woven  fabrics  of  synthetic  filaments, < 85%  mixd  with cotton, printed,  nes 
5407.91  Woven  fabrics  of  synthetic filaments, unbleached  or bleached,  nes 
5407.92  Woven  fabrics  of  synthetic filaments, dyed,  nes 
5407.93  Woven  fabrics  of  synthetic filaments, yam dyed,  nes 
5407.94  Woven  fabrics  of  synthetic  filaments,  printed,  nes 
54Q8  10  Woven  fabrics  of  high tenacity filament yarns of  viscose  rayon 
5408.21  Woven  fab. > /=85 %  of  artificial  fi  o  strip of art tex mat,  unbl/bl,  nes 
5408.22  Woven  fab. > /=85%  of  artificial  fi  or strip of art tex mat,  dyed,  nes 
5408.23  Woven  fab, > / = 85%  of artificial  fi  or strip of  art tex mat,  y dyed,  nes 
5408.24  Woven  fab. > / = 85%  of artificial  fi  or strip of  art tex mat,  printd, nes 
5408.31  Woven  fabrics of  artificial filaments, unbleached  or bleached,  nes 
5408.32  Woven  fabrics  of artificial filaments, dyed,  nes 
5408.33  Woven  fabrics  of  artificial  filaments,  yam dyed,  nes 
5408.34  Woven  fabrics  of  artificial filaments, printed,  nes 

Ch.  55  Man-made staple  fibres 
5501.10  Filament  tow  of  nylon or other polyamides 
5501.20  Filament  tow of  polyesters 
5501.30  Filament tow of acrylic or modacrylic 
5501.90  Synthetic filament tow.  nes 
5502.00  Artificial filament tow 
5503.10  Staple fibres  of  nylon or other polyamides,  not carded or combed 
5503.20  Suple  fibres  of polyesters,  not carded or combed 
5503.30  Suple  fibres  of acrylic or modacrylic,  not carded or combed 
5503.40  Suple  fibres  of  polypropylene,  not carded or combed 
5503.90  Synthetic staple  fibres,  not carded or combed,  nes 

Page 104 

HS No.  Product Description 

. 

5504.10  Suple fibres of viscose,  not carded or combed 
5504.90  Artificial  suple fibres, other than viscose, not carded or combed 
5505.10  Waste of synthetic  fibres 
5505:20  Waste of artificial  fibres 
5506.10  Suple fibres of nylon or other polyamides, carded or combed 
5506.20  Suple fibres of polyesters, carded or combed 
5506.30  Suple fibres of acrylic or modacrylic,  carded or combed 
5506.90  Synthetic suple fibres, carded or combed, nes 
5507.00  Artificial  suple fibres, carded or combed 
5508.10  Sewing thread of synthetic suple  fibres 
5508.20  Sewing thread of artificial  suple  fibres 
$509.11  Yam, > /=85%  nylon or other polyamides suple fibres, single, not put up 
5509.12  Yarn, >/=85%  nylon o oth polyamides suple fibres, multi,  not put up, nes 
5509.21  Yam, > /=85%  of polyester staple fibres, single, not put up 
5509.22  Yarn,>/=85%  of polyester suple fibres, multiple, not put up, nes 
5509.31  Yam, > /=85%  of acrylic or modacrylic suple fibres, single, not put up 
5509.32  Yam,>/=85%  acrylic/modacrylic suple fibres, multiple, not put up, nes 
5509.41  Yarn, >/=85%  of other synthetic suple fibres, single, not put up  . 
5509.42  Yam, >/=85%  of other synthetic suple fibres, multiple, not put up, nes 
5509.51  Yam of polyester suple fibres mixd w/ arti suple fib, not put up, nes 
5509.52  Yam of polyester staple fib mixd w wool/fine  animal hair, nt put up, nes 
5509.53  Yam of polyester staple fibres mixed with cotton, not put up, nes 
5509.59  Yam of polyester suple fibres, not put up, nes 
5509.61  Yam of acrylic suple fib mixd w wool/fine  animal hair, not put up, nes 
5509.62  Yam of acrylic staple fibres mixed with cotton, not put up, nes 
5509.69  Yam of acrylic staple fibres, not put up, nes 
5509.91  Yam of oth synthetic staple fibres mixed w/wool/fine animal hair, nes 
5509.92  Yam of other synthetic staple fibres mixed with cotton, not put up, nes 
5509.99  Yam of other synthetic suple fibres, not put up, nes 
5510.11  Yam, > /=85%  of artificial  staple fibres, single, not put up 
5510.12  Yam. > /=85%  of artificial  staple fibres, multiple,  not put up, nes 
5510.20  Yam of artificl  suple fib mixd w wool/fine  animal hair, not put up. nes 
5510.30  Yam of artificial  staple fibres mixed with conon, not put up, nes 
5510.90  Yarn of artificial  staple fibres, not put up, nes 
5511.10  Yam, > / = 85% of synthetic staple fibres, other than sewing thread, put up 
5511.20  Yam,  <85% of synthetic staple fibres, put up for retail sale, nes 
5511.30  Yam of artificial  fiV.-:  :ther than sewing thread), put up for retail sale 
5512.11  Woven fabrics. contai rag > / « 85 %  of polyester staple fibres. unbl or bl 
5512.19  Woven fabrics, conuing > /=85% of polyester suple fibres, other than unbl or bl 
5512.21  Woven fabrics, containg > /• 85% of acrylic starve fibres, unbleached or bl 
5512.29  Woven fabrics, conuining > '«85%  of acrylic staple fibres, other than unbl or bl 
5512.91  Woven fabrics, conuining;  =85% of oth synthetic suple fibres, unbl/bl 
5512.99  Woven fabrics, conuing > / » 35% of other synthetic suple fib, other than unbl/bl 
5513.11  Plain weave polyest  «apl fib fab, < 85 % .mixd w/conri  < / = 170g/m2, unbl /bl 
5513.12  Twill  weave polyest  stapl fib fab,<£;  't.mixd w/c-v 
5513.13  Woven fab of polyest staple fib, < 85 %  mixd w/ccn 
5513.19  Woven fabrics of oth syn suple fib,<85%,mixd w/cot, < /= 170g/m2, unbl/bl 
5513.21  Plain weave polyester suple fib fab, < 85 % ,mixd w/cotton, < / = 170g/m2. dyd 
5513.22  Twill  weave polyest suple fib fab, < 85 % ,mixd w/cotton, < /.* 170g/m2, dyd 
5513.23  Woven fab of polyester staple fib, < 85% ,mixd w/cot, < /= 170 g/m2, dyd, nes 
5513.29  Woven fabrics of oth syn staple fib, < 85% mixd w/cotton, < / = 170g/m2, dyed 

</=170g  m2, unbi 
-170g/ml.  unbl/bl. nes 

, 

Page 105 

HS No.  Product Description 

5513.31  Plain weave polyest supl fib fab,< 85% mixd w/cot, </=170g/m2,  yam dyd 
5513.32  Twill weave polyest supl fib fab, <85% mixd w/cot, </=170g/m2,  yam dyd 
5513.33  Woven fab of polyest suple fib, < 85% mixd w/cot, < /= 170 g/m2^ dyd nes 
5513.39  Woven fab of oth syn suple fib, < 85% mixd w/cot, < /= 170g/m2. yam dyd 
5513.41  Plain weave polyester supl fib fab, < 85 % ,mixd w/cot, < / = 170g/m2, printd 
5513.42  Twill weave polyest suple fib fab, < 85 % ,mixd w/cot, <  = /170g/m2, printd 
5513.43  Woven fab of polyester suple fib, < 85 % ,mixd w/cot, < / = 170g/m2, ptd, nes 
5513.49  Woven fab of oth syn suple fib,<85%,mixed w/cot, < /= 170g/m2, printed 
5514.11  Plain weave polyest suple fib fab,<85%,mixd  w/cotton, > 1.70g/m2, unbl/bl 
5514.12  Twill weave polyest supl  fib fab,<85%.mixd  w/cotton,>  170g/m2, unbl/bl 
5514.13  Woven fab of polyester suple fib, < 85% mixd w/cot, >  170g/m2, unbl/bl, nes 
5514.19  Woven fabrics of oth syn suple fib, < 85%,mixed w/cot, > 170 g/m2, unbl/bl 
5514.21  Plain weave polyester suple fibre fab.<85%,mixd  w/cotton. > 170g/m2, dyd 
5514.22  Twill  weave polyester staple fibre fab,<85%,mixd  w/cotton, > 170g/m2, dyd 
5514.23  Woven fabrics of polyester suple fib, < 85%,mixed w/cot, > 170 g/m2, dyed 
5514.29  Woven fabrics of oth synthetic suple fib, <85%,mixd w/cot, > 170g/m2. dyd 
5514.31  Plain weave polyester staple fib fab,<85%  mixd w/cot, > 170g/m2. yarn dyd 
5514.32  Twill  weave polyester staple fib fab, < 85% mixd w/cot, > 170g/m2, yarn dyd 
5514.33  Woven fab of polyester supl fib, < 85% mixd w/cot, > 170g/m2, yarn dyd nes 
5514.39  Woveji fabrics of oth syn suple fib, < 85% mixd w/cot, > 170 g/m2,  yarn dyd 
5514.41  Plain weave polyester suple fibre fab, < 85%,mixd w/cot, > 170g/m2, printd 
5514.42  Twill  weave polyester suple fibre fab. < 85%,mixd w/cot, > 170g/m2, printd 
5514.43  Woven fab of polyester suple fibres <85%,mixd  w/cot, > 170g/m2, ptd, nes 
5514.49  Woven fabrics of oth syn staple fib. < 85%,mixed w/cot, > 170 g/m2, printed 
5515.11  Woven fab of polyester staple fib mixd w viscose rayon staple fib, nes 
5515.12  Woven fabrics of polyester staple fibres mixd w man-made filaments,  nes 
5515.13  Woven fab of polyester suple fibres mixd w/wool/fine animal  hair, nes 
5515.19  Woven fabrics of polyester suple fibres, nes 
5515.21  Woven fabrics of acrylic suple fibres,  mixd w man-made filaments, nes 
5515.22  Woven fab of acrylic staple fibres, mixd w/wool/fine  animal hair, nes 
5515.29  Woven fabrics of acrylic or modacrylic staple fibres, nes 
5515.91  Woven fabrics of oth syn staple fib, mixed with man-made filaments,  nes 
5515.92  Woven fabrics of oth syn staple fib, mixd w/wool o fine animal hair, nes 
5515.99  Woven fabrics of synthetic suple  fibres, nes 
5516.11  Woven fabrics, containg > /«85%  of artificial  staple fibres, unbleached/bl 
5516.12  Woven fabrics, conuining > / = 85% of artificial  suple fibres, dyed 
5516.13  Woven fabrics, conuining >/ = 85% of artificial  staple fib, yarn dyed 
5516.14  Woven fabrics, containing >/ = 85% of artificial  staple fibres, printed 
5516.21  Woven fabrics of artificial  suple fib. < 85%.mixd w man-made fi, unbl/bl 
5516.22  Woven fabrics of artificial staple fib, < 85%.mixd with man-made fi, dyd 
5516.23  Woven fabrics of artificial  staple fib. < 85%,mixd with m-m fi. yam dyd 
5516.24  Woven fabrics of artificial  suple fib. < 85%,mixd w man-made fi, printd 
5516.31  Woven fab of arti suple fib. < 85% mixd w/wool/fine  animal hair, unbl/bl 
5516.32  Woven fabrics of arti suple fib. < 85% mixd w/wool/fine  animal hair, dyd 
5516.33  Woven fab of arti suple fib. < 85% mixd w/wool/fine  animal hair, yam dyd 
5516.34  Woven fab of arti suple fib, < 85% mixd w/wool/fine  animal hair, printd 
5516.41  Woven fabrics of artificial  suple fib. < 85% mixd with cotton, unbl o bl 
5516.42  Woven fabrics of artificial  suple  fib,  <85% mixed with cotton, dyed 
5516.43  Woven fabrics of artificial  suple fib, < 85% mixd with cotton, yam dyd 
5516.44  Woven fabrics of artificial  suple fib, < 85% mixed with cotton, printed 
5516.91  Woven fabrics of artificial  suple fibres, unbleached or bleached, nes 

Page  106 

HS  No.  Product  Description 

5516*92  Woven  fabrics  of  artificial  staple fibres,  dyed,  nes 
5516.93  Woven  fabrics  of artificial  suple  fibres,  yarn dyed,  nes 
5516.94  Woven fabrics  of  artificial  staple fibres, printed,  nes 

Cb.  56  Wadding,  felt  & nonwoven; yarns; twine,  cordage,  etc. 
5601.10  Saniury  articles  of  waddg  of textile mat  i.e.  saniury  towels,  tampons 
5601.21  Wadding of  cotton and articles thereof,  other than saniury  articles 
5601.22  Wadding  of  man-made fibres and articles thereof,  other than saniury  articles 
5601.29  ' Waddg  of  oth textile  materials&articles thereof,  other than sanitary  articles 
5601.30  Textile  flock  and dust  and mill  neps 
5602.10  Needleloom  felt  and stitch-bonded fibre fabrics 
5602.21  Felt  other than needleloom,  of  wool  or fine animal  hair,  not  impreg,  ctd, cov  etc 
5602.29  Fèlt other than needleloom,  of  other textile materials,  not  impreg,  ctd,  cov  etc 
5602.90  Felt  of  textile  materials,  nes 
5603.00  Nonwovens,  whether or not  impregnated,  coated,  covered  or  laminated 
5604.10  Rubber thread and cord,  textile  covered 
5604.20  High  tenacity  yam of polyest,  nylon oth polyamid,  viscose  rayon, ctd etc 
5604.90  Textile  yam,  strips&the  like,  impreg  ctd/cov  with rubber o plastics,  nes 
5605.00  Metallisd  yam.  beg  textile  yam combind  w  metal  thread,  strip/powder 
5606.00  Gimped yam  nes; chenille  yam;  loop wale-yam 
5607.10  Twine,  cordage,  ropes and cables,  of jute or other textile  bast fibres 
5607.21  Binder o  baler twine,  of sisal  o oth textile fibres of  the genus  Agave 
5607.29  Twine  nes.  cordage,  ropes  and cables,  of  sisal  textile fibres 
5607.30  Twine,  cordage,  ropes and cables, of  abaca or other hard (leaf)  fibres 
5607.41  Binder or baler twine,  of  polyethylene  or polypropylene 
5607.49  Twine  nes,  cordage,  ropes and cables,  of polyethylene  or polypropylene 
5607.50  Twine,  cordage,  ropes and cables,  of  other synthetic fibres 
5607.90  Twine,  cordage,  ropes and cables, of other  materials 
5608.11  Made  up fishing  nets,  of  man-made  textile  materials 
5608.19  Knottd nettg  of  twine/cordage/rope,  and oth made up nets of  m-m  tex mat 
5608.90  Knottd  nettg  of  twine/cordage/rope,  nes,  and made up nets of  oth tex mat 
5609.(K)  Articles  of  yarn,  strip,  twine,  cordage,  rope and cables,  nes 

Ch.  57  Carpets  and  other textile  floor  coverings 
5701.10  Carpets  of  wool  or fine animal  hair,  knotted 
5701.90  Carpets  of  other textile materials,  knotted 
5702.10  Kelem.  Schumacks,  Karamanie  and similar  textile  hand-woven  rugs 
5702.20  Floor coverings  of  coconut  fibres  (coir) 
5702.31  "  Carpets  of  wool/fine  animl  hair, of wovn pile constructn,  nt made up nes 
5702.32  Carpets of  man-made  textile mat.  of wovn pile construct,  nt made up,  nes 
5702.39  Carpets of oth textile mat.  of  woven pile constructn,  nt made up, nes 
5702.41  Carpets  of  wool/fine  animal  hair, of  wovn pile  construction,  made up, nes 
5702.42  Carpets of  man-made  textile mat.  of  *oven pile construction,  made up, nes 
5702.49  Carpets of  oth textile  materials,  of  wovn pile construction,  made up, nes 
5702.51  Carpets  of wool  or fine animal  hair, woven,  not made up, nes 
5702.52  Carpets  of man-made  textile  materials,  woven,  not made up, nes 
5702.59  Carpets  of  other textile  materials,  woven,  not made up,  nes 
5702.91  Carpets of  wool  or fine animal  hair, woven,  made up,  nes 
5702.92  Carpets  of  man-made  textile materials,  woven,  made up,  nes 
5702.99  Carpets  of  other textile  materials,  woven,  made up, nes 
5703.10  Carpets  of  wool  or fine animal  hair,  tufted 

Page  107 

HS  No.  Product  Description 

5703.20  Carpets  of  nylon or other polyamides,  tutted 
5703.30  Carpets  of other man-made  textile materials,  tutted 
5703.90  Carpets  of  other textile materials,  tufted 
5704.10  Tiles  of  felt  of textile materials,  havg a max surface  area of 0.3  m2 
5704.90  Carpets  of  felt  of  textile materials,  nes 
5705.00  Carpets  and other textile  floor  coverings,  nes 

Special  woven  fab; tufted  tex  fab; lace; tapestries  etc. 

Ch.  58 
5801.10  Woven pile  fabrics  of wool/fine  animal  hair,  other than terry&narrow  fabrics 
5801.21  Woven  uncut  weft  pile  fabrics  of  cotton,  other than terry and narrow  fabrics 
5801.22  Cut  corduroy  fabrics  of cotton,  other than narrow  fabrics 
5801.23  Woven  weft  pile fabrics of cotton, nes 
5801.24  Woven  warp pile  fab of  cotton, pingl  (uncut),other than terry&narrow  fab 
5801.25  Woven  warp pile  fabrics  of  cotton, cut,  other than terry and narrow  fabrics 
5801.26  Chenille  fabrics  of  cotton,  other than narrow  fabrics 
5801.31  Woven  uncut  weft  pile  fabrics  of  manmade  fibres,  other than terryAnarrow fab. 
5801.32.  Cut  corduroy  fabrics  of man-made  fibres,  other than narrow  fabrics 
5801.33  Woven  weft  pile  fabrics  ofmàn-made  fibres,  nes 
5801.34  Woven  warp pile  fab of man-made  fib,  pingl  (uncut),other than terry&nar  fab 
5801.35  Woven  warp pile  fabrics  of man-made  fib,  cut,  other than terry & narrow  fabrics 
5801.36  Chenille  fabrics of  man-made  fibres,  other than narrow  fabrics 
5801.90  Woven  pile  fab&chenille  fab of  other tex mat,  other than terry&narrow  fabrics 
5802.11  Terry  towellg  & similar  woven terry  fab of  cotton,  other than narrow fab, unbl 
5802.19  Terry  towellg&similar  woven  teny  fab of cotton,  other than unbl&other  than nar fab 
5802.20  Tern- towellg&sim  woven terry  fab of oth tex mat,  other than narrow  fabrics 
5802.30  Tufted  textile  fabrics,  other than products, of heading  No  57.03 
5803.10  Gauze  of  cotton,  other than narrow  fabrics 
5803.90  Gauze of  other textile  material,  other than narrow  fabrics 
5804.10  Tulles  & other  net  fabrics,  not  incl  woven,  knitted  or crocheted  fabrics 
5804.21  Mechanically  made  lace of  man-made  fib,  in the piece,  in  strips/motifs 
5804.29  Mechanically  made  lace of oth tex mat,  in the piece,  in strips/in motifs 
•5804.30  Hand-made  lace,  in the piece,  in strips or in motifs 
5805.00  Hand-woven  tapestries&needle-worked  tapestries,  whether  or not made up 
5806.10  Narrow  woven  pile  fabrics  and narrow chenille  fabrics 
5806.20  Narrow  woven  fab,  cntg  by w t > / « 5%  elastomeric  yarn/rubber thread nes 
5806.31  Narrow  woven  fabrics of  cotton,  nes 
5806  32  Narrow  woven  fabrics  of  man-made  fibres,  nes 
5806.39  Narrow  woven  fabrics  of other textile  materials,  nes 
5806 40  Fabrics consisting  of  warp w/o  weft  assembled  by means of  an adhesive 
5807.10  Labels,  badges and similar  woven anicles  of  textile  materials 
5807  90  Labels,  badges and similar  anicles,  not woven,  of textile materials,  nes 
5808.10  Braids  in the piece 
5808.90  Omamenul  trimmings  in the piece,  other than knit; tassels, pompons&similar  art 
5809.00  Woven  fabrics  of  meul  thread/of  metallisd  yam,  for apparel, etc,  nes 
5810.10  Embroidery  without  visible  ground,  in the piece,  in strips or in motifs 
5810.91  Embroidery  of  cotton,  in the piece,  in strips or in motifs,  nes 
5810.92  Embroidery  of  man-made  fibres,  in the piece,  in strips or in motifs,  nes 
5810.99  Embroidery  of  oth textile materials,  in the piece,  in strips/motifs,  nes 
5811.00  Quilted textile  products  in the piece 

Page  108 

HS No.  Product  Description 

Impregnated,  coated, cover/laminated  textile fabric etc. 

Ch.  59 
5901.10  Textile fabrics  coatd with gum, of a kind usd for  outer  covers of books 
5901:90  Tracg cloth; prepared paintg canvas; stiffened  textile fab; for  hats etc 
5902.10  Tire cord fabric  made of nylon or other polyamides high tenacity yarns 
5902.20  Tire cord fabric  made of polyester high tenacity yarns 
5902.90  Tire cord fabric  made of viscose rayon high tenacity yarns 
5903.10  Textile fab impregnatd, ctd, cov, or laminatd w polyvinyl  chloride, nes 
5903.20  Textile fabrics  impregnated,  ctd, cov, or laminated  with polyurethane, nes 
5903.90  Textile fabrics  impregnated,  ctd, cov, or laminated  with plastics, nes 
5904.10  Lineoleum,  whether or not cut to shape 
5904.91  Floor  coverings, other than linoleum, with a base of needleloom  felt/nonwovens 
5904.92  Floor coverings, other than linoleum, with other textile base 
5905.00  Textile wall coverings 
5906.10  Rubberised  textile adhesive tape of a width not exceeding  20 cm 
5906.91  Rubberised  textile knitted or crocheted fabrics, nes 
5906.99  Rubberised  textile fabrics, nes 
5907.00  Textile fab impreg, ctd, cov nes; paintd canvas (e.g.threatrical  scenery) 
5908.00  Textile wicks f lamps, stoves, etc; gas mantles&knittd  gas mantle  fabric 
5909.00  Textile hosepiping  and similar textile tubing 
5910.00.  Transmission  or conveyor belts or belting of textile material 
5911.10  Textile fabrics  usd f card  clothing, and sim fabric  f technical uses 
5911.20  Textile bolting cloth, whether or not made up 
5911.31  Textile fabrics  used  in paper-makmg or similar machines,  <650 g/m2 
5911.32  Textile fabrics  usd  in paper-makg or similar mach, weighg  >/=650  g/m2 
5911.40  Textile straing cloth usd in oil presses o the like, ind  of human hair 
5911.90  Textile products and articles for technical uses, nes 

Ch. 60  Knitted  or  crocheted  fabrics 
6001.10  Long pile knitted  or crocheted  textile fabrics 
6001.21  Looped  pile knitted or crocheted  fabrics,  of cotton 
6001.22  Looped pile knitted or crocheted  fabrics,  of man-made  fibres 
6001.29  Looped  pile knitted  or crocheted  fabrics,  of other textile materials 
6001.91  Pile knitted  or crocheted  fabrics, of cotton, nes 
6001.92  Pile knitted or crocheted  fabrics,  of man-made fibres, nes 
6001.99  Pile knitted  or crocheted  fabrics,  of other textile materials, nes 
6002.10  Knittd or crochetd  tex fab. w < /=30 cm, > /=5%  of elastomeric/rubber. nes 
6002.20  Knitted or crocheted  textile fabrics,  of a width not exceedg 30 cm, nes 
6002.30  Knittd'crochetd tex fab. width  >  30 cm,>/=5%  of elastomeric/rubber.  nes 
6002.41  Warp knitted  fabrics,  of wool or fine animal hair, nes 
6002.42  Warp knitted  fabrics,  of con on. nes 
6002.43  Warp knitted  fabrics,  of man-made  fibres, nes 
6002.49  Warp knitted  fabrics,  of other materials, nes 
6002.91  Knitted or crocheted  fabrics,  of wool or of fine animal hair, nes 
6002.92  Knitted or crocheted  fabrics,  of cotton, nes 
6002.93  Knitted or crocheted  fabrics,  of manmade fibres, nes. 
6002.99  Knitted  or crocheted  fabrics,  of other materials, nes 

Ch. 61  Art of ap 
6101.10  Mens/boy 
6101.20  Mens/boys 
6101.30  Mens/boys 

-'  & clothing access, knitted or crocheted 

oats, anoraks etc, of wool or fine animal hair, knitted 
oats, anoraks etc, of cotton, knitted 

-crcoats, anoraks etc, of man-made  fibres,  knitted 

Page  109 

HS  No.  Product  Description 

6101.90  Mens/boys  overcoats,  anoraks etc,  of other textile  materials,  knitted 
6102.10  Womens/girls overcoats,  anoraks etc,  of  wool  or fine animal  hair, knitted 
6102.20  Womens/girls  overcoats,  anoraks etc,  of  cotton,  knitted 
6102.30  Womens/girls  overcoats,  anoraks etc,  of man-made  fibres,  knitted 
6102.90  Womens/girls  overcoats,  anoraks etc,  of other textile materials,  knitted 
6103.11  Mens/boys  suits,  of  wool  or fine animal  hair,  knitted 
6103.12  Mens/boys  suits,  of  synthetic fibres, knitted 
6103.19  Mens/boys  suits,  of  other textile  materials,  knitted 
6103.21  Mens/boys  ensembles,  of  wool  or fine animal  hair,  knitted 
6103.22  Mens/boys  ensembles,  of  cotton,  knitted 
6103.23  Mens/boys  ensembles,  of  synthetic fibres, knitted 
6103.29  Mens/boys  ensembles,  of  other textile materials,  knitted 
6103.31  Mens/boys jackets and blazers, of  wool  or fine animal  hair,  knitted 
6103.32  Mens/boys jackets  and blazers,  of  cotton,  knitted 
6103.33  Mens/boys jackets  and blazers, of  synthetic  fibres,  knitted 
6103.39  Mens/boys jackets and blazers, of other textile materials,  knitted 
6103.41  Mens/boys  trousers and shorts, of  wool  or fine animal  hair,  knitted 
6103.42  Mens/boys  trousers and shorts,  of  cotton,  knitted 
6103.43  Mens/boys  trousers and shorts,  of synthetic  fibres,  knitted 
6103.49  Mens/boys  trousers  and shorts, of other textile  materials,  knitted 
6104.11  Womens/girls  suits,  of  wool  or fine animal  hair,  knitted 
6104.12  Womens/girls  suits,  of  cotton,  knitted 
6104.13  Womens/girls  suits,  of synthetic fibr.es, knitted 
6104.19  Wômens/girls  suits,  of other textile  materials,  knitted 
6104.21  Womens/girls  ensembles,  of  wool  or fine animal  hair,  knitted 
6104.22  Womens/girls  ensembles,  of  cotton,  knitted 
6104.23  Womens/girls  ensembles,  of synthetic  fibres,  knitted 
6104.29  Womens/girls  ensembies,  of  other textile  materials,  knitted 
6104.31  Womens/girls jackets,  of  wool  or fine animal  hair,  knitted 
6104.32  Womens/girls jackets,  of cotton,  knitted 
6104.33  Womens/girls jackets,  of  synthetic  fibres,  knitted 
6104.39  Womens/girls jackets,  of  other textile  materials,  knitted 
6104.41  Womens/girls  dresses,  of  wool  or fine animal  hair,  knitted 
6104.42  Womens/girls  dresses,  of  cotton,  knitted 
6104.43  Womens/girls  dresses,  of  synthetic  fibres,  knitted 
6104.44  Womens/girls  dresses,  of artificial  fibres,  knitted 
6104.49  Womens/girls  dresses,  of  other textile materials,  knitted 
6104.51  Womens/girls  skirts,  of  wool  or fine animal  hair, knitted 
6104.52  Womens/girls  skins,  of  cotton,  knitted 
6104.53  Womens/girls  skirts,  of  synthetic  fibres,  knitted 
6104.59  Womens/girls  skins,  of  other textile  materials,  knitted 
6104.61  Womens/girls  trousers  and shorts,  of wool  or fine animal  hair,  knitted 
6104.62  Womens/girls  trousers and shorts, of  cotton,  knitted 
6104.63  Womens/girls  trousers and shorts, of  synthetic fibres,  knitted 
6104.69  Womens/girls  trousers and shorts,  of  other  textile  materials,  knitted 
6105.10  Mens/boys  shirts,  of  cotton,  knitted 
6105.20  Mens/boys  shirts,  of  man-made fibres, knitted 
6105.90  Mens/boys  shirts,  of  other textile  materials,  knitted 
6106.10  Womens/girls  blouses  and shirts, of  cotton,  knitted 
6106.20  Womens/girls  blouses  and shirts, of  man-made  fibres,  knitted 
6106.90  Womens/girls  blouses  and shirts, of  other materials,  knitted 

Page  110 

HS  No.  Product  Description 

6107.11  Mens/boys  underpants  and briefs,  of  cotton,  knitted 
6107.12  Mens/boys  underpants  and briefs,  of man-made  fibres,  knitted 
6107.19  Mens/boys  underpants  and briefs,  of other textile  materials,  knitted 
6107.21  Mens/boys  nightshirts  and pyjamas,  of  cotton,  knitted 
6107.22  Mens/boys  nightshirts  and pyjamas,  of man-made  fibres,  knitted 
6107.29  Mens/boys  nightshirts and pyjamas,  of other textile materials,  knitted 
6107.91  Mens/boys  bathrobes,  dressing  gowns  etc of cotton,  knitted 
6107.92  Mens/boys  bathrobes, dressing  gowns,  etc of man-made  fibres,  knitted 
6107.99  Mens/boys  bathrobes, dressg  gowns, etc  of  oth textile  materials,  knitted 
6108.11  Womens/girls  slips and petticoats,  of man-made  fibres,  knitted 
6108.19  Womens/girls  slips  and petticoats,  of other textile  materials,  knitted 
6108.21  Womens/girls  briefs  and panties, of cotton,  knitted 
6108.22  Womens/girls  briefs  and panties,  of  man-made  fibres,  knitted 
6108.29  Womens/girls  briefs and panties, of  other textile  materials,  knitted 
6108.31  Womens/girls  nightdresses  and pyjamas,  of  cotton,  knitted 
6108.32  Womens/girls  nightdresses and pyjamas,  of man-made  fibres,  knitted 
6108.39  Womens/girls' nightdresses  & pyjamas,  of  other textile materials,  knitted 
6108.91  Womens/girls  bathrobes, dressing gowns,  etc,  of  cotton,  knitted 
6108.92  Womens/girls  bathrobes,  dressing  gowns,  etc,  of  man-made  fibres,  knitted 
6108.99  Women/girls  bathrobes,  dressg  gowns,  etc,  of  oth textile  materials,  knittd 
6109.10  T-shirts,  singlets  and other vests,  of  cotton,  knitted 
6109.90  T-shirts,  singlets  and other vests,  of  other textile materials,  knitted 
6110.10  Pullovers,  cardigans&similar  article of  wool  or fine animal  hair,  knittd 
6110.20  Pullovers,  cardigans  and similar  articles  of  cotton,  knitted 
6110.30  Pullovers,  cardigans  and similar  articles  of  man-made  fibres,  knitted 
6110.90  Pullovers,  cardigans&similar  articles  of  oth textile materials,  knittd 
6111.10  Babies  garments&clothg  accessories  of  wool  or fine animal  hair,  knitted 
6111.20  Babies  garments  and clothing  accessories  of cotton,  knitted 
6111.30  Babies  garments  and clothing  accessories  of  synthetic  fibres,  knitted 
6111.90  Babies  garments&clothg  accessories  of other textile  materials,  knitted 
6112.11  Track  suits,  of  cotton,  knitted 
6112.12  Track  suits,  of  synthetic  fibres,  knitted 
6112.19  Track  suits,  of  other textile  materials,  knitted 
6112.20  Ski  suits,  of  textile  materials,  knitted 
6112.31  Mens/boys  swimwear.  of  synthetic  fibres,  knitted 
6112.39  Mens/boys  swimwear,  of other textile  materials,  knitted 
6112.41  Womens/girls  swimwear.  of  synthetic  fibres,  knitted 
6112.49  Womens'girls  swimwear.  of other textile  materials,  knitted 
6113.00  Garments  made  up of  impreg.  coatd.  coverd  or laminatd  textile  knittd  fab 
6114.10  Garments  nes.  of  wool  or fine animal  hair,  knitted 
6114.20  Garments  nes. of  cotton,  knitted 
6114.30  Garments  nes. of  man-made  fibres,  knitted 
6114.90  Garments  nes.  of  other textile  materials,  knitted 
6115.11  Panty  hose&tights.  of  synthetic fibre yarns  <67  dtex/single yam knittd 
6115.12  Panty hosé&tights.  of  synthetic fib yarns  > /=67  dtex/single  yam knittd 
6115.19  Panty  hose  and tights,  of  other textile  materials,  knitted 
6115.20  Women  full-1/knee-l  hosiery,  of textile yam < 67  dtex/single  yam knittd 
6115.91  Hosiery  nes.  of  wool  or fine animal  hair,  knitted 
6115.92  Hosier)' nes,  of  cotton,  knitted 
6115.93  Hosiery  nes,  of  synthetic  fibres,  knitted 
6115.99  Hosiery  nes, of  other textile materials,  knitted 

Page 111 

HS No.  Product  Description 

6,116.10  Gloves impregnated,  coated or covered with plastics or rubber,  knitted 
6116.91  Gloves, mittens and mitts, nes, of wool or fine animal hair, knitted 
6i 16.92  Gloves, mittens and mitts, nes, of cotton, knitted 
6116.93  Gloves, mittens  and mitts, nes, of synthetic fibres, knitted 
6116.99  Gloves, mittens  and mitts, nes, of other textile materials, knitted 
6117.10  Shawls, scarves, veils and the like, of textile materials, knitted 
6117.20  Ties, bow ties and cravats, of textile materials, knitted 
6117.80  Clothing  accessories nes, of textile materials, knitted 
6117.90  Parts of garments/of  clothg accessories, of textile materials, knittd 

Ch. 62  Art of apparel  & clothing access, not knitted/crocheted 
6201.11  Mens/boys overcoats&similar articles of wool/fine  animal hair, not knit 
6201.12  Mens/boys overcoats and similar articles of cotton, not knitted 
6201.13  Mens/boys overcoats & similar articles of man-made fibres, not knitted 
6201.19  Mens/boys overcoats&sim  articles of oth textile materials, not knittd 
6201.91  Mens/boys anoraks&similar articles, of wool/fine  animal  hair, not knittd 
6201.92  Mens/boys anoraks and similar  articles, of cotton, not knitted 
6201.93  Mens/boys anoraks and similar articles, of man-made fibres, not knitted 
6201.99  Mens/boys anoraks&similar  articles, of oth textile materials, not knittd 
6202.11  Womens/girls  overcoats&sim  articles of wool/fine  animal hair nt knit 
6202.12  Woméns/girls overcoats and similar articles of cotton, not knitted 
6202.13  Womens/girls  overcoats&sim  articles of man-made fibres, not knittd 
6202.19  Womens/girls  overcoats&similar  articles of other textile mat, not knit 
6202.91  Womens/girls  anoraks&similar  anicle of wool/fine  animal hair, not knit 
6202.92  Womens/girls  anoraks and similar article of cotton, not knitted 
6202.93  Womens'girls anoraks & similar article of man-made fibres, not knitted 
6202.99  Womens/girls  anoraks&similar  article of oth textile materials, not knit 
6203.11  Mens/boys suits, of wool or fine animal hair,  not knitted 
6203.12  Mens/boys suits, of synthetic fibres, not knitted 
6203.19  Mens/boys suits, of other textile materials, not knitted 
6203.21  Mens/boys ensembles, of wool or fine animal  hair, not knitted 
6203.22  Mens/boys ensembles, of cotton, not knitted 
6203.23  Mens/boys ensembles, of synthetic fibres,  not knitted 
6203.29  Mens/boys ensembles, of other textile materials, not knitted 
6203.31  Mens/boys jackets and blazers, of wool or fine animal hair, not knitted 
6203.32  Mens/boys jackets and blazers, of cotton, not knitted 
6203.33  Mens/boys jackets and blazers, of synthetic fibres, not knitted 
6203.39  Mens/boys jackets and blazers, of other textile materials, not knitted 
6203.41  Mens/boys trousers and shorts, of wool or fine animal hair, not knitted 
6203.42  Mens/boys trousers and shorts, of cotton, not knitted 
6203 43  Mens/boys trousers and shorts, of synthetic fibres,  not knitted 
6203.49  Mens/boys trousers and shorts, of other textile materials, not knitted 
6204.11  Womens/girls suits, of wool or fine animal  hair, not knitted 
6204.12  Womens/girls suits, of cotton, not knitted 
6204.13  Womens/girls  suits, of synthetic fibres, not knitted 
6204.19  Womens/girls suits, of other textile materials, not knitted 
6204.21  Womens/girls  ensembles, of wool or fine animal hair, not knitted 
6204.22  Womens/girls  ensembles, of cotton, not knitted 
6204.23  Womens/girls ensembles, of synthetic fibres, not knitted 
6204.29  Womens/girls ensembles, of other textile materials, not knitted 
6204.31  Womens/girls jackets, of wool or fine animal hair, not knitted 

Page  112 

HS  No.  Product  Description 

6204.32  Womens/girls jackets,  of cotton,  not knitted 
6204.33  Womens/girls jackets,  of  synthetic fibres, not knitted 
6204.39  Womens/girls jackets,  of other textile  materials,  not knitted 
6204.41  Womens/girls  dresses,  of  wool  or fine animal  hair,  not knitted 
6204.42  Womens/girls  dresses,  of cotton,  not knitted 
6204.43  Womens/girls  dresses,  of  synthetic fibres, not knitted 
6204.44  Womens/girls  dresses,  of artificial  fibres,  not knitted 
6204.49  Womens/girls  dresses,  of  other textile  materials,  not knitted 
6204.51  Womens/girls  skirts,  of  wool  or fine animal  hair,  not  knitted 
6204.52  Womens/girls  skirts,  of cotton,  not knitted 
6204.53  Womens/girls  skirts,  of  synthetic  fibres,  not knitted 
6204.59  Womens/girls  skirts,  of other textile  materials,  not knitted 
6204.61  Womens/girls  trousers & shorts,  of  wool  or fine animal  hair,  not knitted 
6204.62  Womens/girls  trousers and shorts,  of cotton,  not knitted 
6204.63  Womens/girls  trousers and shorts,  of synthetic  fibres,  not knitted 
6204.69  Womens/girls  trousers  & shorts,  of  other textile  materials,  not knitter 
6205.10  Mens/boys  shins,  of  wool  or fine animal  hair, not knitted 
6205.20  Mens/boys  shirts,  of  cotton,  not knitted 
6205.30  Mens/boys  shins,  of  man-made  fibres,  not knitted 
6205.90  Mens/boys  shirts,  of  other textile  materials,  not knitted 
6206.10  Womens/girls  blouses  and shirts,  of  silk  or silk  waste,  not knitted 
6206.20  Womens/girls  blouses  & shirts,  of  wool  or fine animal  hair,  not knitted 
6206.30  Womens/girls  blouses  and shirts, of cotton,  not  knitted 
6206.40  Womens/girls  blouses  and shirts,  of  man-made  fibres,  not knitted 
6206.90  Womens/girls  blouses  and shirts,  of  other textile  materials,  not knitted. 
6207.11  Mens/boys  underpants and briefs,  of cotton,  not knitted 
6207.19  Mens/boys  underpants  and briefs,  of  other textile  materials,  not knitted 
6207.21  Mens/boys  nightshirts  and pyjamas,  of cotton,  not knitted 
6207.22  Mens/boys  nightshirts  and pyjamas,  of  man-made  fibres,  not knitted 
6207.29  Mens/boys  nightshirts  & pyjamas,  of  other textile  materials,  not knitted 
6207.91  Mens/boys  bathrobes,  dressing gowns,  etc of cotton,  not knitted 
6207.92  Mens/boys  bathrobes, dressing  gowns,  etc of  man-made  fibres,  not knitted 
6207.99  Mens/boys  bathrobes, dressg  gowns,  etc of oth textile  materials,  not knit 
6208.11  Womens/girls  slips and petticoats, of man-made  fibres,  not knitted 
6208.19  Womens/girls  slips  & petticoats,  of other textile  materials,  not knitted 
6208.21  Womens/girls  nightdresses  and pyjamas,  of cotton,  not knitted 
6208.22  Womens/girls  nightdresses and pyjamas,  of man-made  fibres,  not knitted 
6208.29  Womens/girls  nightdresses&pyjamas,  of oth textile  materials,  not knitted 
6208.91  Womens/girls  panties,  bathrobes, etc,  of cotton,  not knitted 
6208.92  Womens/girls  panties, bathrobes, etc.  of man-made  fibres,  not knitted 
6208.99  Womens/girls  panties, bathrobes, etc, of oth textile materials,  not knittd 
6209.10  Babies garments&clothg  accessories  of wool  o fine animal  hair,  not knit 
6209.20  Babies garments  and clothing  accessories of  cotton,  not knitted 
6209.30  Babies  garments  & clothing  accessories of  synthetic  fibres,  not knitted 
6209.90  Babies  garments&clothg  accessories  of oth textile materials,  not knittd 
6210.10  Garments  made  up of  textile  felts  and of  nonwoven textile  fabrics 
6210.20  Mens/boys  overcoats&similar  articles of  impreg,  ctd,  cov  etc,  tex wov  fab 
6210.30  Womens/girls  overcoats&sim  articles, of  impreg,  ctd, etc, tex wov  fab 
6210.40  Mens/boys  garments  nes,  made up of  impreg,  ad,  cov,  etc, textile woven  fab 
6210.50  Womens/girls  garments  nes,  of  impregnatd, ad,  cov,  etc,  textile  woven fab 
6211.11  Mens/boys  swimwear,  of  textile  materials  not knitted 

Page  113 

HS  No.  Produrt  Description 

6211.12  Womens/girls  swimwear,  of textile materials,  not knitted 
6211.20  Ski  suits,  of textile  materials,  not knitted 
6211.31  Mens/boys  garments  nes,  of  wool  or fine animal  hair,  not  knitted 
6211.32  Mens/boys .garments nes, of  cotton,  not knitted 
6211.33  Mens/boys  garments  nes,  of man-made  fibres,  not knitted 
6211.39  Mens/boys  garments  nes, of other textile materials,  not knitted 
6211.41  Womens/girls  garments  nes, of  wool  or fine animal  hair,  not knitted 
6211.42  Womens/girls  garments  nes,  of cotton,  not  knitted 
6211.43  Womens/girls  garments  nes, of man-made  fibres,  not  knitted 
6211.49  Womens/girls  garments  nes,  of other textile  materials,  not knitted 
6212.10  Brassieres  and parts thereof,  of  textile materials 
6212.20  Girdles,  panty girdles and parts thereof,  of textile  materials 
6212.30  Corselettes and parts thereof,  of textile  materials 
6212.90  Corsets,  braces & similar  articles & parts thereof,  of  textile  materials 
6213.10  Handkerchiefs,  of  silk  or silk  waste,  not knitted 
6213.20  Handkerchiefs,  of  cotton,  not knitted 
6213.90  Handkerchiefs,  of  other textile materials,  not knitted 
6214.10  Shawls,  scarves,  veils  and the like,  of  silk  or silk  waste,  not  knitted 
6214.20  Shawls,  scarves,  veils&the  like,  of wool  or fine animal  hair,  not  knitted 
6214.30  Shawls,  scarves,  veils  and the like,  of synthetic  fibres,  not  knitted 
6214.40  Shawls,  scarves,  veils  and the  like,  of artificial  fibres,  not  knitted 
6214.90  Shawls,  scarves,  veils  & the  like,  of  other textile materials,  not knitted 
6215.10  Ties,  bow  ties  and cravats,  of  silk  or silk  waste,  not knitted 
6215.20  Ties,  bow  ties  and cravats,  of  man-made  fibres,  not knitted 
6215.90  Ties,  bow  ties  and cravats,  of  other textile  materials,  not  knitted 
6216.00  Gloves,  mittens  and mitts,  of textile  materials,  not  knitted 
6217.10  Clothing  accessories  nes,  of  textile  materials,  not  knitted 
6217.90  Parts  of  garments  or of  clothg  accessories  nes,  of  tex  mat,  not knittd. 

Ch.  63  Other  made  up textile  articles; sets; worn  clothing  etc. 
6301.10  Electric  blankets,  of  textile  materials 
6301.20  Blankets  (other than electric) & travelling  mgs,  of  wool  or fine animal  hair 
6301.30  Blankets  (other than electric) and travelling  mgs,  of  cotton 
6301.40  Blankets  (other than electric) and travelling  mgs,  of  synthetic  fibres 
6301.90  Blankets  (other than electric)  and travelling  mgs,  of  other  textile  materials 
6302.10  Bed  linen,  of  textile  knitted  or crocheted  materials 
6302.21  Bed  linen,  of  cotton,  printed,  not knitted 
6302.22  Bed  linen,  of  man-made fibres, printed,  not knitted 
6302.29  Bed  linen,  of  other textile  materials,  printed,  not knitted 
6302.31  Bed linen,  of  cotton,  nes 
6302.32  Bed  linen,  of  man-made fibres, nes 
6302.39  Bed  linen,  of  other textile materials,  nes 
6302.40  Table  linen,  of  textile  knitted or crocheted  materials 
6302.51  Table  linen,  of  cotton,  not knitted 
6302.52  Table  linen,  of  flax,  not knitted 
6302.53  Table  linen,  of  man-made fibres, not knitted 
6302.59  Table  linen,  of other textile  materials,  not knitted 
6302.60  Toilet&kitchen  linen,  of  terry towellg  or similar  terry  fab,  of  cotton 
6302.91  Toilet  and kitchen  linen,  of  cotton,  nes 
6302.92  Toilet  and kitchen linen,  of flax 
6302.93  Toilet  and kitchen linen,  of  man-made fibres 

Page  114 

HS No.  Produa  Description 

6302.99  Toilet  and kitchen  linen, of other textile materials 
6303.11  Curtains, drapes, interior blinds&curuin or bed valances, of cotton, knit 
6303.12  Curtains, drapes, interior blinds&curuin/bd  valances, of syn fib, knittd 
6303,19  Curtains, drapes,  interior blinds&curuin/bd  valances, oth tex mat, knit 
6303.91  Curtains/drapes/interior blinds&curuin/bd  valances, of cotton, not knit 
6303.92  Curtains/drapes/interior  blinds curtain/bd valances, of syn fib,  nt knit 
6303.99  Curtain/drape/interior blind curtain/bd valance, of oth tex mat, nt knit 
6304.11  Bedspreads, of textile materials, nes, knitted or crocheted 
6304.19  Bedspreads of textile materials, nes, not knitted  or crocheted 
6304.91  Furnishing articles nes, of textile materials,  knitted or crocheted 
6304.92  Furnishing anicles nes, of cotton, not knitted  or  crocheted 
6304.93  Furnishing articles nes, of synthetic fibres,  not  Knitted or crocheted 
6304.99  Furnishg  articles nes. of oth textile materials, not knittd o crochetd 
6305.10  Sacks&bags. for  packg of goods, of jute or of other textile bast fibres 
6305.20  Sacks and bags, for  packing of goods, of cotton 
6305.31  Sacks&bags,  for  packg of goods, of polyethylene or polypropylene  strips 
6305.39  Sacks & bags, for  packing of goods, of other man-made  textile materials 
6305.90  Sacks and bags, for packing of goods, of other textile materials 
6306.11  Tarpaulins, awnings and sunblinds, of cotton 
6306.12  Tarpaulins..awnings and sunblinds, of synthetic fibres 
6306.19  Tarpaulins, awnings and sunblinds, of other textile materials 
6306.21  Tents, of cotton 
6306.22  Tents, of synthetic  fibres 
6306.29  Tents, of other textile materials 
6306.31  Sails, of synthetic fibres 
6306.39  Sails, of other textile materials 
6306.41  Pneumatic mattresses, of cotton 
6306.49  Pneumatic mattresses, of other textile materials 
6306.91  Camping  goods nes. of cotton 
6306.99  Camping  goods nes. of other textile materials 
6307.10  Floor-cloths, dish-cloths, dusters & similar  cleaning cloths, of tex mat 
6307.20  Life jackets and life belts, of textile materials 
6307.90  Made up articles, of textile materials, nes, including dress patterns 
6308 00  Sets consistg of woven fab & yam. for makg up into mgs, upestries etc 
6309.00  Worn clothing  and other worn articles 

Textile and  clothing products in Chapters 30*49, 64-96 

IIS No. 

Produa  Description 

3005.90 

Wadding, gauze, bandages and theJike 

ex 3921.12}  { 
ex 3921.13}  {  Woven,  knitted or  non-woven fabrics  coated, covered  or laminated  with plastics 
ex 3921.90}  { 

Page 115 

HS No. 

Produa  Description 

ex 4202.12}  { 
ex 4202.22}  {Luggage, handbags and flatgoods  with an outer surface  predominantly  of textile 
ex 4202.32}  {materials 
éx 4202.92}  { 

ex 6405.20 
ex 6406.10  Footwear uppers of which 50% or more of the external  surface area is textile 

Footwear with soles and uppers of wool  felt 

-  material  . 

Hat-forms,  hat bodies and hoods of felt; plateaux and manchons of  felt 
Hat-shapes, plaited or made by assembling strips of any material 
Felt hats and other felt  headgear 
Hats & other headgear, plaited or made by assembling  strips of any material 
Hats & other headgear,  knitted or made up from  lace, or other textile material 
Umbrellas and sun umbrellas, garden type 
Other umbrella types, telescopic shaft 
Other umbrellas 

ex 6406.99  Leg warmers and gaiters of textile material 
6501.00 
6502.00 
6503.00 
6504.00 
6505.90 
6601.10 
6601.91 
660199 
ex 7019.10  Yarns of fibre glass 
e.x 7019.20  Woven fabrics  of fibre glass 
8708.21 
8804.00 
9113.90 
ex 9404.90 

Safety  seat belts for  motor vehicles 
.Parachutes; their pans and accessories 
Watch straps, bands and bracelets of textile materials 
Pillow and cushions of cotton; quilts; eiderdowns; comforters  and similar  articles 
of textile materials 
Garments  for dolls 

9502.91 
e.x 9612.10  Woven ribbons, of man-made fibres, other than those measuring  less than 30 mm 

in width and permanently  put up in cartridges 

Page 116 

Page  117 

AGREEMENT  ON  TECHNICAL  BARRIERS  TO  TRADE 

Members, 

Having  regard  to the  Uruguay  Round  of  Multilateral  Trade  Negotiations; 

Desiring  to further  the objectives  of GATT  1994; 

Recognizing the important contribution that international standards and conformity  assessment 
systems  can make  in this  regard  by  improving  efficiency  of  production  and  facilitating  the  conduct 
of  international  trade; 

Desiring therefore to encourage the development of such international standards and conformity 

assessment  systems; 

Desiring however to ensure that technical regulations and standards, including packaging, marking 
and  labelling  requirements,  and procedures  for  assessment  of  conformity  with  technical  regulations 
and  standards  do not create  unnecessary  obstacles to  international  trade; 

Recognizing  that  no country  should  be prevented  from  taking  measures  necessary  to  ensure 
the  quality  of  its  exports,  or  for  the  protection  of  human,  animal  or  plant  life  or  health,  of  the 
environment, or for the prevention of deceptive practices, at the levels it considers appropriate, subject 
to the requirement  that they are not applied in a manner which would constitute a means of  arbitrary 
or  unjustifiable  discrimination  between  countries  where  the  same  conditions  prevail  or  a  disguised 
restriction on international trade, and are otherwise in accordance with the provisions of this Agreement ; 

Recognizing  that  no  country  should  be  prevented  from  taking  measures  necessary  for  the 

protection  of  its essential  security  interest; 

Recognizing the contribution  which international  standardization can make  to the transfer  of 

technology  from  developed  to developing  countries; 

Recognizing  that  developing  countries  may  encounter  special  difficulties  in the  formulation 
and  application  of  technical  regulations  and standards and procedures  for  assessment  of  conformity 
with technical regulations and standards, and desiring to assist them in their endeavours in this regard; 

Hereby agree  as  follows: 

Article I 

General  Provisions 

1.1 
General terms for standardization and procedures for assessment of conformity  shall normally 
have  the  meaning  given  to  them  by  definitions  adopted  within  the  United  Nations  system  and  by 
international  standardizing  bodies taking  into account  their context and in the light of the object and 
purpose of  this  Agreement. 

1.2 

However, for the purposes of this Agreement the meaning of the terms given in Annex 1 appl ies. 

All products, including industrial and agricultural products, shall be subject to the provisions 

1.3 
of  this  Agreement. 

Page  118 

Purchasing  specifications  prepared  by  governmental  bodies  for  production  or  consumption 
1.4 
requirements of governmental bodies are not subjea to the provisions of this Agreement but are addressed 
in the  Agreement  on Government  Procurement,  according to  its  coverage. 

The provisions of this Agreement do not apply to saniury and phytosaniury measures as defined 

1.5 
in Annex  A  of  the Agreement  on the Application of  Sanitary and Phytosaniury  Measures. 

All references in this Agreement to technical regulations, standards and conformity assessment 
1.6 
procedures shall be construed to include any amendments thereto and any additions to the rules or the 
product  coverage thereof,  except  amendments  and additions  of an insignificant  nature. 

TECHNICAL  REGULATIONS  AND  STANDARDS 

Article  2 

Preparation,  Adoption  and Application  of  Technical Regulations 
by  Central Government Bodies 

With  respect  to their central  government  bodies: 

Members shall ensure that in respea of technical regulations, products imported from the territory 
2.1 
of any  Member-shall  be accorded treatment  no less favourable than that accorded to like products  of 
national  origin  and to  like products originating  in any other country. 

Members  shall  ensure that technical  regulations are not prepared, adopted  or applied  with a 
2.2 
view  to or with the effect  of creating unnecessary obstacles to international  trade.  For this purpose, 
technical  regulations shall not be more trade-restrictive than necessary to fulfil  a legitimate objective, 
taking  account  of  the  risks  non-fulfilment  would  create.  Such  legitimate  objectives  are,  inter  alia: 
national  security  requirements;  the prevention of deceptive practices;  protection of human health or 
safely,  animal  or plant  life or health, or the environment.  In assessing  such risks, relevant  elements 
of  consideration  are.  inter  alia:  available  scientific  and  technical  information,  related  processing 
technology  or  intended  end-uses  of products. 

2.3 
Technical  regulations  shall  not  be maintained  if  the circumstances  or objectives  giving  rise 
to  their  adoption  no  longer  exist  or  if  the changed  circumstances  or objectives  can be  addressed  in 
a  less  trade-restrictive  manner. 

2.4  Where  technical  regulations  are  required  and  relevant  international  standards  exist  or  their 
completion  is  imminent.  Members  shall  use them,  or the  relevant parts of  them,  as a basis  for their 
technical regulations except when such international standards or relevant parts would be an ineffective 
or  inappropriate  means  for  the  fulfilment  of  the  legitimate  objectives  pursued,  for  instance  because 
of  fundamental  climatic  or geographical  factors or fundamental  technological  problems. 

A Member preparing, adopting or applying a technical regulation which may have a significant. 
2.5 
effect  on trade of other Members shall, upon the request of another Member, explain the justification 
for  that  technical  regulation  in terms  of  the provisions  of paragraphs  2 to 4.  Whenever a technical 
regulation  is  prepared,  adopted  or applied  for  one of  the  legitimate  objeaives  explicitly  mentioned 
in paragraph 2, and is in accordance with relevant international standards, it shall be rebutubly presumed 
not  to create  an unnecessary  obsucle  to  international  trade. 

Page  119 

2.6  With  a view  to harmonizing technical  regulations  on as wide  a basis  as possible,  Members 
shall play a full part, within the limits of their resources, in the preparation by appropriate international 
standardizing  bodies  of  international  standards  for products  for  which they  either  have  adopted,  or 
expect to adopt,  technical  regulations. 

2.7  Members  shall give positive consideration to accepting as equivalent  technical  regulations of 
other Members,  even if these regulations differ  from their own, provided they are satisfied  that these 
regulations  adequately  fulfil  the objectives  of their own regulations. 

2.8  Wherever appropriate. Members shall specify technical regulations based on produa requirements 
in terms  of  performance  rather than design or descriptive  characteristics. 

2.9  Whenever a relevant international standard does not exist or the technical content of a proposed 
technical  regulation is not in accordance with the technical content of relevant international standards, 
and if the technical regulation may have a significant effect on trade of other Members, Members shall : 

2.9.1  publish  a notice  in a publication  at an early  appropriate  suge,  in such  a manner  as 
to enable interested parties in other Members to become acquainted with it, that they 
propose  to introduce a particular technical  regulation; 

2.9.2  notify  other  Members  through  the  Secreuriat  of  the products  to be  covered  by  the 
proposed  technical  regulation,  together  with  a  brief  indication  of  its  objective  and 
rationale.  Such  notifications  shall  take  place  at  an  early  appropriate  suge,  when 
amendments  can still  be  introduced and comments  uken  into account; 

2.9.3  upon request, provide to other Members particulars or copies of the proposed technical 
regulation and. whenever possible,  identify the parts which in substance deviate from 
relevant  international  standards; 

2  9 4  without discrimination, allow reasonable time for other Members to make comments 
in writing,  discuss  these  comments  upon  request,  and take  these  written  comments 
and the results of  these discussions  into account. 

2.10*  Subject to the provisions in the lead-in to paragraph 9, where urgent problems of safety, health, 
environmental  protection  or national  security  arise or threaten to arise for  a Member,  that  Member 
may omit such of the steps enumerated in paragraph 9 as it finds necessary, provided that the Member, 
upon  adoption  of  a technical  regulation, shall: 

2.10.1  notify  immediately  other Members through the Secreuriat  of the particular technical 
regulation and the products covered,  with a brief indication of the objective  and the 
rationale of  the technical  regulation,  including  the nature of  the urgent problems; 

2.10.2  upon request, provide  other Members  with copies of the technical  regulation; 

2.10.3  without  discrimination,  allow other Members  to present  their comments  in writing, 
discuss these comments upon request, and take these written comments and the results 
of  these discussions  into account. 

2.11  Members  shall  ensure that  all  technical  regulations  which have  been adopted  are published 
promptly or otherwise made available in such a manner as to enable interested parties in other Members 
to become  acquainted  with them. 

Page  120 

2.12 
Except  in  those  urgent  circumstances  referred  to  in paragraph  10,  Members  shall  allow  a 
reasonable interval between the publication of technical regulations and their entry into force in order 
to allow time for producers in exporting Members, and particularly in developing country Members, 
to adapt their products  or methods  of production to the requirements  of  the  importing  Member. 

Article  3 

Preparation,  Adoption  and Application  of  Technical Regulations 
by Local  Government Bodies and Non-Governmental Bodies 

With respect to their local government and non-governmental  bodies within their territories: 

3.1  Members shall take such reasonable measures as may be available to them to ensure compliance 
by such bodies with the provisions of Article  2, with the exception of the obligation to notify as referred 
to  in paragraphs 9.2  and  10.1  of  Article 2. 

3.2  Members  shall ensure that the technical  regulations of local governments on the level  directly 
below  that  of  the  central  government  in Members  are notified  in accordance with  the provisions  of 
paragraphs  9.2  and  10.1  of  Article  2,  noting  that  notification  shall  not  be  required  for  technical 
regulations the technical content of which is substantially the same as that of previously notified technical 
regulations "of central  government  bodies  of the  Member  concerned. 

3.3 
Members  may require contact with other Members,  including the notifications,  provision  of 
information,  comments and discussions  referred to in paragraphs 9 and  10 of Article  2, to take place 
through the central  government. 

3.4 
Members shall not take measures which require or encourage local government bodies or non 
governmental  bodies  within  their  territories  to  act  in a manner  inconsistent  with  the  provisions  of 
Article  2. 

3.5 
Members  are fully  responsible under this Agreement  for the observance of  all provisions  of 
Anicle  2.  Members  shall  formulate and implement  positive measures and mechanisms  in support of 
the observance  of  the provisions  of  Article 2 by other than central  government  bodies. 

Article  4 

Preparation,  Adoption and  Application 
of Standards 

Members  shall  ensure that their central  government  standardizing bodies accept and comply 
4.1 
with the Code of Good Practice for the Preparation. Adoption and Application of Standards in Annex  3 
to this  Agreement  (referred  to in this  Agreement  as the  "Code of  Good  Practice").  They  shall  take 
such  reasonable  measures  as  may  be  available  to  them  to  ensure  that  local  government  and  non 
governmental  standardizing bodies  within their territories,  as  well  as  regional  standardizing  bodies 
of  which  they  or one  or  more  bodies  within their territories  are-members,  accept  and comply  with 
this Code of Good Practice.  In addition.  Members shall not take measures which have the effect  of, 
direaly or indirectly, requiring or encouraging such standardizing bodies to act in a manner inconsistent 
with the Code of Good Practice.  The obligations of Members with respea to compliance of standardizing 
bodies  with  the provisions  of  the Code  of  Good  Practice shall  spnly  irrespective  of  whether or not 
a  standardizing  body  has accepted  the Code of Good  Practice. 

Page  121 

Standardizing"bodies that have accepted  and are complying  with  the Code  of  Good  Practice 

4.2 
shall  be  acknowledged  by the  Members  as complying  with the principles  of  this  Agreement. 

CONFORMITY  WITH  TECHNICAL  REGULATIONS  AND  STANDARDS 

Article  5 

Procedures for  Assessment of  Conformity by  Central  Government Bodies 

Members  shall  ensure that,  in cases where a positive  assurance  of conformity  with technical 
5.1 
regulations  or standards  is  required,  their central  government  bodies apply  the following  provisions 
to products  originating  in the territories  of  other Members: 

5.1.1 

conformity  assessment  procedures  are prepared,  adopted  and applied  so  as  to grant 
access  for  suppliers  of  like products originating  in the  territories  of  other  Members 
.  under conditions  no less favourable  than those accorded to suppliers of  like products 
of national origin or originating in any other country, in a comparable situation: access 
emails suppliers' right to an assessment of conformity under the rules of the procedure, 
including,  when  foreseen  by  this  procedure,  the  possibility  to  have  conformity 
assessment activities undertaken at the site of facilities  and to receive the mark of the 
system; 

5.1.2 

conformity  assessment  procedures are not prepared,  adopted  or applied  with a view 
to or with the effea  of creating unnecessary obsucles to international trade.  This means. 
inter alia,  that conformity assessment procedures shall not be more strict or be applied 
more strictly than is necessary to give the importing Member adequate confidence that 
products conform with the applicable technical regulations or standards, taking account 
of  the risks non-conformity  would  create. 

5.2  When  implementing  the provisions  of paragraph  1,  Members  shall  ensure that: 

5.2.1 

5.2.2 

conformity  assessment  procedures are undertaken and completed  as expeditiously  as 
possible  and in a no  less  favourable  order  for  products  originating  in the  territories 
of  other  Members  than for  like domestic  products; 

the standard processing  period of each conformity  assessment  procedure  is published 
or that the anticipated processing period is communicated to the applicant upon request ; 
when receiving an application, the competent body promptly examines the completeness 
of the documentation and informs  the applicant  in a precise and complete manner of 
all deficiencies;  the competent  body  transmits as soon as possible  the  results of  the 
assessment  in a precise and complete manner to the applicant so that corrective action 
may be uken if necessary';  even when the application has deficiencies, the competent 
body  proceeds  as  far  as practicable  with  the conformity  assessment  if  the  applicant 
so  requests;  and  that,  upon  request,  the  applicant  is  informed  of  the  suge  of  the 
procedure,  with any delay  being  explained; 

5.2.3 

infonnation  requirements  are  limited  to  what  is  necessary  to  assess  conformity  and 
determine  fees; 

5.2.4 

the confidentiality  of information about products originating in the territories of other 
Members  arising  from  or supplied  in  connection  with  such  conformity  assessment 

Page  122 

procedures is respected in the same way as for domcJiic products and in such a manner 
that legitimate  commercial  interests  are protected; 

5.2.5 

any fees imposed for assessing the conformity of products originating in the territories 
of  other  Members  are equiuble  in  relation to  any  fees  chargeable  for  assessing  the 
conformity of like products of national origin or originating in any other country, taking 
into account  communication,  transportation and other costs  arising  from  differences 
between  location of  facilities  of the applicant  and the conformity  assessment  body; 

5.2.6 

the siting of  facilities used  in conformity  assessment  procedures and the selection  of 
samples are not such as to cause unnecessary inconvenience to applicants or their agents ; 

5.2.7  whenever specifications  of a product are changed  subsequent to the determination  of 
its  conformity  to  the  applicable  technical  regulations  or  standards,  the  conformity 
assessment  procedure  for  the  modified  product  is  limited  to  what  is  necessary  to 
,  determine whether adequate confidence exists that the product still meets the technical 

regulations  or standards concerned; 

5.2.8 

a  procedure  exists  to  review  complaints  concerning  the  operation  of  a  conformity 
assessment  procedure  and to take corrective  action  when a complaint  is justified. 

Nothing in paragraphs 1 and 2 shall prevent Members from carrying out reasonable spot checks 

5.3 
within  their  territories. 

5.4 
In cases where a positive assurance is required that products conform with technical regulations 
or standards, and relevant guides or recommendations issued by international sundardizing bodies exist 
or their completion  is imminent.  Members shall ensure that central government bodies use them, or 
the  relevant  parts of  them,  as a basis  for their conformity  assessment  procedures,  except  where,  as 
duly explained  upon request, such guides or recommendations  or relevant parts are inappropriate  for 
the Members concerned, for. inter alia, such reasons as:  national security requirements; the prevention 
of  deceptive  practices;  protection  of  human  health  or  safety,  animal  or piant  life  or  health,  or the 
environment; 
fundamenul  technological  or 
infrastructural  problems. 

fundamental  c'imatic  or  other  geographical  factors; 

5.5  With a view to harmonizing conformity assessment procedures on as wide a basis as possible. 
Members shall play a full  part, within the limits of their resources,  in the preparation by appropriate 
international standardizing bodies of guides and recommendations for conformity assessment procedures. 

Whenever a relevant guide or recommendation  issued by an international  sundardizing body 

56 
does not exist or the technical content of a proposed conformity assessment p;  «dure is not in accordance 
with  relevant  guides  and  recommendations  issued  by  international  stanc±:cizing  bodies,  and  if  the 
conformity  assessment  procedure may have a significant  effect  on trade of other Members,  Members 
shall: 

5.6.1  publish a notice  in a publication  at an early  appropriate  stage,  in such  a  manner as 
to enable interested parties in other Members to become acquainted with it  that the} 
propose  to  introduce a particular conformity  assessment  procedure; 

5.6.2  notify  other  Members  through  the  Secretariat  of  the products  to be  covered  by  the 
proposed  conformity  assessment  procedure,  together  with  a  brief  indication  of  its 
objective and rationale.  Such notifications shall take place at an early appropriate suge, 
when amendments  can still  be introduced  and comments  uken  into account; 

Page  123 

5.6.3  upon request, provide to other Members particulars or copies of the proposed procedure 
and,  whenever possible,  identify  the parts which  in substance deviate  from  relevant 
guides  or recommendations  issued by  international  sundardizing  bodies; 

5.6.4  without discrimination,  allow reasonable time for other Members to make comments 
in writing,  discuss  these  comments  upon  request,  and  take these  written comments 
and the results of  these discussions  into account. 

5.7 
Subjea to the provisions in the lead-in to paragraph 6, where urgent problems of safety, health, 
environmental  protection or national  security  arise or threaten to arise for a Member,  that  Member 
may omit such of the steps enumerated in paragraph 6 as it finds necessary, provided that the Member, 
upon adoption of the procedure,  shall: 

5.7.1  notify  immediately other Members through the Secreuriat of the particular procedure 
and the products covered, with a brief indication of the objective and the rationale of 
the procedure,  including  the nature of the urgent problems; 

5.7.2  upon  request,  provide other Members  with copies  of  the rules  of the procedure; 

5.7.3  without  discrimination,  allow  other Members  to present  their comments  in writing, 
discuss these comments upon request, and take these written comments and the results 
of  these  discussions  into account. 

5.8  Members shall ensure that all conformity assessment procedures which have been adopted are 
published  promptly  or otherwise  made available  in such a manner  as to enable  interested parties  in 
other  Members  to become  acquainted  with them. 

5.9 
Except  in  those  urgent  circumstances  referred  to  in  paragraph 7,  Members  shall  allow  a 
reasonable interval between the publication of requirements concerning conformity assessment procedures 
and their entry into force in order to allow time for producers in exporting Members, and particularly 
in developing country Members, to adapt their products or methods of production to the requirements 
of  the  importing  Member. 

Article  6 

Recognition of  Conformity Assessment by  Central  Government Bodies 

With  respect  to their central  government bodies: 

6.1  Without  prejudice to the provisions of paragraphs 3 and 4,  Members  shall  ensure,  whenever 
possible, that results of conformity  assessment procedures in other Members are accepted, even when 
those  procedures  differ  from  their  own,  provided  they  are  satisfied  that  those procedures  offer  an 
assurance  of  conformity  with  applicable  technical  regulations  or  standards  equivalent.to their  own 
procedures.  It is recognized that prior consulutions may be necessary in order to arrive at a mutually 
satisfaaory  undersunding  regarding,  in particular: 

6.1.1 

adequate  and  enduring  technical  competence  of  the  relevant  conformity  assessment 
bodies in the exporting Member, so that confidence in the continued reliability of their 
conformity assessment results can exist;  in this regard, verified compliance, for instance 
through accreditation, with relevant guides or recommendations issued by international 
standardizing bodies shall be uken into account as an indication of adequate technical 
competence; 

Page  124 

6.1.2 

limiution  of  the  acceptance  of  conformity  assessment  results  to  those  produced  by 
designated  bodies  in the exporting  Member. 

6.2  Members shall ensure that their conformity assessment procedures permit, as far as practicable, 
the  implemenution  of the provisions  in paragraph  1. 

6.3  Members are encouraged, at the request of other Members, to be willing to enter into negotiations 
for  the  conclusion  of  agreements  for  the  mutual  recognition  of  results  of  each  other's  conformity 
assessment procedures.  Members may require that such agreements fulfil  the criteria of paragraph 1 
and give mutual satisfaction regarding their potential  for facilitating trade in the products concerned. 

6.4  '  Members  are encouraged  to permit  participation of conformity  assessment  bodies  located  in 
the territories  of other Members  in their conformity  assessment  procedures under conditions  no less 
favourable  than those  accorded  to bodies  located  within their territory  or the territory  of  any  other 
country. 

Article  7 

Procedures for  Assessment of Conformity by Local  Government Bodies 

With  respect  to their  local  government  bodies within their territories: 

7.1  Members shall take such reasonable measures as may be available to them to ensure compliance 
by such bodies  with the provisions of  Articles 5 and 6,  with the exception of the obligation to  notify 
as  referred  to  in paragraphs  6.2  and 7.1  of  Article  5. 

7.2 
Members shall ensure that the conformity  assessment procedures of local governments  on the 
level  directly  below  that of  the central  government  in Members  are notified  in accordance  with the 
provisions  of  paragraphs 6.2  and 7.1  of  Article 5,  noting that notifications  shall  not be  required  for 
conformity  assessment  procedures the technical  content of which is subsumially  the same as that of 
previously  notified  conformity  assessment  procedures of central  government  bodies of the Members 
concerned. 

Members  may  require conuct  with other Members,  including  the notifications,  provision of 
7.3 
information,  comments  and discussions  referred  to in paragraphs  6 and 7 of  Anicle  5,  to take place 
through  the  central  government. 

Members shall not uke measures which require or encourage local government  bodies within 

7.4 
their.territories to act  in a manner  inconsistent  with the provisions of  Anicles  5  and 6. 

Members  are fully  responsible under this  Agreement  for the observance of  all provisions  of 
7.5 
Articles  5 and 6.  Members shall formulate and implement positive measures and mechanisms in support 
of the observance  of the provisions of  Articles 5 and 6  by other than central  government  bodies. 

Article  8 

Procedures for  Assessment of Conformity by  Non-Governmental Bodies 

8.1  Members shall uke such reasonable measures as may be available to them to ensure that non 
governmental bodies within their territories which operate conformity  assessment procedures comply 
with the provisions of Articles 5 and 6. with the exception of the obligation to notify proposed conformity 

Page  125 

assessment procedures.  In addition, Members shall not uke measures which have the effect of,  directly 
or indirectly, requiring or encouraging such bodies to act in a manner inconsistent with the provisions 
of  Articles  5  and 6. 

8.2  Members  shall  ensure  that  their  central  government  bodies  rely  on  conformity  assessment 
procedures operated by non-governmental bodies only if these latter bodies comply with the provisions 
of  Articles  5  and 6,  with the  exception  of  the obligation  to notify  proposed  conformity  assessment 
procedures. 

Article'9 

International and Regional Systems 

9.1  Where a positive assurance of conformity  with a technical  regulation or standard is required. 
Members  shall,  wherever  practicable,  formulate  and  adopt  international  systems  for  conformity 
assessment  and become  members  thereof or participate therein. 

9.2 
Members  shall  take  such  reasonable  measures  as  may  be  available  to them  to  ensure  that 
international  and  regional  systems  for  conformity  assessment  in which  relevant  bodies  within  their 
territories  are members  or participants comply  with the provisions  of  Articles 5 and 6.  In addition. 
Members  shall.not  take  any  measures  which have the  effect  of,  directly  or  indirectly,  requiring  or 
encouraging such systems to act in a manner inconsistent with any of the provisions of Articles 5 and  6. 

9.3  Members  shall  ensure that their central  government  bodies  rely  on  international  or regional 
conformity  assessment  systems  only  to the extent  that these  systems  comply  with  the provisions  of 
Articles  5  and 6,  as applicable. 

INFORMATION  AND  ASSISTANCE 

Article  10 

Information About  Technical Regulations,  Standards  and 
Conformity Assessment Procedures 

10.1 
Each Member shall ensure that an enquiry point exists which is able to answer all reasonable 
enquiries from other Members and interested parties in other Members as well as to provide the relevant 
documents  regarding: 

10.1.1  any technical  regulations adopted or proposed within  its territory by central  or local 
government  bodies, by non-governmental  bodies which have  legal  power to  enforce 
a technical  regulation, or by regional  sundardizing  bodies  of which such bodies are 
members  or participants; 

10.1.2  any standards adopted or proposed within its territory by central or local  government 
bodies,  or  by  regional  standardizing  bodies  of  which  such  bodies  are  members  or 
participants; 

10.1.3  any conformity assessment procedures, orproposed conformity assessment proced 
which are operated within its territory by central  or local  government  bodies,  < 

lures, 
or by 

Page  126 

non-governmental  bodies  which have  legal  power  to enforce  a technical  regulation, 
or by  regional  bodies of  which such bodies  are members  or participants; 

10.1.4  the  membership  and  participation  of  the  Member,  or  of  relevant  central  or  local 
government bodies within its territory, in international and regional standardizing bodies 
and conformity assessment systems, as well as in bilateral and multilateral arrangements 
within  the  scope  of  this  Agreement;  it  shall  also  be  able  to  provide  reasonable 
information  on the provisions  of  such systems  and arrangements; 

10.1.5  the  location  of  notices  published  pursuant  to  this  Agreement,  or  the  provision  of 

information  as to where such information  can be obtained;  and 

10.1.6  the location of  the enquiry points mentioned  in paragraph 3. 

If,  however,  for  legal  or administrative  reasons  more  than one  enquiry  point  is  esublished 
10.2 
by a Member, that Member shall provide to the other Members complete and unambiguous information 
on the scope of responsibility  of each of these enquiry points.  In addition, that Member shall  ensure 
that any  enquiries addressed  to an incorrect enquiry point  shall promptly  be conveyed  to the correct 
enquiry  point. 

10.3  Each Member shall take such reasonable measures as may be available to it to ensure that one 
or  more  enquiry* points exist  which are able to answer all  reasonable enquiries from other Members 
and  interested parties  in other Members as well  as to provide the relevant documents  or  information 
as  to  where  they  can be obtained  regarding: 

10.3.1  any standards adopted or proposed within its territory by non-governmental sundardizing 
bodies,  or  by  regional  standardizing  bodies  of  which  such  bodies  are  members  or 
participants: and 

10.3.2  any conformity assessment procedures. or proposed conformity assessment procedures. 
which  arc operated  within  its  territory  by  non-governmental  bodies,  or  by  regional 
bodies  of  which such bodies are members  or participants; 

10.3.3  the membership and participation of relevant non-governmental bodies within its territory 
in international and regional sundardizing bodies and conformity assessment systems, 
as well as in bilateral and multilateral arrangements within the scope of this Agreement; 
they  shall  also  be able  to provide  reasonable  information  on the provisions  of  such 
systems  and arrangements. 

10 4  Members shall take such reasonable measures as may be available to them to ensure that where 
copies  of  documents  are requested  by other  Members  or by  interested parties  in other Members,  in 
accordance with the provisions of this Agreement, they are supplied at an equiuble price (if any) which 
shall,  apart  from  the  real  cost  of  deliver),  be the same  for the nationals1  of  the Member  concerned 
or of  any other Member. 

10.5  Developed country Members shall. if requested by other Members, provide, in English, French 
or Spanish, translations of the documents covered by a specific  notification or, in case of voluminous 
documents,  of  summaries  of  such documents. 

"Nationals'* here shall  be deemed,  in the case of a separate customs territory Member of the WTO. to mean persons, 
natural or legal, who are domiciled or who have a real and effective  industrial or commercial esublishment in that customs 
territory. 

Page  127 

10.6  The Secreuriat shall,  whenit  receives notifications  in accordance  with the provisions  of this 
Agreement, circulate copies of the notifications to all Members and interested international sundardizing 
and  conformity  assessment  bodies,  and  draw  the  attention  of  developing  country  Members  to  any 
notifications  relating to products of particular interest  to them. 

10.7  Whenever a Member has reached an agreement with any other country or countries on issues 
related  to  technical  regulations,  standards  or conformity  assessment  procedures  which  may  have a 
significant  effea  on trade,  at least  one Member  party to the agreement  shall  notify  other  Members 
through the Secreuriat of the products to be covered by the agreement and include a brief description 
of the agreement.  Members concerned are encouraged to enter, upon request,  into consulutions with 
other Members for the purposes of concluding similar agreements or of arranging for their participation 
in such agreements. 

10.8  Nothing  in this Agreement  shall  be construed as requiring: 

10.8.1  the publication  of texts other than in the language  of  the Member; 

10.8.2  the provision of particulars or copies of drafts other than in the language of the Member 

except  as suted  in paragraph 5; or 

10.8.3  Members to furnish  any information,  the disclosure of which they consider contrary 

to their essential  security  interests. 

10.9  Notifications  to the Secreuriat  shall  be in English,  French or Spanish. 

10  10  Members  shall  designate  a  single  central  government  authority  that  is  responsible  for  the 
implementation  on the national  level  of the provisions  concerning  notification  procedures under this 
Agreement  except  those  included  in Annex 3. 

10.11 
If.  however,  for legal or administrative  reasons the responsibility  for notification  procedures 
is divided  among  two or more central  government  authorities,  the Member  concerned  shall  provide 
to the other  Members  complete  and unambiguous  information  on the scope of responsibility  of  each 
of  these authorities. 

Article  11 

Technical Assistance to  Other Members 

111  Members shall, if requested, advise other Members, especially the developing country Members, 
on the preparation of  technical  regulations. 

11.2  Members shall, if requested, advise other Members, especially the developing country Members, 
and  shall  grant  them  technical  assisunce  on  mutually  agreed  terms  and  conditions  regarding  the 
esublishment of national sundardizing bodies, and participation in the international sundardizing bodies, 
and  shall  encourage  their national  standardizing  bodies to do likewise. 

11.3  Members  shall,  if requested,  uke  such reasonable measures  as may  be available to them to 
arrange  for  the  regulatory  bodies  within  their  territories, to  advise  other  Members,  especially  the 
developing country Members, and shall grant them technical assisunce on mutually agreed terms and 
conditions  regarding: 

Page  128 

11.3.1  the esublishment of regulatory bodies, or bodies for the assessment of conformity  with 

technical  regulations; and 

11.3.2  the methods  by which their technical  regulations  can best be  ma. 

11.4  Members  shall,  if requested,  uke' such reasonable  measures  as may  be available  to them  to 
arrange for  advice to be given  to other Members,  especially  the developing  country  Members,  and 
shall grant them technical assisunce on mutually agreed terms and conditions regarding the esublishment 
of bodies for the assessment of conformity with standards adopted within the territory of the requesting 
Member. 

11.5  Members shall, if requested, advise other Members, especially the developing country Members, 
and shall grant them technical assisunce on mutually agreed terms and conditions regarding the steps 
that should be uken by their producers if they wish to have access to systems for conformity assessment 
operated  by governmental  or non-governmental  bodies  within the territory of the Member  receiving 
the  request. 

11.6  Members which are members or participants of international or regional systems for conformity 
assessment  shall,  if  requested,  advise  other  Members,  especially  the developing  country  Members, 
and  shall  grant  them  technical  assistance  on  mutually  agreed  terms  and  conditions  regarding  the 
esublishment  of the institutions and legal framework which would enable them to fulfil  the obligations 
of  membership  or participation  in such systems. 

11.7  Members  shall,  if so requested, encourage bodies within their territories which are members 
or participants of international or regional systems for conformity assessment to advise other Members, 
especially the developing country Members, and should consider requests for technical assistance from 
them regarding the establishment of the institutions which would enable the relevant bodies within their 
territories  to fulfil  the obligations  of membership  or participation. 

In providing  advice and technical  assistance to other Members  in terms of paragraphs  1 to 7. 

11.8 
Members  shall  give  priority  to the needs of the least-developed  country Members. 

Article  12 

Special  and Differential  Treatment of Developing  Country Members 

12.1  Members shall provide differential and more favourable treatment to developing country Members 
to this Agreement, through the following provisions as well as through the relevant provisions of other 
Articles  of  this  Agreement. 

12.2  Members shall give particular anention to the provisions of mis Agreement concerning developing 
country Members' rights and obligations and shall uke into account the special development,  financial 
and trade needs of developing country Members in the implemenution of this Agreement, both nationally 
and  in the operation of this  Agreement's  institutional  arrangements. 

12.3  Members  shall,  in  the  preparation  and  application  of  technical  regulations,  standards  and 
conformity  assessment procedures, uke account of the special development, financial and trade needs 
of  developing  country  Members,  with a view  to ensuring  that  such technical  regulations,  standards 
and conformity  assessment procedures do not create unnecessary obsudes to exports from developing 
country  Members. 

Page  129 

12.4  Members  recognize  that,  although  international  standards,  guides  or recommendations  may-
exist,  in their particular technological  and socio-economic  conditions,  developing  country  Members 
adopt certain technical regulations, standards or conformity assessment procedures aimed at preserving 
indigenous technology and production methods and processes compatible with their development needs. 
Members  therefore  recognize  that  developing  country  Members  should  not  be  expected  to  use 
international standards as a basis for their technical  regulations or standards,  including test methods, 
which  are not appropriate to their development,  financial  and trade needs. 

12.5  Members  shall  uke  such  reasonable  measures  as  may  be  available  to  them  to  ensure  that 
international  sundardizing bodies and international  systems  for conformity  assessment are organized 
and  operated  in a way  which  facilitates  active  and  representative  participation  of  relevant  bodies  in 
all  Members,  taking  into'account the special  problems  of  developing  country  Members. 

12.6  Members  shall  take  such  reasonable  measures  as  may  be  available  to  them  to  ensure  that 
international sundardizing  bodies, upon request of developing country Members, examine the possibility 
of,  and,  if  practicable,  prepare  international  standards  concerning  products  of  special  interest  to 
developing  country  Members. 

12.7  Members shall,  in accordance with the provisions of  Article  11. provide technical  assistance 
to developing Country Members to ensure that the preparation and application of technical regulations, 
standards and conformity  assessment procedures do not create unnecessary' obstacles to the expansion 
and  diversification  of  exports  from  developing  country  Members. 
In  determining  the  terms  and 
conditions of the technical assistance, account shall be taken of the stage of development of the requesting 
Members  and in particular  of  the least-developed country  Members. 

12.8 
It  is  recognized  that  developing  country  Members  may  face  special  problems,  including 
institutional  and  infrastructural  problems,  in  the  field  of  preparation  and  application  of  technical 
regulations, standards and conformity  assessment procedures. It is further  recognized that the special 
development  and trade needs of developing country  Members,  as well  as their stage of  technological 
development,  may  hinder  their  ability  to  discharge  fully  their  obligations  under  this  Agreement. 
Members,  therefore,  shall take this fact fully  into account.  Accordingly,  with a view  to ensuring that 
developing  country  Members  are able to comply  with  this  Agreement,  the Committee  on Technical 
Barriers  to  Trade  provided  for  in Article  13 (referred  to  in this  Agreement  as  the  "Committee")  is 
enabled to grant, upon request, specified, time-limited exceptions in whole or in pan from obligations 
under this Agreement.  When considering such requests the Committee shall take into account the special 
problems, in the field of preparation and application of technical regulations, standards and conformity 
assessment procedures, and the special development and trade needs of the developing country Member, 
as well  as  its suge  of technological  development,  which may  hinder its ability  to discharge  fully  its 
obligations  under this  Agreement.  The Committee  shall,  in particular,  take into account  the special 
problems  of  the least-developed country  Members. 

12.9  During  consultations,  developed country  Members  shall  bear in mind  the special  difficulties 
experienced by developing country Members in formulating and implementing standards and technical 
regulations  and  conformity  assessment  procedures,  and  in their  desire  to  assist  developing  country 
Members with their efforts in this direction, developed country Members shall take account of the special 
needs  of  the former  in regard to financing,  trade and development. 

12.10  The Comminee  shall examine periodically the special and differential  treatment, as laid down 
in this  Agreement,  granted  to developing  country  Members  on national  and  international  levels. 

Page  130 

INSTITUTIONS,  CONSULTATION  AND  DISPUTE  SETTLEMENT 

Article  13 

The Committee on  Technical Barriers  to  Trade 

13.1  A  Committee  on Technical  Barriers  to Trade  is  hereby  esublished,  and shall  be  composed 
of  representatives from each of the Members.  The Committee  shall elect its own Chairman and shall 
meet as necessary, but no less than once a year, for the purpose of affording  Members the opportunity 
of  consulting  on  any  matters  relating  to  the  operation  of  this  Agreement  or. the  furtherance  of  its 
objectives,  and shall  carry out such responsibilities  as assigned to it under this Agreement  or by the 
Members. 

13.2  The Committee  shall establish working parties or other bodies as may be appropriate,  which 
shall carry out such responsibilities as may be^assigned to them by the Comminee  in accordance with 
the  relevant  provisions  of  this  Agreement. 

It is  understood that unnecessary duplication should be avoided between the work under this 
13.3 
Agreement and that of government  in other technical bodies.  The Comminee shall examine this problem 
with  a view  to minimizing  sc:  replication. 

Article  14 

Consultation and Dispute Settlement 

14.1  Consultations and the settlement of disputes with respect to any maner affecting  the operation 
of this Agreement shall uke place under the auspices of the Dispute Senlement Body and shall  follow, 
mutatis  mutandis,  the provisions of Anicles XXII and XXIII of GATT 1994, as elaborated and applied 
by  the  Dispute  Settlement  Understanding. 

14.2  At the request of a party to a dispute, or at its own initiative, a panel may esublish a technical 
expert  group to assist  in questions of a technical  nature, requiring detailed consideration by experts. 

14.3 

Technical  expert  groups shall  be governed  by the procedures  of  Annex  2. 

14.4  The  dispute  settlement  provisions  set  out  above  can  be  invoked  in  cases  where  a  Member 
considers  that another  Member  has not achieved  satisfactory  results under Articles  3, 4,  7,  8 and  9 
and its trade interests are significantly affected.  In this respect, such results shall be equivalent to those 
as  if  the body  in question  were a Member. 

Page  131 

FINAL PROVISIONS 

Article 15 

Final Provisions 

Reservations 

15.1  Reservations may not be entered in respect of any of the provisions of this Agreement without 
the consent of the other Members. 

Rexiew 

15.2  Each Member shall, promptly after  the date on which the WTO Agreement enters into force 
for  it.  inform  the Committee  of  measures  in existence  or  uken  to ensure  the  implemenution  and 
administration of this Agreement.  Any changes of such measures thereafter  shall also be notified  to 
the Committee. 

15.3  The Comminee shall review annually the implemenution and operation of this Agreement taking 
into account the objeaives  thereof. 

15.4  Not later than the end of the third year from the date of entry into force of the WTO Agreement 
and  at  the  end  of  each  three-year  period  thereafter,  the Committee  shall  review  the operation  and 
implementation  of this Agreement, including the provisions relating to transparency,  with a view to 
recommending an adjustment of the rights and obligations of this Agreement where necessary to ensure 
mutual economic advantage and balance of rights and obligations* without prejudice to the provisions 
of  Article  12.  Having  regard,  inter alia, to  the  experience  gained  in  the  implementation  of  the 
Agreement, the Comminee shall, where appropriate, submit proposals for amendments to the text of 
this  Agreement  to the Council  for Trade in Goods. 

Annexes 

15.'5  The annexes to this Agreement  constitute an integral part thereof. 

Page  132 

ANNEX  1 

TERMS  AND  THEIR  DEFINITIONS  FOR  THE 
PURPOSE  OF THIS  AGREEMENT 

The terms presented  in the sixth edition of the ISO/IEC Guide  2.  1991, General  Terms and 
Their Definitions Concerning Standardization and Related Activities, shall, when used in mis Agreement, 
have the same meaning  as given  in the definitions  in the said Guide taking into account  that  services 
are excluded from the coverage  of this  Agreement. 

For the purpose  of  this Agreement,  however,  the following  definitions  shall  apply: 

1. 

Technical regulation 

Document  which lays down product characteristics or their related processes  and production 

methods,  including  the  applicable  administrative  provisions,  with  which  compliance  is mandatory 
It may  also  include or deal  exclusively  with terminology,  symbols,  packaging,  marking  or labelling 
requirements  as they  apply  to a product,  process  or production method. 

Explanatory note 

The definition  in ISO/IEC Guide 2 is not self-contained,  but based on the so-called  "building 
block" system. 

2. 

Standard 

Document approved by a recognized body, that provides, for common and repeated use. rules. 
guidelines  or  characteristics  for  products  or related  processes  and production  methods,  with  which 
compliance  is  not  mandatory.  It may  also  include  or deal  exclusively  with  terminology,  symbols, 
packaging, marking or labelling requirements as they apply to a product, process or production method. 

Explanatory note 

The  terms  as  defined  in  ISO/IEC  Guide  2  cover  products,  processes  and  services.  This 
Agreement deals only with technical regulations, standards and conformity assessment procedures 
related to products or processes and production methods.  Standards as defined  by  ISO/IEC 
Guide  2  may  be mandatory  or voluntary.  For the purpose of  this  Agreement  standards  are 
defined  as voluntary  and technical  regulations as mandatory  documents.  Standards prepared 
by the international standardization community are based on consensus. This Agreement covers 
also documents  that are not based on consensus. 

3. 

Conformity assessment procedures 

Any procedure used, directly or indirectly, to determine that relevant requirements in technical 

regulations  or sundards are  fulfilled. 

Explanatory  note 

Conformity  assessment  procedures  include,  inter alia,  procedures  for  sampling,  testing and 
inspection;  evaluation, verification and assurance of conformity;  registration,  accreditation 
and approval  as well  as their combinations. 

Page  133 

4. 

International body  or system 

Body  or system  whose  membership  is open to the relevant  bodies  of  at least  all  Members. 

5. 

Regional  body  or system 

Body or system whose membership is open to the relevant bodies of only some of the Members. 

6. 

Central government body 

Central  government,  its ministries  and departments  or any body  subject to the control  of the 

central  government  in respect of the activity  in question. 

Explanatory note: 

In the case of the European Communities the provisions governing central government  bodies 
apply.  However, regional bodies or conformity assessment systems may be esublished within 
the  European  Communities,  and  in  such  cases  would  be  subject  to  the  provisions  of  this 
Agreement  on regional  bodies or conformity  assessment  systems. 

7. 

Local  government body 

Government  other  than  a  central  government  (e.g.  sûtes,  provinces.  Lander,  cantons, 
municipalities, etc.), its ministries or departments or any body subject to the control of such a government 
in  respect  of  the activity  in question. 

8. 

Non-governmental body 

Body  other  than a central  government  body  or  a  local  government  body,  including  a non 

governmental  body  which has legal  power  to enforce  a technical  regulation. 

Page  134 

ANNEX  2 

TECHNICAL  EXPERT  GROUPS 

The following procedures shall apply to technical expert groups esublished in accordance with 

the provisions  of  Article  14. 

Technical expert groups are under the panel's authority.  Their terms of reference and deuiled 

1. 
working  procedures  shall  be decided  by the panel,  and they  shall  report to the panel. 

Participation in technical expert groups shall be restricted to persons of professional  standing 

2. 
and exr; r;i!nce in the field in question. 

Citizens of parties to the dispute shall not serve  on a technical  KXOCTI group without the joint 

3. 
agreement  of the parties to the dispute, except in exceptional  circumstances when the panel considers 
that  the need  for.specialized  scientific  expertise  cannot  be fulfilled  otherwise.  Government  officials 
of parties to the dispute shall not serve on a technical expert group.  Members of technical expert groups 
shall  serve in their individual capacities and not as government  representatives, nor as represenutives 
of  any  organization.  Governments  or organizations  shall  therefore  not  give  them  instructions  with 
regard  to matters  before  a technical  expert group. 

Technical expert groups may consult and seek information and technical advice from any source 
4. 
they deem appropriate.  Before a technical expert group seeks such information or advice from a source 
within  ihe jurisdiction  of  a Member,  it shall  inform  the government  of that Member.  Any  Member 
shall  respond promptly  and fully  to any  request  by a technical  expert  group for such  information  as 
the  technical  expert  group considers  necessary  and appropriate. 

5. 
The parties to a dispute shall  have access  to all relevant  information  provided  to a technical 
expert  group, unless it is of a confidential  nature.  Confidential  information provided to the technical 
expert  group  shall  not  be .released  without  formal  authorization  from  the  government,  organization 
or person providing  the information.  Where such information  is requested from the technical  expert 
group but release of such information by the technical expert group is not authorized, a non-confidential 
summary  of  the  information  will  be provided  by  the government,  organization  or person  supplying 
the  informal ion. 

6. 
The technical  expert group shall submit a draft  report to the Members concerned  with a view 
to obtaining  their comments,  and uking  them into account, as appropriate, in the final report,  which 
shall  also  be circulated  to the  Members  concerned  when  it  is submitted  to the panel. 

Page  135 

ANNEX  3 

CODE  OF GOOD PRACTICE  FOR THE PREPARATION,  ADOPTION  AND 
APPLICATION  OF  STANDARDS 

General  Provisions 

A. 

For the purposes of  this Code the definitions  in Annex  1 of  this Agreement  shall  apply. 

B. 
This Code is open to acceptance by any sundardizing body within the territory of a Member 
of  the WTO. whether a central  government  body,  a local  government  body,  or a non-governmental 
body; to any governmental  regional sundardizing body one or more members of which are Members 
of the WTO; and to any non-governmental regional sundardizing body one or more members of which 
are situated  within the territory' of  a Member  of  the WTO  (referred  to  in this  Code  collectively  as 
"sundardizing bodies" and individually as  "the sundardizing  body"). 

C.  . 
Standardizing bodies that have accepted or withdrawn from this Code shall notify  this fact to 
the  ISO/IEC .Information Centre  in Geneva.  The notification  shall  include the name  and address of 
the body concerned and the scope of its current and expected standardization activities.  The notification 
may be sent either directly to the ISO/IEC Information Centre, or through the national member body 
of ISO/IEC or. preferably, through the relevant national member or international affiliate of ISONET, 
as appropriate. 

SUBSTANTIVE PROVISIONS 

In respect of standards, the sundardizing body shall accord treatment to products originating 
D. 
in the territory of any other Member of the WTO no less favourable than that accorded to like products 
of  national  origin and to like products originating  in any other country. 

The standardizing body shall ensure that standards are not prepared, adopted or applied with 

E. 
a  view  to,  or with the effect  of,  creating unnecessary  obsucles to international  trade. 

F. 
Where international  standards exist  or their completion  is imminent,  the sundardizing  body 
shall  use them,  or the relevant  parts of  them, as a basis for  the standards it develops,  except  where 
such international standards or relevant parts would be ineffective or inappropriate, for instance, because 
of an insufficient  level  of protection or fundamenul  climatic  or geographical  factors or fundamental 
technological  problems. 

G. 
With a view to harmonizing standards on as wide a basis as possible, the sundardizing  body 
shall,  in an appropriate way, play a full part, within the limits of its resources,  in the preparation by 
relevant international sundardizing bodies of international standards regarding subjea matter for which 
it either  has adopted,  or expects  to adopt,  standards.  For sundardizing  bodies  within the territory 
of a Member, participation in a particular international standardization aaivity shall, whenever possible, 
take place through one delegation representing all sundardizing bodies in the territory that have adopted, 
or expea  to adopt, standards for the subjea maner to which the international standardization aaivity 
relates. 

H. 
The  sundardizing  body  within  the territory  of  a  Member  shall  make every  effort  to  avoid 
duplication of,  or overlap with, the work of other sundardizing bodies in the national territory or with 
the work of relevant international or regional sundardizing bodies.  They shall also make every  effort 
to achieve a national  consensus on the standards they develop.  Likewise the regional  sundardizing 

Page  136 

body shall make every effort to avoid duplication of,  or overlap with, the work of relevant international 
sundardizing  bodies. 

.  Wherever  appropriate,  the  sundardizing  body  shall  specify  standards  based  on  product 

I. 
requirements  in terms  of performance  rather than design or descriptive  characteristics. 

J. 
At  least  once  every  six  months,  the  sundardizing  body  shall  publish  a  work  programme 
conuining  its name and address, the standards it is currently preparing arid the standards which it has 
adopted  in the preceding  period.  A  standard  is  under preparation  from  the moment  a decision  has 
been  uken  to  develop  a standard  until  that  standard  has  been adopted.  The  titles  of  specific  draft 
standards shall,  upon request,  be provided  in English,  French or Spanish.  A notice of  the existence 
of the work programme  shall  be published  in a national  or, as the case may be,  regional  publication 
of  standardization activities. 

The work programme shall for each standard indicate, in accordance with any ISONET rules. 
the classification  relevant to the subject matter, the stage attained in the standard's development,  and 
the references  of any international  standards uken as a basis.  No later than at the time of publication 
of  its  work  programme,  the  sundardizing  body  shall  notify  the  existence  thereof  to  the  ISO/IEC 
information  Centre  in Geneva. 

The notification  shall conuin the name and address of the sundardizing  body,  the name and 
issue  of  the  publication  in  which  the  work  programme  is  published,  the  period  to  which  the  work 
programme  applies,  its price (if  any),  and how  and where  it can be obtained.  The notification  may 
be sent directly to the ISO/IEC Information Centre, or, preferably, through the relevant national member 
or  international  affiliate  of  ISONET.  as appropriate. 

The national  member  of  ISO/IEC shall  make  every  effort  to become  a member  of  ISONET 
K. 
or to appoint another body to become a member as well as to acquire the most advanced membership 
type possible for the ISONET member. Other standardizing bodies shall make every effort to associate 
themselves  with the  ISONET member. 

L. 
Before  adopting  a standard,  the sundardizing  body  shall  allow  a period  of  at  least  60  days 
for  the  submission  of  comments  on the draft  standard  by  interested  parties within  the territory  of a 
Member  of  the WTO.  This period  may,  however,  be shortened  in cases  where urgent problems  of 
safety. health or environment arise or threaten to arise.  No later than at the start of the comment period. 
the sundardizing body shall publish a notice announcing the period for commenting  in the publication 
referred  to  in paragraph J.  Such  notification  shall  include,  as  far  as practicable,  whether  the  draft 
standard deviates  from  relevant  international  standards. 

M. 
On  the  request  of  any  interested  party  within  the  territory  of  a  Member  of  the  WTO,  the 
sundardizing  body  shall  promptly  provide,  or arrange  to provide,  a copy  of  a draft  standard  which 
it  has subminèd  for  comments.  Any  fees  charged  for this  service shall,  apart from the real  cost  of 
delivery*, be the same  for foreign and domestic  parties. 

N. 
The standardizing body shall take into account, in the further processing of the standard, the 
comments received during the period for commenting.  Comments received through sundardizing bodies 
that have accepted this Code of Good Practice shall, if so requested, be replied to as promptly as possible. 
The reply shall include an explanation why a deviation from relevant international standards is necessary. 

O. 

Once the standard has been adopted,  it shall  be promptly  publish? 

P. 
On  the  request  of  any  interested  party  within  the  territory  of  a  Member  of  the  WTO,  the 
standardizing  body  shall  promptly  provide,  or  arrange  to  provide,  a  copy  of  its most  recent  work 

Page  137 

programme  or of a standard which  ij produced.  Any  fees  charged  for this  service  shall,  apart from 
the real  cost  of  delivery,  be the same  for  foreign  and domestic parties. 

The  sundardizing  body  shall  afford  sympathetic  consideration  to,  and adequate  opportunity 
Q. 
for,  consulution  regarding  represenutions  with  respect  to  the  operation  of  this  Code  presented  by 
sundardizing bodies that have accepted this Code of Good Practice.  It shall make an objective  effort 
to solve  any complaints. 

Page 138 

AGREEMENT  ON TRADE-RELATED  INVESTMENT  MEASURES 

Page  139 

Members, 

Considering  that  Ministers  agreed  in  the  Punta  del  Este  Declaration  that  "Following  an 
examination  of  the operation of  GATT  Anicles  related to the trade restriaive  and distorting  effects 
of investment measures, negotiations should elaborate, as appropriate, further provisions that may be 
necessary to avoid  such adverse effects  on trade"; 

Desiring to promote the expansion and progressive liberalisation of world trade and to faciliute 
investment across international frontiers so as to increase the economic growth of all trading partners, 
particularly developing  country Members,  while ensuring free competition; 

Taking into account the particular trade, development and financial needs of developing country' 

Members,  particularly  those of the least-developed country Members; 

Recognizing that ceruin investment measures can cause trade-restrictive and distorting effects; 

Hereby agree  as  follows: 

Article  1 

Coverage 

This Agreement applies to investment measures related to trade in goods only (referred  to in 

this  Agreement  as "TRIMs"). 

Article  2 

National  Treatment and  Quantitative  Restrictions 

Without prejudice to other rights and obligations under GATT  1994, no Member shall apply 

1. 
any TRIM  that  is  inconsistent with the provisions  of Anicle  III or Article XI of GATT  1994. 

2. 
An  illustrative  list  of  TRIMs  that are  inconsistent  with the obligation of  national  treatment 
provided  for  in paragraph 4  of  Anicle  III of  GATT  1994 and the obligation  of  general  elimination 
of  quantitative  restriaions provided  for  in paragraph  1 of  Anicle XI of GATT  1994 is contained  in 
the Annex  to this  Agreement. 

Article  3 

Exceptions 

All exceptions under GATT 1994 shall apply, as appropriate, to the provisions of this Agreement. 

Page  140 

Article  4 

Developing  Country Members 

A  developing  country  Member  shall  be free to  deviate  temporarily  from  the  provisions  of 
Article  2  to the extent and in such a manner as Article XVIII of GATT  1994,  the Undersunding  on 
the Balance-of-Payments  Provisions  of GATT  1994,  and the Declaration on Trade Measures  Taken 
for  Balance-of-Payments  Purposes  adopted  on  28  November  1979  (BISD  26S/205-209)  permit  the 
Member  to deviate from the provisions  of  Articles  III and XI of GATT  1994. 

Article  5 

Notification and  Transitional Arrangements 

1. 
Members,  within 90 days of the date of entry into force of the WTO Agreement,  shall  notify 
the  Council  for  Trade  in Goods of  all TRIMs  they  are applying  that  are not  in conformity  with the 
provisions of this Agreement.  Such TRIMs of general or specific  application shall be notified,  along 
with  their principal  features.1 

2. 
Each Member shall eliminate all TRIMs which are notified under paragraph  1 within two years 
of  the date" of  entry  into force  of the WTO Agreement  in the  case of  a developed  country  Member, 
within  five  years in the case of a developing  country Member,  and within seven years in the case of 
a  least-developed  country  Member. 

3. 
On request, the Council for Trade in Goods may extend the transition period for the elimination 
of TRIMs  notified  under paragraph  1 for a developing country  Member,  including a least-developed 
country  Member,  which  demonstrates  particular difficulties  in  implementing  the provisions  of  this 
Agreement.  In considering  such a request,  the Council  for  Trade  in Goods  shall  uke  into  account 
the  individual  development,  financial  and trade needs  of the Member  in question. 

4. 
During the transition period, a Member shall not modify the terms of any TRIM which it notifies 
under paragraph  1 from those prevailing at the date of entry into force of the WTO Agreement  so as 
to increase the degree of  inconsistency  with the provisions of Article  2.  TRIMs  introduced less than 
180 days before the date of entry into force of the WTO  Agreement shall not benefit from the transitional 
arrangements  provided  in paragraph 2. 

Notwithstanding the provisions of Anicle 2, a Member, in order not to disadvantage established 
5. 
enterprises which are subjea to a TRIM notified  under paragraph  1, may apply during the transition 
period the same TRIM to a new investment (0 where the products of such investment are like products 
to those of  the esublished  enterprises, and (IJ) where necessary  to avoid  distorting the conditions  of 
competition  between the new  investment  and the esublished  enterprises.  Any TRIM  so  applied  to 
a  new  investment  shall  be notified  to the Council  for Trade in Goods.  The terms  of  such a TRIM 
shall  be  equivalent  in their competitive  effect  to those  applicable  to the esublished  enterprises,  and 
it shall  be terminated  at the same time. 

'In the case of TRIMs applied  under  discretionary authority, each  specific  application  shall be notified.  Infonnation 

that  would  prejudice  the legitimate  commercial  interests of particular enterprises  need  not be disclosed. 

Page  141 

Article  6 

Transparency 

1. 
Members  reaffirm,  with respect to TRIMs,  their commitment  to obligations  on transparency 
and  notification  in Article  X  of  GATT  1994,  in the undertaking  on  "Notification"  contained  in the 
Undersunding Regarding Notification,  Consultation, Dispute Settlement and Surveillance adopted on 
28  November  1979 and in the Ministerial  Decision  on Notification  Procedures  adopted  on  15 April 
1994. 

Each Member  shall  notify  the Secretariat  of the publications  in which TRIMs  may be found, 

2. 
including  those  applied  by  regional  and local  governments  and authorities  within their territories. 

3. 
Each Member shall accord sympathetic consideration to requests for  information,  and afford 
adequate opportunity  for consulution,  on any matter arising  from  this Agreement  raised  by  another 
Member.  In conformity  with Article  X of GATT 1994 no Member is required to disclose  information 
the disclosure of which would impede law enforcement  or otherwise be contrary to the public interest 
or would  prejudice  the  legitimate  commercial  interests  of  particular  enterprises,  public  or private. 

Article  7 

Committee on Trade-Related Investment Measures 

1. 
A  Committee  on Trade-Related  Investment  Measures  (referred  to  in this  Agreement  as  the 
"Committee")  is  hereby  established,  and shall  be open to all  Members.  The  Committee  shall  elect 
its own Chairman  and Vice-Chairman,  and shall  meet  not  less than once a year and otherwise  at the 
request  of  any  Member. 

2. 
The Committee shall carry out responsibilities assigned to it by the Council for Trade in Goods 
and  shall  afford  Members  the  opportunity  to  consult  on  any  matters  relating  to  the  operation  and 
implementation  of  this  Agreement. 

The Committee  shall  monitor the operation and implementation  of  this Agreement  and shall 

3. 
report  thereon annually  to the Council  for Trade  in Goods. 

Article  8 

Consultation and Dispute Settlement 

The provisions of Anicles  XXII and XXIII of GATT  1994, as elaborated and applied by the 
Dispute Senlement  Undersunding,  shall  apply to consulutions  and the settlement  of disputes  under 
this  Agreement. 

Article  9 

Review by the  Council for  Trade in  Goods 

Not later than five years after the date of entry into force of the WTO Agreement,  the Council 
for Trade in Goods shall review  the operation of this Agreement  and, as appropriate, propose to the 
Ministerial  Conference  amendments  to its text.  In the course of  this  review,  the Council  for Trade 

Page  142 

in Goods shall consider whether the Agreement should be complemented with provisions on investment 
policy  and competition  policy. 

Page  143 

ANNEX 

Illustrative List 

1. 
TRIMs that are inconsistent with the obligation of national treatment provided for in paragraph 4 
of  Article  III of  GATT  1994  include those which are mandatory  or enforceable  under domestic  law 
or under administrative  mlings,  or compliance  with which  is necessary  to obuin  an advanuge,  and 
which  require: 

(a)  . 

. the purchase or use by an enterprise of products of domestic origin or from any domestic 
source, whether specified  in terms of particular products, in terms of volume or value 
of products,  or  in terms of  a proportion  of volume  or value of  its  local  production; 
or 

(b) 

that  an enterprise's  purchases  or use of  imported  products  be  limited  to  an amount 
related  to the volume  or value of  local  products that  it exports. 

2. 
TRIMs that are inconsistent with the obligation of general elimination of quantitative restrictions 
provided  for  in  paragraph  1 of  Article  XI  of  GATT  1994  include  those  which  are  mandatory  or 
enforceable under domestic law or under administrative mlings, or compliance with which is necessary 
to obtain  an advantage,  and which  restrict: 

(a) 

(b) 

(c) 

the importation by an enterprise of products used in or related to its local production, 
generally  or to an amount  related  to the volume  or value  of  local  production that  it 
exports; 

the importation by an enterprise of products used in or related to its local production 
by restricting its access to foreign exchange to an amount related to the foreign exchange 
inflows  attributable  to the enterprise;  or 

the exportation  or sale  for export by an enterprise of products,  whether  specified  in 
terms of particular products,  in terms of volume or value of products, or in terms of 
a proportion  of  volume  or value of  its local  production. 

Page 144 

AGREEMENT  ON IMPLEMENTATION  OF ARTICLE  VI 
OF THE  GENERAL  AGREEMENT  ON TARIFFS AND TRADE  1994 

Page 145 

Members hereby agree as follows: 

PARTI 

Article! 

Principles 

An anti-dumping measure shall be applied only under the circumstances provided for in Article VI 
of GATT  1994 and pursuant to investigations initiated1 and conducted in accordance with the provisions 
of this Agreement.  The following provisions govern the application of Article VI of GATT  1994 in 
so far  as action is uken under anti-dumping legislation or regulations. 

Article 2 

Determination of Dumping 

2.1 
For  the  purpose  of  this  Agreement,  a-product  is  to  be  considered  as  being  dumped,  i.e. 
introduced  into the commerce of another country at less than its normal value, if the export  price of 
the product exported from one country to another  is less than the comparable price,  in the ordinary-
course of trade, for  the like product when destined  for consumption  in the exporting  country. 

2.2  When there are no sales of the like product  in the ordinary' course of trade  in the domestic 
market of the exporting country or when, because of the particular market situation or the low volume 
of  the  sales  in  the  domestic  market  of  the  exporting  country'3,  such  sales  do  not  permit  a  proper 
comparison,  the margin of dumping shall  be determined  by comparison  with  a comparable  price of 
the like product when exported to an appropriate third country, provided that this price is representative, 
or with the cost of production  in the country of origin plus a reasonable amount  for  administrative, 
selling and general  costs and for  profits. 

2.2.1  Sales of the like product  in the domestic market  of the exporting country  or sales to 
a third country at prices below per unit (fixed  and variable) costs of production plus 
administrative, selling and general costs may be treated as not being in the ordinary 
course of trade by reason of price and may be disregarded in determining normal value 

'The term  "initiated* as used in this Agreement means the procedural action by which a Member fofmally  commences 

an  investigation  as provided  in Article 5. 

'Sales of the like  product destined for consumption  in the domestic  market of the exporting  country  shall normally be 
considered  a sufficient  quantity  for the determination of the normal value if such sales constitute 5 per cent or more of the 
sales of the product under consideration to the imponing  Member,  provided that a lower ratio should  be accepuble  where 
the evidence  demonstrates  that domestic  sales at such  lower ratio are nonetheless of sufficient  magnitude to provide  for a 
proper  comparison. 

Page  146 

only  if the authorities 
• ermine that such sales are made within an extended period 
of time4 in substantial c - -cities5 and are at prices which do not provide for the recovery 
of all costs within a reai onable period of time.  If prices which are below per unit costs 
at  the  time  of  sale  are  above  weighted  average  per  unit  costs  for  the  period  of 
investigation, such prices shall be considered to provide for recovery  of costs within 
a reasonable  period  of time. 

2.2.1.1 

For the purpose of paragraph 2, costs shall normally be calculated on 
the  basis  of  records  kept  by  the  exporter  or  producer  under 
investigation,  provided  that such  records  are in accordance  with the 
generally accepted accounting principles of the exporting country and 
reasonably  reflect  the  costs  associated  with  the  production  and  sale 
of  the  product  under  consideration.  Authorities  shall  consider  all 
available  evidence  on  the  proper  allocation  of  costs,  including  that 
which is made available by the exporter or producer in the course of 
the investigation provided that such allocations have been historically 
utilized  by  the  exporter  or  producer,  in  particular  in  relation  to 
establishing  appropriate  amortization  and  depreciation  periods  and 
allowances  for  capital  expenditures  and  other  development  costs. 
Unless already reflected  in the cost allocations under mis sub-paragraph, 
costs shall be adjusted appropriately for those non-recurring  items of 
cost  which  benefit  future  and/or  current  production,  or  for 
circumstances  in which  costs  during  the  period  of  investigation  are 
affected  by start-up operations.6 

n  "»  *> 

For the purpose  of paragraph 2.  the amounts  for administrative,  selling  and general 
costs  and  for profits  shall  be based on actual  data pertaining to production and sales 
in the ordinary  course of trade of the like produa by the exporter or producer under 
investigation.  When such amounts  cannot be determined  on this basis,  the amounts 
may  be determined  on the basis  of: 

( i ) 

the actual amounts incurred and realized by the exporter or producer in question 
in  respect  of  production  and sales  in the domestic  market  of  the  country  of 
origin of  the same  general  category  of products; 

'When in this Agreement  the term 'authorities* ts used,  u shall be interpreted as meaning authorities at an appropriate 

senior  level. 

T he  extended  period  of  time  should  norma 11> be one  year  but shall  in no case  be  less  than six  months. 

*Sales below  per unit costs are made \t\  substantial quantities when the authorities esublish  that tne weighted  average 
selling price of the transactions under consideration for the determination of the normal value is below the weighted average 
per  unit costs,  or that the  volume  of  sales below  per unit costs  represents  not  less  than 20 per cent of  the volume  sold  in 
transactions  under consideration  for  the determination  of  the normal  value. 

•The adjustment  made for  sun-up operations shall  reflect  the costs at the end of  the sun-up  period or.  if that period 
extends beyond the period of investigation, the most recent costs which can reasonably be uken into account by the authorities 
during  the  investigation. 

Page  147 

(ii) 

(iii) 

the  weighted  average  of  the  actual  amounts  incurred  and  realized  by  other 
exporters  or producers subject  to investigation  in respect  of  production and 
sales of the like produa  in the domestic  market  of the country  of  origin; 

any other reasonable method, provided that the amount for profit so established 
shall not exceed the profit normally realized by other exporters or producers 
on sales of products of the same general  category  in the domestic  market  of 
the country of origin. 

2.3 
In cases  where there is no export price or where  it appears to the authorities  concerned that 
the export price is unreliable because of association or a compensatory arrangement between the exporter 
and the importer or a third party, the export price may be constructed on the basis of the price at which 
the imported products are first resold to an independent buyer, or if the products are not resold to an 
independent buyer, or not resold in the condition as imported, on such reasonable basis as the authorities 
may  determine. 

2.4- 
A fair comparison shall be made between the export price and the normal value.  This comparison 
shall be made at the same level of trade, normally at the ex-factory  level, and in respect of sales made 
at as nearly as possible the same time.  Due allowance shall be made in each case, on its merits,  for 
differences  which  affect  price  comparability,  including  differences  in conditions  and terms  of  sale, 
taxation,  levels of trade, quantities, physical  characteristics, and any other differences  which are also 
demonstrated  to affect  price comparability.7  In the cases  referred  to in paragraph 3,  allowances  for 
costs,  including  duties and taxes,  incurred between importation and resale,  and for profits  accruing, 
should  also  be  made.  If  in these  cases  price  comparability  has been  affected,  the  authorities  shall 
establish the normal  value at a level of trade equivalent to the level  of trade of the constructed  export 
price, or shall make due allowance as warranted under this paragraph.  The authorities shall  indicate 
to the parties in question what information is necessary to ensure a fair comparison and shall not impose 
an unreasonable burden of  proof on those parties. 

2.4.1  When  the comparison  under paragraph 4  requires  a conversion  of  currencies,  such 
conversion should be made using the rate of exchange  on the date of sale8,  provided 
that when a sale of foreign currency on forward markets is directly linked to the export 
sale  involved,  the rate of  exchange  in the  forward  sale shall  be  used.  Fluctuations 
in exchange rates shall  be ignored and in an investigation  the authorities  shall  allow 
exporters  at  least  60 days  to  have  adjusted  their  export  prices  to  reflect  sustained 
movements  in exchange rates during the period of  investigation. 

2.4.2  Subject to the provisions governing  fair comparison in paragraph 4, the existence of 
margins of dumping during the investigation phase shall  normally be esublished  on 
the basis of a comparison of a weighted average normal value with a weighted average 
of prices  of all  comparable export  transactions or by  a comparison  of  normal  value 
and export prices on a transaaion-to-transaction basis.  A  normal value  esublished 
on a weighted average basis may be compared to prices of individual export transactions 
if the authorities find a pattern of export prices which differ significantly  among different 

It  is understood  that some of the above  factors  may overlap,  and authorities  shall  ensure  that they do not duplicate 

adjustments that have  been  already  made under this provision. 

•Normally,  the date of sale would be the dau of contract, purchase order, order confirmation,  or invoice,  whichever 

establishes the material  terms of sale. 

Page  148 

purchasers, regions or time periods, and if an explanation is provided as to why such 
differences  cannot  be  uken  into  account  appropriately  by  the  use  of  a  weighted 
average-to-weighted average or transaction-to-transaction comparison. 

2.5 
In the case where products are not imported directly from the country of origin but are exported 
to the importing Member from an intermediate country, the price at which the products are sold  from 
the country of export to the importing Member shall normally be compared with the comparable price 
in the country of export.  However, comparison may be made with the price in the country of origin. 
if,  for example,  the products are merely transshipped through the country of export, or such products 
are not produced  in the country  of  export,  or there  is no comparable  price  for  them  in the country 
of  export. 

2.6 
Throughout this Agreement the term "like product" ("produit  similaire")  shall  be interpreted 
to mean a product which  is identical,  i.e.  alike in all respects to the product under consideration,  or 
in  the  absence  of  such  a  product,  another  product  which,  although  not  alike  in  all  respects,  has 
characteristics  closely  resembling  those of  the product under consideration. 

This  Article  is  without  prejudice  to  the  second  Supplementary  Provision  to  paragraph  1 of 

2.7 
Article  VI  in Annex  I to GATT  1994. 

Article  3 

Determination  of Injury* 

3.1 
A determination of injury for purposes of Article  VI of GATT  1994 shall be based on positive 
evidence and involve an objective examination of both (a) the volume of the dumped imports and the 
effect of the dumped impons on prices in the domestic market for like products, and (b) the consequent 
impact  of  these  imports  on domestic  producers  of  such products. 

3.2  With regard to the volume of the dumped  imports, the investigating authorities shall  consider 
whether there has been a significant  increase  in dumped  imports,  either  in absolute terms or relative 
to production  or consumption  in the  importing  Member.  With  regard  to the effect  of  the dumped 
imports on prices, the investigating authorities shall consider whether there has been a significant  price 
undercutting  by  the  dumped  imports  as  compared  with the price  of  a like product  of  the  importing 
Member,  or whether the effect  of such imports  is otherwise to depress prices to a significant  degree 
or prevent  price  increases,  which  otherwise  would  have  occurred,  to a significant  degree.  No  one 
or several  of  these  factors  can necessarily  give  decisive  guidance. 

3.3  Where  imports  of  a  product  from  more  than  one  country  are  simultaneously  subject  to 
anti-dumping  investigations, the investigating authorities may cumulatively assess the effects  of such 
impons  only  if they  determine that  (a) the margin  of dumping esublished  in relation to the  imports 
from each country* is more than de minimis as defined  in paragraph 8 of Article 5 and the volume  of 
impons from each country is not negligible and (b) a cumulative assessment of the effects of the imports 
is appropriate in light of the conditions of competition between the imported products and the conditions 
of  competition  between the  imported  products and the like domestic  product. 

•Under this Agreement the term "injury* shall, unless otherwise specified,  be uken to mean material injury to a domestic 
industry,  threat  of  material  injury* to * domestic  industry or material  reurdatkm of  the esublishment  of  such an  industry 
and  shall  be  interpreted  in accordance  with  the  provisions  of  this  Anicle. 

Page  149 

The examination of the impact of the dumped imports on the domestic industry concerned shall 
3.4 
include an evaluation of all relevant economic factors and indices having a bearing on the sute of the 
industry,  including  actual  and potential  decline  in sales,  profits,  output,  market  share,  productivity, 
return on  investments,  or utilization  of  capacity;  factors  affecting  domestic  prices;  the magnitude 
of the margin of dumping;  actual and potential negative effects on cash flow, inventories, employment, 
wages, growth, ability to raise capital or investments.  This list is not exhaustive, nor can one or several 
of  these  factors  necessarily  give decisive guidance. 

3.5 
It must be demonstrated that the dumped  imports are, through the effects  of dumping,  as set 
forth in paragraphs  2 and 4, causing injury within the meaning of this Agreement.  The demonstration 
of a causal  relationship between the dumped  imports and the injury to the domestic  industry  shall be 
based  on  an  examination  of  all  relevant  evidence  before  the  authorities.  The  authorities  shall  also 
examine  any  known factors  other than the dumped  imports  which  at the  same  time  are  injuring the 
domestic  industry, and the injuries caused by these other factors must not be attributed to the dumped 
imports.  Factors  which  may  be  relevant  in this respect  include,  inter alia,  the  volume  and  prices 
of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, 
trade restrictive practices of and competition between the foreign and domestic producers, developments 
in technology  and the export performance  and productivity  of  the domestic  industry. 

The effect  of the dumped  imports shall be assessed  in relation to the domestic  production of 
3.6 
the like product when available dau permit the separate identification  of that production on the basis 
of such criteria as the production process, producers' sales and profits.  If such separate  identification 
of that production is not possible, the effects of the dumped imports shall be assessed by the examination 
of  the production of  the  narrowest  group or range of products,  which  includes  the  like  product,  for 
which  the  necessary  information  can be provided. 

A determination of a threat of material injury shall be based on facts and not merely on allegation, 
3.7 
conjecture or remote possibility.  The change in circumstances which would create a situation in which 
the dumping would cause injury must be clearly foreseen and imminent.10  In making a determination 
regarding the existence of a threat of material  injury, the authorities should consider, inter alia,  such 
factors as: 

(i) 

(ii) 

a significant  rate of increase of dumped  imports  into the domestic  market  indicating 
the  likelihood  of substantially  increased  importation; 

sufficient  freely  disposable,  or an imminent,  substantial  increase  in,  capacity  of  the 
exporter  indicating  the  likelihood  of  substantially  increased  dumped  exports  to  the 
importing Member's market, uking into account the availability of other export markets 
to absorb any  additional  exports; 

(iii) 

whether  imports  are  entering  at  prices  that  will  have  a  significant  depressing  or 
•suppressing effect  on domestic prices, and would likely  increase demand for  further 
imports;  and 

(iv) 

inventories of  the produa being  investigated. 

No one of these factors by itself can necessarily give decisive  guidance but the totality of the factors 

MOne example,  though not an exclusive  one.  is that there is convincing  reason to believe  that there  will be,  in the near 

future,  subsumially  increased  importation of the product at dumped  prices. 

Page  150 

considered  must  lead  to  the  conclusion  that further  dumped  exports  are  imminent  and  that,  unless 
protective  action  is uken,  material  injury  would  occur. 

3.8  With  respect  to  cases  where  injury  is  threatened  by  dumped  imports,  the  application  of 
anti-dumping  measures  shall  be considered and decided  with  special  care. 

Article  4 

Definition of Domestic  Industry 

For the purposes of this Agreement, the term "domestic industry" shall be interpreted as referring 
4.1 
to the domestic producers as a whole of the like products or to those of them whose collective output 
of the products constitutes a major proportion of the toul domestic production of those products, except 
that 

(i) 

(ii) 

* when producers are related" to the exporters or importers or are themselves importers 
of the allegedly dumped product, the term  "domestic industry" may be interpreted as 
referring  to the rest of the producers; 

in exceptional  circumstances  the  territory  of  a Member  may.  for  the produaion  in 
question,  be divided  into two or more competitive  markets and the producers within 
each market  may be regarded as a separate  industry  if  (a) the producers within such 
market sell ail or almost all of their production of the product in question in that market, 
and (b) the demand in that market is not to any substantial degree supplied by producers 
of the product  in question located elsewhere  in the territory.  In such circumstances, 
injury may be found to exist even where a major portion of the total domestic industry 
is not injured, provided there is a concentration of dumped imports into such an isolated 
market and provided further that the dumped imports are causing injury' to the producers 
of  all  or almost  all  of the produaion  within such market. 

4  2  When the domestic industry has been interpreted as referring to the producers in a certain area, 
i.e.  a market as defined  in paragraph  l(ii). anti-dumping duties shall be levied12 only on the products 
in question consigned for final consumption to that area.  When the constitutional law of the importing 
Member  does  not permit  the  levying  of anti-dumping duties on such a basis, the importing  Member 
may  levy  the anti-dumping  duties  without  limitation  only  if  (a) the  exporters  shall  have  been given 
an opportunity to cease exporting at dumped prices to the area concerned or otherwise give assurances 
pursuant to Article  8 and adequate assurances in this regard have not been promptly given, and (b) such 
duties  cannot  be  levied  only  on products of  specific  producers which  supply  the area in question. 

4.3  Where  two  or  more  countries  have  reached  under  the  provisions  of  paragraph  8(a)  of 
Anicle  XXIV of GATT  1994 such a level of integration that they have the characteristics of a single, 
unified  market, the industry in the entire area of integration shall be uken to be the domestic industry 

"For the purpose of  this paragraph, producers shall  be deemed to be reb;~d to exporters or importers only  if  (a)  one 
of  them directly or indirectly controls the other;  or (b) both of them are direct;  or indirectly controlled by a third person; 
or  (c)  together they directly or indirectly control a third person, provided that there are grounds for believing or suspecting 
that the effect of the relationship is such as to cause the producer concerned to behave differently from non-related producers. 
For the purpose  of  this paragraph,  one  shall  be deemed to control  another  when the former  is legally  or operationally  in 
a  position  to exercise  restraint or  direction  over  the latter. 

"As  used  in this Agreement  "levy" shall  mean the definitive  or final  legal  assessment  or collection  of  a duty  or tax. 

referred  to in paragraph  1. 

4.4 

The provisions  of paragraph 6  of  Article  3 shall  be applicable  to this Article. 

Page  151 

Article  5 

Initiation and Subsequent Investigation 

5.1 
Except as provided for in paragraph 6, an investigation to determine the existence, degree and 
effect of any alleged dumping shall be initiated upon a written application by or on behalf of the domestic 
industry' 

5.2 
An application under paragraph  1 shall include evidence of  (a) dumping,  (b) injury within the 
meaning of Article  VI of GATT  1994 as interpreted by this Agreement and (c) a causal link between 
the dumped  imports  and the alleged  injury.  Simple assertion, unsubstantiated  by  relevant  evidence, 
cannot be considered sufficient to meet the requirements of this paragraph. The application shall contain 
such  information  as  is  reasonably  available to the applicant  on the  following: 

(i) 

(ii) 

(iii) 

the identity of the applicant and a description of the volume and value of the domestic 
production of the like product by the applicant.  Where a written application is made 
on behalf of the domestic industry, the application shall identify the industry on behalf 
of which the application is made by a list of all known domestic producers of the like 
product (or associations of domestic producers of the like product) and, to the extent 
possible,  a description  of  the volume  and value  of  domestic  produaion  of  the  like 
product  accounted  for by such producers; 

a complete description of the allegedly dumped product, the names of the country or 
countries of origin or export in question, the identity of each known exporter or foreign 
producer  and a list  of known persons  importing  the product  in question; 

information  on  prices  at  which  the  product  in  question  is  sold  when  destined  for 
consumption  in the domestic  markets of the country or countries of origin or export 
(or.  where  appropriate,  information  on the prices at which the produa  is sold  from 
the country or countries of origin or export to a third country or countries, or on the 
constructed value of the produa) and information on export prices or, where appropriate, 
on the prices at which the product is first resold to an independent buyer in the territory 
of  the  importing  Member; 

(iv ) 

information on the evolution of the volume of the allegedly dumped imports, the effect 
of these imports on prices of the like product in the domestic market and the consequent 
impact of the imports on the domestic industry, as demonstrated  by relevant  factors 
and indices having a bearing on the sute of the domestic industry, such as those listed 
in paragraphs 2 and 4  of  Article 3. 

The  authorities  shall  examine  the  accuracy  and  adequacy  of  the  evidence  provided  in  the 
5.3 
application to determine whether there is sufficient evidence to justify the initiation of an investigation. 

5.4 
An  investigation  shall  not  be  initiated  pursuant  to  paragraph  1 unless  the  authorities  have 
daermined., on the basis of an examination of the degree of support for, or opposition to, the application 

Page  152 

expressed13  by domestic  producers  of  the like  product,  that  the application has been made  by  or on 
behalf of the domestic  industry.14  The application shall be considered to have been made  "by or on 
behalf  of the domestic  industry" if it is supported by those domestic producers whose collective output 
constitutes more than 50 per cent of the toul  production of the like product produced by that portion 
of the domestic  industry expressing either support for or opposition to the application.  However,  no 
investigation shall be initiated when domestic producers expressly supporting the application account 
for  less  than 25 per cent of toul  production of the like product produced  by the domestic  industry. 

5.5 
The authorities shall  avoid,  unless a decision has been made to initiate an investigation,  any 
publicizing of the application for the initiation of an investigation.  However, after receipt of a properly 
documented  application and before proceeding to initiate an investigation, the authorities shall  notify 
the government  of the exporting  Member  concerned. 

5.6 
If, in special circumstances, the authorities concerned decide to initiate an investigation without 
having received a written application by or on behalf of a domestic  industry for the initiation of such 
investigationr they shall proceed only if they have sufficient  evidence of dumping, injury and a causal 
link,  as described  in paragraph 2,  to justify  the initiation of an investigation. 

5.7 
The evidence of both dumping and injury shall be considered simultaneously (a) in the decision 
whether or not to initiate an investigation,  and  (b) thereafter,  during the course  of the  investigation, 
starting  on a date not  later than the earliest  date on which  in accordance  with the provisions  of  this 
Agreement  provisional  measures  may  be applied. 

5.8 
An application  under paragraph  1 shall  be: rejected  and sn  investigation  shall  be  terminated 
promptly as soon as the authorities concerned are satisfied that there is not sufficient  evidence of either 
dumping  or of  injury  to justify  proceeding  with the  case.  There  shall  be  immediate  termination  in 
cases where the authorities determine  that the margin of dumping  is  de  minimis, or that the  volume 
of dumped  imports, actual or potential, or the injury,  is negligible.  The margin of dumping  shall  be 
considered  to  be de  minimis if this margin  is  less  than 2 per cent,  expressed  as  a percentage  of  the 
export price.  The volume of dumped  imports shall  normally be regarded as negligible  if the volume 
of  dumped  imports  from a particular country  is found  to account  for  less than 3 per cent  of  impons 
of the like product in the importing Member, unless countries which individually account for less than 
3 per cent of the imports of the like product in the importing  Member  collectively  account.for more 
than 7 per cent  of  imports of the  like product  in the importing  Member. 

5.9 

An anti-dumping proceeding  shall  not hinder the procedures  of  customs  clearance. 

Investigations shall, except in special circumstances, be concluded within one year, and in no 

5.10 
case  more  than  18 months,  after  their  initiation. 

"In the case of fragmented  industries involving an exceptionally  large number of producers, authorities may determine 

support  and opposition  by  using  statistically  valid  sampling  techniques. 

"Members are aware mat in the territory of certain Members employees of domestic producers of the  like product or 

representatives  of  those employees  may  make or  support an application  for  an  investigation  under paragraph  1. 

Page  153 

Article  6 

Evidence 

6.1 
-  All interested parties in an anti-dumping investigation shall be given notice of the information 
which the authorities require and ample opportunity to present in writing all evidence which they consider 
relevant  in respect of  the investigation  in question. 

6.1.1  Exporters  or  foreign  producers  receiving  questionnaires  used  in  an  anti-dumping 
investigation shall be given at least 30 days for reply.13  Due consideration should be 
given to any  request  for an extension  of  the  30-day  period  and,  upon  cause  shown, 
such an-extension should  be granted  whenever  practicable. 

6.1.2  Subject to the requirement to protect confidential  information,  evidence presented  in 
writing  by one interested party shall  be made available  promptly  to other  interested 
parties participating  in the  investigation. 

6.1.3  As  soon as  an investigation  has been  initiated,  the  authorities  shall  provide  the  full 
text of the written application  received under paragraph  1 of  Article  5 to the  known 
exporters16 and to the authorities of the exporting Member and shall make it available, 
upon  request,  to  other  interested  parties  involved.  Due  regard shall  be  paid  to  the 
requirement  for  the  protection  of  confidential  information,  as  provided  for  in 
paragraph 5. 

6.2 
Throughout the anti-dumping  investigation all  interested parties shall  have a full  opportunity 
for the defence of their interests.  To this end, the authorities shall, on request, provide opportunities 
for all  interested  parties to meet  those parties with adverse  interests,  so that opposing  views  may  be 
presented  and rebuttal  arguments  offered.  Provision of  such opportunities  must  take account  of the 
need  to preserve  confidentiality  and of  the convenience  to the parties.  There  shall  be  no  obligation 
on  any party  to attend  a meeting,  and failure  to do  so  shall  not be  prejudicial  to that party's  case. 
Interested  parties  shall  also  have the right,  on justification,  to present  other  information  orally. 

6.3 
Oral  information  provided  under paragraph 2  shall  be taken  into  account  by  the  authorities 
only in so far as it is subsequently reproduced in writing and made available to other interested parties, 
as provided  for  in subparagraph  1.2. 

6.4 
The authorities shall whenever practicable provide timely opportunities for all interested parties 
to see all information that is relevant to the presentation of their cases, that is not confidential as defined 
in paragraph  5,  and that  is used  by  the authorities  in an anti-dumping  investigation,  and  to prepare 
presentations  on the basis of  this  information. 

Any  information  which  is by nature confidential  (for  example,  because  its disclosure  would 
6.5 
be  of  significant  competitive  advanuge  to  a  competitor  or  because  its  disclosure  would  have  a 

"As a general  rule,  the time-limit  for  exporters shall  be counted  from  the date of  receipt of  the questionnaire,  which 
for  this purpose  shall be deemed to have been  received one  week  from  the date on  which  it was sent to the  respondent or 
transmitted to the appropriate diplomatic represenutive of the exponing Member or, in the case of a separate customs territory 
Member of  the  WTO. an official  represenutive  of  the exporting  territory. 

**It being understood that, where Ihe number of exporters involved  b particularly high, the full text of the written application 

should  instead  be  provided  only  to the authorities of  the exporting  Member  or  to the  relevant  trade association. 

Page  154 

significantly adverse effect upon a person supplying the information or upon a person from whom that 
person  acquired  the  information),  or  which  is  provided  on  à  confidential  basis  by  parties  to  an 
investigation shall, upon good cause shown, be treated as such by the authorities.  Such  information 
shall  not be disclosed  without  specific  permission  of the party submitting  it.17 

6.5.1  The authorities  shall  require interested parties providing  confidential  information  to 
furnish  non-confidential  summaries  thereof.  These  summaries  shall  be in  sufficient 
deuil to permit a reasonable undersunding of the  substance of the  information submitted 
in  confidence. 
In  exceptional  circumstances,  such  parties  may  indicate  that  such 
information  is  not  susceptible  of  summary.  In  such  exceptional  circumstances,  a 
sutement  of  the reasons  why summarization  is not possible  must  be provided. 

6.5.2 

If  the  authorities  find  that  a  request  for  confidentiality  is  not  warranted  and  if  the 
supplier of the  information  is either unwilling  to make  the  information  public  or  to 
authorize its disclosure in generalized or summary form, the authorities may disregard 
• such information  unless  it can.be demonstrated  to their satisfaction  from appropriate 
sources  that the  information  is correct.18 

Except  in circumstances  provided  for  in paragraph  8, the authorities  shall during the  course 
6.6 
of an investigation satisfy themselves as to the accuracy of the information supplied by interested parties 
upon  which  their  findings  are based. 

In order to verify  information  provided or to obuin further deuils,  the authorities may carry 
6.7 
out  investigations in the territory' of other Members  as required, provided  they obuin  the agreement 
of  the firms concerned  and notify  the representatives of the government  of the Member  in question, 
and unless that Member objects to the investigation.  The procedures described in Annex  I shall apply 
to investigations  carried out  in the territory of other Members.  Subject to the requirement  to protect 
confidential  information,  the  authorities  shall  make the  results  of  any  such  investigations  available, 
or shall provide disclosure thereof pursuant to paragraph 9, to the firms to which they pertain and may 
make  such  results available  to the applicants. 

6.8 
In cases in which any interested party refuses access to, or otherwise does not provide, necessary 
information within a reasonable period or significantly impedes the investigation, preliminary and  final 
determinations, affirmative or negative, may be made on the basis of the facts available.  The provisions 
of  Annex  II shall  be observed  in the application  of this paragraph. 

6.9 
The authorities shall, before a final determination is made, inform all interested parties of the 
essential  facts  under consideration  which form the basis for the decision whether to apply  definitive 
measures.  Such disclosure should take place in sufficient  time for the parties to defend their interests. 

6.10  The  authorities  shall,  as a rule, determine an individual  margin  of dumping  for  each known 
exporter  or  producer  concerned  of  the produa  under  investigation.  In cases  where  the  number  of 
exporters, producers, importers or types of products involved is so large as to make such a drtermination 
impracticable,  the authorities may limit their examination either to a reasonable number of  interested 
parties or products by using samples which are statistically valid on the basis of information  available 

"Members are aware that in the territory of certain Members disclosure pursuant to a narrowly-drawn protective order 

may  be required. 

"Members  agree  that  requests  for confidentiality  should  not be arbitrarily  rejected. 

Page  155 

to the authorities at the time of the selection,  or to the largest percenuge of the volume of the exports 
from  the country  in question which can reasonably be  investigated. 

6.10.1  Any selection of exporters, producers, importers or types of products made under this 
paragraph shall preferably be chosen in consulution with and with the consent of the' 
exporters,  producers  or importers  concerned. 

6.10.2  In cases where the authorities have limited their examination,  as provided  for  in this 
paragraph, they shall nevertheless determine an individual margin of dumping for any 
•  exporter or producer not initially selected  who submits  the necessary  information  in 
time for that information to be considered during the course of the investigation, except 
where the number of exporters or producers is so large that individual  examinations 
would be unduly burdensome to the authorities and prevent the timely  completion  of 
the  investigation.  Voluntary  responses shall  not be discouraged. 

6.11 

For the purposes  of  this  Agreement,  "interested parties" shall  include: 

(i) 

an exporter or foreign producer or the importer of a produa subjea to investigation, 
or a trade or business association a majority of the members of which are producers, 
exporters or  importers  of such produa; 

(ii) 

.  the government  of the exporting  Member;  and 

(iii) 

a  producer  of  the  like  product  in  the  importing  Member  or  a  trade  and  business 
.  associât ion a majority of the members of which produce the like product in the territory 

of  the  importing  Member. 

This  list  shall  not  preclude  Members  from  allowing  doniestic  or  foreign  parties  other  than  those 
mentioned  above  to be included as  interested parties. 

6.12  The authorities shall provide opportunities for industrial users of the product under investigation, 
and for represenutive consumer organizations in cases where the product is commonly sold at the reuil 
level,  to  provide  information  which  is  relevant  to  the  investigation  regarding  dumping,  injury  and 
causality. 

6.13  The authorities shall  uke due account of any difficulties  experienced by interested parties, in 
particular  small  companies,  in  supplying  information  requested,  and  shall  provide  any  assistance 
practicable. 

6.14  The procedures set out above are not  intended to prevent the authorities of a Member  from 
proceeding  expeditiously  with  regard  to  initiating  an  investigation,  reaching  preliminary  or  final 
daerminations,  whether affirmative  or negative, or from applying provisional  or final measures,  in 
accordance  with relevant  provisions of this Agreement. 

Page  156 

. 

. 

Article  7 

Provisional  Measures 

7.1 

Provisional  measures  may be applied only  if: 

(i) 

(ii) 

(iii) 

an investigation has been initiated  in accordance with  the provisions  of  Article  5,  a 
public  notice  has  been  given  to  that  effect  and  interested  parties  have  been  given 
adequate opportunities to submit  information  and make comments; 

a preliminary  affirmative  determination  has  been made  of  dumping  and  consequent 
injury to a domestic  industry;  and 

the authorities concerned judge such measures necessary to prevent injury being caused 
during  the  investigation. 

7.2 
Provisional  measures may uke  the form of a provisional  duty or, preferably,  a security  - by 
cash  deposit  or bond - equal  to the amount of the anti-dumping  duty provisionally  estimated,  being 
not greater than the provisionally  estimated margin of dumping.  Withholding  of appraisement  is an 
appropriate  provisional  measure,  provided  that  the  normal  duty  and  the  estimated  amount  of  the 
anti-dumping duty be indicated and as long as the withholding of appraisement  is subject to the same 
conditions'as  outer provisional  measures. 

Provisional  measures  shall  not be applied  sooner than 60 days from  the date of  initiation  of 

7.3 
the  investigation. 

The application of provisional  measures  shall be limited to as short a period as possible,  not 
7.4 
exceeding  four  months  or,  on  decision  of  the  authorities  concerned,  upon  request  by  exporters 
representing a significant percenuge of the trade involved, to a period not exceeding six months.  When 
authorities, in the course of an investigation, examine whether a duty lower than the margin of dumping 
would  be  sufficient  to remove  injury,  these periods may  be six  and nine months,  respectively. 

7.5 

The relevant provisions of Article 9 shall be followed in the application of provisional measures. 

Article  8 

Price Undertakings 

Proceed ings may19 be suspended or terminated without the imposition of provisional measures 
8.1 
or anti-dumping duties upon receipt of satisfactory volunury undertakings from any exporter to revise 
its prices or to cease exports to the area in question at dumped prices so that the authorities are satisfied 
that the  injurious effect  of the dumping  is eliminated.  Price increases under such undertakings shall 
not be higher than necessary to eliminate the margin of dumping.  It is desirable that the price increases 
be  less  than the margin of dumping  if such increases would be adequate to remove the injury  to the 
domestic  industry. 

T he  word 'may* shall not be interpreted to allow the simultaneous continuation of proceedings with the implementation 

of  price  undertakings  except  as  provided  in paragraph  4. 

Page  157 

8.2 
Price undertakings shall not.be sought or accepted from exporters unless the authorities of the 
importing  Member have made a preliminary affirmative  determination of dumping and injury caused 
by  such dumping. 

8.3 
Undertakings offered need not be accepted if the authorities consider their acceptance impractical, 
for example,  if the number of actual or potential exporters is too great, or for other reasons,  including 
reasons  of general  policy.  Should  the case arise and where practicable, the authorities shall  provide 
to  the  exporter  the  reasons  which  have  led  them  to  consider  acceptance  of  an  undertaking  as 
inappropriate,  and shall,  to the extent possible,  give  the exporter an opportunity.to make  comments 
thereon. 

If an undertaking  is accepted,  the investigation  of  dumping  and  injury shall  nevertheless  be 
8.4 
completed  if  the  exporter  so  desires  or  the  authorities  so  decide. 
In  such  a  case,  if  a  negative 
determination of dumping or injury is made, the undertaking shall automatically  lapse, except in cases 
where such a determination is due in large part to the existence of a price undertaking.  In such cases, 
the authorities may require that an undertaking be maintained for a reasonable period consistent  with 
the provisions of this Agreement.  In the event that an affirmative  determination of dumping and injury 
is made, the undertaking shall continue consistent with its terms and the provisions of this Agreement. 

8.5 
Price undertakings may be suggested by the authorities of the importing Member, but no exporter 
shall be forced to enter into such undertakings.  The fact that exporters do not offer such undertakings, 
or do not accept an inviution to do so, shall in no way prejudice the consideration of the case.  However, 
the authorities are free to determine that a threat of injury is more likely to be realized  if the dumped 
imports  continue. 

8.6 
Authorities  of  an  importing  Member  may  require  any  exporter  from  whom  an  undertaking 
has been accepted to provide periodically information relevant to the fulfilment  of such an undertaking 
and to permit  verification  of pertinent data.  In case of violation  of an undertaking,  the authorities of 
the importing Member may uke, under this Agreement  in conformity with its provisions, expeditious 
aaions which may constitute immediate application of provisional measures using the best  information 
available.  In such cases, definitive duties may be levied in accordance with this Agreement on products 
entered for consumption  not more than 90 days before the application  of such provisional  measures, 
except that any such retroactive assessment  shall not apply to imports entered before the violation  of 
the  undertaking. 

Article  9 

Imposition and  Collection of Anti-Dumping Duties 

9.1 
The decision  whether or not to impose an anti-dumping duty in cases where all  requirements 
for the imposition have been fulfilled,  and the decision whether the amount of the anti-dumping duty 
to be imposed shall be the full  margin of dumping or less, are decisions to be made by the authorities 
of  the  importing  Member.  It  is  desirable  that  the  imposition  be  permissive  in the  territory  of  all 
Members,  and that the duty be less than the margin if such lesser duty would be adequate to remove 
the  injury' to  the domestic  industry. 

9.2  When an anti-dumping duty is imposed in respect of any product, such anti-dumping duty shall 
be collected in the appropriate amounts in each case, on a non-discriminatory basis on imports of such 
product from all sources found to be dumped and causing injury, except as to imports from those sources 

Page  158 

from which price undertakings under the terms of this Agreement have i^cen accepted.  The authorities 
shall  name  the  supplier  or suppliers  of  the product concerned.  If,  however,  several  suppliers  from 
the same country are involved, and it is impracticable to name all these suppliers, the authorities may 
name the supplying country concerned.  If several suppliers from more than one country are involved, 
the authorities may name either all the suppliers involved, or, if this is impracticable, all the supplying 
countries  involved. 

The amount of the anti-dumping duty shall  not exceed the margin of dumping as esublished 

9.3 
under  Article  2. 

9.3.1  When the  amount  of  the anti-dumping duty  is  assessed  on a retrospective  basis,  the 
determination of the final liability for payment of anti-dumping duties shall uke place 
as soon as possible, normally within 12 months, and in no case more than 18 months, 
after  the  date  on  which  a  request  for  a  final  assessment  of  the  amount  of  the 
anti-dumping duty has been made.20  Any refund shall be made promptly and normally 
in not more  than 90 days following the determination of final liability made pursuant 
to this  sub-paragraph.  In any case,  where a refund  is  not made within 90 days,  the 
authorities  shall  provide an explanation  if so  requested. 

9.3.2  When the amount of the anti-dumping duty is assessed on a prospective basis, provision 
shall  be  made  for  a prompt  refund,  upon request,  of  any duty paid  in excess  of the 
margin  of dumping.  A  refund  of  any such duty paid  in excess of the actual  margin 
.of  dumping  shall  normally  uke  place  within  12 months,  and  in no case  more  than 
18 months, after the date on which a request for a refund, duly supported by evidence, 
has been made by an importer of the product subject to the anti-dumping duty.  The 
refund authorized should normally be made within 90 days of the above-noted  decision. 

9.3.3 

In determining whether and to what extent a reimbursement  should be made when the 
export  price  is  constructed  in accordance  with  paragraph 3  of  Article 2,  authorities 
should uke account of any change in normal value, any change in costs incurred between 
importation and resale, and any movement  in the resale price which is duly  reflected 
in subsequent  selling  prices, and should calculate the export price with no deduction 
for  the  amount  of  anti-dumping  duties paid  when  conclusive  evidence  of  the  above 
is provided. 

9.4  When  the authorities  have  limited  their examination  in accordance with the second  sentence 
of  paragraph  10 of  Article  6.  any anti-dumping duty applied to imports  from exporters or producers 
not  included  in the examination  shall  not exceed: 

(i) 

(ii) 

the  weighted  average  margin  of  dumping  esublished  with  respect  to  the  selected 
exporters  or producers or. 

where  the  liability  for  payment  of  anti-dumping duties  is  calculated  on the basis  of 
a prospective normal value, the difference between the weighted average normal value 
of the selected exporters or producers and the export prices of exporters or producers 
not  individually  examined. 

"It  is understood  that the observance of the time-limits mentioned in this subparagraph and in subparagraph 3.2 may 

not be possible  where the product  in question 'is subject  to judicial review proceedings. 

Page  159 

provided that the authorities shall disregard for the purpose of this paragraph any zero and de minimis 
margins and margins esublished under the circumstances referred to in paragraph 8 of Article  6.  The 
authorities  shall  apply  individual  duties  or normal  values to imports  from  any exporter or producer 
not included in the examination who has provided the necessary information during the course of the 
investigation,  as provided  for  in subparagraph  10.2 of  Article  6. 

9.5 
If a product  is subject to anti-dumping duties  in an importing  Member,  the authorities shall 
promptly  carry  out a review  for  the purpose of determining  individual  margins  of dumping  for  any 
exporters or producers in the exporting country in question who have not exported the product to the 
importing  Member during the period of investigation, provided that these exporters or producers can 
show that they are not related to any of the exporters or producers in the exporting  country who are 
subject  to the anti-dumping  duties  on the product.  Such a  review  shall  be initiated  and carried  out 
on an accelerated basis, compared to normal duty assessment and review proceedings in the importing 
Member.  No anti-dumping duties shall be levied on imports from such exporters or producers while 
the review is being carried out.  The authorities may, however, withhold appraisement and/or request 
guarantees to ensure that, should such a review result in a determination of dumping in respect of such 
producers  or  exporters,  anti-dumping  duties  can be levied  retroactively  to the date of  the  initiation 
of  the  review. 

Article  10 

Retroactivity 

10.1 
Provisional  measures  and anti-dumping duties shall  only  be applied  to products.which enter 
for consumption after the time when the decision uken under paragraph  1  of Article 7 and paragraph 1 
of  Anicle  9,  respectively,  enters  into force,  subject to the exceptions  set out  in this Article. 

10.2  Where a final determination  of  injury (but not of a threat thereof or of a material  retardation 
of the establishment of an industry) is made or. in the case of a final determination of a threat of injury, 
where the effect  of the dumped  imports would,  in the absence of the provisional  measures,  have led 
to a determination of injury, anti-dumping duties may be levied retroaaively  for the period for which 
provisional  measures,  if any,  have been applied. 

10.3 
If the definitive  anti-dumping duty is higher than the provisional  duty paid or payable, or the 
amount estimated for the purpose of the security, the difference shall not be collected.  If the definitive 
duty  is  lower  than the provisional  duty paid or payable,  or the amount  estimated  for the purpose  of 
the security, the difference  shall  be reimbursed or the duty recalculated,  as the case may be. 

10.4  Except  as  provided  in  paragraph 2,  where  a  determination  of  threat  of  injury  or  material 
retardation  is made (but  no injury  has yet  occurred) a definitive  anti-dumping duty may be  imposed 
only from the date of the determination of threat of injury or material retardation, and any cash deposit 
made during  the period  of  the application  of provisional  measures  shall  be refunded  and any  bonds 
released  in an expeditious  manner. 

10.5  Where  a  final  determination  is  negative,  any  cash  deposit  made  during  the  period  of  the 
application of provisional measures shall be refunded and any bonds released in an expeditious manner. 

10.6  A definitive anti-dumping duty may be levied on products which were entered for consumption 
not more  than 90 days prior to the date of application of provisional  measures,  when the authorities 

Page  160 

determine  for  the dumped  product  in question that: 

(i) 

(ii) 

there is a history of dumping whièh caused injury or that the importer was, or should 
have been,  aware that the exporter practises dumping  and that such dumping  would 
cause  injury, and 

the injury is caused by massive dumped imports of a product in a relatively short time 
which  in  light  of  the  timing  and  the  volume  of  the  dumped  imports  and  other 
circumstances (such as a rapid build-up of inventories of the imported product) is likely 
to seriously  undermine  the remedial  effect  of the definitive  anti-dumping duty to be 
applied,  provided  that  the  importers  concerned  have  been  given  an  opportunity  to 
comment. 

10.7  The authorities may,  after  initiating an investigation,  uke  such measures  as the withholding 
of  appraisement  or assessment  as  may  be necessary  to collect  anti-dumping  duties  retroactively,  as 
provided  for  iii paragraph 6,  once  they  have sufficient  evidence  that the  conditions  set  forth  in that 
paragraph  are  satisfied. 

10.8  No  duties  shall  be  levied  retroactively  pursuant  to  paragraph 6  on  products  entered  for 
consumption  prior to the date of  initiation of  the  investigation. 

Article  11 

Duration  and Revie*' of Anti-Dumping Duties and  Price  Undertakings 

11.1  An  anti-dumping  duty  shall  remain  in  force  only  as  long  as  and  to  the  extent  necessary  to 
counteract  dumping  which  is causing  injury. 

1Î .2  The authorities shall review the need for the continued imposition of the duty, where warranted. 
on  iheir own  initiative  or, provided  that a reasonable period of time has elapsed since  the  imposition 
of  the  definitive  anti-dumping  duty,  upon  request  by  any  interested  party  which  submits  positive 
information  substantiating  the  need  for a review.21  Interested parties  shall  have  the  right  to request 
the authorities to examine whether the continued imposition of the duty is necessary to offset dumping. 
whether the  injury  would be likely  to continue or recur if the duty were removed  or varied,  or both. 
If.  as a result of the review under this paragraph, the authorities determine that the anti-dumping duty 
is  no longer  warranted,  it shall  be terminated  immediately. 

11.3  Notwithstanding the provisions of paragraphs  1  and 2, any definitive anti-dumping duty shall 
be terminated on a date not later than five years from its imposition (or from the date of the most recent 
review under paragraph 2 if that review has covered both dumping and injury, or under this paragraph), 
unless the authorities determine,  in a review  initiated before  that date on their own initiative or upon 
a duly substantiated request made by or on behalf of the domestic industry within a reasonable period 
of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence 

"A determination of final liability for payment of anti-dumping duties, as provided for in paragraph  3 of Anicle  9. does 

not  by  itself  constitute  a  review  within  the  meaning  of  this  Article. 

Page  161 

of  dumping  and  injury'.22  The duty may  remain  in force  pending  the outcome  of  such a review. 

11.4  The provisions of Article  6 regarding evidence and procedure shall apply to any review carried 
out  under  this  Article.  Any  such  review  shall  be  carried  out  expeditiously  and  shall  normally  be 
concluded  within  12 months  of  the date of  initiation of  the  review. 

11.5  The provisions of this Article shal 1 apply mutatis mutandis to price undertakings accepted under 
Article  8. 

Article  12 

Public Notice and Explanation of Determinations 

12.1  When the authorities  are satisfied  that there  is sufficient  evidence  to justify  the  initiation  of 
an anti-dumping  investigation pursuant to Article  5,  the Member  or Members  the products  of  which 
are subject to such investigation and other interested parties known to the investigating  authorities  to 
have an interest  therein shall  be notified  and a public  notice shall  be given. 

12.1.1  A public notice  of  the initiation of an investigation  shall  contain,  or otherwise  make 
available  through a separate  report23,  adequate  information  on the  following: 

(i) 

the nameof  the exporting  country  or countries  and the product  involved; 

(ii) 

the date of  initiation of  the  investigation; 

(iii) 

the basis on which dumping  is alleged  in, the application; 

(iv) 

a summary  of  the factors  on which the allegation of  injury  is based: 

(v) 

the address to which representations by interested parties should be directed; 

(vi) 

the time-limits  allowed  to  interested  parties  for making  their  views  known. 

Public  notice  shall  be  given  of  any  preliminary  or final determination,  whether  affirmative 
12.2 
or negative, of any decision to accept an undertaking pursuant to Article  8, of the termination of such 
an undertaking,  and of the termination of a definitive  anti-dumping duty.  Each such notice  shall  set 
forth,  or  otherwise  make  available  through  a  separate  report,  in  sufficient  detail  the  findings  and 
conclusions  reached on all  issues of fact and law considered material by the investigating  authorities. 
All  such  notices  and  reports  shall  be  forwarded  to the  Member  or  Members  the  products  of  which 
are subject to such determination or undertaking and to other interested parties known to have an interest 
therein. 

sWhen the amount of the anti-dumping duty is assessed on a retrospective basis, a finding  in the most recent assessment 
-proceeding under subparagraph  3.1 of Article  9 that no duty is to be levied shall not by itself require the authorities to terminate 
the definitive  duty. 

"Where authorities provide  information  and explanations under the provisions of this Article  in a separate repon.  they 

shall  ensure  that  such  report  is  readily  available  to.the public. 

Page  162 

12.2.1  A public notice of the imposition of provisional  measures shall set forth, or otherwise 
make  available  through  a separate  report,  sufficiently  detailed  explanations  for  the 
preliminary  determinations  on dumping  and  injury  and  shall  refer  to the maners  of 
fact and law which have led to arguments being accepted or rejeaed.  Such a notice 
or  report  shall,  due  regard  being  paid  to  the  requirement  for  the  protection  of 
confidential  information,  contain in particular: 

(i) 

the names of the suppliers, or when this is impracticable, the supplying countries 
involved; 

(ii) 

a description  of the product which  is sufficient  for  customs  purposes; 

(iii) 

the margins of dumping  established and a full  explanation of the reasons  for 
the methodology used in the esublishment and comparison of the export price 
and the normal  value under Article 2; 

(iv) 

considerations  relevant to the injury determination  as set out  in Article  3; 

(v) 

the main  reasons  leading  to the determination. 

i2.2.2  A  public  notice  of  conclusion  or  suspension  of  an  investigation  in  the  case  of  an 
affirma;ive  determination  providing  for  the  imposition  of  a  definitive  duty  or  the 
acceptance of a price undertaking shall contain, or otherwise make available through 
a separate report, all  relevant information on the maners of fact and law and reasons 
which  have  led  to  the  imposition  of  final  measures  or  the  acceptance  of  a  price 
undertaking, due regard being paid to the requirement for the protection of confidential 
information.  In particular, the notice or report shall contain the information described 
in subparagraph  2.1. as well as the reasons for the acceptance or rejection of relevant 
arguments or claims made by the exporters and importers, and the basis for any decision 
made  under subparagraph  10.2  of  Article  6. 

12.2.3  A  public  notice  of  the  termination  or  suspension  of  an  investigation  following  the 
acceptance  of an undertaking  pursuant to Article  8 shall  include, or otherwise make 
available  through a separate  report, the non-confidential  part of  this  undertaking.. 

12.3  The  provisions  of  this  Article shall  apply  mutatis mutandis to the  initiation  and  completion 
of  reviews  pursuant  to  Article  11 and to decisions  under Article  10 to apply duties  retroactively. 

Article  13 

Judicial Review 

Each Member  whose national  legislation contains provisions on anti-dumping measures shall 
maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia,  of the 
prompt review of administrative actions relating to final determinations and reviews of determinations 
within the meaning.of Anicle  11.  Such tribunals or procedures shall be independent of the authorities 
responsible  for  the determination  or review  in question. 

Page  163 

Article  14 

Anti-Dumping Action on Behalf of a  Third Country 

14.1  An  application  for  anti-dumping  action  on  behalf  of  a  third  country  shall  be  made  by  the 
authorities  of  the third country  requesting action. 

Such an application shall be supported by price information to show that the imports are being 
14.2 
dumped and by detailed infonnation to show that the alleged dumping is causing injury to the domestic 
industry concerned in the third country.  The government of the third country shall afford all assisunce 
to the authorities of the importing country to obuin any further information which the latter may require. 

14.3 
In considering such an application, the authorities of the importing country shall consider the 
effects  of  the alleged  dumping  on the  industry  concerned as a whole  in the third country;  that is  to 
say. the injury* shall not be assessed in relation only to the effect of the alleged dumping on the industry's 
exports  to the  imponing  country  or even on the industry's toul  exports. 

14.4  '  The decision whether or not to proceed with a case shall  rest with the importing  country.  If 
the  importing  country  decides that  it  is prepared to uke  aaion,  the  initiation  of the approach  to the 
Council  for Trade in Goods seeking its approval for such action shall rest with the importing country. 

Article  15 

Developing  Country Members 

It is recognized that special regard must be given by developed country Members to the special 
situation of developing country Members when considering the application of anti-dumping measures 
under  this  Agreement.  Possibilities  of  constructive  remedies  provided  for  by  this  Agreement  shall 
be  explored  before  applying  anti-dumping  duties  where  they  would  affect  the essential  interests  of 
developing  country  Members. 

PART II 

Article  16 

Committee on Anti-Dumping Practices 

16.1  There  is  hereby  established  a  Comminee  on  Anti-Dumping  Practices  (referred  to  in  this 
Agreement as the "Comminee") composed of representatives from each of the Members.  The Comminee 
shall  elect  its own Chairman and shall meet not less than twice a year and otherwise as envisaged  by 
relevant provisions of this Agreement at the request of any Member.  The Committee  shall carry out 
responsibilities as assigned to it under this Agreement or by the Members and it shall afford  Members 
the opportunity of consulting on any maners relating to the operation of the Agreement or the furtherance 
of  its objeaives.  The WTO Secreuriat  shall act as the secreuriat  to the Comminee. 

16.2  The  Comminee  may  set up subsidiary  bodies as appropriate. 

Page  164 

In carrying  out  their  functions,  the  Committee  and  any  s-.sidiary  bodies  may  consult  with 
16.3 
and seek  information  from  any  source  they  deem  appropriate.  However,  before  the  Comminee  or 
a subsidiary body  seeks such information  from a source within the jurisdiaion of a Member,  it shall 
inform the Member involved.  It shall obuin the consent of the Member and any firm to be consulted. 

16.4  Members  shall  report  without  delay to the Comminee  all  preliminary  or final anti-dumping 
actions  uken.  Such  reports  shall  be  available  in the  Secreuriat  for  inspection  by  other  Members. 
Members  shall also submit, on a semi-annual  basis, reports of any anti-dumping actions uken  within 
the preceding  six months.  The semi-annual  reports shall  be submitted  on an agreed standard  form. 

16.5  Each Member shall notify the Comminee. (a) which of its authorities are competent to initiate 
and conduct investigations referred to in Article 5 and (b)  its domestic procedures governing the initiation 
and conduct  of  such  investigations. 

Article  17 

Consultation and Dispute  Settlement 

Except  as otherwise provided  herein,  the Dispute  Settlement  Undersunding  is  applicable  to 

17.1 
consulutions  and the settlement  of  disputes  under this  Agreement. 

17.2  Each Member shall afford sympathetic consideration to, and shall afford adequate opportunity 
for consultation regarding, representations made by another Member with respect to any matter affecting 
the  operation  of  this  Agreement. 

If  any  Member  considers  that  any  benefit  accruing  to  it,  directly  or  indirectly,  under  this 
17.3 
Agreement  is being nullified  or impaired, or that the achievement of any objective is being  impeded, 
by another  Member  or Members,  it may,  with a view  to reaching  a mutually  satisfactory  resolution 
of the maner, request in writing consultations with the Member or Members in question.  Each Member 
shall  afford  sympathetic  consideration  to any request  from  another  Member  for  consultation. 

17.4 
If the Member that requested consulutions considers that the consulutions pursuant to paragraph 3 
have failed to achieve a mutually agreed solution, and if final action has been uken by the administering 
authorities  of  the  importing  Member  to  levy  definitive  anti-dumping  duties  or  to  accept  price 
undertakings,  it may  refer the matter to the Dispute Settlement  Body  ("DSB").  When a provisional 
measure has a significant impact and the Member that requested consultations considers that the measure 
was  uken  contrary  to the provisions  of paragraph  1 of  Article  7,  that  Member  may  also  refer  such 
matter  to the  DSB. 

17.5  The DSB shall, at the request of the complaining party, esublish a panel to examine the matter 
based upon: 

(i) 

(ii) 

a written sutement of the Member making the request indicating how a benefit accruing 
to it, direaly  or indirectly, under this Agreement  has1 been nullified  or impaired,  or 

.  that the achieving  of  the objeaives  of the Agreement  is being  impeded, and 

the  facts  made  available  in conformity  with  appropriate  domestic  procedures  to  the 
authorities  of the  importing  Member. 

m 

Page  165 

17.6 

In examining  the matter  referred  to in paragraph 5: 

(i) 

(ii) 

in  its  assessment  of  the  facts  of  the  matter,  the  panel  shall  determine  whether  the 
authorities' esublishment of the facts was proper and  whether their evaluation of those 
facts was unbiased and objective.  If the  establishment of the  facts was proper and the 
evaluation  was unbiased and objective,  even though the panel  might  have  reached a 
different  conclusion,  the evaluation shall  not be overturned; 

the panel shall  interpret the relevant provisions of the Agreement  in accordance  with 
customary  rules of  interpretation of public  international  law.  Where the panel finds 
that  a  relevant  provision  of  the  Agreement  admits  of  more  than  one  permissible 
interpreution,  the panel shall find the authorities' measure  to be  in conformity  with 
the Agreement  if  it rests upon one of those permissible  interpretations. 

17.7  Confidential  information provided to the panel shall not be disclosed without formal authorization 
from the person, body or authority providing such infonnation.  Where such information  is requested 
from the panel but release of such information by the panel is not authorized, a non-confidential summary 
of  the  information,  authorized  by the person,  body  or authority  providing  the  information,  shall  be 
provided. 

PART III 

Article  18 

Final Provisions 

18.1  No  specific  action against  dumping  of exports  from another  Member  can be taken except  in 
accordance  with  the provisions  of  GATT  1994.  as  interpreted  by this  Agreement.24 

18.2  Reservations may not be entered in respect of any of the  provisions of this Agreement  without 
the  consent  of  the other  Members. 

Subject  to  subparagraphs  3.1  and  3.2.  the  provisions  of  this  Agreement  shall  apply  to 
18.3 
investigations,  and reviews  of existing  measures,  initiated  pursuant  to applications  which have  been 
made  on or after  the date of  entry  into force  for a Member  of  the WTO  Agreement. 

18.3.1  With  respect  to  the  calculation  of  margins  of  dumping  in  refund  procedures  under 
paragraph  3 of  Article  9.  the  rules used  in the most  recent  determination  or  review 
of  dumping  shall  apply. 

18.3.2  For the purposes of paragraph 3 of  Article  11, existing anti-dumping measures  shall 
be deemed  to  be  imposed  on a date  not  later than the date  of  entry  into  force  for a 
Member  of  the WTO Agreement, except  in cases  in which the domestic  legislation 
of  a Member  in force on that date already included a clause of the type provided  for 
in that paragraph. 

'This  is not  intended  toi preclude  action  under other  relevant provisions of GATT  1994,  as appropriate. 

Page  166 

18.4  Each Member  shall  uke  all  necessary  steps,  of a general  or particular  character,  to ensure, 
not  later than the date of  entry  mto force  of the WTO Agreement  for  it,  the conformity  of  its  laws, 
regulations  and administrative  procedures with the provisions  of  this Agreement  as they may  apply 
for the Member  in question. 

18.5  Each Member shall  inform the Committee  of any changes in its laws and regulations relevant 
to this  Agreement  and in the administration  of such laws and regulations. 

18.6  The Committee shall review annually the implemenution and operation of this Agreement  uking 
into account  the objectives thereof,  The Committee  shall  inform  annually  the Council  for  Trade  in 
Goods  of  developments  during the period covered by such  reviews. 

18.7  The  Annexes  to this  Agreement  constitute  an integral  part  thereof. 

Page  167 

ANNEX I 

PROCEDURES  FOR ON-THE-SPOT  INVESTIGATIONS  PURSUANT 
TO PARAGRAPH  7 OF ARTICLE  6 

Upon initiation of an investigation, the authorities of the exporting Member and the firms known 

1. 
to be concerned  should be  informed  of the intention to carry out on-the-spot  investigations. 

2. 
If  in  exceptional  circumstances  it  is  intended  to  include  non-governmental  experts  in  the 
investigating team, the firms and the authorities of the exporting Member should be so informed.  Such 
non-governmental  experts  should  be  subject  to  effective  sanctions  for  breach  of  confidentiality 
requirements. 

It should be standard praaice to obuin explicit agreement of the firms concerned in the exporting 

3. 
Member  before  the visit  is finally  scheduled. 

4. 
As soon as the agreement of the firms concerned has been obtained, the investigating authorities 
should  notify  the authorities of the exporting Member of the names and addresses of the firms  to be 
visited  and the dates agreed. 

5. 

Sufficient  advance notice should  be given to the firms  in question before  the visit  is made. 

6. 
Visits  to explain the questionnaire should  only be made at the request of  an exporting  firm. 
Such a visit may only be made if (a) the authorities of the importing Member notify the representatives 
df the  Member  in question and  (b) the latter do not object  to the visit. 

7 
As the main purpose of the on-the-spot  investigation is to verify  information provided or to 
obtain further details, it should be carried out after the response to the questionnaire has been received 
unless  the firm agrees  to the contrary* and the government  of  the exporting  Member  is  informed  by 
the investigating authorities of the anticipated visit and does not object to it; further, it should be standard 
practice prior to the visit  to advise the firms concerned of the general namre of the information to be 
verified  and of  any further information  which needs to be provided, though this should not preclude 
requests to be made on the spot for further deuils to be provided in the light of information obtained. 

8. 
Enquiries or questions put by the authorities or firms of the exporting Members and essential 
to  a successful  on-the-spot  investigation  should,  whenever possible,  be answered  before  the visit  is 
made. 

Page  168 

BEST INFORMATION  AVAILABLE IN TERMS  OF PARAGRAPH  8 OF ARTICLE  6 

ANNEXn 

1. 
As soon as possible after the initiation of the investigation, the investigating authorities should 
specify  in deuil  the  information  required  from  any  interested  party,  and  the manner  in which  that 
infonnation  should be structured by the interested party in its response.  The authorities should also 
ensure that the party is aware that if information is not supplied within a reasonable time, the authorities 
will  be free  tc  make determinations  on the basis  of the facts  available,  including  those conuined  in 
the application  for the initiation of the investigation by the domestic  industry. 

2. 
The authorities  may also  request that an interested party provide  its  response  in a particular 
.medium (e.g.  computer  upe)  or computer  language.  Where such a request  is made,  the authorities 
should  consider the reasonable ability  of the interested party to respond  in the preferred medium  or 
computer  language, and should not request the party to use for its response a computer  system other 
than that used by the party.  The authority should not mainuin a request for a computerized  response 
if the interested party does not mainuin computerized accounts and if presenting the response as requested 
would result in an unreasonable extra burden on the interested party, e.g.  it would entail unreasonable 
additional cost and trouble.  The authorities should not maintain a request for a response in a particular 
medium  or computer  language  if the interested party does not maintain its computerized  accounts  in 
such  medium  or computer  language  and if presenting  the  response  as  requested  would  result  in an 
unreasonable  extra burden on the  interested  party,  e.g.  it would  entail  unreasonable  additional  cost 
and trouble. 

3. 
AH information  which  is verifiable,  which  is appropriately  submitted  so  that  it can be  used 
in  the  investigation  without  undue  difficulties,  which  is  supplied  in  a  timely  fashion,  and.  where 
applicable,  which  is supplied  in a medium or computer language requested by the authorities,  should 
be  uken  into account  when determinations  are made.  If  a party  does  not  respond  in the  preferred 
medium  or computer  language  but the authorities find that the circumstances  set  out  in paragraph 2 
have been satisfied,  the failure to respond in the preferred medium or computer  language should not 
be considered  to significantly  impede  the investigation. 

4. 
Where the authorities do not have the ability to process information if provided in a particular 
medium  (e.g.  computer upe),  the  information  should be supplied  in the form  of written material  or 
any other  form  accepuble  to the authorities. 

5. 
Even though the information provided may not be ideal in all respects, this should not justify 
the authorities  from disregarding  it, provided the interested party has acted to the best of  its ability. 

6. 
If evidence or infonnation  is not accepted, the supplying party should be informed  forthwith 
of  the  reasons  therefor,  and  should  have  an opportunity  to  provide  further  explanations  within  a 
reasonable period, due account being taken of the time-limits of the investigation.  If the  explanations 
are considered by the authorities as not being satisfactory, the reasons for the rejection of such evidence 
or  information  should  be given  in any published determinations. 

7. 
If the authorities have to base their findings,  including those with respect to normal value, on 
information  from  a secondary  source,  including  the  information  supplied  in the application  for  the 
initiation  of  the  investigation,  they  should  do  so  with  special  circumspection.  In  such  cases,  the 
authorities  should,  where practicable, check the information  from other independent  sources at their 

Page  169 

disposal,  such  as  published  price  lists,  official  import  sutistics  and  customs  returns,  and  from  the 
information  obuined from other interested parties during the investigation.  It is clear, however, that 
if  an  interested  party  does  not  cooperate  and  thus  relevant  infonnation  is  being  withheld  from  the 
authorities, this situation could lead to a result which is less favourable to the party than if the party-
did cooperate. 

Page 170 

AGREEMENT  ON  IMPLEMENTATION  OF  ARTICLE  VII 
OF  THE  GENERAL  AGREEMENT  ON  TARIFFS  AND  TRADE  1994 

Page  171 

GENERAL  INTRODUCTORY  COMMENTARY 

1. 
The primary basis for customs value under this Agreement  is  "transaction value" as defined 
in Article  1.  Article  1 is to be read together with Article 8 which provides, inter alia,  for adjustments 
to  the price  actually  paid  or payable  in cases  where ceruin  specific  elements  which are considered 
to form a part of the value for customs purposes are incurred by the buyer but are not included in the 
price actually paid or payable for the imported goods.  Article 8 also provides for the inclusion in the 
transaction  value of  certain considerations  which may pass from  the buyer to the  seller  in the  form 
of specified  goods or services rather than in the form of money.  Articles 2 through 7 provide methods 
of determining the customs value whenever it cannot be determined under the provisions of Article  1. 

2. 
Where the customs value cannot be daermined under the provisions of Article  1  there should 
normally  be a process  of consulution between the customs administration  and importer with a view 
to arriving at a basis of value under the provisions of Article 2 or 3.  It may occur, for example, that 
the  importer  has  information  about the customs  value of  identical  or similar  imported  goods  which 
is not  immediately  available to the customs administration  in the port of  importation.  On the other 
hand, the customs administration may have information about the customs value of identical or similar 
imported goods which is not readily available to the importer.  A process of consulution between the 
two  parties  will  enable  information  to  be  exchanged,  subject  to  the  requirements  of  commercial 
confidentiality,  with a view  to determining  a proper basis of  value for customs purposes. 

3. 
Anicles  5  and  6  provide  two  bases  for  determining  the  customs  value  where  it  cannot  be 
determined on the basis of the transaction value of the imported goods or of identical or similar imported 
goods.  Under paragraph  1 of  Anicle  5 the customs  value  is daermined  on the basis  of the price at 
which the goods are sold in the condition as imported to an unrelated buyer in the country of importation. 
The  importer  also  has the right  to have goods which are further  processed  after  importation  valued 
under the provisions  of  Article  5  if the importer so  requests.  Under Article 6 the customs  value  is 
determined  on the basis of the computed  value.  Both these methods  present  ceruin  difficulties  and 
because of this the importer  is given the right, under the provisions of Article 4,  to choose the order 
of  application  of  the two methods. 

Anicle 7 sets out how to determine the customs value in cases where it cannot be determined 

4. 
under the provisions  of  any of the preceding  Articles. 

Page  172 

Members, 

Having  regard  to the Multilateral  Trade Negotiations; 

Desiring  to  further  the  objectives  of  GATT  1994  and  to  secure  additional  benefits  for  the 

international  trade of developing  countries; 

Recognizing  the importance  of  the provisions  of  Article  VII of  GATT  1994 and desiring  to 
elaborate  rules  for  their  application  in  order  to  provide  greater  uniformity  and  ceruinty  in  their 
implemenution; 

Recognizing the need for a fair, uniform and neutral system for the valuation of goods for customs 

purposes  that precludes  the use of arbitrary  or fictitious  customs  values; 

Recognizing  that the basis for valuation of goods for customs purposes should, to the greatest 

extent  possible,  be the transaction value of  the goods  being  valued; 

Recognizing  that customs  value should be based  on  simple  and  equiuble  criteria  consistent 
with  commercial  practices  and that  valuation  procedures  should  be  of  general  application  without 
distinction  between  sources  of  supply; 

Recognizing  that valuation procedures should  not be used  to combat  dumping; 

Hereby  agree  as  follows: 

PART I 

RULES  ON  CUSTOMS  VALUATION 

Article  1 

The customs value of  imported goods shall be the transaction value,  that is the price actually 
1. 
paid or payable for the goods when sold for export to the country of importation adjusted in accordance 
with  the provisions  of  Anicle  8.  provided: 

(a) 

that there are no restrictions as to the disposition or use of the goods by the buyer other 
than restrictions  which: 

(i) 

are imposed or required by law or by the public authorities  in the country  of 
importation; 

(ii) 

limit  the geographical  area in which the goods may  be  resold;  or 

(iii) 

do not substantially  affect  the value of the goods; 

(b) 

(c) 

that the sale or price is not subjea to some condition or consideration for which a value 
cannot  be daermined  with respect to the goods  being  valued; 

that no part of the proceeds of any subsequent resale, disposal  or use of the goods by 
the buyer will accrue direaly or indirectly to the seller, unless an appropriate adjustment 
can be made  in accordance with the provisions  of  Anicle  8;  and 

Page  173 

(d) 

that the buyer and seller  are not  related,  or where  the  buyer  and seller  are  related, 
that the transaction value  is accepuble  for customs  purposes under the provisions  of 
paragraph 2. 

2. 

(a) 

In  determining  whether  the  transaction  value  is  accepuble  for  the  purposes  of 
paragraph  1, the fact  that the buyer and the seller are  related  within the meaning  of 
Article  15  shall  not  in  itself  be  grounds  for  regarding  the  transaction  value  as 
unacceptable.  In such case the circumstances surrounding the sale shall  be examined 
and  the  transaction  value  shall  be  accepted  provided  that  the  relationship  did  not 
influence  the  price.  If,  in  the  light  of  information  provided  by  the  importer  or 
'  otherwise, the customs administration has grounds for considering that the relationship 
influenced the price, it shall communicate its grounds to the importer and the importer 
shall  be given a reasonable opportunity  to respond.  If the importer  so  requests, the 

.  communication  of  the grounds shall  be  in writing. 

(b) 

In a sale between related persons, the transaction value shall be accepted and the goods 
valued  in  accordance  with  the  provisions  of  paragraph  1  whenever  the  importer 
demonstrates  that such value closely  approximates  to one of the following  occurring 

. at or about the same time: 

(i) 

(ii) 

the transaction value in sales to unrelated buyers of identical  or similar goods 
for export  to the same  country of  importation; 

the  customs  value  of  identical  or  similar  goods  as  determined  under  the 
provisions  of  Article 5; 

(iii) 

the  customs  value  of  identical  or  similar  goods  as  determined  under  the 
provisions  of  Article 6; 

In applying  the  foregoing  tests,  due account  shall  be  uken  of  demonstrated 
differences in commercial levels, quantity levels, the elements enumerated in Article  8 
and costs incurred by the seller in sales in which the seller and the buyer are not related 
that are not incurred by the seller in sales in which the seller and the buyer are related. 

(c) 

The  tests  set  forth  in paragraph 2(b)  are to  be used  at the  initiative  of  the  importer 
and  only  for  comparison  purposes.  Substitute  values  may  not be  established  under 
the provisions  of  paragraph 2(b). 

Article  2 

(a) 

(b) 

If the customs value of the imported goods cannot be determined under the provisions 
of Article  1, the customs  value shall  be the transaction value of  identical  goods  sold 
for export to the same country of importation and exported at or about the same time 
as the goods being  valued. 

In applying this Article, the transaction value of identical  goods in a sale at the same 
commercial  level and in substantially the same quantity as the goods being valued shall 
be used to determine the customs value.  Where no such sale is found, the transaction 
value  of  identical  goods  sold  at  a  different  commercial  level  and/or  in  different 
quantities, adjusted to uke account of differences attributable to commercial  level and/or 
to  quantity,  shall  be used,  provided that such adjustments  can be made on the  basis 
of demonstrated  evidence  which clearly  esublishes  the reasonableness  and accuracy 

Page  174 

of  the  adjustment,  whether  the adjustment  leads  to  an increase  or a decrease  in the 
value. 

Where the costs and charges referred to in paragraph 2 of Article 8 are included in the transaction 
2. 
value, an adjustment shall be made to uke account of significant  differences  in such costs and charges 
between the imported goods and the identical goods in question arising from differences  in distances 
and modes  of  transport. 

If,  in applying this  Article,  more than one transaction value of  identical  goods  is found,  the 

3. 
lowest  such  value  shall  be used to determine  the customs  value of  the  imported  goods 

Article  3 

1. 

(a) 

If the customs value of the imported goods cannot be determined under the provisions 
-  of  Articles  1 and 2,  the customs value shall be the transaction value of similar goods 
sold for export to the same country of importation and exported at or about the same 
time  as the goods  being valued. 

(b) 

In applying  this  Article,  the transaction value of  similar goods  in a sale  at the same 
commercial  level and in substantially the same quantity as the goods being valued shall 
be usee to determine the customs value.  Where no such sale is found, the transaction 
value of similar goods sold at a different commercial level and/or in different quantities, 
adjusted  to  take  account  of  differences  attributable  to  commercial  level  and/or  to 
quantity,  shall  be used,  provided  that such adjustments  can be made  on the basis  of 
demonstrated  evidence  which clearly establishes  the reasonableness  and accuracy  of 
the adjustment, whether the adjustment leads to an increase or a decrease in the value. 

2. 
Where the costs and charges referred to in paragraph 2 of Article 8 are included in the transaaion 
value, an adjustment  shall be made to uke account of significant  differences  in such costs and charges 
between  the  imported  goods  and the similar  goods  in question  arising  from differences  in distances 
and  modes  of  transport. 

If. in applying this Article, more than one transaction value of similar goods is found, the lowest 

3. 
such  value  shall  be used to determine  the customs  value of the imported  goods. 

Article  4 

If the customs value of the imported goods cannot be determined under the provisions of Articles 
1.2 and 3. the customs value shall be determined under the provisions of Article 5 or, when the customs 
value  cannot  be daermined  under that  Article,  under the provisions  of  Article  6  except  that,  at the 
request  of  the  importer, the order of  application of  Articles  5 and 6  shall  be reversed. 

Article  5 

1. 

(a) 

If the  imported goods  or identical  or similar  imported  goods  are sold  in the country 
of importation in the condition as imported, the customs value of the imported  goods 
under the provisions of this Article shall be based on the unit price at which the imported 
goods  or  identical  or  similar  imported  goods  are  so  sold  in  the  greatest  aggregate 
quantity, at or about the time of the importation of the goods being valued, to persons 

Page  175 

who  are  not  related  to  the  persons  from  whom  they  buy  such  goods,  subject  to 
deductions  for the  following: 

(i) 

(ii) 

(iii) 

(iv) 

either the commissions usually paid or agreed to be paid or the additions usually 
made for profit and general expenses in connection with sales in such country 
of  imported  goods of  the same class  or kind; 

the usual costs of transport and insurance and associated costs incurred within 
the country  of  importation; 

where appropriate, the costs and charges referred to in paragraph 2 of Article  8 ; 
and 

the customs duties and other national taxes payable in the country of importation 
by reason of the importation or sale of the goods. 

(b) 

If neither the imported goods  nor identical  nor similar  imported goods  are sold  at or 
about the time of importation of the goods being valued, the customs value shall, subject 
otherwise to the provisions of paragraph 1(a), be based on the unit price at which the 
imported  goods  or  identical  or  similar  imported  goods  are  sold  in  the  country  of 
importation  in the condition as imported  at the earliest date after  the importation  of 
the goods  being  valued but before  the expiration of 90 days after such importation. 

2. 
If neither the imported goods nor identical nor similar imported goods are sold in the country 
of  importation  in the condition as imported, then,  if the importer so requests, the customs value shall 
be based on the unit price at which the imported goods, after further processing, are sold in the greatest 
aggregate  quantity  to persons  in the country of  importation who are not related to the persons  from 
whom  they  buy  such goods,  due allowance  being  made for the value added by  such processing  and 
the deductions  provided  for  in paragraph  1(a). 

Article  6 

The  customs  value of  imported  goods under the provisions  of this  Article shall  be based  on 

1. 
a computed  value.  Computed  value shall  consist  of the sum  of: 

(a) 

fb) 

the cost or value of materials and fabrication or other processing employed in producing 
the  imported  goods; 

an amount  for profit  and general  expenses  equal  to that usually  reflected  in sales  of 
goods of the same class or kind as the goods being valued which are made by producers 
in the country  of exportation  for export to the country  of  importation; 

(c ) 

the cost or value of all other expenses necessary to reflect the valuation option chosen 
by the  Member  under paragraph 2 of Article  8. 

2. 
No  Member  may  require  or compel  any person not  resident  in its own territory to  produce 
for examination,  or to allow  access to, any account or other record for the purposes of determining 
a computed  value.  However,  information  supplied by the producer of the goods for the purposes  of 
determining the customs value under the provisions of this Article may be verified  in another country 
by the authorities of the country of importation with the agreement of the producer and provided they 
give sufficient advance notice to the government of the country in question and the latter does not object 
to the  investigation. 

Page  176 

Article  7 

If  the  customs  value  of  the  imported  goods  cannot  be  daermined  under  the  provisions  of 
1. 
Articles  1 through 6, inclusive, the customs value shall be daermined using reasonable means consistent 
with the principles and general  provisions, of this  Agreement  and of  Article  VII of  GATT  1994 and 
on the basis  of  dau available  in the country  of  importation.  . 

2. 

No  customs  value shall  be determined  under the provisions  of this  Article  on the basis  of: 

(a) 

the selling  price  in the country of  importation  of goods produced  in such  country; 

(b) 

a system which provides for the acceptance for customs purposes of the higher  •- >*' two 
alternative values; 

(c) 

the price of  g  >ds on the domestic market of  the country  of  exportation; 

(d) 

the cost  of  production other than computed  values  which  have  been determined  for 
identical  or similar  goods  in accordance  with the provisions  of  Article  6: 

(e) 

the price of the goods for export to a country other than the country  of  importation; 

(0 

minimum  customs  values;  or 

(g) 

arbitrary or fictitious values. 

If the  importer  so  requests,  the  importer  shall  be  informed  in  writing  of  the  customs  value 

3. 
determined  under the provisions  of  this Article and the method  used to determine  such value. 

Article  8 

In determining  the  customs  value under the provisions  of  Article  1,  there  shall  be  added  to 

1. 
the price  actually  paid  or payable  for  the imported goods: 

(a) 

the following,  to the extent that they  are incurred by the buyer  but are not  included 
in the price  actually  paid or payable for the goods: 

(i) 

commissions  and brokerage,  except  buying  commissions; 

(ii) 

the cost of containers which are treated as being one for customs purposes with 
the goods  in question; 

(iii) 

the cost of packing whether for  labour or materials; 

(b) 

the  value,  apportioned  as  appropriate,  of  the  following  goods  and  services  where 
supplied directly or indirectly by the buyer free of charge or at reduced cost  for  use 
in connection  with the produaion  and sale for  export of the  imported  goods,  to the 
extent that such value has not been included  in the price actually  paid or payable: 

(i) 

materials,  components, parts and similar  items  incorporated  in the imported 
goods; 

Page  177 

(ii) 

• tools, dies, moulds and similar  items  used in the production of the  imported 

goods; 

(iii)  materials  consumed  in the production  of  the  imported  goods; 

(iv) 

engineering,  development,  artwork,  design  work,  and  plans  and  sketches 
undertaken elsewhere than in the country of importation and necessary  for the 
production  of  the imported  goods; 

(c) 

(d) 

royalties  and licence  fees  related to the goods  being  valued  that the buyer must  pay. 
either directly  or indirectly,  as a condition of  sale  of  the goods  being  valued,  to the 
extent that such royalties and fees are not included in the price actually paid or payable; 

the value of any part of the proceeds of any subsequent  resale, disposal  or use of the 
imported  goods  that accrues directly  or  indirectly  to the seller. 

In framing its legislation, each Member shall provide for the inclusion in or the exclusion from 

2. 
the customs  value,  in whole  or  in part, of the  following: 

(a) 

the cost  of transport  of the  imported  goods  to the port or place of  importation; 

(b) 

loading, unloading and handling charges associated with the transport of the imported 
goods  tô the port  or place of  importation;  and 

(c) 

the cost  of  insurance. 

Additions  to the price actually paid or payable shall  be made  under this  Article  only  on the 

3. 
basis of  objective  and quantifiable  data. 

No  additions  shall  be made to the price actually  paid or payable  in determining  the  customs 

4. 
value  except  as provided  in this  Article. 

Article  9 

1. 
Where  the  conversion  of  currency  is  necessary  for  the  determination  of  the  customs  value, 
the rate of exchange to be used shall be that duly published by the competent authorities of the country 
of  importation concerned  and shall  reflect  as effectively  as possible,  in respect  of the period  covered 
by each such document  of publication, the current value of such currency  in commercial  transactions 
in terms  of  the currency  of  the country  of  importation. 

The  conversion  rate to be  used  shall  be that  in effect  at the time  of  exportation  or the  time 

2. 
of  importation,  as provided  by each  Member. 

Article  10 

All  information  which  is by nature confidential  or which  is provided  on a confidential  basis 
for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned 
who shall  not disclose  it without the specific  permission of the person or government providing  such 
information,  except  to  the  extent  that  it  may  be  required  to  be  disclosed  in the  context  of  judicial 
proceedings. 

Page  178 

Article  11 

1. 
The legislation of  each Member shall provide  in regard to a determination  of  customs  value 
for the  right  of  appeal,  without  penalty,  by the importer  or any  other person  liable  for the payment 
of  the duty. 

An initial right of appeal vWmoutperaltyirwy 

2. 
or to an  independent  body,  but the  legislation  of each Member  shall  provide  for the right of  appeal 
without  penalty  to a judicial  authority. 

3. 
Notice of the decision on appeal shall be given to the appellant and the reasons for such decision 
shall  be  provided  in writing.  The appellant  shall also be informed  of any  rights of  further appeal. 

Article  12 

Laws,  regulations, judicial decisions and administrative  mlings of general application giving 
effect  to this Agreement shall be published in conformity with Article X of GATT  1994 by the country 
of  importation  concerned. 

Article  13 

If,  in the course  of  determining  the customs  value of  imported  goods,  it becomes  necessary 
to delay  the final determination  of  such customs  value,  the importer of  the goods  shall  nevertheless 
be able to withdraw them from customs if, where so required, the importer provides sufficient guarantee 
in the form of a surety, a deposit or some other appropriate instrument, covering the ultimate payment 
of  customs  duties  for  which  the  goods  may  be  liable.  The  legislation  of  each  Member  shall  make 
provisions  for  such  circumstances. 

Article  14 

The notes at Annex I to this Agreement form an integral part of this Agreement and the Articles 
of  this  Agreement  are to be read and applied  in conjunction with their respeaive  notes.  Annexes II 
and  III also  form  an integral  part of  this  Agreement. 

In this  Agreement: 

Article  15 

(a) 

"customs value of imported goods "means the value of goods for the purposes of levying 
ad valorem duties  of  customs on  imported  goods; 

(b) 

"country of  importation" means  country  or customs  territory  of  importation;  and 

(c) 

"produced" includes  grown,  manufactured  and mined. 

Page  179 

In this  Agreement: 

(a) 

(b) 

(c) 

-(d) 

(e) 

.  "identical goods" means goods which are the same in all respects, including  physical 
^characteristics,  quality  and repuution.  Minor  differences  in appearance  would  not. 
preclude goods otherwise conforming to the definition from being regarded as identical ; 

"similar  goods"  means  goods  which,  although  not  alike  in  all  respects,  have  like 
characteristics and like component materials which enable them to perform the same 
functions  and to  be  commercially  interchangeable.  The  quality  of  the  goods,  their 
reputation  and the existence  of  a trademark  are  among  the factors  to be  considered 
' in determining  whether goods are similar; 

the terms  "identical  goods" and  "similar goods" do not include,  as the case may be, 
goods which incorporate or reflect engineering,  development,  artwork, design work, 
and plans and sketches for which no adjustment has been made under  paragraph  l(b)(iv) 
of  Article  8 because such elements  were undertaken  in the country  of  importation; 

goods  shall not be regarded as "identical goods" or "similar goods" unless they were 
produced  in the same  country  as the goods  being valued; 

goods  produced by a different  person shall  be uken  into account only when there are 
no identical goods or similar goods, as the case may be, produced by the same person 
as the goods  being  valued. 

3. 
In this  Agreement  "goods of  the same class or kind" means goods which fall  within a group 
or range of goods produced by a particular industry or industry seaor, and includes identical or similar 
goods. 

4. 

For the purposes of  this Agreement,  persons  shall be deemed  to be  related only  if: 

(a) 

they  arc officers  or directors  of  one another's  businesses; 

(b) 

they  are  legally  recognized  partners  in business; 

(c) 

they  are employer  and employee; 

(d) 

(e) 

(f> 

any  person  direaly  or  indirealy  owns,  controls  or holds  5  per  cent  or more  of  the 
outstanding  voting  stock  or shares of both of them; 

one  of  them directly  or  indirectly  controls the other; 

both of  them are directly  or indirectly  controlled  by  a third person; 

(g) 

together they direaly  or indirealy  control a third person;  or 

(h) 

they are members  of  the same  family. 

5. 
Persons  who are associated  in business  with  one  another  in that  one  is  the sole  agent,  sole 
distributor or sole concessionaire,  however described, of the other shall  be deemed to be related for 
the purposes  of this Agreement  if they  fall  within the criteria of paragraph 4. 

Page  180 

Article  16 

Upon written request, the importer shall have the right to an explanation in writing from the 
customs  administration  of the country  of importation as to. how  the customs value of me importer's 
goods  was  daermined. 

Article  17 

Nothing  in this Agreement  shall be construed as restricting or calling  into question the rights 
of customs administrations to satisfy themselves as to the truth or accuracy of any statement, document 
or declaration presented  for  customs  valuation purposes. 

PARTÏÏ 

ADMINISTRATION,  CONSULTATIONS  AND  DISPUTE  SETTLEMENT 

Article  18 

Institutions 

1. 
There is hereby esublished a Committee on Customs Valuation (referred to in this Agreement 
as  "the Committee")  composed  of  representatives from each of the Members.  The Committee  shall 
elect its own Chairman and shall normally meet once a year, or as is otherwise envisaged by the relevant 
provisions of mis Agreement, for the purpose of affording Members the opportuniry to consult on maners 
relating  to the administration  of the customs  valuation system  by any  Member  as it might  affect  the 
operation  of  this  Agreement  or  the  furtherance  of  its  objectives  and  carrying  out  such  other 
responsibilities as may be assigned to it by the Members.  The WTO Secreuriat shall act as the secreuriat 
to  the Committee. 

2. 
There shall  be established  a Technical  Committee  on Customs  Valuation (referred  to  in this 
Agreement  as  "the Technical  Committee")  under the auspices of the  Customs  Co-operation  Council 
(referred  to  in this  Agreement  as  "the CCC"),  which shall carry out the responsibilities  described  in 
Annex II to this Agreement and shall operate in accordance with the rules of procedure contained therein. 

Article  19 

Consultations and Dispute Settlement 

Except  as otherwise  provided  herein, the Dispute  Settlement  Undersunding  is applicable  to 

î. 
• ^nsulutions and the satlement  of disputes under this  Agreement. 

If  any  Member  considers  that  any  benefit  accruing  to  it,  direaly  or  indirectly,  under  this 
2. 
Agreement  is being nullified  or impaired, or that the achievement  of any objective of this Agreement 
is  being  impeded,  as a result  of  the actions  of  another  Member or  of  other  Members,  it  may,  with 
a view to reaching a mutually satisfactory solution of this matter, request consulutions with the Member 
or  Members  in question.  Each  Member  shall  afford  sympathaic  consideration  to any  request from 
another  Member  for  consulutions. 

Page  181 

The Technical Comminee shall provide, upon request, advice and assisunce to Members engaged 

3. 
in  consulutions. 

\. 

. • < .. 

»  •  • 

• 

At the request of a party to<he dispute, or on its own initiative, a panel esublished to examine 
4: 
a dispute  relating to the provisions of this Agreement  may request the Technical  Committee  to carry 
out an examination of any questions requiring technical consideration.  The panel shall determine the 
terms of reference of the Technical Committee for the particular dispute and set a time period for receipt 
of  the  report  of  the Technical  Committee.  The panel  shall  uke  into consideration  the  report  of the 
Technical  Committee.  In the event that the Technical  Committee  is unable to reach consensus  on a 
matter  referred  to it pursuant to this paragraph,  the panel  should afford  the parties  to the dispute an 
opportunity  to present  their views  on the matter to the panel. 

5. 
Confidential  information provided to the panel shall not be disclosed without formal authorization 
from the person, body or authority providing such information.  Where such information  is requested 
from  the panel but release of such information by the panel is not authorized, a non-confidential summary 
of this  information,  authorized  by the person, body or authority providing  the information,  shall  be 
provided. 

PART III 

SPECIAL  AND  DIFFERENTIAL  TREATMENT 

Article  20 

Developing  country1 Members  not party to the Agreement  on  Implementation  of  Article VII 
1. 
df the General  Agreement  on Tariffs  and Trade done on  12 April  1979 may delay  application of the 
provisions  of  this  Agreement  for  a period  not exceeding  five  years from the date of entry  into  force 
of  the  WTO  Agreement  for  such  Members.  Developing  country  Members  who  choose  to  delay 
application  of  this  Agreement  shall  notify  the Director-General  of  the WTO  accordingly. 

2. 
In  addition  to  paragraph  1,  developing  country  Members  not  party  to  the  Agreement  on 
Implementation of Anicle  VII of the General Agreement on Tariffs and Trade done on  12 April  1979 
may delay application of paragraph 2(b)(iii) of Article  1  and Article 6 for a period not exceeding three 
years following their application of all other provisions of this Agreement.  Developing country Members 
that choose to delay application of the provisions specified  in this paragraph shall  notify  the Director-
General  of  the WTO accordingly. 

3. 
Developed  country Members shall furnish, on mutually agreed terms, technical  assistance  to 
developing  country  Members that  so request.  On this basis developed  country  Members  shall  draw 
up programmes of technical assistance which may include, inter  alia,  training of personnel, assistance 
in preparing  implemenution  measures, access to sources of information  regarding customs valuation 
methodology,  and advice on the application of the provisions  of this  Agreement. 

Page 182 

PART  rv 

FINAL PROVISIONS 

Article 21 

Reservations 

Reservations may not be entered in respect of any of the provisions of this Agreement without 

the consent  of the other  Members. 

Article 22 

National Legislation 

1. 
Each  Member  shall  ensure,  not  later than the date of  application  of the provisions  of  this 
Agreement  for  it.  the  conformity  of  its  laws,  regulations  and  administrative  procedures  with  the 
provisions  of this  Agreement. 

Each Member shall inform the Committee of any changes in its laws and regulations relevant 

2. 
to this  Agreement  and  in the administration  of such laws and regulations. 

Anicle 23 

Review 

The Committee shall review annually the implemenution and operation of this Agreement uking 
into account  the objeaives  thereof.  The Committee  shall annually  inform  the Council  for Trade in 
Goods of developments  during the period covered by such reviews. 

Article 24 

Secretariat 

This  Agreement  shall  be  serviced  by  the  WTO  Secreuriat  except  in  regard  to  those 
responsibilities specifically  assigned to the Technical Committee, which will be serviced by the CCC 
Secreuriat. 

Page  183 

ANNEX I 

INTERPRETATIVE  NOTES 

General Note 

Sequential Application  of  Valuation Methods 

1. 
Articles  1 through 7 define how the customs value of imported goods is to be determined under 
the  provisions  of  this  Agreement.  The  methods  of  valuation  are  set  out  in  a  sequential  order  of 
application.  The primary* method  for customs  valuation is defined  in Article  1 and imported  goods 
are to be valued in accordance with the provisions of this Article whenever the conditions prescribed 
therein are  fulfilled. 

2. 
Where the customs  value cannot be determined under the provisions  of  Article  1,  it is to be 
determined  by proceeding sequentially through the succeeding  Articles to the first such Article under 
which the customs value can be determined.  Except as provided in Article 4, it is only when the customs 
value cannot be determined  under the provisions of a particular Article that the provisions of the next 
Anicle  in the sequence  can be used. 

3. 
If the importer does not request that the order of Articles 5 and 6 be reversed, the normal order 
of  the  sequence  is  to. be  followed.  If the importer does  so  request  but  it then proves  impossible  to 
determine the customs value under the provisions of Article 6, the customs value is to be determined 
under the provisions  of  Article  5,  if  it can be so determined. 

Where the customs  value cannot be determined  under the provisions  of Articles  1 through 6 

4. 
it  is  to  be determined  under the provisions  of  Article  7. 

Use of  Generally Accepted Accounting  Principles 

"Generally accepted accounting principles" refers  to the recognized  consensus or substantial 

1. 
authoritative support within a country at a particular time as to which economic resources and obligations 
should be recorded as assets and liabilities, which changes in assets and liabilities should be recorded, 
how  the assets  and  liabilities and changes  in them should  be measured,  what  information  should  be 
disclosed  and how  it should be disclosed, and which financial  sutements  should be prepared.  These 
standards may be broad guidelines of general application as well as detailed practices and procedures. 

For the purposes of this Agreement, the customs administration of each Member shall utilize 

2. 
information prepared in a manner consistent with generally accepted accounting principles in the country 
which is appropriate  for the Article in question.  For example,  the determination of usual profit  and 
general expenses under the provisions of Article 5 would be carried out utilizing information prepared 
in a manner consistent  with generally accepted  accounting principles  of  the country of  importation. 
On  the  other  hand,  the determination  of  usual  profit  and  general  expenses  under  the provisions  of 
Article  6  would  be carried out utilizing  information  prepared  in a manner consistent  with  generally 
accepted accounting principles of the country of production.  As a further example, the determination 
of an element provided for in paragraph  l(b)(ii) of Article 8 undertaken in the country of importation 
would be carried put utilizing information in a manner consistent with the generally accepted accounting 
principles  of  that country. 

Page  184 

Price  Actually  Paid  or  Payable 

Note  to Article  1 

1. 
The price  actually  paid or payable  is the toul  payment  made or to be made by the buyer  to 
or for the benefit of the seller for the imported goods.  The payment need not necessarily uke the form 
of a transfer  of money.  Payment  may be made by way of letters of  credit or negotiable instruments. 
Payment may be made directly or indirectly.  An example of an indirect payment would be the settlement 
by the buyer,  whether  in whole  or in part, of  a debt owed  by the seller. 

2. 
• Activities  undertaken  by  the buyer on the buyer's  own  account,  other  than those  for  which 
an adjustment  is provided ir  Article 8, are not considered to be an indirect payment to the seller, even 
though they might be regarded as of benefit to the seller.  The costs of such activities shall not, therefore, 
be added  to the price actually  paid or payable  in determining  the customs  value. 

The  customs  value  shall  not  include  the  following  charges  or  costs,  provided  that  they  are 

3. 
distinguished  from  the price  actually  paid or payable  for  the  imported  goods: 

(a) 

charges  for  construction,  erection,  assembly,  maintenance  or  technical  assistance, 
undertaken after  importation on imported  goods  such  as  industrial  plant, machinery 
or equipment; 

(b) 

the cost  of  transport after  importation; 

(c) 

duties  and taxes of  the country  of  importation. 

The price actually  paid or payable  refers to the price for the  imported  goods.  Thus the flow 
4. 
of dividends  or other payments  from the buyer to the seller that do not  relate to the imported  goods 
are not  part of  the customs  value. 

Paragraph  1(a) (iii) 

Among  restrictions which would not render a price actually paid or payable unacceptable are 
restrictions which do not substantially affect  the value of the goods.  An example of such re- 
:tions 
would  be the case where a seller requires a buyer of automobiles  not to sell  or exhibit  them prior to 
a  fixed  date which  represents the beginning  of a model  year. 

, 

Paragraph  1(b) 

1. 
If the sale or price is subjea  to some condition or consideration  for which a value cannot be 
daermined  with  respect  to the goods being  valued,  the transaction value  shall  not be acceptable  for 
customs  purposes.  Some  examples  of this  include: 

(a) 

(b) 

(c) 

the seller esublishes the price of the imported goods on cc: 
also buy other goods  in specified  quantities; 

. ion that the buyer will 

the price of the imported goods is dependent upon the price or prices at which the buyer 
of  the imported  goods  sells  other goods  to the seller of the  imported  goods; 

the price is esublished  on the basis of a form of payment  extraneous to the imported 
goods,  such as  where the  imported  goods  are semi-finished  goods  which  have been 
provided  by the seller on condition that the seller will  receive a specified  quantity of 
the  finished  goods. 

Page  185 

2. 
However, conditions or considerations relating to the production or marketing of the imported 
goods shall not result in rejection of the transaction value.  For example, the fact that the buyer furnishes 
the seller with engineering and plans undertaken in the country of importation shall not result in rejection 
of the transaction value for the purposes of Article 1.  Likewise, if the buyer undertakes on the buyer's 
own account,  even  though  by  agreement  with  the  seller,  activities  relating  to  the  marketing  of  the 
imported  goods,  the value of these activities  is not part of the customs value nor shall  such activities 
result  in rejection  of the transaction value. 

Paragraph  2 

Paragraphs 2(a) and 2(b) provide different means of esublishing the acceptability of a transaction 

1. 
value. 

2. 
Paragraph  2(a)  provides  that  where  the  buyer  and  the  seller  are  related,  the  circumstances 
surrounding the sale shall be examined and the transaction value shall be accepted as the customs value 
provided  that the  relationship did not influence  the price.  It is not  intended  that there should  be an 
examination  of  the  circumstances  in  all  cases  where  the  buyer  and  the  seller  are  related.  Such 
examination will  only be required where mere are doubts about the acceptability  of the price.  Where 
the customs  administration  have no doubts about the accepubility  of the price,  it should  be accepted 
without  requesting  further  information from the importer.  For example,  the customs  administration 
may have previously examined the relationship, or it may already have detailed information concerning 
the buyer and the seller, and may already be satisfied  from such examination  or information  that the 
relationship  did  not  influence  the price. 

3. 
Where the customs administration is unable to accept the transaction value without further inquiry, 
it should give the importer an opportunity to supply such further deuiled information as may be necessary 
In  this  context,  the  customs 
to  enable  it  to  examine  the  circumstances  surrounding  the  sale. 
administration  should  be prepared  to examine  relevant  aspects of  the transaction,  including  the way 
in which  the buyer and. seller organize  their commercial  relations  and the way  in which the price  in 
question  was arrived at,  in order to determine  whether the relationship  influenced  the price.  Where 
it can be shown that the buyer and seller, although related under the provisions of Article  15, buy from 
and sell  to each other as  if they  were not related, this would demonstrate that the price had not been 
influenced by the relationship.  As an example of this, if the price had been settled in a manner consistent 
with the  normal  pricing practices of the industry in question or with the way the seller settles  prices 
for sales to buyers who are not related to the seller, this would demonstrate that the price had not been 
influenced  by the relationship.  As a further example,  where  it is shown that the price  is adequate to 
ensure  recovery  of  all costs plus a profit  which is representative  of  the firm's overall  profit  realized 
over  a represenutive  period  of  time  (e.g.  on an annual  basis)  in sales of  goods  of  the same  class  or 
kind,  this  would  demonstrate  that the price had not been  influenced. 

4. 
Paragraph 2(b) provides  an opportunity  for the importer  to demonstrate  that the  transaction 
value  closely  approximates  to a  "test" value previously  accepted  by the  customs  administration  and 
is therefore  accepuble under the provisions of Article  1.  Where a test under paragraph 2(b)  is met, 
it  is  not  necessary  to  examine  the  question  of  influence  under  paragraph  2(a). 
If  the  customs 
administration has already sufficient  information to be satisfied, without further deuiled inquiries, that 
one of the tests provided in paragraph 2(b) has been met, there is no reason for it to require the importer 
to demonstrate that the test can be ma.  In paragraph 2(b) the term  "unrelated buyers" means buyers 
who  are not related to the seller  in any particular case. 

Paragraph  2(b) 

A number of factors must be uken into consideration in determining whether one value "closely 
approximates"  to another value.  These  factors  include the namre of the  imported goods,  the nature 

Page  186 

of the industry itself, the season in which the goods are imported, and, whether the difference  in values 
is commercially  significant.  Since these factors may vary from case to case,  it would be  impossible 
to apply a uniform standard such as a fixed percenuge, in each case.  For example, a small  difference 
in value in a case involving one type of goods could be unacceptable while a large difference  in a case 
involving another type of goods might be accepuble in determining whether the transaction value closely 
approximates  to the  "test" values set forth  in paragraph 2(b) of  Article  1. 

Note to Article  2 

In applying Article 2, the customs administration shall, wherever possible, use a sale of identical 
1. 
goods at the same commercial  level and in substantially the same quantities as the goods being valued. 
Where no such sale is found, a sale of identical goods that takes place under any one of the following 
three conditions  may  be used: 

(a) 

.  a sale at the same  commercial  level  but  in different  quantities; 

(b) 

a sale at a different  commercial  level  but  in substantially  the same quantities;  or 

(c) 

a sale at a different  commercial  level  and  in different  quantities. 

Having  found  a sale under any one of these three conditions adjustments  will  then be made, 

2. 
as  the case  may  be.  for: 

(a) 

quantity  factors  only; 

(b) 

commercial  level  factors  only;  or 

(c) 

both commercial  level  and quantity  factors. 

The expression "and/or" allows the flexibility to use the sales and make the necessary adjustments 

3. 
in any  one  of  the three conditions  described  above. 

For the purposes of Article 2, the transaction value of identical imported goods means a customs 
4. 
value,  adjusted  as  provided  for  in  paragraphs  1(b)  and  2,  which  has  already  been  accepted  under 
Article  1. 

A  condition  for adjustment  because  of  different  commercial  levels  or different  quantities  is 
5. 
that such adjustment,  whether it leads to an increase or a decrease in the value,  be made only on the 
basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustments, 
e.g. valid price lists containing prices referring to different levels or different quantities.  As an example 
of  this,  if  the imported  goods  being  valued consist  of  a shipment  of  10 units and the only  identical 
imported goods  for which a transaction value exists involved a sale of 500 units, and it is recognized 
that  the  seller grants quantity discounts,  the required  adjustment  may  be  accomplished  by  resorting 
to  the  seller's  price  list  and using  that price applicable to a sale of  10 units.  This does  not require 
that a sale had to have been made in quantities of  10 as long as the price list has been esublished  as 
being bona fide through sales at other quantities.  In the absence of such an objective measure, however, 
the determination  of  a customs  value under the provisions  of  Article 2  is not appropriate. 

Page  187 

. 

Note to Article  3 

1. 
In applying Article 3, the customs administration shall, wherever possible, use a sale of similar 
goods at the same commercial  level and in substantially the same quantities as the goods being valued. 
Where no such sale  is found, a sale of similar goods that takes place under any one of the  following 
three conditions may be used: 

(a) 

a sale at the same  commercial  level  but in different  quantities; 

(b) 

a sale at a different  commercial  level  but in substantially  the same quantities;  or 

(c) 

a sale at a different  commercial  level  and in different  quantities. 

Having  found a sale under any one of these three conditions adjustments  will  then be made, 

2. 
as the case  may  be,  for: 

(a) 

quantity  factors  only; 

(b) 

commercial  level  factors only;  or 

(c) 

both commercial  level  and quantity  factors. 

The expression "and/or" allows the flexibility to use the sales and make the necessary adjustments 

3. 
m any  one  of  the three conditions  described above. 

4 
For the purpose of Article 3, the transaction value of similar imported goods means a customs 
value,  adjusted  as  provided  for  in  paragraphs  1(b)  and  2,  which  has  already  been  accepted  under 
Article  1. 

5. 
A  condition  for  adjustment  because  of different  commercial  levels  or different  quantities  is 
thai such adjustment,  whether it leads to an increase or a decrease  in the value, be made only on the 
basis of demonstrated evidence that clearly establishes the reasonableness and accuracy of the adjustment, 
e.g. valid price lists containing prices referring to different levels or different quantities.  As an example 
of this, if the imported goods being valued consist of a shipment of 10 units and the only similar imported 
goods  for  which a transaction value exists  involved a sale of 500 units, and  it is recognized  that the 
seller grants quantity discounts, the required adjustment may be accomplished by resorting to the seller's 
price  list  and using  that price applicable to a sale of  10 units.  This does  not  require that a sale had 
to have been made  in quantities of  10 as long as the price list has been esublished as being bona fide 
through  sales  at  other  quantities. 
In  the  absence  of  such  an  objeaive  measure,  however,  the 
determination  of  a customs  value under the provisions of  Article  3  is not  appropriate. 

Note to Article  5 

1. 
The term  "unit price at which ...  goods are sold in the greatest aggregate quantity" means the 
price at which the greatest number of units is sold in sales to persons who are not related to the persons 
from  whom  they  buy such goods at the first commercial  level  after  importation  at which such  sales 
uke  place. 

Page  188 

As an example of this, goods are sold from a price list when grants favourable unit prices 

2. 
for purchases made in larger quantities. 

Sale quantity 

Unit price 

Number of sales 

Total quantity 
sold at each price 

1-10 units 

100 

10 sales of 5 units 

11-25 units 

over 25 units 

95 

90 

5 sales of 3 units 

5 sales of  11 units 

1 sale of 30 units 
1 sale of 50 units 

65 

55 

80 

The greatest number of units sold at a price is 80;  therefore,  the unit price in the greatest 

aggregate quantity is 90. 

3. 
As another example of this, two sales occur.  In the first sale 500 units are sold at a price of 
95 currency units each.  In the second sale 400 units are sold at a price of 90 currency units each. 
In this example, the greatest number of units sold at a particular price is 500;  therefore, the unit price 
in the greatest aggregate quantity is 95. 

A third example would be the following situation where various quantities are sold at various 

4. 
prices. 

(a)  Sales 

Sale quantity 

40 units 

30 units 

15 units 

50 units 

25 units 

35 units 

5  units 

(b)  Totals 

Unit price 

100 

90 

100 

95 

105 

90 

100 

Total quantity sold 

Unit price 

65 

50 

60 

25 

90 

95 

100 

105 

In this example, the greatest number of units sold at a particular price is 65;  therefore, the 

unit price in the greatest aggregate.quantity is 90. 

Page  189 

5. 
Any sale in the importing country, as described in paragraph  1  above, to a person who supplies 
directly  or indirectly free of charge or at reduced cost  for use in connection with the production and 
sale  for  export  of  the  imported  goods  any of  the  elements  specified  in paragraph  1(b) of  Article  8, 
should  not be uken  into account  in esublishing  the unit price for  the purposes of  Article  5. 

6. 
It should be noted  that  "profit  and general  expenses"  referred  to  in paragraph  1 of  Article  5 
should  be uken  as a whole.  The figure  for the purposes  of this.deduction should  be determined  on 
the  basis  of  information  supplied  by  or on  behalf  of  the  importer  unless  the  importer's  figures  are 
inconsistent with those obuined  in sales in the country of importation of imported goods of the same 
class  or kind.  Where the importer's figures are inconsistent  with such figures,  the amount  for  profit 
and general expenses may be based upon relevant information other than that supplied by or on behalf 
of  the importer. 

7. 

The "general expenses" include the direct and indirect costs of marketing the goods in question. 

8. 
Local taxes payable by reason of the sale of the goods for which a deduction is not made under 
the  provisions  of  paragraph  l(a)(iv)  of  Article  5  shall  be  deducted  under  the  provisions  of 
paragraph  l(a)(i)  of  Article  5. 

9. 
In determining  either  the  commissions  or the  usual  profits  and  general  expenses  under  the 
provisions  pf paragraph  1 of  Article 5,  the question whether certain goods  are  "of the same  class or 
kind" as  other goods.must  be determined  on a case-by-case  basis by  reference  to the  circumstances 
involved.  Sales  in the country of  importation of the narrowest group or range of  imported  goods  of 
the same  class  or kind, which  includes the goods being valued,  for  which the necessary  information 
can be provided, should be examined.  For the purposes of Article 5,  "goods of the same class or kind" 
includes goods  imported  from the same country as the goods being valued as well  as goods  imported 
from other countries. 

10. 
For the purposes of paragraph  1(b) of Anicle 5, the "earliest date" shall be the date by which 
sales of  the  imported goods  or of  identical  or similar  imported  goods  are made  in sufficient  quantity 
to establish the unit price. 

11.  Where  the method  in paragraph 2 of  Article 5  is used, deductions  made  for the value added 
by further processing shall be based on objective and quantifiable data relating to the cost of such work. 
Accepted industry formulas, recipes, methods of construction, and other industry practices would form 
the basis  of  the calculations. 

It is recognized  that the method of  valuation provided  for in paragraph 2 of Article  5  would 
12. 
normally  not be applicable  when, as a result of the further processing,  the imported  goods  lose their 
identity.  However, there can be  instances where, although the identity of the imported  goods is  lost, 
the value added by the processing can be determined  accurately without  unreasonable difficulty.  On 
the other hand, there can also be instances where the imported goods mainuin their identity but form 
such a minor element in the goods sold in the country of importation that the use of this valuation method 
would be unjustified.  In view of the above, each situation of this type must be considered on a case-by-
case  basis. 

> 

Note to Article  6 

As a general mle, customs value is determined under this Agreement on the basis of information 
1. 
readily  available  in the country' of  importation.  In order to determine  a computed  value,  however, 
it may  be necessary to examine the costs of producing the goods being valued and other  information 
which  has  to be  obtained from outside the country  of  importation.  Furthermore,  in most  cases  the 

Page  190 

producer of the goods will be outside the jurisdiction of the authorities of the country of importation. 
The use of  the computed  value method  will  generally be limited to those cases  where the buyer and  ' 
seller are related, and the producer is prepared to supply to the authorities of the country of importation 
the necessary costings and to provide facilities for any subsequent verification which may be necessary. 

2.  . 
The  "cost or value" referred to in paragraph  1(a) of Article 6 is to be determined on the basis 
of  information  relating  to the production  of  the goods  being  valued supplied  by or on behalf  of  the 
producer.  It is to be based upon the commercial  accounts of the producer, provided that such accounts 
are consistent with the generally accepted accounting principles applied in the country where the goods 
are produced. 

3. 
The  "cost or value" shall  include the cost of elements specified  in paragraphs  l(a)(ii) and (iii) 
of  Article  8.  It shall  also  include  the value,  apportioned as appropriate under the provisions  of  the 
relevant note to Article 8, of any element specified in paragraph 1(b) of Article 8 which has been supplied 
directly  or  indirectly  by the buyer  for use  in connection with the production of  the imported  goods. 
The value of the. elements specified in paragraph. 1 (b)(iv) of Article 8 which are undertaken in the country 
of  importation  shall  be  included  only  to the extent  that  such elements  are charged  to  the producer. 
It is to be understood that no cost or value of the elements referred to in this paragraph shall be counted 
twice  in determining  the computed  value. 

4. 
The  "amount for profit  and general expenses" referred to in paragraph  1(b) of Article  6 is to 
be determined on the basis of information supplied by or on behalf of the producer unless the producer's 
figures  are  inconsistent  with those usually reflected  in sales of goods of the same class or kind as the 
goods being valued which are made by producers in the country of exportation for export to the country 
of  importation. 

5. 
It should  be noted in this context that the  "amount for profit  and general  expenses" has to be 
taken as a whole.  It follows  that if,  in any particular case, the producer's profit  figure  is low and the 
producer's general  expenses are high, the producer's profit and general expenses taken together may 
nevertheless be consistent with that usually reflected  in sales of goods of the same class or k*. •-  Such 
a situation might  occur,  for example,  if a product were being launched in the country of  importation 
and the producer accepted a nil or low profit to offset high general expenses associated with the launch. 
Where the producer can demonstrate a low profit on sales of the imported goods because of particular 
commercial  circumstances, the producer's actual profit figures should be uken into account provided 
that the producer has valid commercial  reasons to justify them and the producer's pricing policy reflects 
usual pricing policies in the branch of industry concerned.  Such a situation might occur, for example, 
where  producers  have  been  forced  to  lower  prices temporarily  because  of  an unforeseeable  drop in 
demand, or where  they sell goods to complement  a range of goods being produced  in the country  of 
importation and accept a low profit to mainuin competitivity.  Where the producer's own figures  for 
profit and general expenses are not consistent with those usually reflected in sales of goods of the same. 
class  or  kind  as  the goods  being  valued  which are made by producers  in the  country of  exportation 
for  export  to  the  country  of  importation,  the amount  for profit  and general  expenses  may  be  based 
upon  relevant  information  other than that supplied  by or on behalf of the producer of the goods. 

Where  information  other  than that supplied  by or on behalf  of  the producer  is used  for  the 
6. 
purposes of determining  a computed  value, the authorities of the importing  country shall  inform the 
importer, if the latter so requests, of the source of such information, the dau used and the calculations 
based  upon such dau,  subject  to the provisions  of  Article  10. 

7. 
The "general expenses" referred to in paragraph  1 (b) of Article 6 covers the direct and indirect 
costs  of  producing  and selling  the goods  for export which are not included  under paragraph  1(a)  of 
Article  6. 

Page  191 

8. 
Whether ceruin goods are  "of the same class or kind" as other goods must be determined  on 
a  case-by-case basis  with  reference  to the circumstances  involved.  In determining  the usual  profits 
and general  expenses under the provisions of Article 6,  sales for export to the country of  importation 
of the narrowest group or range, of goods; which includes the goods being valued, for which the necessary 
information can be provided, should be examined.  For the purposes of Article 6,  "goods of the same 
class  or kind" must  be from the same country as the goods  being  valued. 

Note to Article  7 

Customs  values determined  under the provisions  of  Article  7  should,  to the greatest  extent 

1. 
possible,  be based on previously  determined  customs values. 

2. 
The methods of valuation to be employed under Article 7 should be those laid down in Articles 1 
through 6 but a reasonable flexibility in the application of such methods would be in conformity  with 
the aims  and provisions  of  Article 7. 

3.' 

Some  examples  of  reasonable flexibility are as  follows: 

(a) 

(b) 

Identical goods - the requirement that the identical goods should be exported at or about 
the same time as the goods being valued could be flexibly  interpreted;  identical imported 
goods produced  in a country other than the country of exportation of the goods being 
valued could bethe basis for customs valuation;  customs values of identical imported 
goods  already determined  under the provisions of  Articles 5 and 6  could be used. 

Similar goods  - the requirement that the similar goods should be exported at or about 
the same time as the goods being valued could be flexibly interpreted;  similar imported 
goods produced  in a country other than the country of exportation of the goods being 
valued, could be the basis for customs valuation;  customs values of similar  imported 
goods  already determined  under the provisions  of  Articles  5 and 6 could  be used. 

(c ) 

Deductive  method - the requirement that the goods shall have been sold in the "condition 
as imported" in paragraph  1(a) of Article 5 could be flexibly interpreted; the "90 days" 
requirement  could  be administered  flexibly. 

Paragraph  l(a)(i) 

Note to Article  8 

The term  "buying commissions" means fees paid by an importer to the importer's  agent  for 

the service  of  representing  the importer  abroad  in the purchase of  the goods  being valued. 

Paragraph  1(b) (ii) 

There  are  two  faaors 

in 
1. 
paragraph  l(b)(ii)  of Article  8 to the imported goods - the value of the element  itself and the way  in 
which  that value  is to be apportioned  to the  imported  goods.  The apportionment  of  these  elements 
should be made in a reasonable manner appropriate to the circumstances and in accordance with generally 
accepted accounting principles. 

involved  in  the  apportionment  of  the  elements  specified 

2. 
Concerning  the value of  the element,  if the  importer acquires  the element from a seller not 
. related to the importer at a given cost, the value of the element is that cost.  If the element was produced 

Page  192 

by  the  importer  or by a person related  to the  importer,  its  value  would  be the cost  of  producing  it. 
If the element  had been previously  used by the importer,  regardless of whether it had been acquired 
or produced by such importer, the original cost of acquisition or produaion would have to be adjusted 
downward  to reflect  its use  in order to arrive at the value of  the element. 

3. 
Once a value  has been determined  for the element,  it  is necessary to apportion that value to 
the imported goods.  Various possibilities exist.  For example,  the value might be apportioned to the 
first shipment  if the importer wishes to pay duty on the entire value at one time.  As another example, 
the  importer may  request that the value be apportioned over the number of units produced up to the 
time of the first shipment.  As a further example, the importer may request that the value be apportioned 
over the entire anticipated production where contracts or firm commitments  exist for that production. 
The method  of  apportionment  used will  depend upon the documentation  provided  by the  importer. 

4. 
As  an  illustration of  the above,  an importer provides  the producer  with a mould  to be used 
in the production of the imported goods and contracts with the producer to buy  10,000 units.  By the 
time  of  arrival  of  the first shipment  of  1,000  units,  the producer has  already produced 4,000  units. 
The  importer  may  request  the  customs  administration  to  apportion  the  value  of  the  mould  over 
1,000 units, 4,000  units or  10,000 units. 

Paragraph  1(b) (iv) 

Additions  for  the  elements  specified  in paragraph  l(b)(iv)  of  Article  8  should  be  based  on 
1. 
objective  and quantifiable  data.  In order to minimize  the burden for both the importer  and customs 
administration  in determining the values to be added, dau readily available in the buyer's commercial 
record  system  should  be used  in so  far as possible. 

2.  . 
.  For those elements  supplied  by the buyer which were purchased  or leased  by the buyer, the 
addition would be the cost of the purchase or the lease.  No addition shall be made for those elements 
available  in the public domain,  other than the cost  of obuining  copies  of them. 

The ease  with which  it may be possible to calculate the values to be added will  depend  on a 

3. 
particular  firm's  structure and management  practice,  as well  as  its accounting  methods. 

For example, it is possible that a firm which imports a variety of products from several countries 
4. 
maintains the records of  its design centre outside the country of importation in such a way as to show 
accurately the costs attribuuble to a given product.  In such cases, a direct adjustment may appropriately 
be  made  under the provisions  of  Article  8. 

5. 
In another case, a firm may carry the cost of the design centre outside the country of importation 
as a general overhead expense without allocation to specific products.  In this instance, an appropriate 
adjustment  could  be made  under the provisions  of  Article 8  with  respect  to  the  imported  goods  by 
apportioning total design centre costs over total produaion benefiting from the design centre and adding 
such apportioned  cost  on a unit basis to imports. 

Variations in the above circumstances will, of course, require different factors to be considered 

6. 
in determining  the proper method  of  allocation. 

In cases  where the production of the element  in question involves a number of countries and 
7. 
a period of time, the adjustment should be limited to the value actually added to that element outside 
j 
over - , — w-  w 
the country  of  importation. 
:ountry of  importation. 

-, 

Page  193 

Paragraph  1(c) 

1. 
The royalties  and licence fees  referred  to in paragraph  1(c) of  Article  8 may  include,  among 
other things, payments  in respect to patents, trade marks  and copyrights.  However,  the charges  for 
the right to reproduce the imported goods in the country of importation shall not be added to the price 
actually  paid or payable  for the imported  goods  in determining  the customs  value. 

Payments made by the buyer for the right to distribute or resell  the imported  goods shall  not 
2. 
be added to the price actually paid or payable for the imported goods if such payments are not a condition 
of  the sale  for  export  to the country  of  importation  of the  imported  goods. 

Paragraph  3 

Where objective and quantifiable  data do not exist  with regard to the additions  required to'be 
made under the provisions of Article 8, the transaction value cannot be determined under the provisions 
of  Article  1.  As  an  illustration  of  this,  a  royalty  is  paid  on  the  basis  of  the  price  in  a sale  in the 
importing  country  of  a litre of a particular product  that was  imported  by  the  kilogram  and made up 
into a solution after importation.  If the royalty is based partially on the imported goods  and partially 
on other faadrs  which have nothing to do with the imported goods (such as when the imported  goods 
are mixed with domestic ingredients and are no longer separately identifiable, or when the royalty cannot 
be distinguished  from  special  financial  arrangements  between  the buyer and the  seller),  it  would  be 
inappropriate to attempt to make an addition for the royalty.  However,  if the amount  of this royalty 
is  based  only  on  the  imported  goods  and can be readily  quantified,  an addition  to the price  actually 
paid  or payable  can be made. 

Note to Article  9 

For the purposes of Article 9,  "time of importation" may include the time of entry for customs 

purposes. 

Note to Article  11 

Article  11 provides the importer with the right to appeal against a valuation determination made 
1. 
by the customs  administration  for the goods  being valued.  Appeal  may first be to a higher  level  in 
the customs administration,  but the importer shall  have the right  in the final instance to appeal  to the 
judiciary. 

2. 
"Without penalty" means that the importer shall not be subjea to a fine or threat of fine merely 
because the importer chose to exercise the right of appeal.  Payment of normal court costs and lawyers' 
fees  shall  not  be considered  to be a fine. 

However, nothing in Article 11 shall prevent a Member from requiring full payment of assessed 

3. 
customs  duties  prior to an appeal. 

Paragraph  4 

Note to Article  15 

For the purposes of Article  15, the term "persons" includes a legal person, where appropriate. 

Page  194 

Paragraph 4(e) ' 

For the purposes of this Agreement, one person shall be deemed to control another when the 

former  is legally or operationally  in a position to exercise restraint or direction over the latter. 

Page  195 

ANNEX II 

TECHNICAL  COMMITTEE  ON  CUSTOMS  VALUATION 

1.  "• "  In accordance with Article 18 of this Agreement, the Technical Committee shall be esublished 
under the auspices of the CCC with a view to ensuring, at the technical level, uniformity in interpreution 
and application of this Agreement. 

2. 

The  responsibilities  of the Technical  Committee  shall  include  the  following: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

to examine specific technical problems arising in the day-to-day administration of the 
customs valuation system of  Members  and to give  advisory opinions  on appropriate 
solutions  based upon the facts presented; 

to study, as requested, valuation laws, procedures and practices as they relate to this 
Agreement  and to prepare reports on the  results of  such studies; 

to prepare and circulate annual  reports on the technical  aspects  of  the operation and 
sums  of  this  Agreement; 

to  furnish  such  information  and advice  on  any  matters  concerning  the  valuation  of 
imported  goods  for  customs  purposes  as  may  be  requested  by  any  Member  or  the 
Committee.  Such  information  and advice  may  uke  the  form  of  advisory  opinions, 
commentaries  or explanatory  notes; 

to faciliute,  as requested,  technical  assistance to .Members with a view  to  furthering 
the  international  acceptance  of this  Agreement; 

to carry out an examination  of a matter referred  to it by a panel under Article  19 of 
this  Agreement;  and 

(g) 

to exercise  such other responsibilities  as the Committee  may  assign  to it. 

General 

3. 
The Technical  Committee  shall  attempt  to conclude  its work  on specific  matters,  especially 
those  referred  to  it by  Members,  the Committee  or a panel,  in a reasonably  short  period  of  time. 
As provided in paragraph 4 of Article  19, a panel shall set a specific time period for receipt of a report 
of the Technical  Committee  and the Technical Committee  shall provide its report within that period. 

4. 

The Technical Comminee shall be assisted as appropriate in its aaivities by the CCC Secreuriat. 

Representation 

Each Member shall have the right to be represented on the Technical Committee.  Each Member 
5. 
may  nominate  one  delegate  and  one  or  more  alternates  to  be  its  represenutives  on  the  Technical 
Committee.  Such a Member so represented on the Technical Committee  is referred to in this Annex 
as a "member of the Technical Committee".  Represenutives of members of the Technical Committee 
may be assisted by advisers.  The WTO Secreuriat may also attend such meetings with observer sums. 

Page  196 

Members  of  the  CCC  which are not  Members  of  the WTO may  be  represented  at  meetings 
6. 
of  the Technical  Committee  by one delegate  and one Or more alternates.  Such representatives  shall 
attend meetings  of the Technical  Committee  as observers. 

7. 
Subject  to the approval  of  the Chairman of the Technical  Committee,  the  Secretary-General 
of  the  CCC  (referred  to  in  this  Annex  as  "the  Secretary-General ")  may  invite  representatives  of 
governments  which  are neither  Members  of the WTO nor members  of the CCC  and represenutives 
of international governmental  and trade organizations to attend meetings of the Technical  Committee 
as  observers. 

Nominations of delegates, alternates and advisers to meetings of the Technical Committee shall 

8. 
be  made  to the  Secreury-General. 

Technical  Committee Meetings 

The Technical  Committee  shall meet  as necessary  but at least two times a year.  The date of 
9. 
each meeting shall be fixed by the Technical Committee at its preceding session.  The date of the meeting 
may be varied either at the request of any member of the Technical Committee concurred in by a simple 
majority  of  the members  of the Technical  Committee  or,  in cases  requiring  urgent  attention,  at the 
request of the Chairman.  Notwithstanding the provisions in sentence 1 of this paragraph, the Technical 
Committee  shall  meet as necessary to consider matters  referred  to it by a panel under the provisions 
of  Anicle. 19 of  this  Agreement. 

The meetings of the Technical Committee shall be held at the headquarters of the CCC unless 

10. 
otherwise  decided. 

The Secreury-General shall inform all members of the Technical Committee and those included 
11. 
under paragraphs 6 and 7 at least  30 days in advance,  except  in urgent  cases,  of the opening  date of 
each  session  of  the Technical  Committee. 

Agenda 

12. 
A provisional agenda for each session shall be drawn up by the Secreury-General and circulated 
to the members  of  the Technical  Committee  and to those  included under paragraphs 6 and  7 at least 
30 days in advance of the session, except in urgent cases.  This agenda shall comprise all items whose 
inclusion has been approved by the Technical Committee during its preceding session, all items included 
by the Chairman on the Chairman's  own initiative, and all  items whose inclusion has been requested 
by the  Secreury-General,  by the Committee  or by any member  of  the Technical  Committee. 

The Technical  Committee  shall determine  its agenda at the opening of each session.  During 

13. 
the session  the agenda  may  be altered  at any  time by the Technical  Committee. 

Officers  and  Conduct of Business 

14. 
The  Technical  Committee  shall  elect from among  the delegates  of  its members  a Chairman 
and one or more Vice-Chairmen.  The Chairman and Vice-Chairmen shall each hold office  for a period 
of one year.  The rairing  Chairman and Vice-Chairmen  are eligible for re-eleaion.  The mandate of 
a Chairman or Vice-Chairman  who no longer represents a member of the Technical  Committee  shall 
terminate  automatically. 

If the  Chairman  is absent  from any meeting  or part thereof,  a Vice-Chairman  shall  preside. 

15. 
In that  event,  the  latter shall  have the same powers  and duties  as the Chairman. 

(i 

Page  197 

The Chairman of the meeting shall participate in the proceedings of the Technical  Committee 

16. 
as  such  and not  as the represenutive  of  a member  of the Technical  Committee. 

In addition  to exercising  the other powers conferred  upon the Chairman by  these  rules,  the 

17. 
Chairman shall declare the opening and closing of each meeting, direct the discussion, accord the right  • 
to speak,  and; pursuant to these rules, have control of the proceedings.  The Chairman may also call 
a  speaker  to order if the speaker's  remarks are not relevant. 

18. 
During  discussion  of any matter a delegation  may  raise a point  of  order.  In this  event,  the 
Chairman shall  immediately  sute  a ruling.  If this ruling is challenged,  the Chairman  shall  submit  it 
to the meeting  for  decision  and  it shall  stand  unless overruled. 

The Secretary-General, or officers of the CCC Secreuriat designated by the Secretary-General, 

19. 
shall  perform  the secretarial  work  of meetings  of the Technical  Committee. 

Quorum and Voting 

Represenutives of a simple majority of the members of the Technical Committee shall constitute 

20. 
a quorum. 

21. 
Each member  of the Technical  Committee  shall  have one vote.  A decision of the Technical 
Committee  shall  be  taken  by  a  majority  comprising  at  least  two  thirds  of  the  members  present. 
Regardless  of  the outcome  of the vote on a particular matter,  the Technical  Committee  shall  be free 
to make a full  report to the Committee  and to the CCC  on that matter indicating  the different  views 
expressed  in the relevant discussions.  Notwithstanding the above provisions of this paragraph, on matters 
referred  to  it  by  a panel,  the  Technical  Committee  shall  take  decisioas  by  consensus.  Where  no 
agreement is reached in the Technical Committee on the question referred to it by a panel, the Technical 
Committee  shall  provide  a  report  detailing  the  facts  of  the  matter  and  indicating  the  views  of  the 
members. 

Languages  and  Records 

22. 
The  official  languages  of  the  Technical  Committee  shall  be  English,  French  and  Spanish. 
Speeches  or statements  made in any of these three languages shall  be immediately  translated  into the 
other official  languages unless all delegations agree to dispense with translation.  Speeches or statements 
made  in any other language shall be translated into English,  French and Spanish, subject to the same 
conditions, but in that event the delegation concerned shall provide the translation into English, French 
or Spanish.  Only English, French and Spanish shall be used for the official  documents of the Technical 
Committee.  Memoranda  and correspondence for the consideration of the Technical  Committee  must 
be presented  in one of  the official  languages. 

The Technical Committee shall draw up a report of all its sessions and, if the Chairman considers 
23. 
it necessary, minutes or summary records of its meetings.  The Chairman or a designee of the Chairman 
shall  report on the work of  the Technical  Committee  at each meaing  of  the Committee  and at each 
meeting  of  the CCC. 

Page  198 

ANNEX III 

The five-year delay in the application of the provisions of the Agreement by developing country 
1. 
Members  provided  for  in  paragraph  1  of  Article 20  may,  in  practice,  be  insufficient  for  ceruin 
developing  country  Members.  In such cases  a developing  country  Member  may  request before  the 
end of the period referred to in paragraph  1 of Article 20 an extension of such period, it being understood 
that the Members will give sympathetic consideration to such a request in cases where the developing 
country  Member  in question can show  good  cause. 

2. 
Developing countries which currently value goods on the basis of officially  esublished minimum 
values may wish to make a reservation to enable them to retain such values on a limited and transitional 
basis  under such  terms  and conditions as may be agreed to by the Members. 

Developing  countries  which consider  that the  reversal  of  the sequential  order at the request 
3. 
of  the  importer provided  for in Article 4 of the Agreement  may give rise to real difficulties  for them 
may  wish  to make  a reservation to Article 4  in the following  terms: 

reserves  the  right  to  provide  that  the  relevant  provision  of 
"The  Government  of 
Article 4 of the Agreement shall apply only when the customs authorities agree to the request 
to  reverse  the order of  Articles 5 and 6." 

If developing countries make such a reservation, the Members shall consent to it under Article 21 

of  the  Agreement. 

Developing countries may wish to make a reservation with respect to paragraph 2 of Article  5 

4. 
of  the  Agreement  in the following  terms: 

"The Government  of 
reserves the right to provide that paragraph 2 of  Article 5  of 
the  Agreement shall  be applied  in accordance with the provisions of the relevant note thereto 
whether  or not  the  importer  so requests." 

If developing countries make such a reservation, the Members shall consent to it under Article 21 

of  the  Agreement. 

5. 
Certain  developing  countries  may  have  problems  in the  implemenution  of  Article  1 of  the 
Agreement  insofar  as  it  relates to  importations  into their countries  by  sole  agents,  sole  distributors 
and sole concessionaires.  If such problems arise in practice in developing country Members applying 
the  Agreement,  a study of this question shall  be made, at the request of such Members,  with a view 
to  finding  appropriate  solutions. 

Anicle  17 recognizes  that  in applying  the Agreement,  customs  administrations  may need to 
6. 
make enquiries concerning the truth or accuracy of any sutement,  document or declaration presented 
to them for customs  valuation purposes.  The Article thus acknowledges that enquiries may be made 
which are. for example, aimed at verifying that the elements of value declared or presented to customs 
in connection with a determination of customs value are complete and correct.  Members,  subject to 
their national  laws and procedures, have the right to expect the full  cooperation of importers  in these 
enquiries. 

The  price  actually  paid  or payable  includes  all  payments  actually  made  or to be  made  as a 
7. 
condition  of  sale  of  the  imported  goods,  by the buyer to the seller,  or by the buyer to a third party 
to satisfy  an obligation  of  the seller. 

AGREEMENT  ON  PRESHIPMENT  INSPECTION 

Page  199 

Members, 

Noting  that Ministers on 20  September  1986 agreed that the Uruguay  Round of  Multilateral 
Trade  Negotiations  shall  aim  to  "bring  about  further  liberalization  and  expansion  of  world  trade", 
"strengthen the role of GATT" and "increase the responsiveness of the GATT system to the evolving 
international  economic  environment"; 

Noting that a number of developing country Members have recourse to preshipment inspection; 

Recognizing the need of developing countries to do so for as long and in so far as it is necessary 

to verify* the quality,  quantity or price of  imported goods; 

Mindful that such programmes must be carried out without giving rise to unnecessary  delays 

or unequal  treatment: 

Noting that this inspection is by definition carried out on the territory of exporter Members; 

Recognizing the need to establish an agreed international framework of rights and obligations 

of  both  user  Members  and exporter Members; 

Recognizing  that  the  principles  and  obligations  of  GATT  1994  apply  to  thpse  aaivities  of 

preshipment  inspection  entities  that are mandated  by governments  that are Members  of the WTO; 

Recognizing that it is desirable to provide transparency of the operation of preshipment inspection 

entities  and of  laws and regulations  relating to preshipment  inspection; 

Desiring  to  provide  for  the  speedy,  effective  and  equiuble  resolution  of  disputes  between 

exporters  and preshipment  inspection entities arising under this  Agreement; 

.  Hereby  agree  as  follows: 

Article 1 

Coverage - Definitions 

1. 
This Agreement shall apply to all preshipment inspection aaivities carried out on the territory 
of Members, whether such activities are contracted or mandated by the government, or any government 
body,  of  a Member. 

The term "user Member" means a Member of which the government or any government body 

2. 
contracts  for or mandates the use of preshipment  inspection  aaivities. 

3. 
Preshipment  inspection  activities  are all  aaivities  relating  to the verification  of  the  quality, 
the  quantity,  the  price,  including  currency  exchange  rate  and  financial  terms,  and/or  the  customs 
classification  of goods  to be exported to the territory  of  the user Member. 

Page  200 

The term  "preshipment  inspection entity" is any entity contracted or mandated by a Member 

4. 
to carry  out preshipment  inspection  activities.1 

Article  2 

Obligations of  User Members 

Non-discrimination 

1. 
User  Members  shall  ensure  that  preshipment  inspection  activities  are  carried  out  in a non 
discriminatory manner, and that the procedures and criteria employed in the conduct of these activities 
are objective and are applied on an equal  basis to all exporters affected  by such activities.  They shall 
ensure uniform performance  of inspection by all the inspectors of the preshipment  inspection entities 
contracted  or mandated  by them. 

Governmental Requirements 

User Members  shall ensure that in the course of preshipment  inspection activities  relating  to 
2. 
their laws,  regulations and requirements, the provisions of paragraph 4 of  Article  III of GATT  1994 
are  respected  to the extent  that these are relevant. 

Site  of Inspection 

3. 
User  Members  shall  ensure  that all preshipment  inspection  activities,  including  the  issuance 
of a Clean Report of Findings or a note of non-issuance, are performed  in the customs territory  from 
which the goods are exported or, if the inspection cannot be carried out in that customs territory given 
the complex nature of the products involved, or if both parties agree, in the customs territory in which 
the goods  are  manufactured. 

Standards 

4. 
User Members  shall ensure that quantity and quality  inspections are performed  in accordance 
with the standards defined by the seller and the buyer in the purchase agreement and that, in the absence 
of  such  sundards.  relevant  international  standards2 apply. 

Transparency 

User Members shall ensure that preshipment inspection activities are conducted in a transparent 

5. 
manner. 

User Members shall ensure that, when initially contacted by exporters, preshipment inspection 
6. 
entities  provide  to the exporters  a list  of  all  the information  which  is necessary  for the exporters  to 
comply  with  inspection  requirements.  The preshipment  inspection  entities  shall  provide  the actual 
information  when  so  requested  by exporters.  This  information  snail  include a reference  to the  laws 
n activities, and shall also include 
and regulations  of user Members  relating to preshipment  inspe 
the procedures and criteria used for inspection and for price ar,  currency exchange-rate  verification 

'It is understood that this provision does hot obligate Members to allow government entities of other Members to conduct 

preshipment  inspection  activities  on  their territory. 

'An  international  standard  is a standard  adopted by a governmental  or non-governmental  body  whose  membership  is 

open  to all  Members,  one  of  whose  recognized  activities  is  in the  field  of  standardization. 

Page 201  . 

purposes, the exporters' rights vis-à-vis the inspection entities, and the appeals procedures set up under 
paragraph  21.  Additional procedural requirements or changes in existing procedures shall not be applied, 
to a shipment  unless  the exporter  concerned  is  informed  of  these  changes  at the time  the  inspection 
date is arranged.  However,  in emergency  situations of the types addressed by Articles  XX and  XXI 
of GATT  1994, such additional requirements or changes may be applied to a shipment before the exporter. 
has been informed.  This assisunce shall not, however, relieve exporters from their obligations in respect 
of  compliance  with the import  regulations  of  the user Members. 

7. 
User Members  shall ensure that the information  referred  to in paragraph 6  is made available 
to  exporters  in  a  convenient  manner,  and  that  the  preshipment  inspection  offices  maintained  by 
preshipment  inspection entities  serve  as  information  points  where  this  information  is available. 

8. 
User Members shall publish promptly all applicable laws and regulations relating to preshipment 
inspection activities in such a manner as to enable other governments and traders to become acquainted 
with them. 

Protection  of  Confidential Business  Information 

User Members  shall ensure that preshipment  inspection entities treat all  information  received 
9. 
in the course of the preshipment  inspection as business confidential  to the extent that such  information 
is not already published, generally available to third parties, or otherwise  in the public domain.  User 
Members  shall  ensure that preshipment  inspection  entities  mainuin  procedures  to this end. 

10. 
User Members shall provide information to Members on request on the measures they are taking 
to give effect to paragraph 9.  The provisions of this paragraph shall not require any Member to disclose 
confidential  information the disclosure of which would jeopardize the effectiveness  of the preshipment 
inspection programmes or would prejudice the legitimate commercial  interest of particular enterprises, 
public  or private. 

11. 
User  Members  shall  ensure  that preshipment  inspection  entities  do  not  divulge  confidential 
business  information  to  any  third  party,  except  that  preshipment  inspection  entities  may  share  this 
information with the government entities that have contracted or mandated them.  User Members shall 
ensure that confidential  business information  which they receive from preshipment  inspection entities 
contracted or mandated by them is adequately safeguarded.  Preshipment inspection entities shall share 
confidential business information with the governments contracting or mandating them only to the extent 
that  such  information  is customarily  required  for  letters  of  credit  or other  forms  of  payment  or  for 
customs,  import  licensing  or exchange  control  purposes. 

User  Members  shall  ensure that  preshipment  inspection  entities  do  not  request  exporters  to 

12. 
provide  information  regarding: 

(a) 

(b) 

manufacturing dau related to patented, licensed or undisclosed processes, or to processes 
for  which a patent  is pending; 

unpublished technical  dau other than dau necessary to demonstrate compliance  with 
technical  regulations  or standards, 

(c) 

internal  pricing,  including  manufacturing  costs; 

(d) 

profit  levels; 

Page  202 

(e). 

the terms of contracts between exporters and their suppliers unless it is not otherwise 
possible for the entity to condua the inspeaion  in question.  In such cases, the entity 
shall  only  request  the information  necessary  for  this purpose. 

The  information  referred to in paragraph  12, which preshipment  inspeaion  entities shall not 

13. 
otherwise  request,  may  be released  voluntarily  by the exporter to  illustrate  a specific  case. 

Conflicts  of Interest 

14. 
User  Members  shall  ensure  that  preshipment  inspection  entities,  bearing  in  mind  also  the 
provisions  on protection  of  confidential  business  information  in paragraphs 9  through  13,  mainuin 
procedures  to avoid  conflicts  of  interest: 

(a) 

(b) 

(c ) 

between  preshipment  inspeaion  entities  and  any  related  entities  of  the preshipment 
inspection entities in question, including any entities in which the latter have a  financial 
or commercial interest or any entities which have a financial interest in the preshipment 
inspection entities in question, and whose shipments the preshipment inspection entities 
are to inspect; 

between preshipment inspection entities and any other entities, including other entities 
subjea  to  preshipment  inspection,  with  the  exception  of  the  government  entities 
contracting  or mandating  the  inspections; 

with divisions of preshipment inspection entities engaged in aaivities other than those 
required  to carry  out  the  inspection process. 

Delays 

15. 
User  Members  shall  ensure  that preshipment  inspection  entities  avoid  unreasonable  delays 
in inspection of shipments.  User Members shall ensure that, once a preshipment inspection entity and 
an exporter agree on an inspeaion date, the preshipment  inspection entity conducts the inspection on 
that date unless  it is rescheduled on a mutually agreed basis between the exporter and the preshipment 
inspection entity, or the preshipment  inspection entity  is prevented  from doing so by the exporter or 
by force  majeure.-

16. 
User  Members  shall ensure that, following  receipt of the final documents and completion  of 
the inspection, preshipment  inspection entities, within five working days, either issue a Clean Report 
of  Findings  or provide a deuiled  written explanation specifying  the reasons  for non-issuance.  User 
Members  shall  ensure  that,  in  the  latter  case,  preshiprr 
it  inspection  entities  give  exporters  the 
opportunity  to  present  their  views  in writing  and,  if  exporters so  request,  arrange for  re-inspection 
at the  earliest  mutually  convenient  date. 

17. 
User Members shall ensure that, whenever so requested by the exporters, preshipment inspeaion 
entities undertake, prior to the date of physical inspection, a preliminary verification of price and, where 
applicable,  of  currency  exchange  rate,  on the basis  of  tht  contract between  exporter  and  importer, 
the pro forma, invoice and, where applicable, the application for import authorization.  User Members 
shall ensure that a price or currency exchange rate that has been accepted by a preshipment  inspeaion 
entity  on  the  basis  of  such preliminary  verification  is not  withdrawn,  providing  the goods  conform 
to  the  import  documenution  and/or  import  licence.  They  shall  ensure  that,  after  a  preliminary 
verification has uken place, preshipment  inspection entities immediately  inform exporters in writing 

'It is understood that, for the purposes of this Agreement,  'force  majeure " shall mean "irresistible compulsion or coercion, 

unforeseeable  course  of  events  excusing  from  fulfilment  of  contract". 

Page  203 

either of their acceptance or of their deuiled  reasons for non-acceptance of the price and/or currency 
exchange  rate. 

User Members shall ensure that, in order to avoid delays in payment, preshipment  inspection 
18. 
entities send to exporters or to designated represenutives of the  exporters a Clean Report of Findings 
as expeditiously  as possible. 

User Members shall ensure that, in the event of a clerical error in the  Clean Report of Findings, 
19. 
preshipment inspection entities correct the error and forward the correaed information to the appropriate 
parties  as expeditiously  as possible. 

Price  Verification 

User  Members  shall  ensure  that,  in order  to  prevent  over-  and  under-invoicing  and  fraud, 

20. 
preshipment  inspection entities  conduct price verification4  according  to the following  guidelines: 

(a) 

(b) 

preshipment  inspection  entities  shall  only  reject  a contract  price  agreed  between an 
exporter and an importer if they can demonstrate that their findings of an unsatisfactory 
price are based on a verification  process  which  is in conformity  with the criteria set 
out  in subparagraphs  (b) through (e); 

the preshipment  inspection entity shall base  its price comparison  for  the  verification 
of the  export price on the price(s) of identical or similar goods offered for export from 
the  same  country  of  exportation  at or  about  the  same  time,  under  competitive  and 
. comparable  conditions  of  sale,  in conformity  with  customary  commercial  practices 
and net of any applicable standard discounts.  Such comparison shall be based on the 
following: 

(i) 

( i i ) 

(iii) 

(iv) 

only  prices providing  a valid  basis of  comparison  shall  be used,  uking  into 
account the relevant economic factors pertaining to the country of importation 
and a country or countries  used for price comparison; 

the preshipment inspection entity shall not rely upon the price of goods offered 
for export to different countries of importation to arbitrarily impose the lowest 
price upon the shipment; 

the preshipment  inspeaion entity shall uke into account the specific elements 
listed  in subparagraph (c); 

at any suge  in the process described above, the preshipment inspection entity 
shall  provide the exporter with an opportunity  to explain the price; 

(c) 

when  conduaing  price  verification,  preshipment  inspection  entities  shall  make 
appropriate  allowances  for  the  terms  of  the  sales  contract  and  generally  applicable 
adjusting factors pertaining to the transaction;  these faaors  shall  include but not be 
limited to the commercial level and quantity of the sale, delivery periods and conditions, 
price escalation clauses, quality specifications, special design features, special shipping 
or packing specifications,  order size, spot sales, seasonal  influences,  licence or other 
intellectual property fees, and services rendered as part of the  contract if these are not 

*The obligations of user Members with respect to the services of preshipment inspection entities in connection with customs 
valuation shall  be the obligations  which they  have  accepted  in GATT  1994  and die other  Multilateral  Trade  Agreements 
included  in Annex  1A of the WTO  Agreement. 

Page  204 

customarily  invoiced  separately;  they  shall  also  inuude ceruin  elements  relating to 
the  exporter's  price,  such  as  the  contractual  relationship  between  the  exporter  and 
importer; 

(d) 

the verification  of  transportation  charges shall  relate only  to the agreed price  of  the 
mode  of  transport  in the country of  exportation  as indicated  in the sales  contract; 

(e) 

the following  shall  not be used  for price verification  purposes: 

(i) 

(ii) 

the  selling  price  in  the  country  of  importation  of  goods  produced  in  such 
country, 

the  price  of  goods  for  export  from  a  country  other  than  the  country  of 
exportation; 

(iii) 

the cost  of production; 

(iv) 

arbitrary or fictitious  prices or values. 

Appeals  Procedures 

21. 
User Members shall ensure that preshipment inspection entities establish procedures to receive. 
consider and render decisions concerning grievances raised by exporters, and that information concerning 
such procedures is made available to exporters in accordance with the provisions of  paragraphs  6 and 7. 
User  Members  shall  ensure that the procedures are developed and maintained  in accordance with the 
following  guidelines: 

preshipment  inspection  entities  shall  designate  one  or  more  officials  who  shall  be 
available  during  normal  business hours  in each  city  or port  in which  they  maintain 
a preshipment inspection administrative office to receive, consider and render decisions 
on exporters* appeals or grievances; 

exporters shall provide in writing to the designated official(s)  the facts concerning the 
specific  transaction in question, the namre of the grievance and a suggested  solution: 

the designated official(s) shall afford sympathetic consideration to exporters' grievances 
and shall render a decision as soon as possible after receipt of the documentation  referred 
to  in subparagraph (b). 

(a) 

(b) 

(c) 

Derogation 

By derogation to the provisions of Article 2, user Members shall provide that, with the exception 
22. 
of part shipments,  shipments whose value is less than a minimum value applicable to such shipments 
as  defined  by  the  user  Member  shall  not  be  inspeaed,  except  in  exceptional  circumstances.  This 
minimum  value  shall  form  part  of  the  information  furnished  to  exporters  under  the  provisions  of 
paragraph  6. 

Page  205 

Article  3 

Obligations  of Exporter Members 

Non-discrimination 

Exporter Members shall ensure that their laws and regulations relating to preshipment inspection 

1. 
activities  are applied  in a non-discriminatory manner. 

Transparency 

Exporter  Members  shall  publish  promptly  all  applicable  laws  and  regulations  relating  to 
2. 
preshipment inspection activities in such a manner as to enable other governments and traders to become 
acquainted  with them. 

Technical Assistance 

Exporter Members  shall offer  to provide to user Members,  if requested, technical  assistance 

3. 
directed  towards  the achievement  of the objectives  of this  Agreement  on mutually  agreed  terms.5 

Article  4 

Independent Review  Procedures 

Members  shall  encourage  preshipment  inspection entities  and exporters  mutually  to  resolve 
their disputes.  However, two working days after submission of the grievance  in accordance with the 
provisions  of  paragraph  21  of  Anicle  2,  either  party  may  refer  the dispute  to  independent  review. 
Members shall take such reasonable measures as may be available to them to ensure that the following 
procedures  are esublished  and maintained  to this end: 

(a) 

(b) 

these procedureS'Shall  be administered by an independent entity constituted jointly by 
an  organization  representing  preshipment  inspection  entities  and  an  organization 
representing  exporters  for the purposes  of  this  Agreement; 

the independent  entity referred to in subparagraph (a) shall  establish a list of  experts 
as  follows: 

(i) 

a section of members nominated by an organization representing preshipment 
inspeaion  entities; 

(ii) 

a section of members  nominated  by an organization representing exporters; 

(iii) 

a section of  independent  trade experts,  nominated  by the  independent  entity 
referred  to  in subparagraph (a). 

The geographical  distribution of the  experts on this list shall be such as to enable any 
disputes raised under these procedures to be dealt with expeditiously.  This list shall 
be drawn up within two months of the entry  into force  of the WTO Agreement  and 

'It  is understood  mat  such  technical  assisunce  may  be given  on a bilateral,  plurilateral  or multilateral  basis. 

Page  206 

(c) 

(d) 

(e) 

(0 

(g) 

shall  be  updated  annually.  The  list  shall  be  publicly  available.  It shall  be  notified 
to the  Secreuriat  and circulated  to all  Members; 

•. 

• 

'

*

'

•

•• 

• 

. 

an exporter or preshipment  inspection entity  wishing  to  raise a dispute shall  contact 
the  independent  entity referred to  in subparagraph  (a)  and  request  the  formation  of 
a panel.  The  independent entity  shall  be responsible  for  esublishing  a panel.  This 
panel  shall consist  of three members.  The members of  the panel shall  be chosen so 
as  to  avoid  unnecessary  costs  and delays.  The  first  member  shall  be  chosen  from 
section  (i) of the above list by the preshipment  inspection entity concerned, provided 
that this member  is not affiliated  to that entity.  The second member  shall be chosen 
from section  (ii) of the above list by the exporter concerned, provided that this member 
is not affiliated  to that exporter.  The third member shall  be chosen from section  (iii) 
of the above list by the independent entity referred to in subparagraph (a).  No objections 
shall  be made  to any  independent trade expert drawn from  section (iii) of  the  soove 
list; 

the  independent  trade expert drawn from section  (iii) of  the above  list  shall  serve as 
the  chairman  of  the  panel.  The  independent  trade  expert  shall  uke  the  necessary 
decisions to ensure an expeditious settlement of the dispute by the panel, for instance, 
whether  the  facts  of  the  case  require the  panelists  to meet  and,  if  so,  where  such a 
meeting  shall  take place,  taking  into account  the site  of  the  inspection  in question; 

if the parties to the dispute so agree, one independent  trade expert could  be selected 
. from  section  (iii)  of  the  above  list  by  the  independent  entity  referred  to  in 
subparagraph  (a) to review the dispute in question.  This expert shall uke the necessary 
decisions  to ensure an expeditious  settlement  of the dispute,  for  instance uking  into 
account  the site  of  the  inspection  in question; 

the object  of the review  shall be to esublish  whether,  in the course of the  inspection 
in  dispute,  the  parties  to  the  dispute  have  complied  with  the  provisions  of  this 
Agreement.  The procedures shall be expeditious and provide the opportunity for both 
parties  to present  their  views  in person or in writing; 

decisions  by a three-member  panel shall be taken by majority  vote.  The decision on 
the dispute shall be rendered within eight working days of the request for independent 
review  and be communicated  to the  parties to the dispute.  This time-limit  could be 
extended upon agreement by the parties to the dispute.  The panel or independent trade 
expert  shall  apportion the costs,  based on the merits of  the case; 

(h) 

the decision of  the panel shall be binding upon the preshipment  inspection entity and 
the exporter  which  are parties  to the dispute. 

Article  5 

Notification 

Members  shall submit to the Secretariat copies of the laws and regulations by which they put 
this Agreement  into force, as well as copies of any other laws and regulations relating to preshipment 
inspection, when  the WTO Agreement  enters into force with respect to the Member  concerned.  No 
changes  in the  laws and regulations  relating to preshipment  inspection shall  be enforced  before  such 
changes  have  been  officially  published.  They  shall  be  notified  to the  Secretariat  immediately  after 
their  publication.  The  Secreuriat  shall  inform  the Members  of the availability  of this  information. 

Page 207 

Article  6 

Review 

At the end of the second year from the date of entry  into force  of  the WTO Agreement  and 
every three years thereafter,  the Ministerial  Conference  shall  review  the provisions,  implementation 
and operation of this Agreement,  uking  into account the objectives thereof and experience gained in 
its operation.  As a result of  such review,  the Ministerial  Conference  may  amend  the provisions  of 
the  Agreement. 

Article  7 

Consultation 

Members  shall consult  with other Members upon request with respea to any maner  affecting 
the  operation of  this  Agreement.  In such cases,  the provisions  of  Article XXII  of  GATT  1994,  as 
elaborated  and applied  by the  Dispute  Senlement  Undersunding,  are applicable  to this  Agreement. 

Article  8 

Dispute Settlement 

Any disputes  among  Members  regarding the operation of this Agreement  shall  be subjea  to 
the provisions  of  Article XXIII of GATT  1994, as elaborated and applied by the Dispute  Senlement 
Understanding. 

Article  9 

Final Provisions 

1. 

Members shall uke the necessary measures for the implemenution of the present Agreement. 

Members  shall  ensure that their laws and regulations shall  not be contrary to the provisions 

2. 
of  this  Agreement. 

Page 208 

AGREEMENT  ON  RULES  OF  ORIGIN 

Page  209 

Members, 

Noting  that Ministers  on 20  September  1986 agreed  that the Uruguay  Round  of  Multilateral 
Trade  Negotiations  shall  aim  to  "bring about  further  liberalization  and  expansion  of  world  trade", 
"strengthen the role of GATT" and "increase the responsiveness of the GATT system to the evolving 
international  economic  environment"; 

Desiring  to further the objectives  of  GATT  1994; 

Recognizing that clear and predictable  rules of origin and their application  facilitate  the  flow 

of  international  trade; 

Desiring  to ensure that mles of origin themselves do not create unnecessary obstacles to trade; 

Desiring  to ensure that  mles  of origin do  not nullify  or impair the rights of  Members  under 

GATT  1994; 

Recognizing  that  it  is  desirable  to  provide  transparency  of  laws,  regulations,  and  practices 

regarding  mles  of  origin; 

Desiring  to ensure that mles of  origin are prepared  and applied  in an impartial,  transparent, 

predicuble.  consistent  and neutral manner; 

Recognizing the availability of a consulution mechanism and procedures for the speedy,  effective 

and equitable  resolution of  disputes  arising  under this  Agreement; 

Desiring  to harmonize  and clarify' mles  of origin; 

Hereby  agree  as  follows: 

PARTI 

DEFINITIONS  AND  COVERAGE 

Article  1 

Rules of Origin 

1. 
For the purposes of Parts I to IV of this Agreement,  mles of origin shall  be defined  as those 
laws,  regulations and administrative determinations of general application applied by any Member to 
determine  the country of origin of goods provided  such rules of origin are not  related to contractual 
or autonomous trade régimes leading to the granting of uriff preferences going beyond the application 
of  paragraph  1 of  Article  I of  GATT  1994. 

Rules of origin referred to in paragraph  1 shall include all mles of origin used in non-preferential 
2. 
commercial  policy  instmments,  such as in the application of:  most-favoured-nation  treatment  under 
Articles  I, II, III, XI and XIII of G ATT  1994; anti-dumping and countervailing duties under Article  VI 
of GATT  1994;  safeguard measures under Article XIX of GATT  1994;  origin marking  requirements 

Page  210 

under  Article  IX  of  GATT  1994;  and  any  discriminatory  quantitative  restrictions  or  uriff  quotas. 
They  shall  also  include  mles  of  origin used  for government  procurement  and trade  sutistics.1 

DISCIPLINES  TO GOVERN  THE APPLICATION  QF RULES  OF ORIGIN 

PART II 

Article  2 

Disciplines  During the  Transition Period 

Until  the  work  programme  for  the  harmonization  of  r-es  of  origin  set  out  in  Part  IV'is 

completed.  Members  shall  ensure that: 

(a) 

when they issue administrative determinations of general application, the requirements 
to be fulfilled  are clearly defined.  In particular: 

(i) 

(ii) 

(iii) 

in cases  where the criterion of change of uriff  classification  is applied,  such 
a  rule  of  origin,  and  any  exceptions  to  the  mle,  must  clearly  specify'  the 
subheadings or headings within the uriff  nomenclature that are addressed by 
the mle; 

in cases where the ad valorem percenuge criterion is applied, the method  for 
calculating  this percentage  shall  also be  indicated  in the  mles  of origin; 

in  cases  where the  criterion  of  manufacturing  or  processing  operation  is 
prescribed, the operation that confers  origin on the good  concerned shall  be 
precisely  specified: 

notwithstanding  the  measure  or  instrument  of  commercial  policy  to  which  they  are 
linked,  their  mles  of  origin  are  not  used  as  instruments  to  pursue  trade  objectives 
directly  or  indirectly; 

mles of origin shall  not themselves create restrictive, distorting, or disruptive  effects 
on  international  trade.  They shall not pose unduly strict requirements  or require the 
fulfilment  of  a  certain  condition  not  related  to  manufacturing  or  processing,  as  a 
prerequisite for the determination of the country of origin.  However, costs not directly 
related  to  manufacturing  or  processing  may  be  included  for  the  purposes  of  the 
application of  an ad valorem  percentage  criterion consistent  with subparagraph (a); 

(he mles of origin that they apply to imports and exports are not more stringent than 
the mles of origin they apply to determine whether or not a good is domestic and shall 
not  discriminate  between  other  Members,  irrespective  of  the  affiliation  of  the 
manufacturers  of the good  concerned2; 

(b) 

(c) 

(d) 

'It is understood that this provision is without prejudice to those determinations made for purposes of defining  "domestic 

industry" or  "like  products of  domestic  industry" or similar  terms wherever  they  apply. 

'With  respect  to  rules  of  origin applied  for  the purposes  of  government procurement,  this  provision  shall  not create 

obligations  additional  to those  already  assumed  by  Members under GATT  1994. 

Page 211 

(e) 

(f) 

(g) 

(h) 

(i) 

(j ) 

(k ) 

their mles of origin are administered in a consistent, uniform, impartial and reasonable 
manner; 

their mles  of origin are based on a positive standard.  Rules of origin that sute what 
does not confer origin (negative standard) are permissible  as part of a clarification  of 
a positive  standard or in individual  cases where a positive  determination  of  origin  is 
not  necessary; 

their  laws,  regulations,  judicial  decisions  and  administrative  mlings  of  general 
application relating to mles  of origin are published  as if they were subject to, and in 
accordance  with,  the provisions  of paragraph  1 of  Article  X  of  GATT  1994; 

upon  the'request  of  an  exporter,  importer  or  any  person  with  a justifiable  cause, 
assessments of the origin they would accord to a good are issued as soon as possible 
but  no  later than  150 days' after  a request  for  such  an assessment  provided  that all 
necessary  elements  have  been  submitted.  Requests  for  such  assessments  shall  be 
accepted before trade in the good concerned begins and may be accepted at any later 
point  in time.  Such assessments  shall  remain valid for three years provided  that the 
facts and conditions,  including the mles of origin, under which they have been made 
remain comparable.  Provided that the parties concerned are informed in advance, such 
assessments will no longer be valid when a decision contrary to the assessment is made 
in a review as referred to in subparagraph  (j). Such assessments shall be made publicly 
available  subject  to the provisions  of subparagraph (k); 

w h en  introducing  changes  to their mles of  origin or new  mles  of  origin,  they  shall 
not apply such changes retroactively as defined in, and without prejudice to, their laws 
or  regulations; 

any  administrative  action  which they take  in  relation  to the determination  of  origin 
is reviewable promptly  by judicial, arbitral or administrative tribunals or procedures, 
independent of the authority issuing the determination, which can effect the modification 
or  reversal  of the determination; 

all  information that is by nature confidential or that is provided on a confidential  basis 
for the purpose of the application of  mles of origin is treated as strictly  confidential 
by the authorities concerned, which shall not disclose it without the specific permission 
of  the person or government  providing such  information,  except to the extent  that it 
may  be required to be disclosed  in the context  of judicial  proceedings. 

Article  3 

Disciplines  after  the. Transition Period 

Taking into account the aim of all Members to achieve, as a result of the harmonization work 
programme set out in Part IV, the esublishment of harmonized mles of origin, Members shall ensure, 
upon the  implementation  of the results of the harmonization  work programme,  that: 

(a) 

they  apply  mles  of origin equally  for all purposes as set  out  in Article  1 ; 

'In respea  of requests made during the first  year from  the date of entry into force  of the WTO Agreement.  Members 

shall  only  be required  to issue  these  assessments  as soon as possible. 

Page  212 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

under their mles of origin,  the country to be determined  as the origin of  a particular 
good  is either the country  where the good  has been  wholly  obuined  or,  when more 
than one  country  is  concerned  in the production  of  the good,  the country  where the 
last  substantial transformation has  been carried out; 

the mles  of origin that they apply to imports and exports are not more stringent than 
the mles of origin they apply to détermine whether or not a good is domestic and shall 
not  discriminate  between  other  Members,  irrespective  of  the  affiliation  of  the 
manufacturers  of the good concerned; 

the mles of origin are administered in a consistent, uniform,  impartial and reasonable 
manner;  . 

their  laws,  regulations,  judicial  decisions  and  administrative  mlings  of  general 
application relating to mles of origin are published as if they were subject to.  and in 
accordance with,  the provisions  of paragraph  1 of  Article  X of  GATT  1994; 

upon  the  request  of  an  exporter,  importer  or  any  person  with  a justifiable  cause, 
assessments of the origin they would accord to a good  are issued as soon as possible 
but  no  later than  ISO days  after  a request  for  such  an assessment  provided  that  all 
necessary  elements  have  been  submitted.  Requests  for  such  assessments  shall  be 
accepted before trade in the good concerned  begins and may be accepted at any later 
point  in time.  Such assessments  shall remain valid for three years provided  that the 
facts and conditions,  including the mles of origin, under which they have been made 
.  remain comparable.  Provided that the parties concerned are informed in advance, such 
assessments will no longer be valid when a decision contrary to the assessment  is made 
in a review as referred to in subparagraph  (h).  Such assessments shall be made publicly 
available  subject  to the provisions  of subparagraph (i); 

when  introducing  changes  to their mles  of  origin  or new  mles  of  origin,  they  shall 
not apply such changes retroactively as defined in, and without prejudice to. their laws 
or  regulations; 

any  administrative  action which they  take  in  relation  to the determination  of  origin 
is reviewable promptly by judicial, arbitral or administrative tribunals or procedures, 
independent of the authority issuing the determination, which can effect the modification 
or  reversal  of the determination; 

all  information which is by nature confidential  or which is provided on a confidential 
basis for the purpose of the application of mles of origin is treated as strictly confidential 
by the authorities concerned, which shall not disclose it without the specific permission 
. of  the person or government  providing  such information,  except  to the extent  that it 

may  be  required  to be disclosed  in the context  of judicial  proceedings. 

(i 

Page  213 

PART III 

PROCEDURAL  ARRANGEMENTS  ON  NOTIFICATION,  REVIEW, 
CONSULTATION  AND  DISPUTE  SETTLEMENT 

Article  4 

Institutions 

1. 
There  is  hereby established  a Committee  on  Rules  of  Origin (referred  to  in this  Agreement 
as "the Committee") composed of the represenutives from each of the Members.  The Committee shall 
elect  its own  Chairman  and shall  meet  as necessary,  but  not  less  than once  a year,  for  the  purpose 
of affording  Members the opportunity to consult on maners relating to the operation of Parts 1. II, III 
and IV  or  the  furtherance  of  the  objectives  set  out  in  these  Parts  and  to  carry  out  such  other 
responsibilities  assigned  to  it under this Agreement  or by  the Council  for  Trade  in Goods.  Where 
appropriate, the Committee shall request information and advice from the Technical Committee referred 
to in paragraph 2 on matters related to this Agreement.  The Committee  may also request such other 
work  from  the  Technical  Committee  as  it  considers  appropriate  for  the  furtherance  of  the  above-
mentioned  objectives  of  this  Agreement.  The  WTO  Secretariat  shall  act  as  the  secretariat  to  the 
Committee. 

There  shall  be  esublished  a Technical  Committee  on  Rules  of  Origin  (referred  to  in  this 
2. 
Agreement  as  "the Technical  Committee")  under the auspices of  the Customs  Co-operation  Council 
(CCC)  as set out  in Annex  I.  The Technical  Committee  shall carry put the technical  work called  for 
in  Part  IV  and  prescribed  in  Annex  1.  Where  appropriate,  the  Technical  Committee  shall  request 
information  and  advice  from  the  Committee  on  matters  related  to  this  Agreement.  The  Technical 
Comminee  may also request such other work from the Committee  as it considers appropriate for the 
furtherance  of  the above-mentioned  objectives  of  the Agreement.  The  CCC  Secretariat  shall  act as 
the  secretariat  to the Technical  Committee. 

Article  5 

Information and  Procedures for  Modification 
and  Introduction  of New Rules of  Origin 

Each Member shall provide to the Secreuriat,  within 90 days after the date of entry into force 
1. 
of the WTO Agreement for it, its mles of origin, judicial decisions, and administrative mlings of general 
application  relating  to  mles  of  origin  in effea  on that date.  If by  inadvertence  a mle  of  origin  has 
not been provided, the Member concerned shall provide it immediately after this fact becomes known. 
Lists of information  received and available with the Secretariat shall be circulated to the Members by 
the  Secreuriat. 

2. 
During  the period  referred  to  in  Article 2,  Members  introducing  modifications,  other than 
de  minimis modifications,  to their mles of origin or introducing  new mles  of  origin,  which,  for the 
purpose of  this  Article,  shall  include any mle  of  origin referred to  in paragraph  1 and not provided 
to the Secreuriat,  shall  publish a notice to that effea  at least 60 days before  the entry  into force  of 
the modified  or new  mle in such a manner as to enable interested parties to become acquainted with 
the  intention  to  modify  a  mle  of  origin  or  to  introduce  a  new  mle  of  origin,  unless  exceptional 
circumstances  arise or threaten to arise for a Member.  In these exceptional  cases, the Member shall 
publish the modified  or new mle  as soon as possible. 

Page  214 

Article  6 

Review 

1. 
The Committee  shall  review annually the implemenution  and operation of Parts II and III of 
this Agreement having regard to its objeaives.  The Comminee  shall annually inform the Council  for 
Trade  in Goods  of  developments  during the period covered  by such  reviews. 

The Committee  shall  review the provisions  of Parts I, II and III and propose amendments  as 

2. 
necessary  to reflea  the results  of  the harmonization  work programme. 

The  Committee,  in cooperation with the Technical  Comminee,  shall  set up a mechanism  to 
3. 
consider  and propose  amendments  to the results of  the harmonization  work programme,  uking  into 
.account the objectives and principles set out in Article 9.  This may include instances where the mles 
need to be made more operational or need to be updated to uke into account new production processes 
as affected  by  any  technological  change. 

Article  7 

Consultation 

The  provisions  of  Article  XXII  of  GATT  1994,  as  elaborated  and  applied  by  the  Dispute 

Settlement  Understanding,  are applicable  to this  Agreement. 

Article  8 

Dispute  Settlement 

The  provisions  of  Article  XXIII  of  GATT  1994,  as  elaborated  and  applied  by  the  Dispute 

Settlement  Understanding,  are applicable  to this  Agreement. 

PART IV 

HARMONIZATION  OF RULES  OF ORIGIN 

Objectives  and  Principles 

Article  9 

With  the objectives  of  harmonizing  mles of  origin and, inter  alia,  providing  more certainty 
1. 
in the conduct  of  world  trade,  the  Ministerial  Conference  shall  undertake  the work programme  set 
out below  in conjunction  with the CCC.  on the basis of the following  principles: 

(a) 

mles  of  origin should  be applied equally for all purposes as sa  out in Article  1; 

(b). 

mles  of  origin  should  provide  for  the  country  to  be  daermined  as  the  origin  of  a 
particular good to be either the country where the good has been wholly obuined or, 
when more than one country is concerned  in the produaion of the good, the country 
where  the last  substantial  transformation  has been carried out; 

Page  215 

(c) 

mles  of  origin should be objective,  understandable  and predicuble; 

(d) 

(e) 

(f) 

(g) 

notwithstanding the measure or instrument to which they may be linked, mles of origin 
should  not  be  used  as  instruments  to pursue  trade objectives  directly  or  indirectly. 
.They.should  not  themselves  create  restrictive,  distorting  or  disruptive  effects  on 
international  trade.  They  should hot pose  unduly  stria  requirements  or require the 
fulfilment  of  a  ceruin  condition  not  relating  to  manufacturing  or  processing  as  a 
prerequisite for the determination of the country of origin.  However, costs not directly 
related to manufacturing or processing may be included for purposes of the application 
of  an ad valorem percenuge criterion; 

rules of origin should be adrninistrable in a consistent, uniform, impartial and reasonable 
manner; 

mles  of  origin should  be coherent; 

mles  of  origin  should  be based  on a positive  standard.  Negative  standards  may  be 
used  to clarify  a positive standard. 

Work Programme 

(a) 

The work programme shall be initiated as soon after the entry into force of the WTO 

•  Agreement  as possible  and will  be completed  within three years of  initiation. 

(b) 

(c) 

The  Comminee  and the Technical  Comminee  provided  for  in Article 4  shall  be the 
appropriate  bodies  to conduct this work. 

To provide for deuiled  input by the CCC, the Comminee  shall request the Technical 
Committee to provide its interpretations and opinions resulting from the work described 
below on the basis of the principles listed in paragraph  1.  To ensure timely completion 
of the work programme for harmonization, such work shall be conducted on a product 
sector basis, as represented by various chapters or sections of the Harmonized System 
(HS)  nomenclature. 

(i) 

Wholly Obtained and Minimal Operations  or  Processes 

The Technical  Comminee  shall develop harmonized  definitions  of: 

the goods that are to be considered as being wholly obuined  in one country. 
This  work  shall  be as detailed  as possible; 

minimal  operations  or processes  that do not by themselves  confer  origin  to 
a good. 

The results of this work shall be submined to the Comminee  within three months of 
receipt  of  the request  from the Comminee. 

(ii) 

Substantial  Transformation  -  Change in Tariff Classification 

The Technical  Comminee shall  consider and elaborate upon, on the basis of 
the criterion of substantial transformation, the use of change in Uriff subheading 
or heading when developing mles of origin for particular products or a produa 

Page  216 

seaor  and, if appropriate, the minimum change within the nomenclature that 
meets  this criterion. 

The Technical Comminee shall divide the above work on a product basis uking 
into account the chapters or sections of the HS nomenclature,  so as to submit 
results of its work to the Committee at least on a quarterly basis.  The Technical 
Comminee  shall  complete the above work within one year and three months 
from  receipt of the request of the Comminee. 

(iii) 

Substantial Transformation  - Supplementary  Criteria 

Upon  completion  of  the  work  under  subparagraph  (ii)  for  each  product  sector  or 
individual product category where the exclusive use of the HS nomenclature does not 
allow  for the expression of  substantial  transformation,  the Technical  Committee: 

shall consider and elaborate upon, on the basis  of the criterion of substantial 
transformation,  the  use,  in  a supplemenury  or  exclusive  manner,  of  other 
requirements,  including  ad valorem  percentages4  and/or  manufacturing  or 
processing operations5, when developing mles of origin for particular products 
or a product  sector; 

may provide explanations  for  its proposals; 

shall divide the above work on a product basis taking into account the chapters 
or sections of the HS nomenclature, so as to submit  results of  its Work to the 
Committee  at  least  on  a  quarterly  basis.  The  Technical  Committee  shall 
complete  the above work within two years and three months of receipi of the 
request  from  the Committee. 

Role  of the  Committee 

3. 

On the basis  of the principles  listed  in paragraph  1: 

(a) 

the Comminee shall consider the interpretations and opinions of the Technical Comminee 
periodically  in accordance  with  the time-frames  provided  in subparagraphs  (i).  (ii) 
and (iii) of paragraph 2(c) with a view to endorsing such interpretations and opinions. 
The Committee  may request the Technical  Comminee  to refine or elaborate  its work 
and/or to develop new approaches.  To assist the Technical Committee, the Committee 
should provide its reasons for requests for additional work and, as appropriate, suggest 
alternative approaches; 

(b) 

upon  complaion  of  all  the  work  identified  in  subparagraphs  (i).  (ii)  and  (iii)  of 
paragraph 2(c).  the  Committee  shall  consider  the  results  in  terms  of  their  overall 
coherence. 

4lf  the ad  valorem criterion  is prescribed, the method for calculating this percenuge shall also be indicated in the rules 

of  origin. 

5If the criterion of manufacturing  or processing operation is prescribed, the operation mat confers origin on the - 

iuct 

concerned  shall  be  precisely  specified. 

Page  217 

Results  of the Harmonization  Work Programme and Subsequent  Work 

4. 
The Ministerial  Conference  shall esublish the results of the harmonization  work programme 
in an annex as an integral part of this Agreement.6  The Ministerial  Conference  shall esublish a time 
frame  for  the entry  into force  of this annex. 

ANNEX I 

TECHNICAL  COMMITTEE  ON  RULES  OF ORIGIN 

Responsibilities 

1. 

The  ongoing  responsibilities  of  the Technical  Committee  shall  include  the  following. 

(a) 

(b) 

(c) 

(d) 

at the request of any member of the Technical Committee, to examine specific technical 
problems  arising  in the day-to-day  administration  of the mles  of  origin  of  Members 
and to give advisory opinions on appropriate solutions based upon the facts presented : 

to furnish  information and advice on any maners concerning the origin determination 
of  goods  as may  be  requested  by any  Member  or the Committee; 

to prepare and circulate periodic reports on the technical aspects of the operation and 
status of  this  Agreement;  and 

to review annually the technical aspects of the implementation and operation of Parts II 
and III. 

The Technical Comminee shall exercise such other responsibilities as the Committee may request 

2. 
of  it. 

The  Technical  Committee  shall  attempt  to conclude  its work  on  specific  matters,  especially 

3. 
those  referred  to  it by  Members  or the Committee,  in a reasonably  short  period  of time. 

Representation 

4. 
Each Member shall have the right to be represented on the Technical Committee.  Each Member 
may  nominate  one  delegate  and  one  or  more  alternates  to  be  its  representatives  on  the  Technical 
Committee.  Such a Member so represented on the Technical  Committee  is hereinafter  referred  to as 
a  "member"  of trie Technical  Committee.  Represenutives  of  members  of  the Technical  Committee 
may be assisted by advisers at meetings of the  Technical Committee.  The WTO Secreuriat may also 
attend  such meetings  with observer  sutus. 

Members  of  the CCC  which are not  Members  of the WTO may  be  represented  at meetings 
5. 
of  the Technical  Committee  by one delegate  and one or more alternates.  Such represenutives  shall 
anend  meetings  of  the Technical  Committee  as observers. 

*At the same time, consideration shall be given to arrangements concerning the settlement of disputes relating to customs 

classification. 

Page  218 

6. 
Subject  to the approval  of  the Chairman of the Technical  Committee,  the  Secreury-General 
of  the  ÇCC  (referred  to  in  this  Annex  as  "the  Secretary-General")  may  invite  represenutives  of 
governments  which are neither  Members  of the WTO nor members  of the CCC  and representatives 
of  international  governmental  and trade organizations to anend meetings of the Technical  Comminee 
as  observers. 

Nominations of delegates, alternates and advisers to meetings of the Technical Comminee shall 

7. 
be made  to the  Secreury-General. 

Meetings  . 

8. 

The  Technical  Committee  shall  meet  as necessary,  but not  less  than once  a year. 

Pfocedures 

9. 

The Technical Committee shall elect its own Chairman and shall esublish its own procedures. 

COMMON  DECLARATION  WITH  REGARD  TO PREFERENTIAL  RULES  OF ORIGIN 

ANNEX II 

Recognizing that some Members apply preferential  mles.of origin, distinct from non-preferential 

1. 
mles  of  origin,  the  Members  hereby  agree  as  follows. 

2. 
For  the  purposes  of  this  Common  Declaration,  preferential  mles  of  origin  shall  be  defined 
as those laws, regulations and administrative determinations of general application applied by any Member 
to determine  whether goods qualify  for preferential  treatment  under contractual  or autonomous trade 
régimes  leading  to the granting  of  tariff  preferences  going  beyond  the application  of paragraph  1 of 
Article  I of  GATT  1994. 

3. 

The  Members  agree  to ensure that: 

(a) 

when they issue administrative determinations of general application, the requirements 
to  be  fulfilled  are clearly  defined.  In particular: 

.  (i) 

in cases where the criterion of change of uriff  classification  is applied, such 
a preferential mle of origin, and any exceptions to the mle. must clearly specify 
the subheadings or headings within the uriff  nomenclature that are addressed 
by  the mle; 

(ii) 

(iii) 

in cases where the ad valorem percentage criterion is applied, the method for 
calculating  this percentage shall also be  indicated  in the preferential  mles  of 
origin; 

in  cases  where  the  criterion  of  manufacturing  or  processing  operation  is 
prescribed,  the  operation  that  confers  preferential  origin  shall  be  precisely 
specified: 

(b) 

their preferential  mles of origin are based on a positive standard.  Preferential  mles 
of  origin that  sute  what does not  confer  preferential  origin  (negative  standard ) are 

Page 219 

(c) 

(d) 

(e) 

(f) 

(g) 

permissible as part of a clarification of a positive standard or in individual cases where 
a positive  determination  of preferential  origin  is not necessary; 

their  laws,  regulations,  judicial  decisions  and  administrative  mlings  of  general 
application relating to preferential mles of origin are published as if they were subject • 
to,  and in accordance with, the provisions of paragraph  1  of Article  X of GATT  1994; 

upon request of an exporter, importer or any person with a justifiable cause, assessments 
of the preferential  origin they would accord to a good are issued as soon as possible 
but no  later than  150 days7 after  a request  for  such an assessment  provided  that all 
necessary  elements  have  been  submitted.  Requests  for  such  assessments  shall  be 
accepted before trade in the good concerned begins and may be accepted at any later 
point  in time.  Such assessments  shall remain valid for three years provided  that the 
facts and conditions, including the preferential  mles of origin, under which they have 
been made remain comparable.  Provided that the parties concerned are informed  in 
advance,  such  assessments  will  no  longer  be  valid  when  a decision  contrary  to  the 
assessment  is made  in a review as referred  to in subparagraph  (f).  Such assessments 
shall  be made publicly  available  subjea  to the provisions  of subparagraph  (g); 

when introducing changes to their preferential mles of origin or new preferential  mles 
of  origin,  they  shall  not apply such changes  retroactively  as defined  in, and without 
prejudice  to,  their  laws or regulations; 

'  any administrative action which they uke in relation to the determination of preferential 
origin  is  reviewable  promptly  by  judicial,  arbitral  or  administrative  tribunals  or 
procedures,  independent  of the  authority  issuing  the determination,  which can  effect 
the modification  or reversal  of  the determination; 

all information that is by nature confidential  or that is provided on a confidential  basis 
for  the purpose of  the application  of preferential  mles  of origin  is treated as  strictly 
confidential by the authorities concerned, which shall not disclose it without the  specific 
permission of the  person or government providing such information, except to the extent 
that  it may be required to be disclosed  in the context  of judicial  proceedings. 

Members agree to provide to the Secreuriat promptly their preferential mles of origin, including 
4. 
a  listing  of  the preferential  arrangements  to which they apply, judicial  decisions,  and administrative 
mlings of general application relating to their preferential  mles of origin in effect  on the date of entry 
into force of the WTO  Agreement for the Member concerned.  Furthermore, Members agree to provide 
any  modifications  to their preferential  mles  of origin or  new preferential  mles  of origin  as  soon  as 
possible  to the Secraariat.  Lists of  information received and available with the Secreuriat shall  be 
circulated  to the  Members  by the  Secreuriat. 

In  respect of requests made during  the first year from entry  into force  of the WTO Agreement,  Members shall  only 

be  required to issue these  assessments as soon as possible. 

Page 220 

AGREEMENT  ON  IMPORT  LICENSING  PROCEDURES 

Page 221 

Members, 

Having  regard  to the  Multilateral  Trade  Negotiations; 

Desiring  to further the objectives  of GATT  1994; 

Taking into account the particular trade, development and financial needs of developing country 

Members; 

Recognizing  the usefulness  of  automatic  import  licensing  for  certain purposes  and that  such 

licensing  should  not be used  to restrict trade; 

Recognizing mat import licensing may be employed to administer measures such as those adopted 

pursuant  to the  relevant provisions  of  GATT  1994; 

Recognizing  the provisions  of  GATT  1994  as they  apply  to  import  licensing  procedures; 

Desiring  to ensure that  import  licensing  procedures  are not utilized  in a manner  contrary to 

the principles  and  obligations  of  GATT  1994; 

Recognizing  that the flow  of international trade could be impeded by the inappropriate use of 

import  licensing  procedures; 

Convinced  that  import  licensing,  particularly  non-automatic  import  licensing,  should  be 

implemented  in a transparent  and predictable manner; 

Recognizing  that  non-automatic  licensing  procedures  should  be  no  more  administratively 

burdensome  than absolutely  necessary  to administer  the  relevant measure; 

Desiring  to simplify,  and bring transparency to, the administrative  procedures and  practices 
used inintemational  trade, and to ensure the fair and equiuble application and administration of such 
procedures  and practices; 

Desiring  to  provide  for  a  consulutive  mechanism  and  the  speedy,  effective  and  equitable 

resolution  of  disputes  arising  under mis  Agreement; 

Hereby agree  as  follows: 

Article  1 

General Provisions 

1. 
For the purpose of this Agreement,  import licensing  is defined  as administrative procedures' 
used for the operation of import licensing régimes requiring the submission of an application or other 
documentation  (other than that required for customs purposes) to the relevant administrative  body as 
a prior condition  for  importation  into the customs  territory  of  the importing  Member. 

'Those  procedures  referred  to as  "licensing" as  well  as other  similar  administrative  procedures. 

Page  222 

2. 
Members  shall  ensure that the administrative procedures used to in-  lement  import  licensing 
régimes are in conformity with the relevant provisions of GATT  1994 including its annexes and protocols, 
as  interpreted by this Agreement,  with a view  to preventing  trade distortions  that may arise  from an 
inappropriate operation of those procedures, uking  into account the economic development  purposes 
and financial  and trade needs of  developing  country  Members.2 

The  mles  for  import  licensing procedures shall  be neutral  in .application and administered  in 

3. 
a  fair  and equiuble  manner. 

(a) 

4. 
The mles and all information concerning procedures for the submission of applications, 
including the eligibility of persons, firms and institutions to make such applications, the administrative 
body(ies)  to  be  approached,  and  the  lists  of  products  subject  to  the  licensing  requirement  shall  be 
published,  in  the  sources  notified  to  the  Committee  on  Import  Licensing  provided  for  in  Article  4 
(referred  to in this Agreement  as  "the Committee"),  in such a manner as to enable governments3 and 
traders to become  acquainted with them.  Such publication shall uke place, whenever practicable. 21 
days prior to the effective  date of the requirement but in all  events not  later than such effective  date. 
Any  exception,  derogations  or changes  in or from  the  mles  concerning  licensing  procedures  or the 
list  of products subject to import  licensing shall also be published  in the same manner and within the 
same  time  periods  as  specified .above.  Copies  of  these  publications  shall  also  be made  available  to 
the  Secretariat. 

(h) 

Members  which wish to make comments in writing shall be provided the opportunity 
to discuss these comments upon request.  The concerned Member shall give due consideration to these 
comments  and  results  of  discussion. 

5. 
Application forms  and. where applicable, renewal forms shall be as simple as possible.  Such 
documents and information as are considered strictly necessary for the proper functioning of the licensing 
régime  may  be  required  on application. 

Application procedures and. where applicable, renewal procedures shall be as simple as possible. 
6 
Applicants  shall  be  allowed  a reasonable  period  for the  submission  of  licence  applications.  Where 
there is a closing date, this period should be at least 21 days with provision for extension in circumstances 
where insufficient  applications have been received within this period.  Applicants shall have to approach 
only  one administrative  body  in connection with an application.  Where it is strictly  indispensable to 
approach  more  than one  administrative  body,  applicants  shall  not need  to approach more  than three 
administrative  bodies. 

No application shall be refused  for minor documentation errors which do  ot alter basic data 
7. 
contained  therein.  No penalty  greater than necessary  to serve merely  as a warning  shall be imposed 
in respect of any omission or mistake in documentation or procedures which is obviously made without 
fraudulent  intent  or gross  negligence. 

8. 
Licensed  imports shall  not be refused  for minor variations in value, quantity  or weight  from 
the amount designated on the licence due to differences occurring during shipment, differences incidental 
to  huVs loading  and other minor differences  consistent  with normal  commercial  practice.. 

''Nothing in this Agreement shall he uken as implying that the basis, scope or duration of a measure being implemented 

by  a  licensing  procedure  is subject  to question  under this  Agreement. 

'For the purpose of this Agreement, the term "governments" is deemed to include the competent authorities of the European 

Communities. 

Page  223 

The foreign exchange necessary to pay for licensed  imports shall be made available to licence 

9. 
holders  on the same  basis as to  importers  of goods  not requiring  import  licences. 

10.  With  regard to security  exceptions,  the provisions  of  Article  XXI  of  GATT  1994 apply. 

11. 
The  provisions  of  this  Agreement  shall  not  require  any  Member  to  disclose  confidential 
information  which  would  impede  law enforcement  or otherwise .be contrary  to the public  interest or 
would  prejudice  the  legitimate  commercial  interests of particular enterprises,  public or private. 

Article  2 

Automatic Import Licensing* 

Automatic  import  licensing  is defined  as  import licensing  where approval  of the application 

1. 
is granted  in all  cases,  and which  is  in accordance with the requirements  of paragraph 2(a). 

The  following  provisions5,  in addition to those  in paragraphs  1 through  11 of  Article  1 and 

2. 
paragraph  1 of  this  Article,  shall  apply  to automatic  import  licensing  procedures: 

(a) 

automatic licensing procedures shall not be administered  in such a manner as to have 
restricting  effects  on  imports  subject  to  automatic  licensing.  Automatic  licensing 
procedures  shall  be deemed  to have trade-restricting  effects  unless,  inter  alia: 

(i) 

(ii) 

(iii ) 

any  person,  firm  or  institution  which  fulfils  the  legal  requirements  of  the 
importing Member for engaging in import operations involving products subjea 
to  automatic  licensing  is  equally  eligible  to  apply  for  and to  obuin  import 
licences; 

applications  for  licences  may be  submitted  on any  working  day prior  to the 
customs  clearance of the goods; 

applications for licences when submined in appropriate and complete form are 
approved immediately  on receipt, to the extent administratively  feasible,  but 
within a maximum  of  10 working days; 

(b) 

Members recognize mat automatic import licensing may be necessary whenever other 
appropriate procedures are not available.  Automatic import licensing may be maintained 
as  long  as the circumstances  which gave rise to  its  introduction prevail  and as  long 
as  its  underlying  administrative  purposes  cannot be -achieved  in a more  appropriate 
wav 

Those  import licensing procedures requiring a security which have no restrictive effects on imports are to be considered 

as  falling  within  the scope  of  paragraphs  1 and 2. 

5A developing country Member, other than a developing country Member which was a Party to the Agreement on Import 
Licensing  Procedures done on  12 April  1979. which has specific  difficulties  with the requirements of subparagraphs  (a)(ii) 
and (aKiii) may. upon notification to the Committee, delay the application of these subparagraphs by not more than two years 
from  the  date  of  entry  into force  of  the  WTO  Agreement  for  such  Member. 

Page  224 

Article  3 

Non-Automatic Import Licensing 

The following  provisions,  in addition to those in paragraphs  1  through  11 of Article  1,  shall 
1.. 
apply to non-automatic  import licensing procedures.  Non-automatic  import  licensing procedures are 
defined  as  import  licensing  not falling  within the definition  contained  in paragraph  1 of  Article  2. 

2. 
Non-automatic licensing shall not have trade-restriaive or -distortive effects on imper--, additional 
to those caused by the imposition of the restriction.  Non-automatic licensing procedures shall correspond 
in scope and duration to the measure they are used to implement, and shall be no more administratively 
burdensome  than absolutely  necessary  to administer  the measure. 

In the case of licensing requirements for purposes other than the implementation of quantitative 
3. 
restrictions. Members shall publish sufficient, infonnation  for other Members and traders to know the 
basis  for  granting  and/or allocating  licences. 

Where a Member provides the possibility for persons, firms or institutions to request exceptions 
4. 
or derogations from a licensing requirement, it shall include this fact in the information published under 
paragraph 4 of Article  1 as well as information on how to make such a request and, to the extent possible, 
an  indication  of  the circumstances  under which  requests would  be considered. 

5. 

(a) 

.  Members shall provide, upop the request of any Member having an interest in the trade 

in the product  concerned,  all  relevant  information  concerning: 

(i) 

the administration  of the restrictions; 

(ii) 

the  import  licences  granted  over a recent period; 

(iii) 

(iv) 

the distribution  of  such  licences  among  supplying  countries; 

where  practicable,  import  sutistics  (i.e.  value  and/or  volume)  with  respect 
to the products subjea to import licensing.  Developing country Members would 
not be expected to take additional  administrative  or financial burdens on this 
account; 

(b) 

(c) 

Members administering quotas by means of licensing shall publish the overall amount 
of quotas to be applied by quantity and/or value, the opening and closing dates of quotas, 
and any change thereof,  within the time periods specified  in paragraph 4 of  Article 1 
and in such a manner as to enable governments and traders to become acquainted with 
them; 

in the case of quotas allocated among  supplying  countries, the Member applying  the 
restrictions shall promptly  inform all other Members  having an interest  in supplying 
the product  concerned  of the shares  in the quota  currently  allocated,  by quantity  or 
value, to the various supplying countries and shall publish this information within the 
time periods specified  in paragraph 4  of  Article  1 and in such a manner as to enable 
governments  and traders to become  acquainted  with them; 

(d) 

where situations arise  which make  it necessary  to provide  for an early opening  date 
of quotas, the information referred to in paragraph 4 of Article  1  should be published 

Page  225 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

within  the time  periods  specified  in paragraph 4  of  Article  1 and  in such  a manner 
. as to enable  governments  and traders to become  acquainted  with mem; 

any person, firm or institution which fulfils  the legal and administrative  requirements 
pf the  importing  Member  shall be equally  eligible  to apply  and to be considered  for 
a licence.  If the licence  application is not approved,  the applicant  shall,  on  request, 
be given the reason therefor and shall have a right of appeal or review  in accordance 
with the domestic  legislation or procedures  of  the  importing  Member; 

'the period for processing applications shall, except when not possible for reasons outside 
the control  of the Member,  not be longer than 30 days  if applications  are considered 
as  and when received,  i.e.  on a first-come first-served basis,  and no  longer than  60 
days  if  all applications  are considered  simultaneously.  In the  latter case,  the period 
for processing applications shall be considered to begin on the day following the closing 
date of  the announced  application period; 

the period  of  licence  validity  shall  be of  reasonable  duration  and  not  be  so  short  as 
to preclude  imports.  The period of  licence  validity  shall  not  preclude  imports  from 
distant sources, except in special cases where imports are necessary to meet unforeseen 
short-term  requirements; 

. when administering quotas, Members shall not prevent importation from being effected 
in accordance with the issued licences, and shall  not discourage  the full  utilization of 
quotas; 

when  issuing  licences.  Members  shall  take  into  account  the  desirability  of  issuing 
licences  for products  in economic  quantities; 

in  allocating  licences,  the  Member  should  consider  the  import  performance  of  the 
applicant.  In this regard, consideration should be given as to whether licences  issued 
to applicants in the past have been fully utilized during a recent representative period. 
In cases  where  licences  have not  been  fully  utilized,  the  Member  shall  examine  the 
reasons for this and uke these reasons into consideration when allocating new licences. 
Consideration  shall  also be given to ensuring a reasonable distribution  of  licences  to 
new importers, uking  into account the desirability of issuing  licences for products  in 
economic  quantities.  In this  regard,  special  consideration  should  be  given  to  those 
importers  importing  products  originating  in  developing  country  Members  and,  in 
particular,  the least-developed country  Members; 

(k) 

in the  case  of  quotas  administered  through  licences  which  are  not  allocated  among 
supplying  countries,  licence holders" shall  be free to choose  the sources  of  imports. 
In the case  of  quotas  allocated  among  supplying  countries,  the  licence  shall  clearly 
stipulate  the country  or countries; 

(1) 

in applying paragraph  8 of Article  1, compensating adjustments may be made in future 
licence  allocations  where  imports  exceeded  a previous  licence  level. 

•Sometimes  referred  to as "quou holders" 

Page  226 

Article  4 

Institutions 

There  is  hereby  esublished  a Committee  on  Import  Licensing  composed  of  represenutives 
from each of the Members.  The Committee shall elect its own Chairman and Vice-Chairman and shall 
meet as necessary  for the purpose of affording  Members the opportunity of consulting on any matters 
relating  to the  operation of this  Agreement  or the furtherance  of  its  objectives. 

Article  5 

Notification 

Members  which institute licensing procedures or changes in these procedures shall notify  the 

1. 
Committee  of  such  within 60 days of  publication. 

Notifications  of  the  institution  of  import  licensing  procedures  shall  include  the  following 

2. 
information: 

(a) 

list  of  products  subject to licensing  procedures; 

(b) 

contact  point  for  information  on  eligibility; 

(c) 

administrative  body(ies)  for  submission  of  applications; 

(d) 

date and name of  publication where  licensing  procedures  are nublished; 

(e) 

indication of whether the licensing procedure is automatic or non-automatic according 
to definitions  contained  in Articles  2  and 3; 

(0 

in the case of  automatic  import  licensing  procedures,  their administrative  purpose: 

(g) 

(h) 

in the case  of  non-automatic  import  licensing  procedures,  indication  of  the  measure 
being  implemented  through the licensing  procedure; and 

expected  duration  of  the  licensing  procedure  if  this  can  be  estimated  with  some 
probability,  and  if not.  reason why  this  information  cannot  be provided. 

Notifications  of changes in import licensing procedures shall indicate the elements mentioned 

3. 
above,  if changes  in such occur. 

Members  shall  notify  the Committee  of the publication(s)  in which the infonnation  rec<4 red 

4. 
in paragraph 4  of  Article  1 will  be published. 

5. 
Any  interested  Member which considers that another Member has not notified  the institution 
of a licensing procedure or changes therein in accordance with the provisions of paragraphs  1 through  3 
may  bring  the  matter  to the  attention of  such other  Member.  If notification  is  not made  promptly 
thereafter,  such  Member  may  itself  notify'  the licensing  procedure  or changes  therein,  including  all 
relevant  and available  information. 

Page  227 

Article  6 

Consultation and Dispute Settlement 

Consulutions  and the settlement of disputes with respect to any matter affecting  the operation 
of  this  Agreement  shall  be subject  to the provisions  of  Articles  XXII  and XXIII  of  GATT  1994,  as 
elaborated  and applied by the Dispute  Settlement  Understanding. 

Article  7 

Review 

1. 
The Committee shal 1 review as necessary, but at least once every two years, the implemenution 
and operation of this Agreement, taking into account the objectives thereof, and the rights and obligations 
contained  therein. 

2. 
As a basis  for the Committee  review,  the Secreuriat  shall  prepare a factual  report based on 
information  provided  under  Anicle  5,  responses  to  the  annual  questionnaire  on  import  licensing 
procedures" and other relevant reliable information which is available to it.  This report shall provide 
a  synopsis  of  the aforementioned  information,  in particular  indicating  any changes  or developments 
during  the period  under review,  and  including  any other information  as agreed by the Committee. 

Members undertake to complete the annual questionnaire on import licensing procedures promptly 

3 
and  in  full. 

The Committee shall inform the Council for Trade in Goods of developments during the period 

4. 
covered  bv  such  reviews. 

Article  8 

Final Provisions 

Reservations 

1 

Reservations may not be entered in respect of any  of the provisions of this Agreement without 

the consent  of  the other Members. 

Domestic  Legislation 

2. 

(a) 

Each  Member  shall  ensure,  not  later than the  date  of  entry  into  force  of  the  WTO 
Agreement for it. the conformity of its laws, regulations and administrative procedures 

.  with the provisions  of  this Agreement. 

(b) 

Each  Member shall inform the Committee of any changes in its laws and regulations 
relevant  to this Agreement  and in the administration  of  such  laws and regulations. 

'Originally  circulated as GATT  1947 document  L/3515 of 23  March  1971. 

Page 228 

(i 

AGREEMENT  ON  SUBSIDIES  AND  COUNTERVAILING  MEASURES 

Page  229 

Members  hereby agree  as  follows: 

PARTI:  GENERAL  PROVISIONS 

Article  1 

Definition of a Subsidy 

1.1 

For the purpose of  this  Agreement,  a subsidy  shall  be deemed  to exist  if: 

(a)( 1 ) 

there is a financial contribution by a government or any public body within the territory 
of  a Member  (referred  to in this Agreement  as  "government"),  i.e.  where: 

(i) 

a government  practice  involves a direct transfer of  funds  (e.g.  grants,  loans, 
and equity infusion), potential direct transfers of funds or liabilities (e.g.  loan 
guarantees); 

(ii) 

'government  revenue  that  is  otherwise  due  is  foregone  or  not  collected  (e.g. 
.  fiscal  incentives  such as tax credits)1; 

(iii) 

(iv) 

a government  provides  goods  or  services  other  than  general  infrastructure, 
or purchases  goods; 

a government makes payments to a funding mechanism,  or entrusts or directs 
a private  body  to  carry  out  one  or more  of  the type  of  functions  illustrated 
in (i)  to (iii)  above  which would  normally  be vested  in the  government  and 
the  practice,  in  no  real  sense,  differs  from  practices  normally  followed  by 
governments; 

or 

(a)(2) 

there is any form of income or price support in the sense of Article  XVI of GATT  1994; 

(b) 

a benefit  is thereby  conferred. 

and 

A  subsidy  as  defined  in paragraph  1 shall  be subject  to  the provisions  of  Part  II or shall  be 
1.2 
subject  to  the provisions  of  Part III  or V  only  if  such  a  subsidy  is  specific  in  accordance  with  the 
provisions  of  Article  2. 

'In accordance with the provisions of Article XVI of GATT 1994 (Note to Article XVI) and the provisions of Annexes 
I through III of this Agreement,  the exemption of an exported product from duties or taxes borne by the like product when 
destined  for domestic consumption, or the remission of such duties or uxes  in amounts not in excess of those which  have 
accrued,  shall  not be deemed to be a subsidy. 

Page  230 

Article  2 

Specificity 

In order  to determine  whether a subsidy,  as defined  in paragraph  1 of  Article  1,  is  specific 
2.1 
to an enterprise or industry or group of enterprises or industries (referred to in this Agreement as "certain 
enterprises")  within  the jurisdiction  of the granting  authority,  the following  principles  shall  apply: 

(a) 

Where the granting authority, or the legislation pursuant to which the granting authority 
operates, explicitly limits access to a subsidy to certain enterprises, such subsidy shall 
be  specific. 

(b)  Where the granting authority, or the legislation pursuant to which the granting authority 
operates, establishes objective criteria or conditions2 governing the eligibility for, and 
the amount  of,  a subsidy,  specificity  shall  not  exist,  provided  that the  eligibility  is 
automatic  and that  such criteria  and conditions  are strictly  adhered  to.  The  criteria 
or conditions must be clearly spelled out in law, regulation, or other official  document, 
so  as to be capable of  verification. 

(c) 

If,  notwithstanding  any appearance  of  non-specificity  resulting  from  the  application 
of the principles  laid down in subparagraphs (a) and (b), there are reasons to believe 
that the subsidy may in fact be specific, other factors may be considered.  Such factors 
are:  use  of  a  subsidy  programme  by  a  limited  number  of  certain  enterprises, 
predominant use by certain enterprises, the granting of disproportionately large amounts 
of subsidy to certain enterprises, and the manner in which discretion has been exercised 
by  the  granting  authority  in  the  decision  to  grant  a  subsidy.3 
In  applying  this 
subparagraph,  account  shall  be  taken  of  the  extent  of  diversification  of  economic 
activities  within the jurisdiction of the granting  authority,  as well  as of the length of 
time during  which  the subsidy  programme  has been  in operation. 

A subsidy which is limited to certain enterprises located within a designated geographical region 
2.2 
within the jurisdiction of the granting authority shall  be specific.  It is understood  that the setting  or 
change of generally applicable tax rates by all levels of government entitled to do so shall not be deemed 
to be  a specific  subsidy  for the purposes  of  this  Agreement. 

2.3 

Any  subsidy  falling  under the provisions of  Article  3 shall  be deemed  to be  specific. 

Any determination of specificity  under the provisions of this Article shall be clearly substantiated 

2.4 
on  the  basis  of  positive  evidence. 

^Objective criteria or conditions, as used herein, mean criteria or conditions which are neutral, which do not favour certain 
enterprises  over others,  and which are economic  in nanire and horizonul  in application,  such as number of  employees or 
size  of  enterprise. 

'In this regard, in particular, information on the frequency with which applications for a subsidy are refused or approved 

and  the  reasons  for  such  decisions  shall  be considered. 

. 

Page 231  • 

PART  II:  PROHIBITED  SUBSIDIES 

Article  3 

Prohibition 

Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning 

3.1 
of  Article  1,  shall  be prohibited: 

(a) 

(b) 

subsidies  contingent,  in  law  or  in  fact4,  whether  solely  or  as  one  of  several  other 
conditions,  upon export performance,  including  those  illustrated  in Annex Is; 

subsidies  contingent,  whether solely  or as one of  several  other conditions,  upon the 
use of  domestic  over  imported goods. 

» 

3.2 

A  Member shall  neither grant nor maintain subsidies  referred  to in paragraph  1. 

Article  4 

Remedies 

4.1  Whenever  a  Member  has  reason  to  believe  that  a  prohibited  subsidy  is  being  granted  or 
maintained  by  another Member,  such Member may  request consultations  with such other Member. 

A request  for consultations under paragraph  1  shall include a statement  of available evidence 

4.2 
with  regard to  the existence  and nature of  the subsidy  in question. 

4.3 
Upon  request  for  consultations  under  paragraph  1,  the  Member  believed  to  be  granting  or 
maintaining  the subsidy  in question  shall  enter  into such consultations  as quickly  as possible.  The 
purpose  of  the  consultations  shall  be  to clarify  the facts  of the  situation and to arrive  at a mutually 
agreed  solution. 

If no mutually  agreed solution has been reached within 30 days6 of the request for consultations, 
4.4 
any Member party to such consultations may refer the matter to the Dispute Settlement Body ("DSB") 
for  the  immediate  establishment  of  a panel,  unless  the  DSB decides  by consensus  not to establish a 
panel. 

Upon its establ ishment. the panel may request the assistance of the Permanent Group of Experts7 
4.5 
(referred  to  in  this  Agreement  as the  "PGE")  with regard to  whether  the  measure  in question  is  a 
prohibited  subsidy.  If so requested, the PGE shall  immediately  review  the evidence  with regard to 

This  standard is met when the facts demonstrate mat the granting of a subsidy, without having been made legally contingent 
upon export performance,  is in fact tied to actual or anticipated exportation or export earnings. The mere fact dut a subsidy 
is granted to enterprises which export shall not for that reason alone be considered to be an export subsidy within the meaning 
of  this provision. 

'Measures referred to in Annex I as not constituting export subsidies shall not be prohibited under this or any other provision 

of  this  Agreement. 

*Any  time-periods  mentioned  in this Anicle  may be extended  by  mutual  agreement. 

'As established  in Article  24. 

Page  232 

the existence  and nature of the measure  in question and shall provide an opportunity for the Member 
applying  or maintaining  the measure to demonstrate  that the measure  in question  is not a prohibited 
subsidy.  The PGE shall report its conclusions to the panel within a time-limit determined by the .panel. 
The PGE's conclusions on the issue of whether or not the measure in question is a prohibited subsidy 
shall  be  accepted  by  the panel  without  modification. 

4.6 
The panel shall submit its final report to the parties to the dispute.  The report shall be circulated 
to all Members within 90 days of the date pf the composition and the establishment of the panel's terms 
of  reference. 

4.7 
If the measure in question is found to be a prohibited subsidy, the panel shall recommend that 
the subsidizing  Member  withdraw the subsidy without delay.  In this regard, the panel  shall  specify-
in'its  recommendation  the time-period  within which the measure  must  be withdrawn. 

4.8  Within 30 days of the issuance of the  panel's report to all Members, the report shall be adopted 
by the DSB unless one of the parties to the dispute formally  notifies  the DSB of its decision to appeal 
or the  DSB  decides  by  consensus  not to adopt the report. 

4.9  Where a panel  report  is appealed,  the Appellate  Body  shall  issue  its decision  within 30 days 
from the date when the party to the dispute formally notifies its intention to appeal.  When the Appellate 
Body  considers  that it cannot provide  its report within 30 days,  it shall  inform the DSB  in writing of 
the reasons for the delay together with an estimate of the period within which it will submit its report. 
In no case  shall  the proceedings  exceed  60 days.  The appellate  report shall  be adopted by  the  DSB 
and  unconditionally  accepted  by  the parties  to the dispute unless  the DSB  decides  by  consensus  not 
to adopt  the appellate  report within  20 days  following  its  issuance  to the Members.8 

In the event  the recommendation  of the DSB is not followed  within the time-period  specified 
4.10 
by the panel,  which shu : commence  from  the date of adoption of the panel's  report or the  Appellate 
Body's  report,  the  DSB  shall  grant  authorization  to  the  complaining  Member  to  take  appropriate* 
countermeasures.  unless  the  DSB decides  by consensus  to reject  the  request. 

4. ; ; 
In the event  a party to the dispute  requests arbitration under paragraph 6 of Article 22 of the 
Dispute Settlement Understanding ( "DSU"). the arbitrator shall determine whether the countermeasures 
are appropriate.1" 

4.12 
For purposes of disputes conducted pursuant to this Article, except for time-periods  specifically 
prescribed in this Article, time-periods applicable under the DSU for the conduct of such disputes shall 
be  half  the time  prescribed  therein. 

'if  a  meeting  of  the  DSB  is not scheduled  during  this period,  such a meeting  shall  be  held  for  this  purpose. 

*This expression  is not meant to allow  countermeasures  that are disproportionate  in light of  the fact  that the  subsidies 

dealt  with  under  these  provisions  are prohibited. 

"This expression  is not meant to allow countermeasures that are disproportionate  in light of the fact  that the subsidies 

dealt  with  under  these  provisions  are  prohibited. 

Page 233 

PART  HI:  ACTIONABLE  SUBSIDIES 

Article  5 

Adverse Effects 

No  Member  should cause,  through the use of any subsidy  referred  to  in paragraphs  1 and  2 

of  Article  1,  adverse  effects  to the  interests of other Members,  i.e.: 

(a) 

(b) 

injury to the domestic  industry  of another Member11; 

nullification or impairment of benefits accming directly or indirectly to other Members 
under GATT  1994 in particular the benefits  of concessions  bound under Article  II of 
GATT  199412; 

(c) 

serious prejudice  to the interests of  another  Member.13 

This Article does not apply to subsidies maintained on agricultural  products as provided  in Article  13 
of  the  Agreement  on  Agriculture. 

Article  6 

Serious .Prejudice 

Serious prejudice in the sense of paragraph (c) of Article  5 shall be deemed to exist  in the case 

6.1 
of: 

(a) 

the total  ad valorem  subsidization14 of  a product exceeding  5 per cent15; 

(b) 

subsidies  to cover  operating  losses  sustained  by  an industry; 

(c) 

subsidies  to  cover  operating  losses  sustained  by  an  enterprise,  other  than  one-time 
measures which are non-recurrent and cannot be repeated for that enterprise and  which 
are given merely  to provide time for the development  of  long-term  solutions  and to 
avoid  acute social  problems; 

"The  term  "injury to the  domestic  industry" is used  here  in the same  sense  as it is used  in Pan  V. 

"The term "nullification or impairment" is used in this Agreement in the same sense as it is used in the relevant provisions 
of  GATT  1994,  and  the existence of such  nullification  or impairment shall be esublished  in accordance  with the  practice 
of  application  of these  provisions. 

"The term  "serious prejudice  to the interests of another Member" is used in this Agreement  in the same  sense as it is 

used  in paragraph  1 of Anicle  XVI of GATT  1994.  and  includes  threat of serious  prejudice. 

"The  toul  ad valorem  subsidization  shall  be calculated  in accordance  with  the provisions  of Annex IV. 

"Since it is anticipated that civil aircraft  will be subject to specific  multilateral rules, the threshold  in this subparagraph 

does  not apply  to civil  aircraft. 

Page  234 

(d)  -  direct forgiveness of debt, i.e. forgiveness of government-held debt, and grants to cover 

debt repayment.16 

.  Notwithstanding  the  provisions  of  paragraph  1,  serious  prejudice  shall  not  be  found  if  the 
6.2 
subsidizing  Member  demonstrates  that the subsidy  in question  has not  resulted  in any  of  the  effects 
enumerated  in paragraph 3. 

Serious prejudice  in the sense of paragraph (c) of  Article  5 may arise in any case where one 

6.3 
or several  of  the  following  apply: 

(a) 

(b) 

(c) 

(d) 

the effect of the subsidy is to displade or impede the imports of a like product of another 
Member  into the market  of  the subsidizing  Member; 

the effect of the subsidy is to displace or impede the exports of a like product of another 
Member  from  a third country market; 

the effect  of  the subsidy  is a significant  price undercutting  by the subsidized product 
as compared  with the price of a like product  of another  Member  in the same market 
or significant  price suppression,  price depression or lost  sales  in the same market:. 

the effect  of  the subsidy  is an  increase  in the  world  market  share  of  the  subsidizing 
Member  in a particular subsidized  primary  product  or  commodity'7  as compared  to 
the  average  share  it  had during the previous  period  of  three  years  and this  increase 
follows  a consistent  trend over a period  when subsidies  have been granted. 

For the purpose of paragraph 3(b). the displacement  or impeding of exports shall include any 
6.4 
case  in which,  subject  to the provisions of paragraph 7,  it has been demonstrated  that there has been 
a change  in relative shares of the market to the disadvantage of the non-subsidized  like product (over 
an appropriately  representative period sufficient  to demonstrate clear trends in the development  of  the 
market for the product concerned, which, in normal circumstances, shall be at least one year).  "Change 
in relative shares of the market" shall  include any of the following  situations:  (a) there is an increase 
in the market share of the subsidized product:  (b) the market share of the subsidized product remains 
constant  in circumstances  in which,  in the  absence  of  the  subsidy,  it  would  have  declined:  (c) the 
market  share of  the subsidized  product  declines,  but at a slower  rate than would  have been the case 
in the  absence  of  the subsidy. 

6.5 
For  the  purpose  of  paragraph  3(c).  price  undercutting  shall  include  any  case  in which  such 
price  undercutting  has been demonstrated  through a comparison  of  prices of  the subsidized  product 
with prices of  a non-subsidized  like product  supplied  to the same market.  The comparison  shall  be 
made at the same  level of trade and at comparable times, due account being taken of any other factor 
affecting  price comparability.  However,  if such a direct comparison  is not possible,  the existence  of 
price  undercutting  may  be demonstrated  on the basis of  export  unit values. 

6.6 
Each Member  in the market of which serious prejudice is alleged to have arisen shall, subject 
to the provisions of paragraph 3 of  Annex  V. make available to the parties to a dispute arising under 
Article 7.  and to the panel  established pursuant to paragraph 4  of Article  7,  all relevant information 

••Members  recognize  that where  royalty-based  financing  for a civil  aircraft  programme  is not being  fully  repaie  -.\.e 
to the level of actual sales falling  below the level of forecast sales, this does not in itself constitute serious prejudice fo-  •••'• 
purposes of this  subparagraph. 

"Unless other multilaterally  agreed  specific  rules apply to the trade  in the product or commodity  in question. 

Page  235 

that can be obtained as to the changes in market shares of the parties to the dispute as well as concerning 
prices  of  the products  involved. 

Displacement  or impediment  resulting  in serious prejudice shall  not arise under paragraph 3 

6.7 
where any  of the following  circumstances  exist18 during the relevant period: 

(a) 

(b) 

(c) 

prohibition or restriction on exports of the like product from the complaining Member 
or on imports from the complaining Member into the third country market concerned; 

decision by an importing government operating  a monopoly  of trade or state trading 
in  the  product  concerned  to  shift,  for  non-commercial  reasons,  imports  from  the 
complaining  Member  to another country or countries; 

natural  disasters,  strikes,  transport  disruptions  or  other force  majeure substantially 
affecting production, qualities, quantities or prices of the product available for export 
from  the complaining  Member; 

(d) 

existence  of  arrangements  limiting  exports from the complaining  Member; 

(e) 

(f) 

voluntary  decrease  in the availability  for  export  of  the  product  concerned  from  the 
complaining Member (including, inter alia,  a situation where firms in the  complaining 
Member have been autonomously reallocating exports of this product to new markets); 

failure  to conform  to standards  and other  regulatory  requirements  in the  importing 
country. 

In the absence of circumstances  referred to in paragraph 7,  the existence of serious prejudice 
6.8 
should be determined on the basis of the  information submined to or obtained by the panel,  including 
information  submitted  in accordance  with the provisions  of Annex  V. 

This  Article  does  not apply to subsidies  maintained  on agricultural  products  as provided  in 

6.9 
Article  13 of  the  Agreement  on Agriculture. 

Article  7 

Remedies 

7.1 
Except as provided  in Article  13 of the Agreement  on Agriculture,  whenever a Member has 
reason to believe that any subsidy referred to in Article  1, granted or maintained by another Member, 
results in injury to its domestic industry, nullification or impairment or serious prejudice, such Member 
may  request  consultations  with such other Member. 

7.2 
A request for consultations under paragraph  1 shall include a statement of available evidence 
with regard to  (a) the existence and nanire of the  subsidy in question, and (b) the injury caused to the 

T he  (act that ceruin  circumstances are referred  lo in this paragraph does not.  in itself,  confer  upon them any  legal 
status in terms of either GATT  1994 or mis Agreement.  These circumstances must not be isolated,  sporadic or otherwise 
insignificant. 

Page  236 

domestic  industry,  or the nullification or impairment,  or serious prejudice19 caused to the interests of 
the Member  requesting  consultations. 

Upon  request  for  consultations  under paragraph  1,  the  Member  believed  to  be  granting  or 
7.3 
maintaining the subsidy practice in question shall enter into such consulutions  as quickly as possible. 
The purpose of the consultations shall be to clarify the facts of the  situation and to arrive at a mutually 
agreed  solution. 

If consultations do not result in a mutually agreed solution within 60 days20, any Member party 
7.4 
to such consultations may refer the maner to the DSB for the establishment of a panel, unless the DSB 
decides by consensus not to establish a panel.  The composition of the  panel arid its terms of  reference 
shall  be established  within  15 days  from  the date when  it is  esublished. 

7.5 
The panel shall review the maner and shall submit its final report to the parties to the dispute. 
The  report  shall  be  circulated  to  all  Members  within  120 days  of  the date  of  the  composition  and 
esublishment  of  the panel's terms of  reference. 

7.6  Within 30 days of the issuance of the panel's report to all Members, the report shall be adopted 
by the DSB:i  unless one of the  parties to the dispute formally notifies the DSB of its decision to appeal 
or the  DSB  decides  by consensus  not to adopt the report. 

7.7  Where a panel  report  is appealed, the Appellate Body shall  issue  its decision  within 60 days 
from the date when the party to the dispute formally notifies its intention to appeal.  When the Appellate 
Body  considers  that it cannot provide its report within 60 days, it shall inform the DSB  in writing  of 
the reasons for the delay together with an estimate of the  period within which it will submit its report. 
In no  case  shall  the proceedings  exceed  90 days.  The appellate  report shall  be adopted by the  DSB 
and unconditionally  accepted  by the parties to the dispute unless  the  DSB  decides  by  consensus  not 
to adopt  the appellate report within 20 days  following  its  issuance  to the  Members.-

7.8  Where  a panel  report or an Appellate  Body  report  is adopted  in which  it  is determined  that 
any subsidy  has resulted  in adverse effects  to the interests of another Member within the meaning  of 
Article  5,  the  Member  granting  or maintaining  such  subsidy  shall  take appropriate  steps to  remove 
the adverse  effects  or shall  withdraw  the subsidy. 

7.9 
In the event the Member  has not taken appropriate steps to remove the adverse  effects  of the 
subsidy or withdraw the subsidy within six months from the date when the DSB adopts the panel report 
or the Appellate Body  report, and in the absence of agreement  on compensation, the DSB shall grant 
authorization to the complaining Member to take countermeasures, commensurate with the degree and 
namre of  the adverse  effects  determined  to exist,  unless the  DSB decides by consensus  to reject  the 
request. 

"In the event that the request relates to a subsidy deemed to result in serious prejudice in terms of paragraph 1 of Anicle 6. 
the available evidence of serious prejudice may be limited to the available evidence as to whether the conditions of paragraph 1 
of  Article  6 have  been  met or not. 

"Any  time-periods  mentioned  in this  Article  may  be extended  by mutual  agreement. 

"If  a meeting  of the  DSB  is not  scheduled  during  this period,  such a meeting  shall  be held for this  purpose. 

sIf  a meeting  of the  DSB  is not scheduled  during  this period,  such a meeting  shall be held for this purpose. 

7.10 
In the  event  that  a party  to  the dispute  requests arbitration under  paragraph  6  of  Article  22 
of  the DSU,  the arbitrator shall  determine  whether the countermeasures  are commensurate  with the 
degree  and nature of  the adverse effects  determined  to exist. 

Page  237 

PART IV:  NON-ACTIONABLE  SUBSIDIES 

Article  8 

Identification of Non-Actionable Subsidies 

8.1 

The  following  subsidies  shall  be considered  as non-actionable:3: 

(a) 

subsidies  which are not specific  within the meaning  of  Article  2: 

(b) 

subsidies which are specific  within the meaning of Article  2 but which meet  all of the 
conditions  provided  for  in paragraphs 2(a), 2(b)  or 2(c)  below. 

8.2 

Notwithstanding the provisions of Parts III and V, the following subsidies shall be non-actionable: 

(a) 

assistance for research activities conducted by firms or by higher education or research 
esublishments  on a contract  basis with firms if:24  ^  26 

the assistance covers27  not more than 75  per cent of the costs  of  industrial  research2" 
or 50 per cent of  the costs  of pre-competitive development  activity2" M; 

!,It  is  recognized  that  government  assisunce  for  various  purposes  is widely  provided  by  Members  and  that  the  mere 
fact  that such assistance  may not qualify  for non-actionable  treatment under the provisions  of this  Article does  not  in itscll 
restrict  the  ability  of  Members  to provide  such  assisunce. 

*4Since it is anticipated that civil aircraft  will be subject to specific  multilateral rules,  the provisions of  this subparagraph 

do  not apply  to  that product 

*Not  later than  18 months after  the date of  entry  into force  of the WTO Agreement,  the  Committee  on Subsidies and 
Countervailing  Measures  provided  for  in Anicle  24  (referred  to  in this  Agreement  as  "the Committee")  shall  review  the 
operation of the provisions of subparagraph 2(a) with a view to making all necessary modifications  to improve the operation 
of  these provisions.  In its consideration of  possible  modifications,  the Comminee  shall  carefully  review the definitions  of 
the categories set forth in this subparagraph in the light of the experience of Members in the operation of research programmes 
and  the  work  in other  relevant  international  institutions. 

T he  provisions of this Agreement do not apply to fundamenul  research activities independently  conducted  by higher 
education or research establishments.  The term 'fundamenul research" means an enlargement of general scientific  and technical 
knowledge  not  linked  to  industrial  or commercial  objectives. 

'The  allowable  levels of non-actionable  assisunce  referred to in this subparagraph shall be esublished  by reference  to 

the toul  eligible  costs  incurred  over  the duration of  an  individual  project. 

"The term  "industrial research" means planned search or critical  investigation aimed at discovery  of new  knowledge, 
with the objective that such knowledge may be useful in developing new products, processes or services, or in bringing about 
a  significant  improvement  to existing  products,  processes  or services. 

'The term "pre-competitive development activity" means  the translation of industrial research findings into a plan, blueprint 
or design  for  new,  modified  or  improved  products, processes or services  whether  intended  for  sale  or use,  including  the 
creation of a first prototype which would not be capable of commercial use.  It may further include the conceptual formulation 
and design of products, processes or services alternatives and initial demonstration or pilot projects, provided that these same 

Page  238 

and provided that such assisunce  is  limited  exclusively  to: 

(i) 

(ii) 

costs of personnel (researchers, technicians and other supporting suff employ ed 
exclusively  in the research activity); 

costs  of  instruments,  equipment,  land  and  buildings  used  exclusively  and 
permanently (except when disposed of on a commercial basis) for the research 
activity; 

(iii) 

costs of consultancy and equivalent services used exclusively for the research 
activity,  including  bought-in  research,  technical  knowledge,  patents,  etc.; 

(iv) 

additional overhead costs incurred directly as a result of the research activity; 

(v) 

other running costs (such as those of materials, supplies and the like), incurred 
directly  as a result  of  the research  activity. 

(b) 

assisunce  to disadvanuged  regions, within the territory of a Member  given pursuant 
to a general framework of regional development31 and non-specific (within the meaning 
of  Article  2)  within eligible  regions provided that: 

(i) 

(ii) 

each disadvanuged region must be a clearly designated contiguous geographical 
area with a definable  economic  and administrative  identity; 

the region is considered as disadvanuged on the basis of neutral and objective 
criteria32,  indicating  that  the  region's  difficulties  arise  out  of  more  than 
temporary  circumstances;  such  criteria  must  be  clearly  spelled  out  in  law, 
regulation,  or other official  document,  so as to be capable of  verification; 

( iii ) 

the criteria shall include a measurement of economic development which shall 
be based  on at  least  one of  the following  factors: 

one  of  either  income  per capita  or household  income  per  capita,  or 
GDP per capita, which must not be above 85 per cent of the average 
for the territory  concemed; 

projects  cannot  he convened  or used  for  industrial  application or commercial  exploitation.  It does not include  routine  or 
periodic alterations to existing products, production lines, manufacturing processes, services, and other on-going operations 
even  though  those  alterations  may  represent  improvements. 

"In the case of programmes which span industrial research and pre-compethive development activity, the allowable level 
of non-actionable assisunce shall not exceed the simple average of the allowable levels of non-actionable assisunce applicable 
to the above  two categories, calculated on the basis of all eligible costs as set forth  in items (i) to (v) of this subparagraph. 

"A  "general  framework  of  regional  development"  means that regional  subsidy  programmes are pan of  an internally 
consistent and generally  applicable regional development policy and that regional development subsidies are not granted in 
isolated  geographical  points  having  no.  or  virtually  no.  influence  on  the development  of  a region. 

B"Neutral and objective criteria" means criteria which do not favour ceruin regions beyond what is appropriate for the 
elimination  or  reduction  of  regional  disparities  within the framework  of  the regional  development  policy.  In this regard, 
regional  subsidy  programmes  shall  include ceilings on the amount of assisunce  which can  be granted  to each  subsidized 
project.  Such ceilings  must be differentiated  accordmg to the different  levels  of development of assisted  regions and must 
be expressed  in terms of  investment costs or cost of job creation.  Within such ceilings, the distribution of assistance  shall 
be sufficiently  broad and even to avoid the predominant use of a subsidy by, or the grantmg of disproportionately large amounts 
of  subsidy  to.  ceruin  enterprises  is  provided  for  in Article  2. 

Page  239 

unemployment rate» which must be at least 110 per cent of the average 
for the territory  concerned; 

as measured over a three-year period;  such measurement,  however, may be 
a composite  one and may  include  other  factors. 

(c) 

assistance  to  promote  adapution  of  existing  facilities33  to  new  environmental 
requirements  imposed  by  law  and/or regulations  which  result  in greater  constraints 
and financial  burden on firms, provided that the assisunce: 

(i) 

is a one-time  non-recurring measure;  and 

(ii) 

is limited  to 20 per cent of the cost  of  adapution;  and 

(iii) 

(iv) 

does not cover, the cost of replacing and operating the assisted investment, which 
must  be fully  borne by  firms;  and 

is directly linked to and proportionate to a firm's planned reduction of nuisances 
and pollution, and does not cover any manufacturing cost savings which may 
be achieved:  and 

(v) 

is available to all firms which can adopt the new equipment and/or production 
processes. 

8.3 
A subsidy programme  for which the provisions of paragraph 2 are invoked  shall be  notified 
in advance of its implemenution to the Committee in accordance with the provisions of Pan VII.  Any 
such notification  shall  be sufficiently  precise to enable other Members  to evaluate the consistency  of 
the programme with the conditions and criteria provided for in the relevant provisions of paragraph 2. 
Members shall also provide the Committee  with yearly updates of such notifications,  in particular by 
supplying  information  on  global  expenditure  for  each  programme,  and  on  any  modification  of  the 
programme.  Other  Members  shall  have  the  right  to  request  information  about  individual  cases  of 
subsidization  under a notified  programme.34 

Upon  request  of  a  Member,  the  Secretariat  shall  review  a  notification  made  pursuant  to 
8.4 
paragraph  3 and. where necessary, may require additional  information from the subsidizing  Member 
concerning  the  notified  programme  under  review.  The  Secretariat  shall  report  its  findings  to  the 
Committee.  The Committee shall, upon request, promptly  review the findings of the Secreuriat (or, 
if a review by the Secreuriat has not been requested, the notification itself), with a view to determining 
whether the conditions and criteria laid down in paragraph 2 have not been met.  The procedure provided 
for  in  this  paragraph  shall  be  completed  at the  latest  at the  first  regular  meeting  of  the  Comminee 
following  the  notification  of  a subsidy  programme,  provided  that at least  two  months* have  elapsed 
between such notification and the regular meeting of the Comminee.  The review procedure described 
in this paragraph shall also apply, upon request, to substantial modifications  of a programme'notified 
in the yearly  updates referred  to  in paragraph 3. 

Upon the request of a Member, the determination by the Committee referred to in paragraph 4, 
8.5 
or a failure  by  the Comminee  to make such a determination,  as well  as the violation,  in  individual 

'The term "existing facilities" means facilities which have been in operation for at least two years at the time when new 

environmenul  requirements  are  imposed. 

"It is recognized that nothing in this notification provision requires the provision of confidential  information,  including 

confidential  business  information. 

Page  240 

cases,  of  the  conditions  set  out in a notified  programme,  shall  be s emitted  to binding  arbitration. 
The arbitration body shall present its conclusions to the Members within  120 days from the date when 
the matter was referred to the arbitration body.  Except as otherwise provided  in this paragraph, the 
DSU  shall  apply  to  arbitrations  conducted under this paragraph. 

Article  9 

Consultations and Authorized Remedies 

If,  in the course  of  implemenution  of a programme  referred  to in paragraph  2 of  Anicle  8. 
9.1 
notwithstanding the fact that the programme is consistent with the criteria laid down in  that paragraph, 
a  Member  has  reasons  to believe  that this programme  has  resulted  in serious  adverse  effects  to the 
domestic  industry of that Member,  such as to cause damage which would be difficult  to repair, such 
Member  may  request consulutions  with the Member  granting  or mainuining  the subsidy. 

9.2 
Upon  request  for  consulutions  under paragraph  1, the Member  granting  or mainuining  the 
subsidy programme in question shall enter into such consulutions as quickly as possible.  The purpose 
of the consulutions  shall be to clarify  the facts of the situation and to arrive at a mutually acceptable 
solution. 

If no mutually accepuble solution has been reached in consulutions under paragraph  2 within 
9.3 
60  days  of  the  request  for  such  consulutions,  the  requesting  Member  may  refer  the  matter  to  the 
Committee. 

9.4  Where a matter is referred to the Committee, the Committee shall immediately review the facts 
involved and the evidence of the effects  referred to in paragraph  1.  If the Committee determines that 
such  effects  exist,  it may  recommend  to the subsidizing  Member to modify  this programme  in such 
a way as to remove these effects.  The Committee  shall present  its conclusions within  120 days from 
the date when the matter is referred to it under paragraph 3.  In the event the recommendation  is not 
followed within six  months, the Committee shall authorize the requesting Member to uke appropriate 
countermeasures  commensurate  with the nanire and degree of the effects  determined  to exist. 

Page 241 

PART  V:.  COUNTERVAILING  MEASURES 

Article  10 

Application  of Article  VI of GATT 1994*5 

Members shall uke all necessary steps to ensure that the imposition of a countervailing duty36 
on  any product  of the territory  of  any  Member  imported  into the territory  of  another  Member  is  in 
accordance  with  the  provisions  of  Anicle  VI  of  GATT  1994 and  the  terms  of  this  Agreement. 
Countervailing  duties may  only  be  imposed  pursuant  to  investigations  initiated37  and  conducted  in 
accordance  with the provisions  of  this  Agreement  and the Agreement  on  Agriculture. 

Article  11 

Initiation and Subsequent Investigation 

11.1  Except  as  provided  in paragraph 6,  an investigation  to determine  the existence,  degree  and 
effect of any alleged subsidy shall be initiated upon a written application by or on behalf of the domestic 
industry. 

11.2  An  application  under paragraph  1 shall  include  sufficient  evidence  of  the  existence  of  (a) a 
subsidy  and,  if possible,  its amount,  (b) injury' within the meaning  of  Anicle  VI of  GATT  1994  as 
interpreted  by  this  Agreement,  and  (c|a  causal  link' between the subsidized  imports  and the alleged 
injury-.  Simple assertion, unsubstantiated by relevant evidence, cannot be considered sufficient  to meet 
the requirements  of  this paragraph.  The application  shall  contain such  information  as is  reasonably 
available  to the applicant  on the  following: 

(i) 

the identity of the applicant and a description of the volume and value of the domestic 
production of the like product by the applicant.  Where a written application  is made 
on behalf of the domestic industry, the application shall identify the industry on behalf 
of which the application is made by a list of all known domestic producers of the like 
product (or associations of domestic producers of the like product) and, to the extent 
possible,  a description  of  the  volume  and  value  of  domestic  production  of  the  like 
product  accounted  for by  such producers; 

*The  provisions  of  Pan  II or m  may  be  invoked  in parallel  with the provisions  of  Pan  V;  however,  with  regard  to 
the  effects  of  a  panicular  subsidy  in  the  domestic  market  of  the  imponing  Member,  only  one  form  of  relief  (either  a 
countervailing  duty,  if «he requirements of  Pan V are met, or a countermeasure under Anicles 4  or 7) shall  be available. 
The  provisions  of  Parts .III and V shall  not be  invoked regarding  measures considered  non-actionable  in accordance  with 
the provisions  of  Pan  IV.  However,  measures referred  to in paragraph  1(a) of  Anicle  8  may  be  investigated  in order to 
determine  whether or not they are specific  within the meaning of Anicle  2.  In addition,  in the case of  a subsidy  referred 
to in paragraph 2 of Article 8 conferred pursuant to a programme which has not been notified  in accordance with paragraph 
3  of  Anicle  8.  the provisions of  Pan  III or V may be  invoked,  but such  subsidy  shall  be treated as  non-actionable  if  it is 
found  to conform  to the  sundards  set  forth  in paragraph 2  of  Anicle  8. 

'The term "countervailing duty " shall be understood to mean a special duty levied for the purpose of offsetting any subsidy 
bestowed directly or indirectly upon the manufacture, productions export of any merchandise, as provided for in paragraph  3 
of  Anicle  VI  of  GATT  1994. 

T he  term  "initiated" as used hereinafter means procedural action by which a  Member formally commences an investigation 

as  provided  in Anicle  11. 

Page  242 

(ii) 

a complete  description of the allegedly  subsidized product,  the names of the country 
or  countries  of  origin  or export  in question,  the  identity  of  each known exporter or 
foreign  producer and a list of  known persons  importing  the product  in question; 

(iii) 

evidence  with regard to the existence, amount  and nature of the subsidy  in question; 

(iv) 

evidence  that alleged  injury  to a domestic  industry  is  caused  by  subsidized  imports 
through the effects of the subsidies; this evidence includes information on the evolution 
of the volume of the allegedly subsidized imports, the effect  of these imports on prices 
of the like product in the domestic market and the consequent  impact  of the  imports 
on  the domestic  industry,  as demonstrated  by  relevant  factors  and  indices  having a 
bearing on the sute of the domestic industry, such as those listed in paragraphs 2 and 
4  of  Article  15. 

11.3  The  authorities  shall  review  the  accuracy  and  adequacy  of  the  evidence  provided  in  the 
application to determine whether the evidence is sufficient  to justify  the initiation of an investigation. 

11.4  An  investigation  shall  not  be  initiated  pursuant  to  paragraph  1 unless  the  authorities  have 
determined, on the basis of an examination of the degree of support for, or opposition to, the application 
expressed'*  by domestic  producers  of  the like  product,  that the application  has been made by  or on 
behalf of  the domestic  industry.39  The application shall  be considered  to have been made  "by or pn 
behalf of the domestic industry" if it is supported by those domestic producers whose collective output 
constitutes  more than 50 per cent of the total production of the like product produced by that portion 
of the domestic  industry expressing either support for or opposition to the application.  However,  no 
investigation shall be initiated when domestic producers expressly  supporting the application account 
for  less  than 25  per cent  of  total  production of  the  like product  produced  by the domestic  industry. 

11.5  The authorities  shall avoid,  unless a decision has been made to initiate an investigation,  any 
publicizing  of  the application  for  the  initiation of  an investigation. 

If. in special circumstances, the authorities concerned decide to initiate an investigation without 
11.6 
having  received a written application by or on behalf of a domestic  industry  for the initiation of such 
investigation,  they  shall  proceed  only  if they  have sufficient  evidence  of  the existence  of  a subsidy, 
injury  and causal  link,  as described  in paragraph 2,  to justify-  the  initiation  of an  investigation. 

11.7  The evidence of both subsidy and injury shall be considered simultaneously  (a) in the decision 
whether  or  not  to  initiate an investigation  and  (b) thereafter,  during  the course  of  the  investigation, 
starling  on  a date  not  later than the earliest  date on  which  in accordance  with the provisions  of  this 
Agreement  provisional  measures  may  be applied. 

11.8 
In cases where products are not imported directly from the country of origin but are exported 
to the importing Member from an intermediate country, the provisions of this Agreement shall be fully 
applicable and the transaction or transactions shall,  for the purposes of this  Agreement,  be  regarded 
as  having  taken place between the country  of  origin and the  importing  Member. 

11.9  An  application  under paragraph  1 shall  be  rejected  and an investigation  shall  be  terminated 
promptly as soon as the authorities concerned are satisfied that there is not sufficient evidence of either 

Mln the case of  fragmented  industries involving an exceptionally  large number of producers, authorities may determine 

suppon  and  opposition  by  using  sutistically  valid  sampling  techniques. 

"Members are aware that in the territory of ceruin  Members employees of domestic  producers of the  like product or 

represenutives  of  those  employees  may  make  or  suppon an application  for  an  investigation  under paragraph  1. 

Page  243 

subsidization or of  injury to justify  proceeding  with the case.  There shall  be immediate  termination 
in cases  where  the  amount  of  a subsidy  is de  minimis, or where the volume  of  subsidized  imports, 
actual  or potential,  or the injury,  is negligible.  For the purpose of this paragraph, the amount of the 
subsidy  shall  be considered  to be de  minimis if the subsidy  is  less  than  1 per cent ad valorem. 

11.10  An  investigation  shall  not hinder the procedures of  customs  clearance. 

11.11  Investigations shall, except in special circumstances, be concluded within one year, and in no 
case  more  than  18 months,  after  their initiation. 

Article  12 

Evidence 

Interested  Members  and all  interested  parties  in a countervailing  duty  investigation  shall  be 
12.1 
given notice of the information which the authorities require and ample opportunity to present in writing 
all  evidence  which they  consider  relevant  in respect  of the investigation  in question. 

12.1.1  Exporters, foreign producers or interested Members receiving questionnaires used in 
a  countervailing  duty  investigation  shall  be given at least  30 days  for  reply.40  Due 
consideration  should  be given  to any  request  for  an extension  of  the  30-day  period 
-and. upon cause  shown,  such an extension should be granted  whenever practicable. 

12.1.2  Subject  to the requirement to protect confidential  information,  evidence presented  in 
writing by one interested Member or interested party shall be made available promptly 
to other  interested  Members  or interested parties'participating  in the  investigation. 

12.1.3  As  soon  as  an investigation  has been  initiated,  the authorities  shall  provide  the  full 
text  of the written application received under paragraph  1 of Article  11 to the known 
exporters41 and to the authorities of the exporting Member and shall make it available, 
upon  request,  to other  interested parties  involved.  Due  regard shall  be paid  to the 
protection of confidential  information,  as provided for  in paragraph 4. 

Interested Members and interested parties also shall have the right, upon justification, to present 
12.2. 
information orally.  Where such information is provided orally, the interested Members and interested 
parties  subsequently  shall  be  required  to  reduce such  submissions  to  writing.  Any  decision  of  the 
investigating  authorities can only be based on such information and arguments as were on the written 
record  of  this  authority  and  which  were  available  to  interested  Members  and  interested  parties 
participating  in the  investigation,  due account  having been given to the need  to protect  confidential 
information. 

12.3  The authorities shall whenever practicable provide timely opportunities for all interested Members 
and interested  parties to see all  infonnation that  is relevant to the presenution  of their cases,  that  is 

"As a general  rule,  the  time-limit  for  exporters  shall be counted  from  the date of receipt of the questionnaire,  which 
for  this purpose  shall  be deemed to have  been  received  one  week  from  the date on which  it was  sent to the respondent or 
transmitted to the appropriate diplomatic represenutives of the exponing Member or, in the case of a separate customs territory 
Member  of the  WTO.  an official  represenutive  of the  exponing  territory. 

4,It  being  understood  that where  the number of exporters' involved  is particularly  high,  the full  text of the  application 
should  instead  be provided  only  to the authorities of the exponing  Member or to the  relevant trade  association  who  then 
should  forward  copies  to the  exporters  concerned. 

Page  244 

not confidential  as defined  in paragraph 4,  and that is used by the authorities  in a countervailing duty 
investigation,  and to prepare presenutions  on the basis of  this  information. 

12.4  Any  information  which is by nature confidential  (for  example,  because  its disclosure  would 
be  of  significant  competitive  advanuge  to  a  competitor  or  because  its  disclosure  would  have  a 
significantly  adverse effect  upon a person supplying the information or upon a person from whom the 
supplier  acquired  the  infonnation),  or  which  is  provided  on  a  confidential  basis  by  parties  to  an 
investigation shall, upon good cause shown, be treated as such by the authorities.  Such  information 
shall  not  be disclosed  without  specific  permission  of the party  submitting  it.42 

12.4.1  The  authorities  shall  require  interested  Members  or  interested  parties  providing 
confidential information to furnish non-confidential summaries thereof.  These summaries 
shall  be  in sufficient  deuil  to permit a reasonable  undersunding  of the substance  of 
the information submitted in confidence.  In exceptional circumstances, such Members 
or parties may indicate that sucr. information  is not susceptible of summary.  In such 
exceptional circumstances, a sutement of the reasons why summarization is not possible 
must  be provided. 

12.4.2  If  the  authorities  find  that  a request  for  confidentiality  is  not  warranted  and  if  the 
supplier  of  the information  is either  unwilling  to make  the  information  public  or to 
authorize its disclosure in generalized or summary form, the authorities may disregard 
such information unless it can be demonstrated  to their satisfaction  from appropriate 
sources that the information  is correct.43 

12.5 
Except  in circumstances  provided  for  in paragraph 7,  the authorities  shall during the  course 
of  an  investigation  satisfy  themselves  as  to  the  accuracy  of  the  information  supplied  by  interested 
Members  or  interested parties upon which their findings  are based. 

12.6  The  investigating  authorities  may  carry out  investigations  in the territory  of  other  Members 
as  required,  provided  that  they  have  notified  in good  time  the  Member  in  question  and  unless  that 
Member objects to the investigation.  Further, the investigating authorities may carry out investigations 
on the premises  of a firm and may examine the records of a firm if  (a) the firm so agrees and  (b) the 
Member in question is notified and does not object.  The procedures set forth in Annex  VI shall apply 
to investigations on the premises of a firm. Subject to the requirement to protect confidential  information. 
the authorities shall  make the results of any such investigations available,  or shall provide  disclosure 
thereof pursuant to paragraph  8. to the firms to which they peruin and may make such results available 
to the applicants. 

In cases  in which any  interested  Member or interested party  refuses  access  to, or  otherwise 
12.7 
does  not  provide,  necessary'  information  within  a  reasonable  period  or  significantly  impedes  the 
investigation, preliminary and final determinations, affirmative  or negative, may be made on the basis 
of  the  facts  available. 

12.8  The authorities shall, before a final determination is made, inform all interested Members and 
interested parties of the essential facts under consideration which form the basis for the decision whether 
to apply  definitive  measures.  Such disclosure should  uke  place in sufficient  time  for the parties to 
defend  their  interests. 

"Members are aware that in the territory of certain Members disclosure pursuant to a narrowly-drawn protective order 

may  be  required. 

4,Members  agree  that requests for  confidentiality  should  not be arbitrarily  rejected.  Members  further  agree  that the 
investigating  authority  may  request the waiving  of  confidentiality  only  regarding  infonnation  relevant to the proceedings. 

(l 

Page  245 

12.9 

For the purposes of  this Agreement,  "interested parties" shall  include: 

.  (i) 

(ii) 

an exporter or foreign producer or the importer of a product subject to investigation, 
or a trade or business association a majority of the members  of which are producers, 
exporters  or importers  of  such product;  and 

a  producer  of  the  like  product  in  the  importing  Member  or  a  trade  and  business 
association a majority of the members of which produce the like product in the territory 
of  the  importing  Member. 

This  list  shall  not  preclude  Members  from  allowing  domestic  or  foreign  parties  other  than  those 
mentioned  above to be  included as  interested parties. 

12.10  The authorities shall provide opportunities for industrial users of the product under investigation, 
and for represenutive consumer organizations in cases where the product is commonly sold at the retail 
level, to provide information which is relevant to the investigation regarding subsidization, injury and 
causality. 

12.11  The authorities shall uke due account of any difficulties  experienced by  interested parties, in 
particular  small  companies,  in  supplying  information  requested,  and  shall  provide  any  assisunce 
practicable. 

12.12  The procedures  set out above are not  intended to prevent  the authorities  of  a Member  from 
proceeding  expeditiously  with  regard  to  initiating  an  investigation,  reaching  preliminary  or final 
determinations,  whether  affirmative  or negative,  or from applying  provisional  or final measures,  in 
accordance  with  relevant  provisions  of  this  Agreement. 

Article  13 

Consultations 

13.1 
-As soon as possible after an application under Article  11 is accepted, and in any event  before 
the initiation of any investigation. Members the products of which may be subject to such investigation 
shall  be invited  for consulutions with the aim of clarifying  the situation as to the matters referred  to 
in paragraph  2  of  Article  11 and arriving at a mutually  agreed solution. 

13.2 
Furthermore, throughout the period of investigation.  Members the products of which are the 
subject of the investigation shall be afforded  a reasonable opportunity to continue consultations, with 
a  view  to clarifying  the  factual  situation and to arriving at a mutually  agreed  solution.44 

13.3  Without  prejudice  to the obligation  to afford  reasonable  opportunity  for  consulution,  these 
provisions  regarding  consulutions  are  not  intended  to  prevent  the  authorities  of  a  Member  from 
proceeding  expeditiously  with  regard  to  initiating  the  investigation,  reaching  preliminary  or final 
determinations,  whether affirmative  or negative,  or from  applying provisional  or final measures,  in 
accordance  with the provisions of this  Agreement. 

13.4  The Member which intends to initiate any investigation or is conducting such an investigation 
shall  permit,  upon  request,  the  Member  or  Members  the  products  of  which  are  subject  to  such 

"It is particularly important, in accordance with the provisions of this paragraph, that no affirmative determination whether 
preliminary  or final  be made without reasonable  opportunity for consulutions  having been given.  Such consulutions  may 
esublish  the basis  for proceeding  under thé provisions of Pan  II,  in  or X. 

Page  246 

investigation access to non-confidential  evidence,  including the non-confiiential  summary of  confidential 
dau  being  used  for  initiating  or conducting  the  investigation. 

Article  14 

Calculation of the Amount of a  Subsidy  in Terms 
of the Benefit to  the  Recipient 

For the purpose of Part V, any method used by the investigating authority to calculate the  benefit 
to  the  recipient  conferred  pursuant  to paragraph  1 of  Article  1 shall  be provided  for  in the  national 
legislation or implementing  regulations of the Member concerned and its application to each particular 
case shall be transparent and adequately explained.  Furthermore, any such method shall be consistent 
with the  following  guidelines: 

(a) 

(b) 

( c ) 

(d) 

government provision of equity capital shall not.be considered as conferring a benefit, 
unless the  investment decision can be regarded as inconsistent with the usual investment 
practice (including for the provision of risk capital) of private investors in the territory 
of  that Member; 

a loan  by a government  shall  not be considered  as conferring  a benefit,  unless  there 
is  a  difference  between  the  amount  that  the  firm  receiving  the  loan  pays  on  the 
.  government loan and the amount the firm would pay on a comparable commercial  loan 
which the firm could actually obuin on the market.  In this case the benefit  shall be 
the difference  between these  two amounts; 

a loan guarantee by  a government shall not be considered as conferring a benefit, unless 
there  is a difference  between  the amount  that  the firm receiving  the guarantee pays 
on a loan guaranteed by the government  and the amount  that the firm would pay  on 
a comparable commercial  loan absent the government guarantee.  In this case the benefit 
shall be the difference between these two amounts adjusted for any differences  in fees; 

the  provision  of  goods  or services  or purchase  of  goods  by  a government  shall  not 
be considered as conferring a benefit unless the provision is made for less than adequate 
remuneration,  or the purchase  is made  for more  than adequate  remuneration.  The 
adequacy of remuneration shall be determined in relation to prevailing market conditions 
for the good or service in question in the country of provision or purchase (including 
price, quality, availability, marketability, transportation and other conditions of purchase 
or sale). 

Article  15 

Determination of Injury45 

15.1  A déterminât ton of injury for purposes of Anicle VI of GATT  1994 shall be based on positive 
evidence  and  involve an objective examination of  both  (a) the volume  of the subsidized  imports and 

«'Under this Agreement the term "injury" shall, unless otherwise specified, be uken to mean material injury to a domestic 
industry,  threat of material  injury  to a domestic  industry or material  reurdation of the esublishment of such an industry 
and  shall  be interpreted  m accordance  with  the provisions of this  Article. 

Page 247 

the effect  of  the subsidized  imports  on prices  in the domestic  market  for  like products46  and  (b) the 
consequent  impact  of these  imports on the domestic  producers  of  such products. 

15.2  With regard to the volume of the subsidized imports, the investigating authorities shall consider 
whether there has been a significant  increase in subsidized imports, either in absolute terms or relative 
to production or consumption  in the importing  Member.  With regard to the effect  of the subsidized 
imports on prices, the investigating authorities shall consider whether there has been a significant price 
undercutting by the subsidized  imports as compared with the price of a like product of the importing 
Member,  or whether the effect  of such imports  is otherwise to depress prices  to a significant  degree 
or to prevent price increases, which otherwise would have occurred, to a significant  degree.  No one 
or several  of  these  factors  can necessarily give decisive  guidance. 

15.3  Where  imports  of  a  product  from  more  than  one  country  are  simultaneously  subject  to 
countervailing  duty  investigations,  the  investigating  authorities  may  cumulatively  assess  the  effects 
of  such  imports only  if they determine that  (a) the amount of  subsidization esublished  in relation to 
the  imports from  each country  is more than de minimis as defined  in paragraph 9 of  Article  11 and 
the volume of imports from each country is not negligible and (b) a cumulative assessment of the effects 
of the imports is appropriate in light of the conditions of competition  between the imported  products 
and the conditions  of  competition  between the imported products  and the like domestic  product. 

15.4  The examination of the  impact of the subsidized imports on the domestic industry shall include 
an evaluation of all relevant economic factors and indices having a bearing on the sute of the industry, 
including  actual  and potential  decline  in output, sales, market share,  profits,  productivity,  return on 
investments, or utilization of capacity;  factors affecting domestic prices;  actual and potential negative 
effects  on cash  flow,  inventories, employment,  wages, growth, ability to raise capital or. investments 
and.  in  the  case  of  agriculture,  whether there has been an increased  burden on government  support 
programmes.  This list is not exhaustive, nor  can one or several of these factors necessarily give decisive 
guidance. 

It must  be demonstrated  that  the  subsidized  imports  are,  through  the  effects47  of  subsidies, 
15.5 
causing injury within the meaning of mis  Agreement.  The demonstration of a causal relationship between 
the  subsidized  imports  and the  injury  to the domestic  industry  shall  be  based  on an examination  of 
all relevant evidence before the authorities.  The authorities shall also examine any known factors other 
than the subsidized imports which at the same time are injuring the domestic industry, and the injuries 
caused  by  these  other  factors  must  not be attributed  to the subsidized  imports.  Factors  which  may 
be relevant  in this respect include, inter alia,  the volumes and prices of non-subsidized imports of the 
product in question, contraction in demand or changes in the patterns of consumption, trade restrictive 
practices of and  competition between the foreign and domestic producers, developments in technology 
and the export  performance  and productivity  of the domestic  industry. 

15.6  The effect  of the subsidized  imports shall  be assessed  in relation to the domestic  production 
of the like product when available data permit the separate identification of that production on the basis 
of such criteria as the production process, producers* sales and profits.  If such separate  identification 
of  that  production  is  not  possible,  the  effects  of  the  subsidized  imports  shall  be  assessed  by  the 
examination  of  the production of  the narrowest  group or range of products,  which includes the  like 
product,  for  which the necessary  information  can be provided. 

"Throughout this Agreement the term "like product" ("produit  similaire") shall be interpreted to mean a product which 
is identical,  i.e.  alike in all respects to the product under consideration, or in the absence of such a product, another product 
which,  although  not alike  in all  respects,  has characteristics closely  resembling  those of me product under  consideration. 

"As  set forth  in paragraphs 2 and 4. 

Page  248 

15.7  A determination of a threat of material injury shall be based on facts and not merely on allegation, 
conjecture or remote possibility.  The change in circumstances which would create a situation in which 
the subsidy  would cause  injury must  be clearly  foreseen  and imminent. 
In making  a determination 
regarding  the  existence  of  a threat of  material  injury,  the  investigating  authorities  should  consider, 
inter  alia,  such  factors as: 

(i) 

(ii) 

(iii) 

(iv) 

nanire  of  the  subsidy  or  subsidies  in  question  and  the  trade  effects  likely  to  arise 
therefrom; 

a significant rate of increase of subsidized imports into the domestic market indicating 
the likelihood  of  substantially  increased  importation; 

sufficient  freely  disposable,  or an imminent,  substantial  increase  in,  capacity  of  the 
exporter indicating the likelihood of substantially  increased subsidized exports to the 
importing Member's market, uking into account the availability of other export markets 
to absorb any additional  exports; 

whether  imports  are  entering  at  prices  that  will  have  a  significant  depressing  or 
suppressing effect  on domestic prices,  and would  likely  increase demand  for  further 
imports;  and 

(v) 

inventories  of  the product  being  investigated. 

No one of these  factors by itself can necessarily give decisive guidance but the totality of the factors 
considered  must  lead to the conclusion that further subsidized  exports are imminent  and that,  unless 
protective  action  is  taken, material  injury  would  occur. 

15.8  With  respect  to  cases  where  injury  is  threatened  by  subsidized  imports,  the  application  of 
countervailing  measures  shall  be considered  and decided  with special  care. 

Article  16 

Definition of Domestic Industry 

16.1 
For the purposes  of this  Agreement,  the term  "domestic industry" shall,  except  as provided 
in paragraph  2.  be interpreted as referring  to the domestic producers as a whole of the like products 
or to those of them whose collective output of the  products constitutes a major proportion of the total 
domestic  production  of  those  products, except  that when producers  are related48  to the exporters  or 
importers or are themselves importers of the  allegedly subsidized product or a like product from other 
countries, the term  "domestic  industry" may  be interpreted as referring  to the  rest of the producers. 

16.2. 
In exceptional  circumstances,  the territory of a Member may, for the produaion  in question. 
be divided into two or more competitive markets and the producers within each market may be regarded 
as a separate industry if  (a)  the producers within such market sell all or almost all of their production 
of the  product  in question in that market, and  (b) the demand in that market  is not to any substantia I 

"For the  purpose of this paragraph,  producers shall  be deemed to be related to exporters or importers only  if  (a) one 
of them directly or indirectly controls the other:  or (b) both of them are directly or indirectly  controlled by a third person; 
or (c) together they directly or indirectly control a third person, provided that there are grounds for believing or suspecting 
that the effea of the relationship is such as to cause the producer concerned to beta ve differently from non-related producers. 
For the  purpose of this paragraph,  one  shall be deemed to control  another  wr-  :  the former  is legally or operationally in 
a  position to exercise  restraint  or direction  over  the  latter. 

Page  249 

degree supplied  by producers of the product  in question  located elsewhere  in the territory. 
In such 
circumstances,  injury may be found to exist even where a major portion of the toul  domestic industry 
is  not  injured,  provided  there is  a concentration  of  subsidized  imports  into  such  an isolated  market 
and provided  further that the subsidized  imports  are causing  injury to the producers of  all  or almost 
all  of  the production within such market. 

16.3  When the domestic industry has been interpreted as referring to the producers in a certain area, 
i.e.  a market  as defined  in paragraph 2, countervailing duties shall  be levied  only on the products in 
question consigned  for final consumption to that area.  When the constitutional  law of the importing 
Member  does not permit the levying of countervailing duties on such a basis, the importing  Member 
may  levy  the countervailing  duties without  limitation only  if  (a) the exporters  shall  have been  given 
an opportunity to cease exporting at subsidized prices to the area concerned or otherwise give assurances 
pursuant to Article  18, and adequate assurances in this regard have not been promptly given, and (b) such 
duties  cannot  be  levied  only  on products of  specific  producers  which supply  the area  in question. 

16.4  Where  two  or  more  countries  have  reached  under  the  provisions  of  paragraph  8(a)  of 
Article  XXIV of GATT  1994 such a level of integration that they have thé characteristics of a single. 
unified  market, the industry in the entire area of integration shall be taken to be the domestic industry-
referred  to  in paragraphs  1 and 2. 

. 

16.5  The provisions  of  paragraph 6 of  Article  15 shall  be applicable  to this  Article. 

Article  17 

Provisional  Measures 

17.1 

Provisional  measures  may  be applied  only  if:  ' •  ' 

(a) 

(b) 

(c) 

an  investigation  has  been  initiated  in accordance  with  the  provisions  of  Article  11. 
a  public  notice  has been given  to that  effect  and  interested  Members  and  interested 
parties  have  been  given  adequate  opportunities  to  submit  information  and  make 
comments; 

a preliminary  affirmative  determination has been made that a subsidy  exists and that 
there  is  injury to a domestic  industry  caused by subsidized  imports:  and 

the authorities concerned judge such measures necessary to prevent injury being caused 
during the investigation. 

17.2 
Provisional  measures  may  uke  the  form  of provisional  countervailing  duties  guaranteed  by 
cash deposits  or bonds equal  to the amount  of  the provisionally  calculated  amount  of  subsidization. 

Provisional  measures  shall  not be applied sooner than 60 days  from the date of  initiation  of 

17.3 
the  investigation. 

17.4  The application of provisional  measures shall  be limited to as short a period as possible,  not 
exceeding  four months. 

17.5  The relevant provisions of Article  19 shall be followed in the application of provisional measures. 

Page  250 

Article  18 

Undertakings 

Proceedings may49 be suspended or terminated without the imposition of provisional measures 

18.1 
or countervailing  duties upon receipt  of  satisfactory  voluntary  undertakings  under which: 

(a) 

(b) 

the government of the exporting Member agrees to eliminate or limit the subsidy 
or take other measures  concerning  its effects;  or 

the exporter agrees to revise its prices so that the investigating  authorities are 
satisfied that the injurious effect of the subsidy is  eliminated.  Price increases 
under such  undertakings shall  not be higher  than necessary  to eliminate the 
amount  C  ?.he subsidy. 
It is desirable  that the price  increases be less than 
the amour,; of the subsidy if such  increases would be adequate to remove the 
injury  to the domestic  industry. 

18.2  Undertakings shall  not be sought or accepted unless the authorities of the importing  Member 
have  made  a  preliminary  affirmative  determination  of  subsidization  and  injury  caused  by  such 
subsidization and,  in case of undertakings from exporters, have obuined the consent of the exporting 
Member. 

18.3  Undertakings offered need not be accepted if the authorities of the importing Member consider 
their acceptance  impractical,  for  example  if the number of actual  or potential  exporters  is too great, 
or for other reasons, including reasons of general policy.  Should the case arise and where practicable, 
the authorities  shall  provide  to the exporter the reasons  which  have led them to consider  acceptance 
of an undertaking as inappropriate, and shall, to the extent possible, give the exporter an opportunity 
to make  comments  thereon. 

If an undertaking  is accepted,  the investigation of subsidization and injury  shall  nevertheless 
18.4 
be completed  if the exporting Member so desires or the importing Member so decides.  In such a case, 
if a negative determination of subsidization or injury is made, the undertaking shall automatically lapse, 
except  in  cases  where  such  a determination  is  due  in  large  part to the  existence  of  an undertaking. 
In such cases, the authorities concerned may require that an undertaking be maintained for a reasonable 
period consistent with the provisions of this Agreement.  In the event that an affirmative  determination 
of  subsidization  and  injury  is made,  the undertaking  shall  continue consistent  with  its terms  and the 
provisions  of  this  Agreement. 

1.8.5 
Price undertakings may be suggested by the authorities of the importing Member, but no exporter 
shall  be forced  to enter into such undertakings.  The fact that governments or exporters do not  offer 
such undertakings, or do not accept an invitation to do so, shall in no way prejudice the consideration 
of  the case.  However,  the authorities  are free to determine that a threat of  injury  is more  likely  to 
be  realized  if the subsidized  imports  continue. 

18.6  Authorities of an importing  Member may require any government  or exporter from whom an 
undertaking  has been accepted  to provide periodically  information  relevant to the fulfilment  of  such 
an undertaking, and to permit  verification  of pertinent dau. 
la case of violation of an undertaking, 
the  authorities  of  the  importing  Member  may  take,  under  this  Agreement  in  conformity  with  its 
provisions,  expeditious  actions which may constitute  immediate  application of provisional  measures 
using the best information available.  In such cases, definitive duties may be levied in accordance with 

T he  word "may" shall not be interpreted to allow the simultaneous continuation of proceedings with the implemenution 

of  undertakings,  except  as  provided  in paragraph  4. 

Page 251 

this Agreement  on products entered for consumption not more than 90 days before the application of 
such provisional  measures, except that any such retroactive assessment shall not apply to imports entered 
before the violation of  the undertaking. 

Article  19 

Imposition and  Collection of  Countervailing  Duties 

19.1 
If.  after reasonable efforts have been made to complete consulutions, a Member makes a final 
determination of the existence and amount of the subsidy and that, through the effects of the subsidy. 
the subsidized imports are causing injury, it may impose a countervailing duty in accordance with the 
provisions  of  this Article unless the subsidy  or subsidies  are withdrawn. 

19.2  The decision whether or not to impose a countervailing duty in cases where all  requirements 
for the imposition have been fulfilled,  and the decision whether the amount of the countervailing duty 
to be imposed shall be the full amount of the subsidy or less, are decisions to be made by the authorities 
of  the imponing  Member. 
It is desirable  that the imposition  should be permissive  in the territory 
of  all  Members,  that the duty should be less than the total amount of the subsidy  if such lesser duty 
would  be  adequate  to  remove  the  injury  to  the  domestic  industry,  and  that  procedures  should  be 
established which would allow the authorities concerned to take due account of represenutions made, 
by  domestic/interested  parties90 whose  interests  might  be adversely  affected  by  the  imposition  of  a 
countervailing  duty. 

19.3  When a countervailing  duty  is  imposed  in respect  of  any product,  such countervailing  duty 
shall be levied,  in the appropriate amounts in each case, on a non-discriminatory basis on imports  of 
such product from  all  sources  found  to be subsidized  and causing  injury,  except as to  imports  from 
those sources which have renounced any subsidies in question or from which undertakings under the 
terms of this Agreement  have been accepted.  Any exporter whose exports are subject to a definitive 
countervailing duty but who was not actually investigated for reasons other than a refusal to  cooperate, 
shall  be entitled  to an expedited  review  in order that the  investigating  authorities promptly  esublish 
an individual  countervailing  duty  rate for that exporter. 

19.4  No countervailing  duty shall  be levied51  on any imported  product  in excess of the amount  of 
the subsidy found to exist, calculated in terms of subsidization per unit of the subsidized and exported 
product. 

Article  20 

Retroactivity 

20.1 
Provisional  measures and countervailing duties shall only be applied to products which enter 
for consumption  after the time when the decision under paragraph  1 of  Article  17 and paragraph 1 
of  Article  19, respectively,  enters into force,  subject to the exceptions set out in this Article. 

20.2  Where a final determination of injury (but not of a threat thereof or of a material  retardation 
of the esublishment of an industry) is made or, in the case of a final determination of a threat of injury. 

"For the purpose of this paragraph, the term "domestic interested parties" shall  include consumers and industrial users 

of  the  imported  product  subject to investigation. 

"As  used in this  Agreement  "levy" shall  mean the definitive  or final  legal  assessment or collection of a duty or tax. 

Page  252 

where  the  effect  of  the subsidized  imports  would,  in the absence  of  the provisional  measures,  have 
led to a determination of injury,  countervailing  duties may  be levied  retroaaively  for the period  for 
which provisional  measures,  if any,  have been applied. 

20.3 
If the definitive countervailing duty is higher than the amount guaranteed by the cash deposit 
or bond, the difference shall not be collected.  If the definitive duty is less than the amount guaranteed 
by the cash deposit or bond, the excess amount shall be reimbursed or the bond released in an expeditious 
manner. 

20.4  Except  as  provided  in  paragraph 2,  where  a  determination  of  threat  of  injury  or  material 
reurdation  is made (but no injury has yet occurred) a definitive  countervailing  duty may be imposed 
only from the date of the determination of threat of injury or material retardation, and any cash deposit 
made  during  the period  of the application  of  provisional  measures  shall  be  refunded  and any  bonds 
released  in an expeditious manner. 

20.5  Where  a  final  determination  is  negative,  any  cash  deposit  made  during  the  period  of  the 
application of provisional measures shall be refunded and any bonds released in an expeditious manner. 

In critical circumstances where for the subsidized product in question the authorities find that 
20.6 
injury which is difficult to repair is caused by massive imports in a relatively short period of a product 
benefiting  from subsidies paid or bestowed  inconsistently  with the provisions  of GATT  1994 and of 
this Agreement  and where it is deemed necessary, in order to preclude the recurrence of such injury, 
to assess countervailing duties retroactively on those imports, the definitive countervailing duties may 
be assessed  on  imports which were entered for consumption not more than 90 days prior to the date 
of  application  of  provisional  measures. 

Article  21 

Duration and Review of  Countervailing Duties  and  Undertakings 

21.1  A  countervailing  duty  shall  remain  in  force  only  as  long  as  and  to  the  extent  necessary  to 
counteract  subsidization  which  is causing  injury. 

21.2  The authorities shall review the need for the continued imposition of the duty, where warranted. 
on their own initiative or, provided that a reasonable period of time  has elapsed  since the imposition 
of  the  definitive  countervailing  duty,  upon  request  by  any  interested  party  which  submits  positive 
information subsuntiating the need for a review.  Interested parties shall  have the right to request the 
authorities to examine whether the continued imposition of the duty is necessary to offset subsidization. 
whether the injury would be likely to continue or recur if the duty were removed  or varied, or both. 
If. as a result of the review under this paragraph, the authorities determine that the countervailing duty 
is  no  longer  warranted,  it shall  be terminated  immediately. 

21.3  Notwithstanding the provisions of paragraphs 1  and 2, any definitive countervailing duty shall 
be terminated on a date hot later than five years from its imposition (or from the date of the most recent 
review  under  paragraph  2  if  that  review  has  covered  both  subsidization  and  injury,  or  under  th-
paragraph), unless the authorities determine, in a review initiated before that date on their own initiative 
or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable 
period  of time  prior to that date,  that the expiry  of the duty would  be  likely  to  lead to continuation 

Page  253 

or recurrence  of  subsidization  and injury.32  The duty may  remain  in force  pending.the outcome  of 
such a review. 

21.4  The provisions of Article 12 regarding evidence and procedure shal 1 apply to any review carried 
out  under  this  Article.  Any  such  review  shall  be  carried  out  expeditiously  and  shall, normally  be 
concluded  within  12 months  of  the date of  initiation of  the  review. 

21.5  The  provisions  of  this  Article  shall  apply  mutatis mutandis to undertakings  accepted  under 
Article  18. 

Article  22 

Public Notice and Explanation  of 
Determinations 

22.1  When the authorities  are satisfied  that there is sufficient  evidence  to justify  the  initiation  of 
an investigation  pursuant  to  Article  11,  the Member  or Members  the products  of  which  are subject 
to such investigationand other interested parties known to the investigating authorities to have an interest 
therein shall  be  notified  and a public  notice shall  be given. 

22.2  A public notice of the  initiation of an  investigation shall contain, or otherwise make available 
through  a separate  report33,  adequate  information  on the  following: 

(i) 

the name of  the exporting  country or countries and the product  involved; 

(ii) 

the date of  initiation  of  the investigation; 

(iii) 

a description of  the subsidy practice or practices  to be  investigated; 

(iv) 

a summary  of  the factors  on which the  allegation  of  injury  is based; 

(v) 

(vi) 

the  address  to  which  representations  by  interested  Members  and  interested 
parties should  be directed;  and 

the time-limits allowed to interested Members and interested parties for making 
their views  known. 

Public  notice  shall  be given  of  any preliminary  or final determination,  whether  affirmative 
22.3 
or negative, of any decision to accept an undertaking pursuant to Article  18, of the  termination of such 
an undertaking, and of the termination of a definitive countervailing duty.  Each such notice shall set 
forth,  or  otherwise  make  available  through  a  separate  report,  in  sufficient  detail  the  findings  and 
conclusions  reached on all issues of fact and law considered material by the investigating  authorities. 
All  such  notices  and reports  shall  be forwarded  to the Member or  Members  the products  of  which 
are subject to such determination or undertaking and  to other interested parties known to have an interest 
therein. 

sWhen the amount of the countervailing duty is assessed on a retrospective basis, a finding  in the most recent assessment 

proceeding  that no duty  is to be levied  shall  not by itself  require the authorities to terminate  the definitive  duty. 

"Where authorities provide  information and explanations under the provisions of this Anicle  in a separate repon, they 

shall  ensure  that  such  repon  is readily  available  to the public. 

Page  254 

22.4  A  public notice of the imposition of provisional  measures  shall  set forth,  or otherwise make 
available through a separate report, sufficiently detailed explanations for the preliminary determinations 
on the existence of a subsidy and injury and shall refer to the maners of fact and law which have led 
to arguments  being accepted or rejected.  Such a notice or report shall, due regard being paid to the 
requirement  for the protection of confidential  information,  conuin  in panicular: 

(i) 

the names of the suppliers or, when this is impracticable, the supplying countries 
involved; 

(ii) 

a description  of the  product  which  is  sufficient  for  customs  purposes; 

(iii) 

the amount  of  subsidy  esublished  and the basis  on which the existence  of a 
subsidy  has been determined; 

(iv) 

considerations  relevant  to the  injury determination  as set out  in Article  15; 

(v) 

the main  reasons  leading to the determination. 

22.5  A public  notice  of conclusion  or suspension of an investigation  in the case of  an  affirmative 
détermination  providing  for  the imposition  of  a definitive  duty  or the  acceptance  of  an undertaking 
shall  contain,  or otherwise  make available through a separate  report, all  relevant  information  on the 
matters of fact and law and reasons which have led to the imposition of final measures or the acceptance 
of an undertaking, due regard being paid to the requirement for the protection of confidential  information. 
In particular,  the notice  or report shall  conuin the information  described  in paragraph 4.  as well  as 
the reasons for the acceptance or rejection of relevant arguments or claims made by interested Members 
and  by  the exporters  and  importers. 

22.6  A public  notice of the termination or suspension of an investigation following  the acceptance 
of an undertaking  pursuant to Anicle  18 shall  include, or otherwise make available through a separate 
report,  the  non-confidential  part of  this undertaking. 

22.7  The  provisions  of  this  Article shall  apply  mutatis mutandis to the  initiation  and completion 
of  reviews  pursuant  lo  Article  21  and to decisions  under Article 20 to apply  duties  retroactively. 

Article  23 

Judicial Review 

Each Member whose national legislation contains provisions on countervailing  duty measures • 
shall  maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter  alia, 
of  the  prompt  review  of  administrative  actions  relating  to  final  determinations  and  reviews  of 
determinations  within the meaning of  Article 21.  Such tribunals or procedures shall be independent 
of the authorities responsible for the determination or review in question, and shall provide all interested 
parties  who  participated  in the  administrative  proceeding  and are directly  and  individually  affected 
by the administrative  actions with access to review. 

Page 255 

PART VI:  INSTITUTIONS 

Article  24 

Committee on Subsidies and Countervailing Measures 
and Subsidiary Bodies 

24.1  There is hereby established a Committee on Subsidies and Countervailing Measures composed 
of representatives from each of the Members.  The Comminee  shall elect its own Chairman and shall 
meet  not  less  than twice a year and otherwise as envisaged by relevant provisions  of this Agreement 
at the request of any Member.  The Committee  shall carry out responsibilities as assigned to it under 
this Agreement  or.by the Members and it shall afford  Members the opportunity of consulting on any 
matter  relating  to  the  operation  of  the  Agreement  or the  furtherance  of  its  objectives.  The  WTO 
Secretariat  shall  act as the secreuriat  to the Comminee. 

24.2  The  Committee  may set up subsidiary  bodies as appropriate. 

24.3  The Committee  shall  establish a Permanent  Group of Experts composed  of five independent 
persons,  highly  qualified  in the  fields  of  subsidies  and trade relations.  The experts  will  be  elected 
by the Committee  and one of them will be replaced every year..  The PGE may be requested to assist 
a panel, as provided for in paragraph 5 of Article 4.  The Committee may also seek an advisory opinion 
on the existence  and nature of  any subsidy. 

24.4  The  PGE  may  be consulted  by  any Member  and may  give  advisory  opinions  on the nanire 
of  any  subsidy proposed  to be  introduced or currently  maintained  by that Member.  Such advisory 
opinions  will  be confidential  and may  not be invoked  in proceedings under Article  7. 

24.5 
In carrying  out  their  functions,  the Committee  and any  subsidiary  bodies  may  consult  with 
and  seek  information  from  any source they deem appropriate.  However,  before  the Comminee  or 
a subsidiary  body seeks such information  from a source within the jurisdiction  of a Member,  it shall 
inform  the  Member  involved. 

PART VII:  NOTIFICATION  AND  SURVEILLANCE 

Article  25 

Notifications 

25.1  Members  agree  that,  without  prejudice  to the provisions  of  paragraph  1 of  Article XVI  of 
GATT  1994. their notifications of subsidies shall be submined not later than 30 June of each year and 
shall  conform  to the provisions of paragraphs 2 through 6. 

25.2  Members  shall  notify  any subsidy  as defined  in paragraph  1 of  Article  1,  which  is  specific 
within the meaning  of  Article 2,  granted or mainuined  within their territories. 

25.3 
.The content of notifications should be sufficiently specific to enable other Members to evaluate 
the trade effects and to understand the operation of notified subsidy programmes.  In this connection, 

Page  256 

and without prejudice to the contents and form of the questionnaire on subsidies54, Members shall ensure 
that their  notifications  conuin the following  information: 

(i) 

form  of  a subsidy  (i.e.  grant,  loan, tax concession,  etc.); 

(ii) 

subsidy  per unit or,  in cases  where  this  is  not possible,  the toul  amount  or 
the annual  amount budgeted for that subsidy (indicating, if possible, the average 
subsidy  per unit  in the previous year); 

(iii) 

policy  objective  and/or purpose of a subsidy; 

(iv) 

duration of a subsidy  and/or any other time-limits  attached  to it; 

(v) 

sutistical  dau  permitting  an assessment  of the trade effects  of  a subsidy. 

25.4  Where specific points in paragraph 3 have not been addressed in a notification,  an explanation 
shall  be provided  in the notification  itself. 

If subsidies are granted to specific  products or sectors,  the notifications  should be organized 

25.5 
by product  or sector. 

25.6  Members  which consider that there are no measures  in their territories requiring  notification 
under paragraph  1 of Anicle  XVI of GATT  1994 and this Agreement shall  so inform the Secretariat 
in writing. 

25.7  Members recognize that notification of a measure does not prejudge either its legal status under 
GATT  1994 and this Agreement, the effects under this Agreement, or the nature of the measure itself. 

25.8  Any Member may. at any time, make a written request for information on the nature and extent 
of any subsidy granted or mainuined by another Member (including any subsidy referred to in Part IV ). 
or for an explanation of the reasons for which a specific  measure has been considered as not subject 
to the  requirement  of  notification. 

25.9  Members  so  requested  shall  provide  such  information  as  quickly  as  possible  and  in  a 
comprehensive  manner,  and  shall  be  ready,  upon  request,  to  provide  additional  information  to  the 
requesting  Member. 
In particular, they  shall provide  sufficient  details  to enable the other  Member 
to  assess their compliance with the terms of this Agreement.  Any Member which considers that such 
information  has not been provided  may  bring the matter to the attention of  the Committee. 

25.10  Any  Member  which  considers  that  any measure  of  another  Member  having  the  effects  of a 
subsidy  has  not  been  notified  in  accordance  with  the  provisions  of  paragraph  1 of  Article  XVI  of 
GATT  1994 and this Article may bring the matter to the attention of such other Member.  If the alleged 
subsidy is not thereafter notified promptly, such Member may itself bring the alleged subsidy in question 
to the notice  of  the Committee. 

25.11  Members  shall  report without delay  to the Comminee  all  preliminary  or final actions taken 
with respect to countervailing duties.  Such reports shall be available in the Secretariat for inspection 
by other Members.  Members shall also submit, on a semi-annual  basis, reports on any countervailing 
duty actions uken  within the preceding  six months.  The semi-annual  reports shall  be submitted  on 
an agreed standard  form. 

T he  Comminee  shall esublish  a Working  Party to review the contents and  form of  the questionnaire  as contained in 

BISD  9S/19M94. 

25.12  Each Member shall notify  the Committee  (a) which of its authorities are competent to initiate 
and  conduct  investigations  referred  to  in  Article  11  and  (b) its  domestic  procedures  governing  the 
initiation and conduct of  such  investigations. 

Page 257 

Article  26 

Surveillance 

26.1 
The  Committee  shall  examine  new  and  full  notifications  submitted  under  paragraph  1  of 
Article  XVI of GATT  1994 and paragraph  1  of Article  25 of this Agreement  at special sessions  held 
every  third  year.  Notifications  submitted  in  the  intervening  years  (updating  notifications)  shall  be 
examined  at each  regular meeting  of  the Committee. 

26.2  The Comminee shall examine reports submined under paragraph  11 of Article 25 at each regular 
meeting  of  the Committee. 

PART  VIII:  DEVELOPING  COUNTRY  MEMBERS 

Article  27 

Special  and Differential  Treatment of Developing  Country Members  -

27.1  Members  recognize  that  subsidies  may  play  an  important  role  in  economic  development 
programmes  of  developing  country  Members. 

27.2  The  prohibition  of  paragraph  1(a) of  Article  3 shall  not apply to: 

(a) 

developing  country  Members  referred  to  in Annex  VII. 

j(b) 

other developing country Members  for a period of eight  years from the date of entry 
into  force  of  the .WTO  Agreement,  subject  to  compliance  with  the  provisions  in 
paragraph  4. 

27.3  The prohibition of paragraph  1 (b) of Article  3 shall not apply to developing country Members 
for a period of five years, and shall not apply to least developed country Members for a period of eight 
years,  from  the date of  entry  into force  of  the WTO  Agreement. 

27.4  Any developing country Member referred to in paragraph 2(b) shall phase out its export subsidies 
within  the  eight-year  period,  preferably  in a progressive  manner.  However,  a developing  country 
Member shall not increase the level of its export subsidies55,  and shall eliminate them within a period 
shorter than that provided for  in this paragraph when the use of such export subsidies  is  inconsistent 
with its development needs.  If a developing country' Member deems it necessary to apply such subsidies 
beyond  the  8-year period,  it shall  not  later than one year before  the expiry  of this period enter into 
consulution with the Committee, which will determine whether an extension of this period is justified, 
after examining all the relevant economic,  financial  and development needs of the developing country 
Member in question.  If the Committee determines that the extension is justified, the developing country 
Member  concerned  shall hold annual consulutions  with the Committee  to détermine the necessity  of 

"For a developing country Member not granting export subsidies as of the date of entry into force of the WTO Agreement, 

this  paragraph  shall  apply  on the  basis  of  the  level  of  export subsidies  granted  in  1986. 

Page  258 

mainuining the subsidies.  If no such determination is made by the Committee, the developing country 
Member  shall  phase  out  the  remaining  export  subsidies  within  two  years  from  the  end  of  the  last 
authorized  period. 

27.5  A developing country Member which has reached export competitiveness in any given product 
shall phase  out  its export  subsidies  for such product(s) over a period  of two years.  However,  for a 
developing  country  Member  which  is  referred  to  in  Annex  VII  and  which  has  reached  export 
competitiveness  in one or more products, export subsidies on such products shall be gradually phased 
out  over  a period  of  eight  years. 

27.6  Export competitiveness  in a product exists  if a developing  country Member's  exports of that 
product have reached a share of at least 3.25  per cent in world trade of that product for two consecutive 
calendar years.  Export competitiveness shall exist either (a) on the basis of notification by the developing 
country Member having reached export competitiveness, or (b) on the basis of a computation undertaken 
by the Secretariat at the request of any Member.  For the purpose of this paragraph, a product is defined 
as a section heading of the Harmonized System Nomenclature.  The Comminee shall review the operation 
of  this provision  five  years  from  the date of  the entry  into force  of  the WTO  Agreement. 

27.7  The provisions of Article 4 shall not apply to a developing country Member in the case of export 
subsidies which are in conformity  with the provisions of paragraphs 2 through 5.  The relevant provisions 
in such a case  shall  be  those of  Article  7. 

27.8  There shall-be no presumption  in terms of paragraph  1 of Article 6 that a subsidy granted by 
a developing country Member results in serious prejudice, as defined in this Agreement.  Such serious 
prejudice, where applicable under the terms of paragraph 9, shall be demonstrated by positive evidence, 
in accordance  with  the provisions  of  paragraphs  3 through  8 of  Article  6. 

27.9  Regarding actionable subsidies granted or maintained by a developing country Member other 
than those referred to in paragraph  1  of Article 6. action may not be authorized or uken under Article  7 
unless nullification or impairment of tariff concessions or other obligations under GATT  1994 is found 
to exist  as a result of such a subsidy,  in such a way as to displace or impede imports of a like product 
of  another  Member  into the market  of  the subsidizing  developing  country' Member  or unless  injury 
to a domestic  industry  in the market  of an importing  Member occurs. 

27.10  Any countervailing duty investigation of a product originating in a developing country Member 
shall  be terminated  as soon  as the authorities concerned  determine that: 

(a) 

(b) 

the  overall  level  of  subsidies  granted  upon the product  in question does  not 
exceed  2 per cent of  its value calculated  on a per unit basis;  or 

the volume of the subsidized imports represents less than 4  per cent of the toul 
imports  of  the  like  product  in the  importing  Member,  unless  imports  from 
developing country Members whose individual shares of toul imports represent 
less than 4  per cent collectively  account for more than 9 per cent of the total 
imports  of  the like product  in the  importing  Member. 

27.11  For those developing country Members within the scope of paragraph 2(b) which have eliminated 
export  subsidies  prior to the expiry  of  the period  of eight  years from  the date of  entry  into force  of 
the WTO  Agreement, and for those developing country Members referred to in Annex  VII, the number 
in  paragraph  10(a)  shall  be  3 per cent  rather than 2 per cent.  This provision  shall  apply  from  the 
date that  the elimination  of  export  subsidies  is notified  to the Committee,  and for  so  long  as export 
subsidies  are not  granted  by the notifying  developing  country  Member.  This provision shall  expire 
eight  years  from  the date of  entry  into force  of the WTO Agreement. 

Page  259 

27.12  The provisions of paragraphs  10 and  11 shall govern any determination of de  minimis under 
paragraph 3  of  Article  15. 

27.13  The provisions of Pan III shall not apply to direct forgiveness of debts, subsidies to cover social 
costs, in whatever form, including relinquishment of government revenue and other transfer of liabilities 
when such subsidies are granted within and directly linked to a privatization programme of a developing 
country-  Member,  provided  that  both such programme  and the subsidies  involved  are granted  for a 
limited period and notified to the Comminee  and that the programme results in eventual privatization 
of  the enterprise concerned. 

27.14  The Committee shall, upon request by an interested Member, undertake a review of a specific 
export subsidy practice of a developing country Member to examine whether the practice is in conformity 
with  its development  needs. 

27.15  The Committee  shall, upon request by an interested developing  country  Member,  undertake 
a review  of a specific  countervailing measure to examine whether it is consistent  with the provisions 
of  paragraphs  10 and  11 as applicable  to the developing  country Member  in question. 

PART IX:  TRANSITIONAL  ARRANGEMENTS 

Article  28 

Existing Programmes 

Subsidy programmes  which have been esublished  within the territory' of any Member  before 
28.1 
the  date  on  which  such a Member  signed  the WTO Agreement  and which  are  inconsistent  with the 
provisions  of  this  Agreement  shall be: 

(a) 

(b) 

notified  to the Committee  not later than 90 days after the date of  entry  into force  of 
the WTO Agreement  for such Member;  and 

brought  into conformity  with the provisions  of this Agreement  within three years  of 
the date of entry  into force of the WTO Agreement  for such Member  and until  then 
shall  not be subject  to Pan II. 

28.2  No  Member  shall  extend the scope of any such programme,  nor shall  such a programme  be 
renewed  upon  its expiry. 

Article  29 

Transformation  into a Market Economy 

29.1  Members in the process of transformation from a centrally-planned into a market, free-enterprise 
•economy  may  apply  programmes  and measures  necessary  for  such a transformation. 

29.2 
For  such  Members,  subsidy  programmes  falling  within the scope  of  Article  3,  and  notified 
according to paragraph  3, shall be phased out or brought into conformity with Article  3 within a period 
of  seven  years  from  the date of  entry' into  force  of  the WTO Agreement.  In such a case.  Article  4 
shall  not  apply.  In addition during the same period: 

Page  260  . 

(a) 

Subsidy programmes falling within the scope of paragraph  1 (d) of Article  6 shall not 
be actionable  under Article 7; 

(b)  With respect to other actionable subsidies, the provisions of paragraph 9 of Article  27 

shall  apply. 

29.3 
Subsidy programmes  falling within the scope of Article  3 shall  be notified  to the Committee 
by  the  earliest  practicable  date  after  the date  of  entry  into force  of  the  WTO  Agreement.  Further 
notifications  of such subsidies may be made up to two years after  the date of entry  into force  of  the 
WTO  Agreement. 

In exceptional  circumstances  Members  referred  to  in paragraph  1 may  be given  departures 
29.4 
from their notified programmes and measures and their time-frame by the Comminee if such departures 
are deemed  necessary  for the process of  transformation. 

PARTX:  DISPUTE  SETTLEMENT 

Article  30 

The provisions of  Articles  XXII and XXIII of GATT  1994 as elaborated  and applied  by the 
Dispute  Settlement  Undersunding  shall  apply to consulutions  and the  senlement  of  disputes  under 
this  Agreement,  except  as otherwise  specifically  provided herein. 

PART XI:  FINAL  PROVISIONS 

Article  31 

Provisional  Application 

The provisions of paragraph  1 of Article 6 and the provisions of Article  8 and Article  9 shall 
apply for a period of five years, beginning with the date of entry into force of the WTO Agreement. 
Not  later  than  180 days before  the end  of  this period,  the Comminee  shall  review  the operation  of 
those provisions,  with a view  to determining  whether to extend their application,  either as presently 
drafted  or  in a modified  form,  for a further period. 

Article  32 

Other Final Provisions 

32.1  No  specific  action  against  a subsidy  of  another  Member  can be  uken  except  in accordance 
with the provisions  of GATT  1994.  as  interpreted by this  Agreement.* 

32.2  Reservations may not be entered in respect of any of the  provisions of this Agreement without 
the consent  of  the other Members. 

"This paragraph is not intended to preclude action under-other relevant provisions of GATT  1994,  where appropriate. 

(l 

Page 261 

Subject to paragraph 4, the provisions of this Agreement shall apply to investigations, and reviews 
32.3 
of existing  measures,  initiated pursuant to applications which have been made on or after  the date of 
entry  into force  for a Member  of the WTO Agreement. 

32.4 
For the purposes of paragraph 3 of Article 21, existing countervailing measures shall be deemed 
to be imposed on a date not later than the date of entry into force for a Member of the WTO Agreement, 
except  in cases  in which the domestic  legislation  of a Member  in force  at that date already  included 
a clause4 of  the type provided  for  in that paragraph. 

32.5  Each -Member  shall  take all  necessary  steps,  of  a general  or particular  character,  to ensure. 
not later than the date of entry  into force of the WTO Agreement  for  it,  the conformity  of  its  laws, 
regulations  and administrative  procedures  with the provisions  of  this Agreement  as they  may  apply 
to the  Member  in question. 

32.6  Each Member shall inform the Committee of any changes in its laws and regulations relevant 
to this  Agreement  and in the administration  of  such  laws and regulations. 

32.7  The Committee  shall  review annually the implemenution  and operation  of  this  Agreement. 
uking into account the objectives thereof.  The Committee shall inform annually the Council for Trade 
in Goods  of  developments  during the period  covered  by  such  reviews. 

32.8  The  Annexes  to this Agreement  constitute  an integral  part  thereof. 

Page  262 

ANNEX I 

ILLUSTRATIVE  LIST OF EXPORT  SUBSIDIES 

(a) 

The  provision  by  governments  of  direct  subsidies  to  a firm  or an  industry  contingent  upon 
export  performance. 

(b) 

Currency  retention schemes  or any similar practices  which  involve  a bonus on exports. 

(c) 

•(d) 

(e) 

(f) 

Internal  transport  and  freight  charges  on  export  shipments,  provided  or  mandated  by 
governments,  on terms more  favourable  than for domestic  shipments. 

The  provision  by  governments  or  their  agencies  either  directly  or  indirectly  through 
government-mandated  schemes,  of  imported or domestic products or services  for use  in the 
production of exported goods, on terms or conditions more favourable than for provision  of 
like or directly  competitive products or services for use in the production of goods for domestic 
consumption,  if (in the case of products) such terms or conditions  are more  favourable than 
those  commercially  available57  on world markets to their exporters. 

The  full  or partial  exemption  remission,  or deferral  specifically  related to exports, of  direct 
taxes5* or social  welfare  charges paid or payable by  industrial  or commercial  enterprises.59 

The  allowance  of  special  deductions  directly  related to exports or export performance,  over 
and above those granted in respect to production for domestic consumption, in the calculation 
of  ihe  base  on which direct  taxes are charged. 

'"The lent) "commercially available" means that the choice between domestic and imported products is unrestricted and 

depend*» onl\  on  commercial  considerations. 

'Tor  the  purpose  ol  this  Agreement: 

The term "direct taxes" shall mean taxes on wages, profits,  interests, renjs, royalties, and all other forms of income, 

and  taxes  on  the  ownership  of  real  property: 

The term  "import charges" shall  mean tariffs,  duties, and other fiscal  charges  not elsewhere enumerated  in this 

note  that arc  levied  on  imports: 

The term  "indirect taxes" shall  mean sales,  excise,  turnover, value added, franchise,  stamp, transfer,  inventory 

and  equipment  uxes.  border  taxes and all  taxes other  than direct taxes and  import charges; 

"Prior-stage* indirect uxes are those levied on goods or services used directly or indirectly in making the product: 
"Cumulative"  indirect uxes  are multi-suged uxes  levied  where there  is no mechanism  for subsequent crediting 
of  the ux  if  the goods or services subject lo ux  at one suge  of  production are used  in a succeeding stage of  production: 

"Remission" of  uxes  includes  the  refund  or  rebate of  uxes: 
"Remission  or drawback*  includes the  full  or partial  exemption  or deferral  of  import charges. 

T he  Members recognize that deferral  need not amount to an export subsidy where,  for example, appropriate  interest 
charges are collected. The Members reaffirm the principle that prices for goods-itrtransactions between exporting enterprises 
and foreign buyers under their or under the same control should for ux purposes be the prices which would be charged between 
independent enterprises acting at arm's length.  Any Member may draw the attention of another Member to administrative 
or  other  practices  which  may  contravene  this  principle  and  which  result  in a significant  saving  of  direct  uxes  in  expon 
transactions'.  In such circumsunces the Members shall normally attempt to resolve their differences  using the facilities  of 
existing  bilateral  ux  treaties or othrr specific  international  mechanisms,  without prejudice to the rights and obligations  of 
Members  under  GATT  1994.  including  the  right of  consulution  created  in the preceding  sentence. 

Paragraph (e) is not intended to limit a Member from uking measures to avoid the double uxation of foreign-source 

income  earned  by  its enterprises  or  the enterprises  of  another  Member. 

Page 263 

(g) 

(h) 

(i) 

(j) 

(k) 

The exemption or remission, in respea of the production and distribution of exported products, 
of indirect taxes58 in excess of those levied in respect of the production and distribution of like 
products  when sold for domestic  consumption. 

The exemption,  remission  or deferral  of prior-stage cumulative  indirect  taxes58 on goods  or 
services  used  in the production of  exported  products  in excess  of  the exemption,  remission 
or  deferral  of  like  prior-stage  cumulative  indirect  taxes  on  goods  or  services  used  in  the 
produaion  of  like products  when sold  for domestic  consumption;  provided,  however,  that 
prior-stage cumulative indirect taxes may be exempted, remitted or deferred on exported products 
even  when  not  exempted,  remitted  or  deferred  on  like  products  when  sold  for  domestic 
consumption, if the prior-stage cumulative indirect taxes are levied on inputs that are consumed 
in the production of the  exported product  (making normal allowance for waste).60  This item 
shall be interpreted in accordance with the guidelines on consumption of inputs in the production 
process  contained  in Annex II. 

The remission  or drawback of import charges58 in excess of those  levied on imported  inputs 
that  are consumed  in the production of the exported  produa  (making  normal  allowance  for 
waste);  provided, however, that in particular cases a firm may use a quantity of home market 
inputs equal  to, and having the same quality and charaaeristics  as, the imported  inputs as a 
substitute for them in order to benefit from this provision if the import and the corresponding 
export operations both occur within a reasonable time period, not to exceed two years.  This 
item  shall  be  interpreted  in accordance  with the guidelines  on consumption  of  inputs  in the 
production process contained in Annex  II and the guidelines in the determination of substitution 
drawback  systems  as export subsidies contained  in Annex III. 

The provision  by governments  (or special  institutions controlled  by governments)  of  export 
credit  guarantee  or  insurance  programmes,  of  insurance  or  guarantee  programmes  against 
increases in the cost of exported products or of exchange risk programmes, at premium rates 
which  are inadequate to cover the long-term operating  costs and losses  of the programmes. 

The grant by governments (or special institutions controlled by and/or acting under the authority 
of governments) of export credits at rates below those which they actually have to pay for the 
funds so  employed  (or would have to pay if they borrowed  on international  capital markets 
in order to obtain funds of the same maturity and other credit terms  and denominated  in the 
same currency as the export credit), or the payment by them of all or part of the costs incurred 
by exporters or financial  institutions in obtaining credits, in so far as they are used to secure 
a  material  advantage in the field of export credit terms. 

Provided, however, that if a Member is a party to an international undertaking on official export 
credits  to  which  at  least  twelve  original  Members  to  this  Agreement  are  parties  as  of 
1 January  1979 (or a successor undertaking which has been adopted by those original Members), 
or  if  in practice a Member applies the  interest rates provisions  of the relevant  undertaking, 
an export credit practice which is in conformity  with those provisions shall not be considered 
an export subsidy  prohibited by this Agreement. 

(1) 

Any other charge on the public account constitutmg an export subsidy m u^ sense of Artide XVI 
of  GATT  1994. 

•Paragraph (h) does not apply to value-added ux systems and border-ux adjustment in lieu thereof:  the problem of 

the excessive  remission of value-added uxes  is exclusively  covered by paragraph  (g). ' 

Page  264 

,  GUIDELINES  ON CONSUMPTION  OF INPUTS  IN THE PRODUCTION  PROCESS61 

ANNEX II 

I 

Indirect  tax  rebate  schemes  can  allow  for  exemption,  remission  or  deferral  of  prior-stage 
1. 
cumulative indirect taxes levied on inputs that are consumed in the production of the exported product 
(making  normal  allowance for waste).  Similarly,  drawback schemes  can allow for the remission  or 
drawback of import charges levied on inputs that are consumed in the production of the exported product 
(making  normal  allowance'for waste). 

2. 
The Illustrative List of Export Subsidies in Annex I of this Agreement makes reference to the 
term  "inputs that are consumed  in the production of the exported product" in paragraphs  (h) and (i). 
Pursuant  to paragraph (h), indirect tax rebate schemes  can constitute an export subsidy  to the extent 
that they result  in exemption,  remission or deferral  of prior-stage cumulative  indirect taxes in excess 
of the amount of such taxes actually levied on inputs that are consumed in the production of the exported 
product.  Pursuant to paragraph (i), drawback schemes can constitute an export subsidy to the extent 
that they result in a remission or drawback of import charges in excess of those actually levied on inputs 
that are consumed  in the production of the exported product.  Both paragraphs stipulate that normal 
allowance  for waste must  be made  in findings  regarding consumption of  inputs in the production of 
the exported  product.  Paragraph (i) also provides for substitution,  where  appropriate. 

II 

In examining  whether inputs are consumed  in the production of the exported product,  as part 
of a countervailing duty investigation pursuant to this Agreement, investigating authorities should proceed 
on  the  following  basis: 

1. 
Where it is alleged that an indirect tax rebate scheme, or a drawback scheme, conveys a subsidy 
by reason of over-rebate  or excess drawback of indirect taxes or import  charges on inputs consumed 
in the production of the exported product, the investigating authorities should first determine whether 
the government  of  the exporting  Member  has in place and applies a system or procedure  to  confirm 
which inputs are consumed  in the produaion of the exported product  and in what amounts.  Where 
such a system or procedure is daermined to be applied, the investigating authorities should then examine 
the system or procedure to see whether it is reasonable, effective  for the purpose intended, and based 
on generally  accepted commercial  practices  in the country  of export.  The  investigating  authorities 
may  deem  it  necessary to carry out,  in accordance with paragraph 6  of  Article  12. certain practical 
tests  in  order  to  verify  information  or  to  satisfy  themselves  that  the  system  or  procedure  is  being 
effectively  applied. 

2. 
Where there is no such system or procedure, where it is not reasonable, or where it is instituted 
and  considered  reasonable  but  is found  not to be applied  or not to be  applied  effeaively,  a further 
examination  by the exporting  Member  based on the actual  inputs involved  would need to be carried 
out in the context of determining whether an excess payment occurred.  If the investigating authorities 
deemed  it necessary,  a further examination  would  be carried out  in accordance with paragraph  1. 

"Inputs consumed in the production process are inputs physically incorporated, energy, fuels and oil used in the production 

process  and  caulysts  which are consumed  in the course of  their use to obuin  the exported  produa. 

Page 265 

3. 
Investigating authorities should treat inputs as physically  incorporated if such inputs are used 
in the production process and are physically present in the product exported.  The Members note that 
an input need not be present  in the final product  in the same form in which it entered the production 
process. 

4. 
In deterniining the amount of a particular input that is consumed in the produaion of the exported 
product, a "normal allowance for waste" should be taken into account, and such waste should be treated 
as consumed  in the production of the exported product.  The term  "waste" refers  to that portion  of 
a given input which does not serve an independent function in the production process, is not consumed 
in the produaion  of  the exported product  (for  reasons  such  as  inefficiencies)  and  is  not  recovered, 
used  or sold by the same  manufacturer. 

5. 
The  investigating  authority's  determination  of  whether  the  claimed  allowance  for  waste  is 
"normal" should  take into account the production process, the average experience of  the industry  in 
the country of export, and other technical factors, as appropriate.  The investigating authority should 
bear  in  mind  that  an  important  question  is  whether  the  authorities  in  the  exporting  Member  have 
reasonably calculated the amount of waste, when such an amount  is intended to be included  in the tax 
or duty  rebate or remission. 

Page  266 

ANNEX III 

GUIDELINES  IN THE  DETERMINATION lX)F SUBSTITUTION 
DRAWBACK  SYSTEMS  AS  EXPORT  SUBSIDIES 

I 

Drawback  systems  can allow  for the refund or drawback of  import  charges  on irr.-urs which 
are consumed  in the production process of another product and where the export of this latter product 
contains domestic inputs having the same quality and characteristics as those substituted for the imported 
inputs.  Pursuant to paragraph (i) of the Illustrative List of Export Subsidies  in Annex  I,  substitution 
drawback systems can constitute an export subsidy to the extent that they result in an excess drawback 
of the  import  charges  levied  initially  on the imported  inputs for which drawback  is being  claimed. 

In examining  any substitution drawback  system as part of a countervailing  duty  investigation 

pursuant  to this  Agreement,  investigating  authorities  should  proceed  on the  following  basis: 

Paragraph (i) of the Illustrative List stipulates that home market inputs mav  be substituted for 
1. 
imported  inputs  in the produaion  of a product for export provided  such  inputs arc equal  in quantity 
to. and have the same quality and characteristics as. the imported inputs being substituted.  The existence 
of a verification  system or procedure  is important because ii enables the government  of the exporting 
Member  to  ensure  and demonstrate  that  the quantity  of  inputs  for  which  drawback  is  claimed  does 
not exceed the quantity of similar products exported, in whatever form, and that there is not drawback 
of  import  charges  in excess  of those  originally  levied  on the  imported  inputs  in question. 

Where  it  is alleged  that a substitution drawback  system conveys a subsidy,  the  investigating 
2. 
authorities  should  first  proceed  to determine  whether  the government  of  the  exporting  Member  has 
in place and applies a verification system or procedure.  Where such a system or procedure is determined 
to be appl ied. the invest igat ing authorities should then examine the verification procedures to see whether 
they are reasonable, effective  for the purpose intended, and based on generally  accepted commercial 
practices  in the country of export.  To the extent that the procedures are determined to meet this test 
and  are effectively  applied,  no subsidy  should  be presumed  to exist. 
It may  be deemed  necessary 
by  the  investigating  authorities  to cany- out.  in accordance  with  paragraph 6  of  Article  12,  certain 
practical  tests  in order to verify  information  or to satisfy  themselves  that the verification  procedures 
are being  effectively  applied. 

3. 
Where there  are no  verification  procedures,  where  they  are  not  reasonable,  or  where  such 
procedures  are  instituted  and considered  reasonable  but  are  found  not  to be  actually  applied  or not 
applied  effectively,  there  may  be a  subsidy. 
In such cases  a further  examination  by  the exporting 
Member based on the actual transactions involved  would need to be carried out to determine whether 
an excess payment occurred.  If the investigating authorities deemed it necessary, a further examination 
would  be carried  out  in accordance  with paragraph 2. 

4. 
The existence of a substitution drawback provision under which exporters are allowed to select 
particular import shipments on which drawback is claimed should not of itself be considered to convey 
a  subsidy. 

5. 
An excess drawback of import charges in the sense of paragraph (i) would be  deemed to exist 
where governments paid interest on any monies refunded under their drawback schemes, to the extent 
of  the  interest  acmally paid or payable. 

Page 267 

Page  268 

ANNEX  IV 

CALCULATION  OF THE TOTAL AD  VALOREM  SUBSIDIZATION 
(PARAGRAPH  1(A) OF ARTICLE Ô)62 

Any calculation of the amount of a subsidy for the purpose of paragraph  1 (a) of Article 6 shall 

1. 
be done  in terms  of  the cost  to the granting  government. 

2. 
Except  as  provided  in  paragraphs  3  through  5,  in  determining  whether  the  overall  rate  of 
subsidization exceeds 5 per cent of the  value of the product, the value of the product shall be calculated 
as the total  value  of the recipient firm's63 sales  in the most  recent  12-month period,  for  which  sales 
.data is available,  preceding  the period  in which the subsidy  is granted.64 

3. 
Where the subsidy is tied to the production or sale of a given produa, the value of the  product 
shall  be  calculated  as  the total  value  of  the  recipient  firm's  sales  of  that  product  in the most  recent 
12-month period, for which sales data is available, preceding the period in which the subsidy is granted. 

Where the recipient firm is in a start-up situation,  serious prejudice shall be deemed  to exist 
4. 
if the overall  rate of  subsidization  exceeds  IS per cent of the total  funds  invested.  For purposes  of 
this  paragraph,  a start-up period  will  not extend  beyond  the first year of production.65 

Where the recipient firm is locatec  • r: an inflationary economy country, the value of the product 

5. 
shall  be calculated  as  the recipient  firm's  total  sales  (or sales of  the  relevant  product,  if the  subsidy 
is tied)  in the preceding  calendar year  indexed  by the rate of inflation  experienced  in the  12 months 
preceding  the  month  in which the subsidy  is to be given. 

In determining the overall rate of subsidization in a given year, subsidies given under different 

6. 
programmes  and by different  authorities  in the territory  of  a Member  shall  be aggregated. 

Subsidies  granted prior  to the date of  entry  into force  of  the WTO  Agreement,  the  benefits 

7. 
of  which  are allocated  to future production,  shall  be  included  in the overall  rate of  subsidization. 

8. 
Subsidies  which are non-actionable  under relevant provisions of this Agreement  shall  not be 
included  in the calculation of the amount of a subsidy for the purpose of paragraph  1(a) of Article  6. 

••'An undersunding among Members should be developed, as necessary, on matters which are not specified  in this Annex 

or  which  need  further  clarification  for the  purposes of paragraph  1(a) of Article 6. 

T he  recipient  firm  is a firm  in the  territory  of the subsidizing  Member. 

"In the case of tax-related  subsidies the value of the product shall be calculated as the toul  value of the recipient  firm's 

sales  in the fiscal  year  in which  the ux-related  measure  was earned. 

"Sun-up situations include insunces where financial commitments for product development or construction of facilities 

to  manufacture  products  benefiting  from  the subsidy  have  been  made,  even  though produaion  has not  begun. 

Page  269 

ANNEX  V 

PROCEDURES  FOR  DEVELOPING  INFORMATION  CONCERNING  SERIOUS  PREJUDICE 

1. 
Every Member  shall  cooperate  in the development  of evidence  to be examined  by a panel  in 
procedures under paragraphs 4 through  6 of Article  7.  The parties to the dispute and any third-country 
Member concerned shall notify* to the DSB, as soon as the provisions of paragraph 4 of Article  7 have 
been invoked, the organization responsible for administration of this provision within its territory and 
the procedures  to be used  to comply  with  requests  for  information. 

In cases where matters are referred to the DSB under paragraph 4 of Article  7, the DSB shall, 
2. 
upon request, initiate the procedure to obtain such information from the government of the subsidizing 
Member  as  necessary  to establish the existence  and amount  of subsidization,  the value  of total  sales 
of the subsidized firms, as well  as information necessary to analyze the adverse effects  caused by the 
subsidized  product.66  This process may  include,  where appropriate,  presentation  of questions to the 
government of the subsidizing Member and of the complaining Member to collect information,  as well 
as  to  clarify  and  obtain  elaboration  of  information  available  to  the  parties  to  a dispute  through  the 
notification  procedures  set  forth  in Part VII.6" 

3. 
In the case  of effeas  in third-country  markets,  a party to a dispute may collect  information, 
including  through the use of questions to the government  of the third-country  Member,  necessary  to 
analyse  adverse  effects,  which  is  not otherwise  reasonably  available  from  the  complaining  Member 
or the subsidizing  Member.  This requirement should be administered  in such a way as not to impose 
an unreasonable burden on the third-country  Member.  In particular, such a Member  is not expected 
to make a market  of  price analysis specially for that purpose.  The information  to be supplied  is that 
which is already available or can be readily obtained by this Member (e.g.  most recent statistics which 
have already been garnered by relevant statistical services but which have not yet been published, customs 
data concerning  imports and declared  values  of the products concerned,  etc.).  However,  if a party 
to a dispute  undertakes a detailed  market  analysis  at its own expense,  the task  of the person or firm 
conducting  such  an  analysis  shall  be  facilitated  by  the authorities  of  the  third-country  Member  and 
such  a  person  or  firm  shall  be  given  access  to  all  information  which  is  not  normally  maintained 
confidential  by  the  government. 

The  DSB  shall  designate  a  representative  to  serve  the  function  of  facilitating  the 
4. 
information-gathering  process.  The sole purpose of  the representative  shall  be to ensure  the  timely 
development  of  the information  necessary  to facilitate  expeditious  subsequent  multilateral  review  of 
the dispute.  In particular,  the representative  may  suggest  ways  to most  efficiently  solicit  necessary 
information  as well  as encourage  the cooperation  of  the parties. 

5. 
The information-gathering process outlined in paragraphs 2 through4 shall be completed within 
60 days of the date on which the matter has been referred to the DSB under paragraph 4 of Article  7. 
The  information  obtained during this process shall  be submitted  to the panel  established  by the  DSB 
in accordance with the provisions of Pan X.  This information should include,  inter alia, data concerning 
the amount of the subsidy in question (and. where appropriate, the value of total sales of the subsidized 
firms), prices of the subsidized product, prices of the non-subsidized produa, prices of other suppliers 
to the market,  changes  in the supply of the subsidized product to the market  in question and changes 

•In cases  where  the existence  of  serious  prejudice  has to be  demonstrated. 

•The  information-gathering  process by the DSB shall uke into account the need to protect information which is by namre 

confidential  or  which  is provided  on  a confidential  basis  by any  Member  involved  in this  process. 

Page  270 

in market  shares.  It should also include rebuttal evidence,  as well  as such supplemental  information 
as the panel  deems  relevant  in the course of  reaching  its  conclusions. 

If the subsidizing and/or third-country Member fail to cooperate in the  information-gathering 
6. 
process, the complaining Member will present its case of serious prejudice, based on evidence available 
to it, together with facts and circumstances of the non-cooperation of the subsidizing and/or third-country 
Member.  Where  information  is  unavailable  due  to  non-cooperation  by  the  subsidizing  and/or 
third-country  Member,  the panel  may complete  the record as necessary  relying  on best  information 
otherwise  available. 

In making  its determination,  the panel should'draw adverse inferences  from instances of non-

7. 
cooperation  by  any party  involved  in the information-gathering  process. 

8. 
In making  a determination to use either best information available or adverse inferences,  the 
panel  shall  consider  the  advice  of  the  DSB  representative  nominated  under  paragraph 4  as  to  the 
reasonableness  of  any  requests  for  information  and the efforts  made by parties to comply  with these 
requests  in a cooperative  and timely  manner. 

Nothing in the  information-gathering  process shall  limit the ability  of the panel  to seek  such 
9. 
additional  information  it  deems  essential  to  a proper  resolution  to  the  dispute,  and  which  was  not 
adequately sought or developed during that process.  However, ordinarily the panel should not request 
additional  information to complete the record where the information would support a particular party's 
position and the absence of that information in the record is the result of unreasonable non-cooperation 
by  that  party  in the  information-gathering  process. 

Page  271 

ANNEX  VI 

PROCEDURES  FOR ON-THE-SPOT  INVESTIGATIONS  PURSUANT  TO 
PARAGRAPH  6 OF ARTICLE  12 

Upon initiation of an investigation, the authorities of the exporting Member and the firms known 

1. 
to be concerned  should be informed  of the  intention to carry out on-the-spot  investigations. 

2. 
If  in  exceptional  circumstances  it  is  intended  to  include  non-governmental  experts  in  the 
investigating team, the firms and the authorities of the exporting Member should be so informed.  Such 
non-governmental  experts  should  be  subjea  to  effective  sanctions  for  breach  of  confidentiality 
requirements. 

It should be standard practice to obtain explicit agreement of the firms concerned in the exporting 

3. 
Member  before  the visit  is finally  scheduled. 

4 
As soon as the agreement of the firms concerned has been obtained, the investigating authorities 
should  notify  the authorities  of the exporting  Member  of the names and addresses of the firms to be 
visited  and the dates agreed. 

5. 

Sufficient  advance  notice  should  be given to the firms in question  before  the visit  is made. 

6. 
Visits to explain the questionnaire  should  only  be made at the request of  an exporting firm. 
In case of such a request the investigating authorities may place themselves at the disposal of the  firm; 
such a visit may only be made if (a) the authorities of the importing Member notify the representatives 
of  the government  of  the  Member  in question and  (b) the latter do not object  to the visit. 

7. 
As  the main purpose  of  the on-the-spot  investigation  is to verify  information  provided  or to 
obtain further details, it should be carried out after the response to the questionnaire has been received 
unless  the firm agrees  to the contrary  and the government  of  the exponing  Member  is  informed  by 
the investigating authorities of the anticipated visit and does not object to it; further, it should be standard 
practice prior to the visit to advise the firms concerned of the general nature of the information to be 
verified  and of  any  further  information  which needs to be provided,  though this should not preclude 
requests to be made on the spot for further details to be provided in the light of information obtained. 

8. 
Enquiries or questions put by the authorities or firms of the exporting Members and essential 
to a successful  on-the-spot  investigation  should,  whenever  possible,  be answered  before  the  visit  is 
made 

Page  272 

ANNEX  VII 

DEVELOPING  COUNTRY  MEMBERS  REFERRED  TO 
IN PARAGRAPH  2(A) OF ARTICLE  27 

The developing country Members not subject to the provisions of paragraph  1(a) of Article  3 

under the  terms  of  paragraph 2(a) of  Article 27 are: 

(a) 

(b) 

Least-developed countries  designated  as such  by the  United  Nations  which are  Members  of 
the WTO. 

Each of the following  developing  countries which are Members  of the WTO shall  be subject 
to  the  provisions  which  are  applicable  to  other  developing  country  Members  according  to 
paragraph  2(b) of Article 27 when GNP per capita has reached $1,000 per annum68:  Bolivia, 
Cameroon,  Congo, Côte d'Ivoire,  Dominican Republic,  Egypt,  Ghana, Guatemala,  Guyana. 
India, Indonesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan, Philippines, Senegal, Sri Lanka 
and  Zimbabwe. 

••The  inclusion  of  developing  country Members in the list in paragraph  (b)  is based on the  most recent dau  from  the 

World  Bank  on  GNP  per cap tu. 

Page  273 

AGREEMENT  ON  SAFEGUARDS 

Members, 

Having in mind the overall objective of the Members to improve and strengthen the international 

trading  system  based on GATT  1994; 

Recognizing  the need to clarify  and reinforce the disciplines of GATT  1994, and  specifically 
those of its  Article XDC (Emergency Aaion on Imports of Particular Products), to re-establish multilateral 
control  over safeguards and eliminate  measures  that escape such control; 

Recognizing the importance of structural adjustment and the need to enhance rather than limit 

competition  in international  markets;  and 

Recognizing  further  that,  for these  purposes,  a comprehensive  agreement,  applicable  to  all 

Members  and based  on the basic principles of  GATT  1994,  is called  for; 

Hereby  agree  as  follows: 

Article  1 

General Provision 

This  Agreement  establishes  mles  for  the  application  of  safeguard  measures  which  shall  be 

understood  to mean those measures  provided  for  in Article  XIX >of GATT  1994. 

Article  2 

Conditions 

A Member1 may apply a safeguard measure to a product only if that Member has determined, 
1. 
pursuant to the provisions set out below,  that such product  is being imported  into its territory  in such 
increased quantities, absolute or relative to domestic production, and under such conditions as to cause 
or threaten to cause serious injury to the domestic industry that produces like or directly  competitive 
products. 

2. 

Safeguard  measures shall  be applied to a product being  imported  irrespective  of  its source. 

'A customs  union  may apply  a safeguard  measure  as a single  unit or on  behalf of a member  Sute.  When a customs 
union applies a ufeguard measure as a single unit, all the requirements for the determination of serious injury or threat thereof 
under this Agreement shall be based on the conditions existing in the customs union as a whole.  When a safeguard  measure 
is applied on behalf of a member Sute.  all the requirements for the determination of serious  injury or threat thereof  shall 
be  based  on the  conditions  existing  in that member Sute  and «the measure  shall be limited to that member Sute.  Nothing 
in this  Agreement  prejudges  the  interpreution of the  relationship  between  Article  XDC and paragraph  8 of Anicle  XXIV 
of  GATT  1994. 

Page  274 

Article  3 

Investigation 

1. 
A  Member  may apply a safeguard  measure only following  an investigation  by the competent 
authorities of that Member pursuant to procedures previously established and made public in consonance 
with Article  X of GATT 1994.  This investigation shall include reasonable public notice to all interested 
parties and public hearings or other appropriate means in which importers, exporters and other interested 
parties could present evidence and their views, including the opportunity to respond to the presentations 
of other parties and to submit their views, inter alia,  as to whether or not the application of a safeguard 
measure would be in the public interest.  The competent authorities shall publish a report sening  forth 
their findings  and  reasoned  conclusions  reached  on all pertinent  issues  of  fact  and law. 

2.- 
Any  information  which is by nature confidential  or which is provided on a confidential  basis 
shall, upon cause being shown, be treated as such by the competent authorities.  Such information shall 
not be disclosed without permission of the party submitting it. Parties providing confidential  information 
may be  requested to furnish non-confidential  summaries thereof or,  if such parties indicate that such 
information  cannot be summarized,  the reasons why a summary cannot be provided.  However,  if the 
competent authorities find that a request for confidentiality  is not warranted and if the party concerned 
is either unwilling to make the information public or to authorize its disclosure in generalized or summary 
form, the authorities may disregard such information unless it can be demonstrated to their satisfaction 
from  appropriate  sources  that the  information  is correct. 

Article  4 

Determination of Serious Injury or  Threat Thereof 

1. 

For the purposes  of  this  Agreement: 

(a) 

(b) 

(c) 

"serious  injury" shall  be understood  to mean a significant  overall  impairment  in the 
position  of  a domestic  industry; 

"threat of  serious  injury" shall  be understood  to  mean serious  injury that  is  clearly 
imminent,  in accordance with the provisions of paragraph 2.  A determination of the 
existence  of  a  threat  of  serious  injury  shall  be  based  on  facts  and  not  merely  on 
allegation,  conjecture  or remote possibility;  and 

in determining  injury or threat thereof,  a "domestic industry" shall  be understood  to 
mean the producers as a whole of the like or directly competitive products operating 
within the territory of a Member, or those whose collective output of the like or directly 
competitive  products constitutes a major proportion of the total domestic production 
of  those products. 

(a) 

2. 
In  the  investigation  to  determine  whether  increased  imports  have  caused  or  are 
threatening  to  cause  serious  injur)' to  a domestic  industry  under  the  terms  of  this  Agreement,  the 
competent  authorities shall evaluate all relevant factors of an objective  and quantifiable nanire having 
a bearing on the situation of that industry, in particular, the rate and amount of the increase in imports 
of  the  product  concerned  in absolute  and  relative  terms,  the share of  the domestic  market taken by 
increased imports, changes in the level of sales, production, productivity, capacity utilization,  profits 
and losses,  and  employment. 

Page  275 

(b) 

The  determination  referred  to  in  subparagraph (a)  shall  not  be  made  unless  this 
investigation demonstrates, on the basis of objective evidence, the existence of the causal link between 
increased  imports of the product concerned and serious injury or threat thereof.  When factors other 
than increased imports are causing injury to the domestic industry at the same time,  such injury shall 
not be attributed  to  increased  imports. 

(c) 

The competent authorities shall publish promptly,  in accordance with the provisions 
of Article  3, a detailed analysis of the case under investigation as well as a demonstration of the relevance 
of the factors  examined. 

Article  5 

Application  of Safeguard Measures 

A Member  shall apply safeguard measures only to the extent necessary to prevent or remedy 
1. 
serious  injury and to facilitate  adjustment.  If a quantitative restriction is used,  such a measure shall 
not  reduce the quantity  of  imports  below  the level  of  a recent period which  shall  be the average  of 
imports in the last three represenutive years for which statistics are available, unless clear justification 
is given that a different  level is necessary to prevent or remedy serious injury.  Members should choose 
measures  most  suitable  for the achievement  of these objectives. 

(a) 

.  In cases in which a quota is allocated among supplying countries, the Member applying 
2. 
the restrictions may seek agreement with respect to the allocation of shares in the quota with all other 
Members having a substantial interest in supplying the product concemed.  In cases in which this method 
is not reasonably practicable, the Member concerned shall allot to Members having a substantial interest 
in supplying the produa shares based upon the proportions, supplied by such Members during a previous 
representative period, of ihe toul quantity or value of imports of the product, due account being uken 
of  any special  factors  which may  have affected  or may be affecting  the trade in the product. 

(b) 

A Member maydepart from the provisions in subparagraph (a) provided that consulutions 

under paragraph  3  of  Anicle  12 are conducted  under the auspices  of  the  Committee  on  Safeguards 
provided  for in paragraph  1 of Article  13 and that clear demonstration is provided to the Committee 
that (/) impons  from certain Members have increased in disproportionate percenuge in relation to the 
total  increase of  imports  of  the product  concerned  in the represenutive  period,  (ii)  the reasons  for 
the  departure  from  the provisions  in subparagraph (a) are justified,  and (iii)  the  conditions  of  such 
departure are equitable to all  suppliers of the product concerned.  The duration of any such measure 
shall not be extended beyond the initial period under paragraph  1  of Article  7.  The departure referred 
to above  shall  not be permitted  in the case of threat of serious  injury. 

Article 6 

Provisional  Safeguard Measures 

In critical circumstances where delay would cause damage which it would be difficult to repair, 
a Member may uke a provisional safeguard measure pursuant to a preliminary determination that there 
is clear evidence that increased imports have caused or are threatening to cause serious  injury.  The 
duration  of  the  provisional  measure  shall  not  exceed  200 days,  during  which  period  the  pertinent 
requirements  of  Articles 2  through 7  and  12 shall  be met.  Such measures  should  uke  the  form  of 
tariff  increases to be promptly  refunded  if the subsequent investigation referred to in paragraph 2 of 
Article 4 does not determine that increased imports have caused or threatened to cause serious injury 

Page  276 

to a domestic  industry.  The duration of  any such provisional  measure  shall be counted  as a part of 
the  initial  period and any extension  referred to in paragraphs  1, 2  and 3 of  Article  7. 

Article  7 

Duration and Review of Safeguard Measures 

1. 
A Member shall  apply safeguard measures only  for such period  of time as may be necessary 
to prevent or remedy serious injury and to faciliute adjustment.  The period shall not exceed four years, 
unless  it  is  extended  under paragraph 2. 

2. 
The period mentioned in paragraph  1  may be extended provided that the competent authorities 
of  the  importing  Member  have determined,  in conformity  with the procedures  set  out  in Articles  2, 
3 ,4  and 5,  that  the safeguard measure continues to be necessary to prevent or remedy serious  injury 
and  that  there  is  evidence  that the  industry  is adjusting,  and provided that the pertinent  provisions 
of  Articles  8 and  12 are observed. 

The toul  period of application of a safeguard  measure  including the period of application of 
3. 
any provisional  measure, the period of initial application and any extension thereof,  shall not exceed 
eight  years. 

In order to facil itate adjustment in a situation where the expected duration of a safeguard measure 

4. 
as notified  under the provisions of paragraph  1 of Article  12 is over one year, the Member  applying 
the measure  shall  progressively  liberalize  it at regular  intervals during the period  of application.  If 
the duration  of the measure  exceeds  three years, the Member  applying  such a measure shall  review 
the  situation  not  later than the mid-term of  the measure  and,  if  appropriate,  withdraw  it or  increase 
the pace of  liberalization.  A measure extended under paragraph 2 shall not be more restrictive than 
it  was at the end  of  the  initial  period,  and should  continue to be  liberalized. 

No safeguard measure shall be applied again to the import of a product which has been subject 
5. 
to  such  a measure,  taken after  the date of  entry  into  force  of  the WTO Agreement,  for  a period  of 
time  equal  to that during  which such measure had been previously  applied, provided  that the period 
of  non-application  is at least two years. 

Notwithstanding the provisions of paragraph 5, a safeguard measure with a duration of 180 days 

6. 
or  less  may  be applied  again to the  import of a product  if: 

(a) 

(b) 

at least one year has elapsed since the date of introduction of a safeguard  measure on 
the  import  of  that product;  and 

such a safeguard measure  has not been applied on the same product more than twice 
in the five-year period immediately preceding the date of introduction of the measure. 

Article  8 

Level of  Concessions and  Other  Obligations 

A  Member  proposing  to apply  a safeguard  measure  or  seeking  an extension  of  a  safeguard 
1. 
measure shall endeavour to maintain à substantially equivalent level of concessions and other obligations 
to that existing  under GATT  1994 between it and the exporting  Members  which  would  be  affected 
by such a measure,  in accordance with the provisions of paragraph 3 of Article  12.  To achieve this 

(i 

Page  277 

objective,  the Members  concerned  may agree on any adequate means  of  trade compensation  for  the 
adverse  effects  of the measure  on their trade. 

2. 
If no agreement is reached within 30 days in the consulutions under paragraph  3 of Article  12, 
then the affected exporting Members shall be free, not later than 90 days after the measure is applied, 
to suspend, upon the expiration of 30 days from the day on which written notice of such suspension 
is received by the Council  for Trade in Goods, the application of subsumially  equivalent concessions 
or other obligations under GATT  1994, to the trade of the  Member  applying the safeguard  measure, 
the suspension of which the Council  for Trade in Goods does  not disapprove. 

3. 
The right of  suspension  referred  to  in paragraph 2  shall  not be  exercised  for  the first three 
years that a safeguard  measure  is  in effect,  provided that the safeguard  measure  has been uken  as a 
result of an absolute  increase in imports and that such a measure  conforms  to the provisions of  this 
Agreement. 

Article  9 

Developing  Country Members 

1. 
Safeguard measures shall not be applied against a product originating in a developing country 
Member  as long as its share of imports of the produa  concerned  in the importing  Member does not 
exceed 3 per cent, provided that developing country Members with less than 3 per cent import share 
collectively  account for not more than 9 per cent of toul  imports  of the product  concerned.2 

2. 
A developing  country  Member  shall  have the right to extend thé period of application  of a 
safeguard  measure  for  a  period  of  up  to  two  years  beyond  the  maximum  period  provided  for  in 
paragraph 3 of  Article  7.  Notwithstanding the provisions  of paragraph 5 of  Article 7.  a developing 
country  Member  shall  have the right to apply a safeguard  measure  again to the  import  of a product 
which has been subject to such a measure, uken after the date of entry into force of the WTO Agreement. 
after  a period  of  time  equal  to half  that during  which  such  a measure  has  been previously  applied, 
provided  that the period  of non-application is at least two years. 

Article  10 

Pre-existing Article XIX Measures 

Members shall terminate all safeguard measures uken pursuant to Article  XIX of GATT  1947 
that were in existence on the date of entry into force of the WTO  Agreement not later than eight years 
after  the date on which  they  were first applied  or five years  after  the date of  entry  into force  of  the 
WTO Agreement,  whichever comes  later. 

2A Member shall immediately notify  an action uken under paragraph  1 of Artick  9to  the Committee on Safeguards. 

Page  278 

Article  11 

Prohibition and Elimination of  Certain  Measures 

(a) 

1. 
A Member shall not uke or seek any emergency action on imports of particular products 
as set forth  in  Article  XIX  of  GATT  1994- unless  such  action conforms  with  the provisions  of  that 
Article  applied  in accordance with this Agreement. 

(b) 

Furthermore, a Member shall not seek, take or mainuin any volunury export restraints, 
orderly  marketing  arrangements  or any  other  similar  measures  on  the export  or  the  import  side.34 
These-include actions uken  by a single  Member as well  as actions under agreements,  arrangements 
and understandings  entered  into by two or more  Members.  Any  such measure  in effea  on the date 
of  entry  into force  of the WTO Agreement  shall  be brought  into conformity  with this Agreement  or 
phased  out  in accordance  with paragraph 2. 

(c) 

•  This Agreement does not apply to measures sought, uken or mainuined by a Member 
pursuant to provisions of GATT  1994 other than Article  XIX, and Multilateral  Trade Agreements in 
Annex  1A other than this Agreement, or pursuant to protocols and agreements or arrangements concluded 
within  the  framework  of GATT  1994. 

2. 
The phasing  out  of  measures  referred  to  in paragraph  1(b) shall  be carried out according  to 
timetables to be presented to the Committee  on Safeguards by the Members  concerned not later than 
180 days  after  the date of  entry  into  force of  the WTO Agreement.  These  timetables  shall  provide 
for  all  measures  referred  to  in paragraph  1 to  be  phased  out  or  brought  into  conformity  with  this 
Agreement  within  a  period  not  exceeding  four  years  after  the  date  of  entry  into  force  of  the 
WTO  Agreement, subject to hot more than one specific measure per importing Member3, the duration 
of  which shall  not extend  beyond  31  December  1999.  Any such exception must be mutually  agreed 
between the Members direaly  concerned and notified  to the Committee  on Safeguards  for its review 
and acceptance  within 90 days  of  the entry  into  force  of  the WTO Agreement.  The  Annex  to  this 
Agreement  indicates a measure  which  has been agreed as falling  under this  exception. 

Members  shall  not  encourage or support the adoption or maintenance  by public and private 

3. 
enterprises  of  non-governmental  measures  equivalent  to those  referred  to  in paragraph  1. • 

Article  12 

, 

Notification and Consultation 

1. 

A  Member  shall  immediately  notify  the Committee  on Safeguards upon: 

(a) 

initiating an investigator)' process relating to serious  injury or threat thereof and the 
reasons  for  it; 

'An  import quota  applied as a safeguard  measure  in conformity-  with the relevant provisions of GATT  1994  and mis 

Agreement  may.  by mutual  agreement,  be administered by the  exponing  Member. 

'Examples of similar measures  include export moderation, export-price or import-price monitoring systems,  expon or 
impon surveillance, compulsory  impon cartels and discretionary  expon or impon licensing  schemes, any of which  afford 
protection. 

•The only  such exception to which the European Communities is entitled is indicated in die Annex to this Agreement. 

Page  279 

(b) 

making a finding of serious injury or threat thereof caused by increased imports;  and 

(c) 

uking  a decision to apply or extend a safeguard  measure. 

2. 
In making  the  notifications  referred  to  in paragraphs  1(b) and  1(c),  the Member  proposing 
to apply or extend a safeguard measure shall provide the Comminee  on Safeguards with all pertinent 
information, which shall include evidence of serious injury or threat thereof caused by increased imports, 
precise description of the product involved and the proposed measure, proposed date of introduction, 
expected duration and timeuble for progressive liberalization.  In the case of an extension of a measure, 
evidence  that the industry  concemed  is adjusting  shall  also be provided.  The Council  for Trade  in 
Goods or the Committee on Safeguards may request such additional information as they may consider 
necessary  from  the Member proposing  to apply or extend the measure. 

3. 
A Member proposing to apply or extend a safeguard measure snail provide adequate opportunity 
for  prior consulutions  with those Members  having a substantial  interest as exporters of  the produa 
concemed. with a view to,  inter alia, reviewing the infonnation provided under paragraph 2, exchanging 
views  on  the  measure  and  reaching  an  undersunding  on  ways  to  achieve  the  objective  set  out  in 
paragraph  1 of  Article &. 

a 

4. 
A Member shall make a notification to the Comminee on Safeguards before uking a provisional 
safeguard measure referred to in Article 6.  Consulutions shall be initiated immediately after the measure 
is taken. 

5. 
The results of the consulutions referred to in this Article, as well  as the results of mid-term 
reviews referred to in paragraph 4 of Article 7, any form of compensation referred to in paragraph. 1 
of Anicle 8. and proposed suspensions of concessions and other obligations referred to in paragraph  2 
of Article  8. shall be notified immediately to the Council for Trade in Goods by the Members concerned. 

6. 
Members  shall  notify  promptly  the Committee  on Safeguards  of their laws,  regulations and 
administrative procedures relating to safeguard measures as well  as any modifications  made to them. 

7. 
Members  mainuining  measures described in Article  10 and paragraph  1 of Article  11 which 
exist on the date of entry into force of the WTO Agreement  shall notify such measures to the Committee 
on Safeguards  not  later than 60 days after the date of entry  into force  of the WTO Agreement.  " 

8. 
Any Member may notify the Committee on Safeguards of all laws, regulations, administrative 
procedures  and any measures or actions dealt with  in this Agreement  that have not been notified  by 
other  Members  that are required by this Agreement  to make such  notifications. 

Any  Member  may  notify  the Committee  on  Safeguards  of  any  non-governmental  measures 

9. 
referred  to  in paragraph 3 of  Anicle  11. 

AH notifications to the Council for Trade in Goods referred to in this Agreement shall normally 

10. 
be made through the Committee  on Safeguards. 

The provisions  on notification  in this  Agreement  shall  not  require any  Member  to  disclose 
11. 
confidential information the disclosure of which would impede law enforcement or otherwise be contrary 
to the public interest or would prejudice the legitimate commercial  interests of particular enterprises, 
public or private. 

Page  280 

Article  13 

Surveillance 

1. 
A Committee on Safeguards is hereby esublished, under the authority of the Council for Trade 
in Goods, which shall be open to the participation of any Member  indicating  its wish to serve on it. 
The Committee  will  have the following  functions. 

(a) 

(b) 

to  monitor,  and report  annually  to the  Council  for  Trade  in Goods  on,  the  general 
implemenution of this Agreement and make recommendations towards its improvement; 

to find, upon request of an affected Member, whether or not the procedural requirements 
of this Agreement  have been complied  with in connection with a safeguard measure, 
and report  its findings  to the Council  for Trade in Goods; 

(c) 

'  to assist  Members,  if they so  request,  in their consulutions  under the provisions  of 

this  Agreement; 

(d) 

(e) 

(f) 

(g) 

to examine  measures  covered  by  Article  10 and paragraph  1 of  Article  11,  monitor 
the phase-out of such measures and report as appropriate to the Council  for Trade in 
Goods; 

to review, at the request of the Member uking a safeguard measure, whether proposals 
to suspend concessions or other obligations are "substantially equivalent", and report 
as appropriate to the Council  for Trade  in Goods; 

to receive  and review  all  notifications  provided  for  in this Agreement  and report as 
appropriate  to the Council  for Trade in Goods;  and 

to perform any other function connected with this Agreement that the Council for Trade 
in Goods  may determine. 

2. 
To assist the Committee  in carrying out its surveillance function, the Secreuriat §hall prepare 
annually a factual  report on the operation of this Agreement  based on notifications  and other reliable 
information  available  to it. 

Article  14 

Dispute Settlement 

The provisions  of  Articles  XXII and XXIII of GATT  1994 as elaborated and applied  by the 
Dispute  Settlement  Undersunding  shall apply to consulutions  and the settlement  of disputes arising 
under this  Agreement. 

Page 281 

ANNEX 

EXCEPTION  REFERRED  TO IN PARAGRAPH  2 OF ARTICLE  11 

Members concerned 

Product 

EC/Japan 

Passenger cars, off road 
vehicles, light commercial 
vehicles, light trucks (up 
to 5 tonnes), and the same 
vehicles in wholly 
knocked-down form (CKD 
sets). 

Termination 

31 December  1999 

Page 282 

Page  283 

ANNEX  IB 

GENERAL  AGREEMENT  ON  TRADE  IN  SERVICES 

PARTI 

SCOPE AND  DEFINITION 

Article  I 

. 

'  Scope and  Definition 

PART  II 

GENERAL  OBLIGATIONS  AND  DISCIPLINES 

Most-Favoured-Nation  Treatment 
Transparency 

Increasing Participation of  Developing  Countries 
Economic  Integration 
Labour Markets  Integration  Agreements 
Domestic  Regulation 
Recognition 

Article II 
Anicle  III 
Article  III bis  Disclosure  of  Confidential  Information 
Article IV 
Article V 
Article  V  bis 
Article  VI 
Article  VII 
Article  VIII 
Business  Practices  . 
Article  IX 
Emergency Safeguard  Measures 
Article  X 
Payments and Transfers 
Article  XI 
Restrictions  to Safeguard  the Balance of  Payments 
Article  XII 
Government  Procurement 
Anicle  XIII 
Anicle  XIV 
General  Exceptions 
Anicle  XIV  bis  Security  Exceptions 
Anicle  XV 

*  Monopolies  and Exclusive Service  Suppliers 

Subsidies 

PART  III 

SPECIFIC  COMMITMENTS 

Anicle  XV] 
Anicle  XVII 
Anicle  XVIII 

Market  Access 
National Treatment 
Additional Commitments 

PART  IV 

PROGRESSIVE  LIBERALIZATION 

Ànicle  XIX 
Anicle  XX 
Anicle  XXI 

Negotiation of  Specific  Commitments 
Schedules of Specific  Commitments 
Modification  of Schedules 

PART  V 

INSTITUTIONAL PROVISIONS 

Consulution 
Dispute Settlement and  Enforcement 

Anicle  XXn 
Anicle  XXIII 
Anicle  XXTV  Council  for Trade in  Services 
Anicle  XXV 
Anicle  XXVI  Relationship with Other International  Organizations 

Technical  Cooperation 

Page  284 

PART  VI 

FINAL  PROVISIONS 

Article  XXVII  Denial  of  Benefits 
Article  XXVIII  Definitions 
Article XXIX  Annexes 

Annex  on Article  II Exemptions 
Annex  on  Movement  of  Natural  Persons  Supplying  Services under the Agreement 
Annex  on Air Transport  Services 
Annex  on  Financial  Services 
Second- Annex  on Financial  Services 
Annex  on  Negotiations  on Maritime  Transport  Services 
Annex  on  Telecommunications 
Annex  on  Negotiations  on Basic  Telecommunications 

GENERAL  AGREEMENT  ON TRADE  IN  SERVICES 

Page  285 

Members, 

Recognizing  the growing  importance of  trade in services  for the growth and development  of 

the  world  economy; 

Wishing to esublish a multilateral framework  of principles and mles for trade in services with 
a view to the expansion pf such trade under conditions of transparency and progressive  liberalization 
and  as  a means  of  promoting  the  economic  growth  of  all  trading  partners  and  the  development  of 
developing  countries; 

Desiring the early achievement of progressively higher levels of liberalization of trade in.services 
through successive rounds of multilateral negotiations aimed at promoting the interests of all participants 
on a mutually  advanugeous  basis and at securing an overall  balance of  rights and obligations,  while 
giving  due  respect  to national  polxy  objectives; 

Recognizing the right of Members to regulate, and to introduce new regulations, on the supply 
of services within their territories in order to meet national policy  objectives and, given  asymmetries 
existing  with  respect  to the degree  of development  of services  regulations  in different  countries,  the 
particular  need  of  developing  countries  to exercise  this right; 

Desiring  to facilitate  the increasing participation of developing  countries  in trade in services 
and  the  expansion  pf  their  service  exports  including,  inter alia,  through  the  strengthening  of  their 
domestic  services  capacity  and  its efficiency  and competitiveness; 

Taking particular account  of the serious difficulty  of the least-developed  countries  in view  of 

their special  economic  situation and their development,  trade and financial  needs; 

Hereby  agree  as  follows: 

PARTI 

SCOPE AND  DEFINITION 

Article I 

Scope and Definition 

1. 

2. 

This  Agreement  applies to measures  by  Members  affecting  trade  in services. 

For the purposes of  this  Agreement,  trade  in services  is defined  as  the supply  of  a service: 

(a) 

from  the territory  of  one  Member  into the territory  of  any other  Member; 

(b) 

in the territory  of one  Member  to the service consumer  of  any other Member; 

by  a service  supplier  of  one  Member,  through commercial  presence  in the territory 

(c) 
of  any  other  Member; 

Page  286 

by a service supplier of one Member, through presence of natural persons of a Member 

(d)  • 
in the territory  of  any other Member. 

3. 

For the purposes  of  this  Agreement: 

(a) 

"measures  by  Members'4 means measures  uken  by: 

(i) 

(ii) 

central,  regional  or local  governments  and authorities;  and 

non-governmental  bodies  in  the  exercise  of  powers  delegated  by  central, 
regional  or local  governments  or authorities; 

In fulfilling  its obligations  and commitments  under the Agreement,  each Member  shall  uke 
such reasonable measures as may be available to it to ensure their observance by regional and 
local  governments  and authorities and non-governmental  bodies within  its territory; 

"services"  includes any service  in any sector except services  supplied in the exercise 

(b) 
of  governmental  authority; 

(c) 
"a service supplied in the exercise of governmental authority" means any service, which 
is suppl ied neither on a commercial basis, nor in competition with one or more service suppliers. 

PARTII 

GENERAL  OBLIGATIONS  AND  DISCIPLINES 

Article II 

Most-Favoured-Nation  Treatment 

1. 
With respect to any measure covered by this Agreement, each Member shall accord-immediately 
and unconditionally to services and service suppliers of any other Member treatment no less favourable 
than that  it accords  to  like services  and service suppliers  of  any other country. 

A Member may maintain a measure inconsistent with paragraph  1 provided that such a measure 

2. 
is  listed  in.  and meets  the conditions  of.  the Annex on Article  II Exemptions. 

3. 
The provisions  of this Agreement  shall not be so  construed as to prevent any Member  from 
conferring  or  according  advantages  to adjacent  countries  in order to  faciliute  exchanges  limited  to 
contiguous  frontier  zones  of  services  that are both locally produced  and consumed. 

Article III 

Transparency 

Each Member shall publish promptly and, except in emergency situations, at the latest by the 
1. 
time  of their entry into force,  all  relevant measures  of general  application which peruin to or  affect 
the operation of this Agreement.  International agreements peruining  to or affecting  trade in services 
to  which a  Member  is a signatory  shall  also be published. 

Page 287 

' Where publication as referred  to in paragraph  1 is not practicable,  such information  shall be 

2. 
made otherwise  publicly  available. 

Each Member  shall promptly  and at least annually  inform the Council  for Trade in Services 
3.  ' 
of the introduction of any new, or any changes to existing, laws, regulations or administrative guidelines 
which significantly  affect trade in services covered by its specific commitments  under this Agreement. 

Each  Member  shall  respond  promptly  to  all  requests  by  any  other  Member  for  specific 
4. 
information on any of its measures of general application or international agreements within the meaning 
of  paragraph  1.  Each  Member  shall  also  esublish  one  or more  enquiry  points  to  provide  specific 
information  to  other  Members,  upon  request,  on  all  such  matters  as  well  as  those  subject  to  the 
notification  requirement  in paragraph 3.  Such enquiry  points  shall  be esublished  within  two years 
from the date of entry into force of the Agreement Esublishing the WTO (referred to in this Agreement 
as the  "WTO Agreement").  Appropriate flexibility  with respect to the time-limit  within which such 
enquiry points are to be established may be agreed upon for individual developing country Members. 
Enquiry  points need  not be depositories of  laws and regulations. 

Any Member may notify to the Council for Trade in Services am/measure, uken by any other 

5. 
Member,  which  it  considers  affects  the operation of this  Agreement. 

Article III bis 

Disclosure  of Confidential Information 

Nothing  in this Agreement shall require any Member to provide confidential  information, the 
disclosure  of  which  would  impede  law enforcement,  or otherwise be contrary to the public  interest, 
or which would prejudice legitimate commercial  interests of particular enterprises, public or private. 

Article IV 

Increasing Participation of Developing  Countries 

The increasing participation of developing country Members in world trade shall be faciliuted 
1. 
through negotiated  specific  commitments,  by different  Members pursuant to Parts III and IV of this 
Agreement,  relating to: 

the  strengthening  of  their  domestic  services  capacity  and  its  efficiency  and 

(a) 
competitiveness,  inter alia  through access to technology  on a commercial  basis; 

the  improvement  of  their access to distribution channels and  information  networks; 

(b) 
and 

the liberalization of market access  in sectors and modes of  supply of export interest 

(c) 
to them. 

2. 
Developed country Members, and to the extent possible other Members, shall esublish contact 
points within two years from the date of entry into force of the WTO Agreement to faciliute the access 
of developing country Members' service suppliers to information, related to their respective markets, 
concerning: 

(a) 

commercial -and technical  aspects of the supply of  services; 

Page  288 

(b) 

registration,  recognition and obtaining  of professional  qualifications;  and 

(c) 

the availability  of  services technology. 

3. 
Special priority shall be given to the least-developed country Members in the implemenution 
of paragraphs  1 and 2.  Particular account shall be uken of the serious difficulty  of the least-developed 
countries in accepting negotiated specific commitments in view of their special economic situation and 
their development,  trade and financial needs. 

Article V 

Economic Integration 

This Agreement  shall  not prevent any of  its Members  from being  a party to of  entering  into 
1. 
an agreement liberalizing trade in services between or among the parties to such an agreement, provided 
that such an agreement: 

(a) 

has substantial  sectoral  coverage1, and 

(b) 
provides for the absence or elimination of substantially all discrimination,  in the sense 
of Article XVII. between or among the parties, in the sectors covered under subparagraph  (a), 
through: 

(i) 

(ii) 

elimination  of existing discriminatory  measures,  and/or 

prohibition of  new or more discriminatory  measures, 

either at the entry into force of that agreement or on the basis of a reasonable time-frame, except 
for  measures  permitted  under Articles  XI,  XII,  XIV  and XIV bis. 

2. 
In evaluating whether the conditions under paragraph 1 (b) are met, consideration may be given 
to the relationship of the agreement to a wider process of economic  integration or trade liberalization 
among  the countries  concerned. 

3. 
(a)  Where  developing  countries  are  parties  to  an agreement  of  the  type  referred  to  in 
paragraph  1. flexibility shall be provided for regarding the conditions set out in paragraph 1, particularly 
with reference to subparagraph (b) thereof, in accordance with the level of development of the countries 
concerned,  both overall  and in individual  sectors and subsectors. 

(b) 

Notwithstanding  paragraph 6,  in the case of  an agreement  of the type  referred  to  in 
paragraph  1 involving only developing countries, more favourable treatment may be granted to juridical 
persons  owned  or controlled by naniral persons of the parties to such an agreement. 

4. 
Any agreement referred to in paragraph  1 shall be designed to faciliute trade between the parties 
to the agreement and shall  not in respect of any Member outside the agreement  raise the overall  level 
of barriers to trade in services within the respective seaors or subsectors compared to the level applicable 
prior to such an agreement. 

'This condition  is understood  in terms of number of sectors,  volume of trade affected  and modes of supply.  In order 

to  meet  this condition,  agreements  should  not provide for the a priori  exclusion of any  mode of supply. 

Page  289 

If,  in  the  conclusion,  enlargement  or  any  significant  modification  of  any  agreement  under 
5. 
paragraph  1, a Member intends to withdraw or modify  a specific commitment  inconsistently with the 
terms  and conditions set out in its Schedule,  it shall provide at least 90 days advance notice of such 
modification  or withdrawal and the procedure set forth in paragraphs  2,  3 and 4 of Article  XXI shall 
apply. 

6. 
A  service  supplier of any other Member  that is a juridical  person constituted  under the laws 
of a party to an agreement referred to in paragraph  1 shall be entitled to treatment granted under such 
agreement,  provided that it engages  in substantive  business operations  in the territory  of the parties 
to such agreement.  • 

. 

(a) 

Members which are parties to any agreement referred to in paragraph  1 shall promptly 
7. 
notify  any such agreement and any enlargement  or any significant  modification  of that agreement  to 
the Council for Trade in Services. They shall also make available to the Council such relevant information 
as may be requested by it.  The Council may esublish a working  party to examine such an agreement 
or enlargement or modification of that agreement and to report to the Council  on its consistency  with 
this  Article. 

(b) 

Members  which  are  parties  to  any  agreement  referred  to  in  paragraph  1 which  is 
implemented on the basis of a time-frame shall report periodically to the Council  for Trade in Services 
on its implemenution.  The Council may esublish a working party to examine such reports if it deems 
such a working party necessary.. 

(c) 

.  Based on the reports of the working parties referred to in subparagraphs (a) and (b). 

the Council  may  make  recommendations  to the parties as  it deems  appropriate. 

A  Member  which  is  a  party  to  any  agreement  referred  to  in  paragraph  1  may  not  seek 

8. 
compensation  for  trade benefits  that may accme to any other Member  from  such  agreement. 

Article  V bis 

Labour Markets Integration Agreements 

This  Agreement  shall  not prevent  any  of  its  Members  from  being  a party  to  an agreement 
esublishing full integration2 of the labour markets between or among the parties to such an agreement, 
provided  that such an agreement: 

(a) 

exempts citizens of parties to the agreement  from requirements concerning  residency 
and work permits; 

(b) 

is notified  to the Council  for Trade in Services. 

Article VI 

Domestic  Regulation 

1. 
In  seaors  where  specific  commitments  are  undertaken,  each  Member  shall  ensure  that  all 
measures of general application affecting trade in services are administered in a reasonable,  objective 
and  impartial  manner. 

Typically, such integration provides citizens of the partiesconcerne,! •»:•' 
lie panies  and  includes  measures concerning conditions of pay;  other conoiuons of employment and social  benefits. 

l.'htof free entry to the employment markets 

Page  290 

(a) 

2. 
Each  Member  shall  mainuin  or  institute as  soon  as  practicable judicial,  arbitral  or 
administrative  tribunals or procedures  which provide,  at the request  of  an affected  service supplier, 
for the prompt review of,  and where justified, appropriate remedies for, administrative decisions affecting 
trade  in  services.  Where  such  procedures  are  not  independent  of  the  agency  entrusted  with  the 
administrative  decision concerned,  the  Member  shall  ensure that the procedures  in fact  provide  for 
an objective  and  impartial  review. 

(b) 

The provisions of subparagraph (a) shall not be construed to require a Member to institute 
such tribunals or procedures where mis would be inconsistent with  its constitutional  structure or the 
nature of  its  legal  system. 

Where authorization  is required for the supply of  a service on which a specific  commitment 
3. 
has been made, the competent authorities of a Member shall, within a reasonable period of time after 
the'submission  of  an application  considered  complete  under domestic  laws  and  regulations,  inform 
the applicant of the decision concerning the application.  At the request of the applicant, the competent 
authorities  of  the  Member  shall  provide,  without undue delay,  information  concerning  the sums  of 
the application. 

With a view to ensuring that measures  relating to qualification  requirements and procedures, 
4. 
technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, 
the  Council  for  Trade  in  Services  shall,  through  appropriate  bodies  it  may  esublish,  develop  any 
necessary  disciplines.  Such disciplines shall  aim to ensure that such  requirements  are, inter  alia: 

(a) 

' based on objective and transparent criteria, such as competence and the ability to  supply 
the  service; 

<b) 

not more  burdensome  than necessary  to ensure the quality  of  the service; 

(c) 

in the case  of  licensing  procedures,  not  in themselves  a restriction on the supply  of 
the service. 

(a) 

5. 
In sectors in which a Member has undertaken specific commitments, pending the entry 
into  force  of  disciplines  developed  in these sectors  pursuant  to paragraph 4,  the  Member  shall  not 
apply licensing and qualification requirements and technical standards that nullify or impair such specific 
commitments  in a manner which: 

(i) 

(ii) 

does not comply  with the criteria outlined in subparagraphs 4(a), (b) or (c); 
and 

could  not  reasonably  have  been  expected  of  that  Member  at  the  time  the. 
specific  commitments  in those  sectors  were made. 

(b) 

In  determining  whether  a  Member  is  in  conformity  with  the  obligation  under 
paragraph 5(a). account shall be taken of international standards of relevant international organizations3 
applied  by  that  Member. 

6. 
In sectors  where specific  commitments  regarding professional  services  are undertaken, each 
Member shall provide for adequate procedures to verify  the competence of professionals  of any  other 
Member. 

The  term "relevant international organizations" refers to international bodies whose membership is open to the relevant 

bodies of at  least all  Members of the WTO. 

Page 291 

Article  VII 

Recognition 

1. 
For. the  purposes  of  the  fulfilment,  in whole  or  in part,  of  its  standards  or criteria  for  the 
authorization,  licensing  or  certification  of  services  suppliers,  and  subject  to  the  requirements  of 
paragraph 3,  a Member  may  recognize  the education or experience  obuined,  requirements  met,  or 
licenses  or certifications  granted  in a particular  country.  Such recognition,  which may be achieved 
through harmonization or otherwise, may be based upon an agreement or arrangement with the country 
concerned  or may  be accorded  autonomously. 

A Member that is a party to an agreement or arrangement of the type referred to in paragraph  1, 
2. 
whether existing or future, shall afford adequate opportunity for other interested Members to negotiate 
their accession to such an agreement or arrangement or to negotiate comparable ones with it.  Where 
a Member accords recognition autonomously, it shall afford adequate opportunity for any other Member 
to demonstrate that education, experience,  licenses, or certifications  obuined or requirements met in 
that other  Member's  territory  should  be  recognized. 

A  Member  shall  not  accord  recognition  in  a  manner  which  would  constitute  a  means  of 
3. 
discrimination  between  countries  in the application of  its standards or criteria for the authorization, 
licensing  or certification  of  services  suppliers,  or a disguised  restriction on trade in services. 

4. 

Each Member  shall: 

(a) 

(b) 

(c) 

. within 12 months from the date on which the WTO Agreement takes effect for it, inform 
the Council for Trade in Services of its existing recognition measures and sute whether 
such  measures  are based  on  agreements  or  arrangements  of  the  type  referred  to  in 
paragraph  1; 

promptly  inform  the Council  for Trade in Services  as far  in advance as possible  of 
the opening  of  negotiations  on an agreement or arrangement  of  the type referred  to 
in paragraph  1 in order to provide adequate opportunity to any other Member to indicate 
their interest in participating in the negotiations before they enter a substantive phase; 

promptly inform  the Council  for Trade in Services  when  it adopts new  recognition 
measures  or significantly  modifies  existing ones and sute  whether the measures are 
based  on an agreement  or arrangement  of  the type referred  to in paragraph  1. 

Wherever  appropriate,  recognition  should  be  based  on  multilaterally  agreed  criteria.  In 
5. 
appropriate  cases.  Members  shall  work  in  cooperation  with  relevant  intergovernmental  and  non 
governmental organizations towards the esublishment and adoption of common international standards 
and criteria  for recognition and common  international  standards for the practice of relevant  services 
trades and professions. 

Article VIII 

Monopolies and Exclusive Service  Suppliers 

Each Member  shall ensure that any monopoly  supplier of a service  in its territory does  not, 
1. 
in the supply  of the monopoly  service in the relevant market,  aa  in a manner inconsistent with that 
Member's  obligations  under Article II and specific  commitments. 

Where a Member's monopoly supplier competes, either directly or through an affiliated company, 
2. 
in the supply of a service outside the scope of its monopoly rights and which is subject to that Member's 

Page  292 

specific commitments, the Member shall ensure that such a supplier does not abuse its monopoly position 
to act in its territory  in a manner inconsistent  with such commitments. 

.  The  Council  for  Trade  in Services  may,  at the  request  of  a Member  which  has  a reason  to 
3. 
believe that a monopoly  supplier of a service of any other Member  is acting in a manner  inconsistent 
with paragraph  1 or 2, request the Member esublishing,  mainuining  or authorizing  such supplier to 
provide  specific  information  concerning  the relevant operations. 

4. 
If,  after the date of entry into force of the WTO Agreement, a Member grants monopoly rights 
regarding  the supply  of à service covered  by its specific  commitments,  that Member  shall  notify  the 
•Council  for Trade  in Services  no later than three months  before  the  intended  implementation  of  the 
grant of  monopoly  rights and the provisions  of paragraphs 2,  3 and 4  of  Article  XXI  shall  apply. 

5. 
The provisions  of this Article shall also apply to cases  of exclusive service suppliers,  where 
a Member, formally  or in effect,  (a) authorizes or establishes a small number of service suppliers and 
(b)  substantially  prevents competition  among those  suppliers  in its territory. 

Article IX 

Business Practices 

Members recognize that certain business practices of service suppliers, other than those falling 

1. 
under  Article  VIII.  may  restrain competition  and thereby  restrict trade in services. 

2. 
Each Member shall, at the request of any other Member, enter into consultations with a view 
to  eliminating  practices  referred  to  in  paragraph  1.  The  Member  addressed  shall  accord  full  and 
sympathetic consideration to such a request and shall cooperate through the supply of publicly available 
non-confidential  information of relevance to the matter in question.  The Member addressed shall also 
provide other  information  available to the requesting  Member,  subject to its domestic  law and to the 
conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting 
Member. 

Article X 

Emergency Safeguard Measures 

1. 
There shall be multilateral negotiations on the question of emergency safeguard measures based 
on the principle of  non-discrimination.  The  results of  such negotiations  shall  enter  into effect  on a 
date not  later than three years from  the date of entry  into force  of  the WTO  Agreement. 

2. 
In  the  period  before  the  entry  into  effect  of  the  results  of  the  negotiations  referred  to  in 
paragraph  1, any Member may, notwithstanding the provisions of paragraph  1  of Article  XXI. notify' 
the Council  on Trade  in Services of  its intention to modify  or withdraw a specific  commitment  after 
a period of one year from the date on which the commitment enters into force; provided that the Member 
shows cause to the Council that the modification or withdrawal cannot await the lapse of the three-year 
period provided  for  in paragraph  1 of  Article XXI. 

The provisions of paragraph 2 shall cease to apply three years after the date of entry into force 

3. 
of the WTO  Agreement. 

(i 

Page  293 

Article XI 

Payments and Transfers 

1. 
„  Except under the circumstances envisaged in Article XII, a Member shall not apply restrictions 
on international  transfers and payments for current transactions relating to its specific  commitments. 

Nothing  in  this  Agreement  shall  affect  the  rights  and  obligations  of  the  members  of  the 
2. 
International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange 
actions  which .are in conformity  with the  Articles  of  Agreement,  provided  that  a Member  shall  not 
impose restrictions on any capital transactions inconsistently with its specific  commitments  regarding 
such transactions,  except  under Article  XII or at the request  of  the Fund. 

.  . 

Restriaions  to  Safeguard the Balance of Payments 

Article  Xll 

1. 
In the event of serious balance-of-payments and external financial difficulties  or threat thereof. 
a Member may adopt or maintain restrictions on trade in services on which it has undertaken  specific 
commitments,  including  on payments  or transfers  for transactions  related  to such  commitments.  It 
is  recognized  that  particular  pressures  on  the balance  of  payments  of  a  Member  in  the  process  of 
economic  development  or economic  transition may necessitate the use of  restriaions  to ensure,  inter 
alia,  the maintenance of a level of financial  reserves adequate for the implementation of its programme 
of  economic  development  or economic  transition.. 

2. 

The  restrictions  referred  to  in paragraph  1: 

(a) 

shall  not discriminate  among  Members; 

(b) 

shall be consistent with the Articles of Agreement of the International  Monetary Fund; 

(c) 

shall  avoid unnecessary  damage to the commercial,  economic  and financial interests 
of  any other Member; 

(d) 

shall not exceed those necessary to deal with the circumstances described in paragraph  1 ; 

(e) 

shall  be  temporary  and  be  phased  out  progressively  as  the  situation  specified  in 
paragraph  1 improves. 

3. 
In determining  the  incidence  of  such restriaions.  Members  may  give  priority  to'the supply 
of services which are more essential to their economic or development programmes.  However,  such 
restrictions shall not be adopted or maintained for the purpose of protecting a particular service sector. 

Any  restriaions  adopted  or mainuined  under paragraph  1, or any changes therein, shall  be 

4. 
promptly  notified  to the General  Council. 

(a) 

5. 
Committee  on  Balance-of-Payments  Restrictions  on restriaions  adopted  under this  Article. 

Members  applying  the  provisions  of  this  Article  shall  consult  promptly  with  the 

Page  294 

(b) 

The Ministerial Conference shall esublish procedu. is4  for periodic consultations with 
the objective of enabling such recommendations  to be made to the Member concerned as it may deem 
appropriate. 

(c) 

Such consulutions shall assess the balance-of-payment situation of the Member concerned 
and the restrictions adopted or maintained under this Article, uking into account, imeralia,  such factors 
as: 

(i) 

the nature and extent  of the balance-of-payments  and the external  financial 

difficulties; 

(ii) 

the external  economic  and trading environment  of the consulting  Member; 

(iii) 

alternative corrective measures  which may  be available. 

(d) 

.  The consulutions  shall address the compliance  of any  restrictions  with paragraph  2, 

in particular the progressive phaseout  of  restrictions  in accordance with paragraph 2(e). 

(e) 

In  such  consultations,  all  findings  of  sutistical  and  other  facts  presented  by  the 
International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments, 
shall  be  accepted  and  conclusions  shall  be  based  on the  assessment  by  the  Fund  of  the  balance-of-
payments  and the external financial situation of the consulting  Member. 

6. 
If a Member which  is not a member of the International  Moneury  Fund wishes to apply the 
provisions of this Article, the Ministerial Conference shall esublish a review procedure and any other 
procedures  necessary. 

Article XIII 

Government Procurement 

1. 
Articles  II. XVI and XVII shall not apply to laws, regulations or requirements governing the 
procurement  by governmental  agencies of services purchased for govemmenul purposes and not with 
a  view  to commercial  resale  or with a view  to use  in the supply  of  services  for  commercial  sale. 

There  shall  be  multilateral  negotiations  on  government  procurement  in  services  under this-

2. 
Agreement  within  two years  from  the date of entry  into force  of  the WTO  Agreement. 

Article XIV 

General Exceptions 

Subject to the requirement that such measures are not applied in a manner which would constitute 
a  means of arbitrary  or unjustifiable discrimination  between countries where  like conditions prevail, 
or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prevent 
the adoption or enforcement  by any  Member  of measures: 

(a) 

necessary  to protect public  morals  or to maintain public  order;5 

*It is understood  that the  procedures  under paragraph 5 shall  be the same as the  GATT  1994  procedures. 

'The public order exception may be invoked only where a genuine and sufficiently  serious threat is posed to one of die 

fundamenul  interests of society. 

Page 295 

(b) 

necessary  to protect  human,  animal  or plant  life  or health; 

(c) 

necessary  to secure  compliance  with  laws  or regulations  which  are not  inconsistent 
with the provisions  of this Agreement  including  those  relating to:. 

(i) 

(ii) 

i  • 

.- 

, 

the prevention of deceptive and  fraudulent practices or to deal with the effects 
of a default  on services contracts; 

the protection of the  privacy of individuals in relation to the processing and 
dissemination  of  personal  dau  and  the  protection  of  confidentiality  of 
individual  records and accounts; 

(iii) 

safety; 

(d) 

(e) 

inconsistent  with Article  XVII, provided  that the difference  in treatment  is aimed at 
ensuring the equiuble or effective6  imposition or collection of direct uxes  in respect 
of  services or service  suppliers of other Members; 

inconsistent  with Article  II, provided  that the difference  in treatment  is the result  of 
an agreement  on the avoidance of double taxation or provisions  on the avoidance  of 
double  taxation  in  any  other  international  agreement  or  arrangement  by  which  the 
Member  is bound. 

"Measures that  are  aimed  at ensuring  the equiuble  or effeaive  imposition  or collection  of  direct  u x es  include  measures 

u k en  by a  Member  under 

its  uxation  system  which: 

<i> 

(II > 

<iiu 

(iv) 

(v) 

(vi) 

*Ppl>  to non-resident  service  suppliers  in recognition of the  fact  that the  ux obligation  of  non-residents 
is  determined  with  respect  to uxable  hems  sourced  or located  in the Member's  territory;  or 

apply  to non-residents  in order  to ensure  the  imposition  or  collection of u x es  in the  Member's  territory; 
or 

. 

apply  to  non-residents  or  residents  in order  to prevent  the avoidance  or evasion  of  u x e s, 
compliance  measures;  or 

including 

tpply  to consumers  of services  supplied  in or from  the  territory  of another  Member  in order  to ensure 
the  imposition  or collection of u x es  on  such  consumers  derived  from  sources  in the Member's  territory; 
or 

distinguish service suppliers subject to ux  on worldwide uxable  items from other service suppliers,  in 
recognition  of  the difference  in the nature of  the ux  base  between  them;  or 

determine,  allocate  or apportion  income,  profit,  gain,  loss,  deduction or credit of  resident persons or 
branches, or between related persons or branches of the same person, in order to safeguard the Member's 
ux  base. 

Tax terms or concepts in paragraph (d) of Anicle XIV and in this fc>otrK>ui are  determined according toux definitions 

and concepts, or equivalent or similar defmitions and concepts, under the domestic law of the Member uking the measure. 

Page  296 

Article  XIV bis 

Security Exceptions 

1. 

Nothing  in this Agreement  shall  be construed: 

(a) 

(b) 

to require any Member to furnish any information, the disclosure of which it considers 
contrary  to its essential  security  interests; or 

to prevent  any Member  from uking  any aaion  which  it considers  necessary  for the 
protection of  its essential  security  interests: 

(i) 

relating to the supply of services as carried out directly or indirectly  for the 
purpose of provisioning  a military  esublishment; 

• 

(ii) 

relating to fissionable  and fusionable materials or the materials  from which 
they are derived; 

(iii) 

uken  in time of  war or other emergency  in international  relations;  or 

(c) 

to prevent any Member from uking  any action in pursuance of  its obligations under 
the  United  Nations  Charter for the maintenance  of  international  peace and security. 

The Council  for Trade in Services shall be informed to the fullest extent possible of measures 

2. 
uken  under paragraphs  1(b) and (c) and of their termination. 

Article XV 

Subsidies 

1. 
Members  recognize  that,  in certain  circumstances,  subsidies  may  have distort!ve effects  on 
trade  in  services.  Members  shall  enter  into  negotiations  with  a view  to  developing  the  necessary 
multilateral  disciplines to avoid such trade-distortive effects.7  The negotiations shall also address the 
appropriateness of countervailing procedures.  Such negotiations shall recognize the role of subsidies 
in relation to the development  programmes  of developing  countries  and uke  into account  the  needs 
of  Members,  particularly  developing  country  Members,  for flexibility  in this area.  For the purpose 
of  such  negotiations.  Members  shall  exchange  information  concerning  all  subsidies  related  to trade 
in services  that they  provide to their domestic  service suppliers. 

2. 
Any  Member  which considers  that  it  is adversely  affected  by  a subsidy  of another  Member 
may  request  consulutions  with  that  Member  on  such  maners.  Such  requests  shall  be  accorded 
sympathetic  consideration. 

'A  future  work programme shall determine how. and in what time-frame,  negotiations on such multilateral disciplines 

will  be conducted. 

Page 297 

PART III 

SPECIFIC  COMMITMENTS 

Article XVI 

Market Access 

1. 
With respect to market access through the modes of supply identified  in Article I, each Member 
shall accord services and service suppliers of any  other Member treatment no less favourable than that 
provided  for under the terms,  limitations  and conditions  agreed and specified  in its Schedule." 

2. 
In seaors where market-access  commitments  are undertaken, the measures which a Member 
shall  not mainuin  or adopt either on the basis of  a regional  subdivision  or on the basis of  its entire 
territory,  unless  otherwise  specified  in its Schedule,  are defined  as: 

(a) 

(b) 

(c) 

(d) 

(e) 

(0 

limitations on the number of service suppliers whether in the form of numerical quotas, 
monopolies, exclusive service suppliers or the requirements of an economic needs test: 

limitations on the total value of service transactions or assets in the form of numerical 
quotas or the  requirement  of an economic  needs test; 

limitations on the total number of service operations or on the total quantity of service 
output expressed in terms of designated numerical  units  in the form of quotas or the 
requirement  of  an economic  needs test;9 

limitations on the total number of natural persons that may be employed in a particular 
service seaor  or that a service supplier may employ  and who are necessary  for,  and 
directly  related  to,  the supply  of  a specific  service  in the  form  of  numerical  quotas 
or the requirement  of  an economic  needs test; 

measures which restrict or require specific types of legal entity or joint venture through 
which  a service supplier may  supply  a service;  and 

limitations on the participation of foreign capiul in terms of maximum percenuge limit 
on foreign shareholding or the total value of individual or aggregate foreign investment. 

•if a Member underukes a market-access commitment in relation to the supply of a service through the mode of supply 
referred to in subparagraph  2(a) of Anicle  I and if the cross-border movement of capiul  is an essential pan of the service 
itself,  that  Member  is thereby  commined  to allow  such  movement of capiul.  If a Member  underukes  a  market-access 
commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(c) of Anicle I, 
it is thereby  committed  to allow  related  transfers  of capiul  into its territory. 

'Subparagraph 2(c)  does  not cover  measures of a Member which  limit  inputs fer  the supply of services. 

Page  298 

Article XVII 

National Treatment 

1. 
In the  sectors  inscribed  in its  Schedule,  and  subject  to any  conditions  and qualifications  sa 
out therein, each Member shall accord to services and service suppliers of any other Member, in respect 
of all  measures  affecting  the supply of  services,  treatment  no  less  favourable  than that  it accords  to 
its own  like services  and service suppliers.10 

2. 
A  Member  may  meet  the  requirement  of  paragraph  1 by  according  to  services  and  service 
suppliers of any other Member,  either formally  identical treatment or formally  different  treatment to 
that  it accords  to  its own  like  services and service suppliers. 

.3.' 
Formally  identical  or formally  different  treatment  shall  be  considered  to be  less  favourable 
if  it modifies  the conditions of competition  in favour of services or service suppliers of the Member 
compared  to  like services  or service  suppliers of any other  Member. 

Article XVIII 

Additional Commitments 

Members may negotiate commitments with respect to measures affecting  trade in services not 
subjea to scheduling under Articles  XVI or XVII, including those regarding qualifications, standards 
or  licensing  matters.  Such commitments  shall  be  inscribed  in a Member's  Schedule. 

PARTIV 

PROGRESSIVE  LIBERALIZATION 

Article XIX 

Negotiation of  Specific Commitments 

1. 
In pursuance of the  objectives of this Agreement,  Members shall enter into successive rounds 
of  negotiations,  beginning  not  later  than five years  from  the date  of  entry  into  force  of  the  WTO 
Agreement  and  periodically  thereafter,  with  a  view  to  achieving  a  progressively  higher  level  of 
liberalization.  Such negotiations shall be directed to the reduction or elimination of the adverse effects 
on trade in services of measures as a means of providing effective  market access.  This process shall 
take place with a view to promoting the interests of all participants on a mutually advanugeous  basis 
and to securing  an overall  balance of  rights and obligations. 

2. 
The process  of  liberalization shall  uke  place with due respect for  national  policy  objeaives 
and the  level  of development  of  individual  Members,  both overall  and in individual  seaors.  There 
shall be appropriate flexibility  for individual developing country.Members for opening fewer seaors, 
liberalizing  fewer  types  of  transactions,  progressively  extending  market  access  in  line  with  their 
development situation and,  when making access to their markets available to foreign service suppliers, 
attaching to such access conditions  aimed  at achieving  the objeaives  referred  to  in Article  IV. 

"Specific commitments assumed under this Anicle shall not be con?!- - 

.lire any Member to compensate for any 
inherent competitive  disadvanuges  which  result from the foreign  character ot ate  relevant services or service  suppliers. 

-•• 

Page  299 

3. 
For each round, negotiating guidelines and procedures shall be esublished.  For the purposes 
of establishing such guidelines, theCouncil for Trade in Services shall carry out an assessment of trade 
in services  in overall terms and on a sectoral basis with reference to the objectives of this Agreement, 
including those set out in paragraph  1  of Article IV.  Negotiating guidelines shall esublish modalities 
for the treatment of liberalization undertaken autonomously by Members since previous negotiations, 
as  well  as  for  the  special  treatment  for  least-developed  country  Members  under  the  provisions  of 
paragraph  3 of  Article IV. 

4. 
The process of progressive liberalization shall be advanced in each such round through bilateral, 
plurilateral  or  multilateral  negotiations  directed  towards  increasing  the  general  level  of  specific 
commitments  undertaken by  Members  under this Agreement. 

Article XX 

Schedules of Specific  Commitments 

1. 
Each Member shall set out in a schedule the specific commitments it underukes under Part III 
of this Agreement.  With respect to sectors where such commitments  are undertaken, each Schedule 
shall  specify-: 

(a) 

terms,  limitations  and conditions  on market access; 

(b) 

'  conditions  and qualifications  on national  treatment; 

(c) 

undertakings  relating  to additional  commitments; 

(d) 

where  appropriate the time-frame  for  implemenution  of such commitments;  and 

(e) 

the date of  entry  into force  of such commitments. 

2. 
Measures inconsistent with both Articles XVI and XVII shall be inscribed in the column relating 
to Article  XVI.  In this case the inscription will be considered to provide a condition or  qualification 
to  Anicle  XVII  as  well. 

Schedules of specific commitments shall be annexed to this Agreement and shall form an integral 

3. 
part thereof. 

Article XXI 

Modification of Schedules 

(a) 

1. 
A  Member  (referred to  in this Anicle  as the  "modifying  Member") may  modify  or 
withdraw  any commitment  in its Schedule, at any time after three years have elapsed  from  the date 
on which that commitment  entered  into force,  in accordance with the provisions of this Article. 

(b) 

A modifying Member shall notify its intent to mom^ or withdraw a commitmempursuam 
to this Anicle to the Council  for Trade in Services no later than three months before the intended date 
of  implementation  pf the modification  or withdrawal. 

(a) 

At the request of any Member the benefits of which urider this Agreement may be affeaed 

2. 
(referred to in this Anicle as an "affeaed Member") by a proposed modification or withdrawal notified 
under subparagraph  1(b), the modifying  Member shall enter into negotiations with a view to reaching 
agreement on any necessary compensatory adjustment.  In such negotiations and agreement, the Members 

Page  300 

concerned shall endeavour to maintain a general level of mutually advanugeous commitments not less 
favourable to trade than that provided for in Schedules of specific commitments prior to such negotiations. 

(b) 

Compensatory  adjustments shall  be made on a most-favoured-nation  basis. 

(a) 

3. 
If agreement is not reached between the modifying  Member and any affected Member 
before  the end of  the period provided for negotiations,  such affected  Member  may  refer the matter 
to arbitration.  Any affected  Member that wishes to enforce a right that it may have to compensation 
must participate  in the arbitration. 

(b) 

If no affected  Member has requested arbitration, the modifying  Member shall be free 

to  implement  the proposed-modification or withdrawal. 

(a) 

4. 
compensatory  adjustments  in conformity  with the findings of the arbitration. 

The modifying Member may not modify or withdraw its commitment until it has made 

(b) 

If the modifying Member implements its proposed modification or withdrawal and does 
not comply wim the findings of thear^ 
participated in the arbitration 
may  modify  or  withdraw  subsumially  equivalent  benefits  in  conformity  with  those  findings. 
Notwithstanding Anicle II, such a modification or withdrawal may be implemented solely with respea 
to the modifying  Member. 

The Council  for Trade in Services shall esublish procedures for rectification  or modification 
5. 
of Schedules.  Any Member which has modified or withdrawn scheduled commitments under this Article 
shall  modify  its  Schedule  according  to such procedures. 

PARTV 

INSTITUTIONAL  PROVISIONS 

Article XXII 

Consultation 

1. 
Each Member shall accord sympathetic consideration to, and shall afford adequate opportunity 
for.  consulution  regarding such representations as may be made by any other Member with  respea 
to any matter affecting the operation of this Agreement.  The Dispute Senlement Understanding (DSU) 
shall  apply  to such  consulutions. 

The Council for Trade in Services or the Dispute Senlement Body (DSB) may.  at the request 
2. 
of a Member, consult with any Member or Members in respect of any maner for which it has not been 
possible  to find  a satisfaaory  solution through consulution under paragraph  1. 

• 

• 

• 

A Member may not invoke Anicle XVII. either under this Anicle or Anicle XXIII. with respect 
3. 
to a measure of another Member .that falls within the scope of an international agreement between them 
relating to the avoidance of double taxation.  In case of disagreement between Members as to whether 
a measure falls within the scope of such an agreement between them, it shall be open to either Member 
to  bring this  matter  before the Council  for Trade in Services.11  The  Council  shall  refer  the matter 
to arbitration.  The decision of the arbitrator shall  be final  and binding  on the Members. 

"With respect to agreements on the avoidance of double ttxation which exist on the date of entry into force of the WTO 
Agreement, such a matter may be brought before die Council for Trade in Services only  with the consent of both panics 
to such an agreement. 

Rage 301 

Article XXIII 

Dispute  Settlement and Enforcement 

1. 
If any Member should consider mat any other Member fails to carry out its obligations or specific 
commitments under this Agreement,  it may with a view to reaching a mutually satisfactory  resolution 
of  the maner  have recourse  to the  DSU. 

2. 
If the DSB considers that the circumstances  are serious enough to justify' such action,  it may 
authorize  a  Member  or  Members  to  suspend  the  application  to  any  other  Member  or  Members  of 
obligations  and specific  commitments  in accordance  with  Article  22  of  the  DSU. 

3. 
If any Member considers that any benefit it could reasonably have expected to accrue fo it under 
a specific commitment of another Member under Part III of this Agreement is being nullified or impaired 
as  a  result  of  the  application  of  any  measure  which  does  not  conflict  with  the  provisions  of  this 
Agreement, it may have recourse to the DSU.  If the measure is determined by the DSB to have nullified 
or impaired such a benefit, the Member affected  shall be entitled to a mutually satisfactory  adjustment 
on the basis of paragraph  2 of Article  XXI. which may  include the modification  or withdrawal  of the 
measure.  In the event an agreement  cannot be reached between the Members  concerned.  Article  22 
of  the DSU  shall  apply 

Article XXIV 

Council for  Trade in Sendees 

1. 
The Council  for Trade in Services  shall  carry out such functions  as may  be assigned  to  it to 
facilitate the operation of this Agreement and further  its objectives.  The Council  may establish such 
subsidiary  bodies  as  it considers  appropriate  for  the effective  discharge  of  its  functions. 

The  Council  and,  unless  the Council  decides  otherwise,  its  subsidiary  bodies  shall  be  open 

2. 
to participation  by  represenutives  of  all  Members. 

3. 

The  Chairman  of  the Council  shall  be elected  by the Members. 

Article XXV 

Technical Cooperation 

Service  suppliers of  Members  which  are  in need  of  such assistance  shall  have  access  to  the 

1. 
services  of  contact  points  referred to  in paragraph 2 of  Article  IV. 

Technical  assisunce to developing countries shall be provided at the multilateral  level by the 

2. 
Secretariat  and shall  be decided upon by the Council  for Trade in Services. 

Article XXVI 

Relationship  with Other International  Organizations 

The  General  Council  shall  make appropriate arrangements  for  consulution  and  cooperation 
with the United Nations and its specialized agencies as well as with other intergovernmental  organizations 
concerned  with  services. 

Page  302 

PART VI 

FINAL  PROVISIONS 

Article XXVII 

Denial  of Benefits 

A  Member  may  deny  the benefits  of  this  Agreement: 

(a) 

(b) 

to the supply  of a service,  if  it establishes  that the service  is supplied  from  or in the 
territory  of  a non-Member  or of  a Member  to which  the denying  Member  does  not 
apply  the WTO  Agreement; 

in the case of the supply of a maritime transport service, if it esublishes that the service 
is  supplied: 

(i) 

(ii) 

by a vessel  registered  under the laws of  a non-Member  or of  a Member  to 
which  the denying  Member  does  not  apply  the WTO  Agreement,  and 

by  a person  which  operates  and/or  uses  the vessel  in whole  or in part but 
which  is of  a non-Member  or of  a Member  to which the denying  Member 
does  not apply  the WTO  Agreement; 

(c) 

to a service  supplier that  is a juridical  person,  if  it establishes  that  it is not a service 
supplier of another Member,  or that it is a service supplier of a Member to which the 
denying  Member  does  not apply  the WTO  Agreement. 

Article  XXVIII  , 

Definitions 

For  the purpose  of  this  Agreement: 

(a) 

(b) 

"measure" means any measure by a Member, whether in the form of a law, regulation, 
mle.  procedure, decision,  administrative  action, or any other  form; 

"supply of a service" includes the production, distribution, marketing, sale and delivery 
of  a service; 

(C) 

"measures  by  Members  affecting  trade  in services"  include  measures  in respea  of 

(i) 

(ii) 

(iii) 

the purchase, payment  or use of  a service; 

the access to and use of.  in connection with the supply of a service,  services 
which are required by those  Members to be offered  to the public generally; 

the presence,  including  commercial  presence,  of  persons  of  a Member  for 
the supply  of a service  in the territory  of  another  Member; 

(d) 

"commercial  presence"  means  any  type  of  business  or  professional  esublishment, 
including  through 

Page  303 

(i) 

(ii) 

the constitution,  acquisition or maintenance  of  a juridical  person,  or 

the creation or maintenance  of a branch or a represenutive  office, 

within  the territory  of  a Member for the purpose of  supplying  a service; 

(e) 

"sector" of  a service means, 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

(i) 

with reference to a specific commitment,  one or more, or all. subsectors of 

that service,  as specified  in a Member's  Schedule, 

(ii) 

otherwise,  the whole of that service  sector,  including  all of  its subsectors; 

"service of another Member" means a service which is  supplied, 
(i) 

from  or in the  territory  of  that other  Member,  or  in the  case  of  maritime 
transport,  by  a vessel  registered  under  the  laws  of  that other  Member,  or 
by  a person  of  that other Member  which supplies  the  service  through  the 
operation of  a vessel  and/or  its use  in whole  or in part; or 

( i i ) 

in the case of the supply of a service through commercial presence or through 
the presence of natural persons, by a service supplier of that other Member; 

"service  supplier" means any person that supplies  a service;12 

"monopoly  supplier of  a service" means any person, public or private,  which  in the 
relevant market of the territory of a Member is authorized or esublished  formally  or 
in effect  by that Member  as the sole supplier of that service; 

"service  consumer" means any person that receives  or uses  a service; 

"person" means  either a natural person or a juridical  person; 

"natural person of another Member" means a natural person who resides in the territory 
of  that  other  Member  or  any  other  Member,  and  who  under  the  law  of  that  other 
Member: 

(i) 

(ii) 

is a national  of  that other Member; or 

has the right of permanent  residence  in that other  Member,  in the case  of 
a  Member  which 

1. 

2. 

does  not have nationals; or 

accords substantially the same treatment to its permanent  residents 
as it does to its nationals  in respea  of measures  affecting  trade  in 
services,  as notified  in its  acceptance  of  or accession to the WTO 
Agreement, provided that no Member is obligated to accord to such 
permanent  residents  treatment  more  favourable  than  would  be 

"Where the service  is not supplied directly by a juridical person but through other forms of commercial presence such 
as a branch or a represenutive office,  the service supplier (i.e.  the juridical person) shall, nonetheless, through such presence 
be accorded the treatment provided for service suppliers under the Agreement.  Such treatment shall be extended to the presence 
through which the service is supplied and need not be extended to any other pans of the supplier located outside the territory 
where  the  service  is  supplied. 

Page  304 

accorded by that other Member to such permanent  residents.  Such 
notification  shall  include  the assurance  to assume,  with  respect  to 
those  permanent  residents,  in  accordance  with  its  laws  and 
regulations, the same responsibilities that other Member bears with 
respect to  its nationals; 

(1) 

"juridical person" means any legal entity duly constituted or otherwise organized under 
applicable  law,  whether  fqr  profit  or  otherwise,  and  whether  privately-owned  or 
governmenully-owned,  including  any corporation,  tmst,  partnership, joint  venture. 
sole proprietorship  or association; 

(m) 

"juridical  person of another Member" means  a juridical  person which  is either:; 

(i) 

(ii) 

constituted or otherwise organized under the law of that other Member, and 
is engaged in subsuntive business operations in the territory of that Member 
or any other Member;  or 

in the case of the supply of a service through commercial  presence,  owned 
or controlled by: 

1. 

2. 

naniral  persons  of that Member;  or 

juridical  persons  of 
subparagraph  (i); 

that  other  Member 

identified  under 

(n) 

a juridical  person  is 

(i) 

(ii) 

(iii) 

"owned" by  persons  of  a Member  if  more  than  50 per  cent  of  the  equity 
interest  in it  is  beneficially  owned by persons  of that  Member: 

"controlled" by persons of a Member if such persons have the power to name 
a majority  of  its directors  or otherwise  to  legally  direct  its actions: 

"affiliated" with another person when  it controls,  or is  controlled  by.  that 
other person;  or when it and the other person are both controlled by the same 
person: 

(o) 

"direct  taxes" comprise  all taxes on total  income,  on total  capital  or on elements  of 
income or of capital,  including taxes on gains from the alienation of property, taxes 
on estates, inheritances and gifts, and uxes  on the total amounts of wages or salaries 
paid  by enterprises,  as well  as taxes on capital  appreciation. 

Article XXIX 

Annexes 

The  Annexes  to this  Agreement  are an integral  part of  this  Agreement. 

ANNEX  ON  ARTICLE  II  EXEMPTIONS 

Page  305 

Scope 

This  Annex  specifies  the  conditions  under which  a Member,  at the  entry  into  force  of  this 

1. 
Agreement,  is  exempted  from  its obligations  under paragraph  1 of  Article II. 

Any new exemptions applied for after the date of entry into force of the WTO Agreement shall 

2. 
be dealt with under paragraph 3 of  Article  IX of that Agreement. 

Review 

3. 
The Council  for Trade in Services shall  review  all  exemptions  granted  for  a period  of more 
than 5  years-.  The first such  review  shall  uke  place  no more than 5  years  after  the entry  into  force 
of  the WTO  Agreement. 

4. 

The  Council  for Trade in Services  in a review  shall: 

(a) 

. 

examine whether the conditions which created the need for the exemption still prevail : 
and 

(b) 

determine  the date of any  further  review. 

Termination 

The exemption of a Member from its obligations under paragraph  1  of Article Il'of the Agreement 

5. 
with  respect  to  a particular  measure  terminates  on the date provided  for  in the exemption. 

In principle, such exemptions should not exceed a period of  10 years.  In any event, they shall 

6. 
be subject  to negotiation  in subsequent  trade liberalizing  rounds. 

A Member  shall notify the Council  for Trade in Services at the termination  of the exemption 
7. 
period that the  inconsistent  measure has been brought  into conformity  with paragraph  1  of  Article II 
of  the  Agreement. 

Lists  of Article  11 Exemptions 

[The agreed lists of exemptions under paragraph 2 of Article II will be annexed here in the treaty copy 
of  the WTO  Agreement.l 

Page  306 

ANNEX  OK MOVEMENT  OF NATURAL  PERSONS 
SUPPLYING  SERVICES  UNDER  THE  AGREEMENT 

1. 
This Annex applies to measures affecting  natural persons who are service suppliers of a Member, 
and naniral  persons  of  a Member  who are employed  by  a service  supplier  of  a Member,  in  respect 
of  the supply  of  a service. 

2. 
The  Agreement  shall  not  apply  to measures  affecting  natural  persons  seeking  access  to  the 
employment  market  of  a Member,  nor shall  it apply to measures  regarding  citizenship,  residence or 
employment  on a permanent  basis. 

3. 
In  accordance  with  Parts  III  and  IV  of  the  Agreement,  Members  may  negotiate  specific 
commitments  applying to the  movement of all categories of natural persons supplying services under 
the Agreement.  Natural persons covered by a specific commitment shall be allowed to supply the service 
in accordance  with  the terms  of  that commitment. 

4. 
The Agreement  shall  not prevent a Member from applying measures  to regulate the entry of 
natural  persons  into,  of  their temporary  suy  in,  its territory,  including  those  measures  necessary  to 
protect  the  integrity  of,  and  to ensure  the orderly  movement  of  naniral persons  across,  its borders, 
provided that such measures are not applied in such a manner as to nullify or impair the benefits accming 
lo any  Member  under the  terms  of  a specific  commitment.1 

'The sole fact of requiring a visa for natural persons of ceruin Members and not for those of others shall not be regarded 
jllifying  or  impairing  benefits  under  a specific  commitment. 

as  nullifying  or 

ANNEX  ON  AIR  TRANSPORT  SERVICES 

Page 307 

This  Annex  applies  to measures  affecting  trade in air transport  services,  whether  scheduled 
1. 
or non-scheduled, and ancillary services.  It is confirmed  that any specific  commitment  or obligation -
assumed  under  this  Agreement  shall  not  reduce  or affect  a Member's  obligations  under  bilateral  or 
. 
multilateral  agreements  that are in effect  on the date of  entry  into force  of  the WTO Agreement. 

2. 

The Agreement, including its dispute settlement procedures, shall not apply to measures affecting: 

(a), 

traffic  rights,  however granted;  or 

(b) 

services  directly  related  to the exercise  of  traffic  rights, 

except  as provided  in paragraph  3 of this  Annex. 

3. 

The  Agreement  shall  apply  to measures  affecting: 

(a) 

aircraft  repair and maintenance  services; 

(b) 

the selling  and marketing  of  air transport  services; 

(O 

computer  reservation  system  (CRS)  services. 

4 
The dispute settlement  procedures of the Agreement  may be invoked only where obligations 
or specific  commitments  have been assumed by the concerned Members and where dispute senlement 
procedures  in bilateral  and other multilateral  agreements  or arrangements  have been exhausted. 

5. 
The  Council  for  Trade  in  Services  shall  review  periodically,  and  at  least  every  five  years, 
developments  in the air transport  sector and the operation of  this  Annex  with a view  to considering 
the possible  further  application  of the  Agreement  in this sector. 

6. 

Definitions: 

(a) 

"Aircraft  repair and maintenance services" mean such activities when undertaken on 
an  aircraft  or  a  part  thereof  while  it  is  withdrawn  from  service  and  do  not  include  so-called  line 
maintenance. 

(b) 

"Selling and marketing of air transport services" mean opportunities for the air carrier 
concerned  to sell  and market  freely  its air transport  services  including  all  aspects of marketing  such 
as  market  research,  advertising  and distribution.  These  activities  do  not  include  the pricing  of  air 
transport  services  nor the applicable  conditions. 

(c) 

"Computer reservation system (CRS) services" mean services provided by computerised 
systems that contain information about air carriers' schedules, availability, fares and fare mles, through 
which  reservations  can be made or tickets may be issued. 

(d) 

"Traffic  rights" mean the right for  scheduled  and non-scheduled  services  to operate 
and/or to carry passengers, cargo and mail for remuneration or hire from, to, within, or over the territory 
of a Member, including points to be served, routes to be operated, types of traffic to be carried, capacity 
to  be  provided,  tariffs  to  be  charged  and  their  conditions,  and  criteria  for  designation  of  airlines, 
including  such criteria as number,  ownership,  and control. 

Page  308 

1. 

Scope and  Definition 

ANNEX  ON  FINANCIAL  SERVICES 

(a) 

This Annex applies to measures affecting  the supply of financial  services.  Reference 
to  the  supply  of  a financial  service  in this  Annex  shall  mean  the  supply  of  a service  as defined  in 
paragraph 2  of  Article  I of  the Agreement. 

(b) 

For the purposes of subparagraph  3(b) of Article I of the Agreement,  "services supplied 

in the exercise  of  governmental  authority" means the  following: 

(i) 

(ii) 

(iii) 

activities conducted by a central bank or monetary authority or by any other 
public entity  in pursuit  of monetary  or exchange  rate policies; 

activities  forming  part  of  a  statutory  system  of  social  security  or  public 
retirement  plans;  and 

other  activities  conducted  by  a  public  entity  for  the  account  or  with  the 
guarantee or using  the financial resources  of  the Government. 

• (c) 

For  the purposes  of  subparagraph 3(b)  of  Anicle  I of  the  Agreement,  if  a Member 
allows any of the activities referred to in subparagraphs (b)(ii) or (b)(iii) of this paragraph to be conducted 
by  its  financial  service  suppliers  in competition  with a public  entity  or  a financial  service  supplier. 
"services" shall  include  such activities. 

(d) 

Subparagraph 3(c) of  Anicle  I of the Agreement  shall  not apply  to services  covered 

by this  Annex. 

2. 

Domestic  Regulation 

(a) 

Notwithstanding any other provisions of the Agreement, a Member shall not be prevented 
from taking measures for prudential reasons, including for the protection of investors, depositors, policy 
holders or persons to whom a fiduciary  duty is owed by a financial  service supplier, or to ensure the 
integrity and subility of the financial system.  Where such measures do not conform with the provisions 
of  the  Agreement,  they  shall  not  be  used  as  a  means  of  avoiding  the  Member's  commitments  or 
obligations  under the  Agreement. 

(b) 

Nothing in the Agreement shall be construed to require a Member to disclose information 
relating to the affairs and accounts of individual customers or any confidential or proprietary information 
in the possession  of  public  entities. 

3. 

Recognition 

(a) 

A  Member  may  recognize pmdential  measures  of  any other  country  in determining 
how the Member's  measures  relating to financial  services shall be applied.  Such recognition, which 
may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement 
with the country  concerned  or may  be accorded  autonomously. 

(b) 

A  Member  that  is  a  party  to  such  an  agreement  or  arrangement  referred  to  in 
subparagraph  (a),  whether  future  or existing,  shall  afford  adequate  opportunity  for  other  interested 
Members to negotiate their accession to such agreements or arrangements, or to negotiate comparable 
ones  with  it.  under  circumstances  in  which  there  would  be  equivalent  regulation,  oversight, 
implementation of such regulation, and. if appropriate, procedures concerning-the sharing of information 
between  the  parties  to  the  agreement  or  arrangement.  Where  a  Member  accords  recognition 

(a 

Page 309 

autonomously,  it shall afford  adequate opportunity  for any other  Member  to demonstrate  that such 
circumstances  exist. 

(c)  Where a Member  is contemplating  according  recognition to prudential  measures of 

any other country, paragraph 4(b) of Article VII shall not apply. 

4. 

Dispute Settlement 

Panels for disputes on prudential  issues and other financial  matters shall have the necessary 

expertise  relevant  to the specific  financial  service under dispute. 

5. 

Definitions 

For the purposes of this Annex: 

(a) 

A financial  service is any service of a financial  nature offered  by a financial  service 
supplier  of a Member.  Financial  services include all  insurance and insurance-related  senices.  and 
all banking and other financial services (excluding insurance).  Financial services include the following 
activities: 

Insurance and insurance-related services 

(i) 

Direct  insurance (including co-insurance): 

(A) 

life 

(B) 

non-life 

(ii) 

Reinsurance and retrocession; 

(iii) 
(iv) 

Insurance  intermediation, such as brokerage and agency: 
Services auxiliary to insurance, such as consultancy, actuarial, risk assessment 
and claim settlement services. 

Banking and other financial services (excluding insurance) 

(v) 

(vi) 

Acceptance of deposits and other repayable funds  from  the public; 

Lending of all types, including consumer credit, mortgage credit,  factoring 
and financing  of commercial  transaction; 

(vii) 

Financial  leasing; 

(viii) 

All payment and money transmission services, including credit, charge and 
debit cards, travellers cheques and bankers drafts; 

(ix) 

Guarantees and commitments; 

(x) 

Trading  for  own  account  or  for  account  of  customers,  whether  on  an 
exchange, in an over-the-counter market or otherwise, the  following: 

(A)  money market instruments (including cheques, bills, certificates of 

deposits); 
foreign  exchange; 
derivative products including, but net limited r :  :\: ; *.  >  f-2 -*»; 

(B) 
(C) 

Page  310 

(D) 

(E) 
(F) 

exchange rate and interest rate instruments, including products such 
as swaps,  forward  rate agreements; 
transferable  securities; 
other negotiable instruments and financial  assets, including bullion. 

(xi)  - 

Participation in issues of all kinds of securities,  including  underwriting and 
placement as agent (whether publiclyor privately) and provision of services 
related to such  issues; 

(xii) 

Money  broking; 

(xiii) 

(xiv) 

( x v ) 

(xvi) 

Asset  management,  such  as  cash  or  portfolio  management,  all  forms  of 
collective  investment  management,  pension  fund  management,  custodial, 
depository  and tmst services; 

Settlement  and  clearing  services  for  financial  assets,  including  securities, 
derivative products,  and other negotiable  instruments; 

Provision and transfer of financial information, and financial dau processing 
and related software  by suppliers of other  financial  services; 

Advisory,  intermediation  and  other  auxiliary  financial  services  on  all  the 
activities listed in subparagraphs (v) through (xv), including credit reference 
and  analysis,  investment  and  portfolio  research  and  advice,  advice  on 
acquisitions  and on corporate  restructuring  and strategy. 

(b) 

A financial service supplier means any natural or juridical person of a Member wishing 
to supply or supplying  financial  services but the term  "financial  service supplier" does not include a 
public  entity. 

(c) 

"Public entity" means: 

(i) 

a government,  a central  bank or a monetary authority,  of a Member,  or an 
entity  owned  or  controlled  by  a  Member,  that  is  principally  engaged  in 
carrying out governmental functions or aaivities for governmental purposes, 
not  including  an entity principally  engaged  in supplying  financial  services 
on commercial  terms;  or 

( ii) 

a private entity, performing functions normally performed by a central bank 
or monetary  authority,  when exercising  those  functions. 

SECOND  ANNEX  ON  FINANCIAL  SERVICES 

Page 311 

Notwithstanding Article IT of the Agreement and paragraphs  1 and 2 of the Annex on Article II 

1. 
Exemptions, a Member may, during a period of 60 days beginning four months after the date of entry 
into force  of  the WTO Agreement,  list  in that  Annex  measures  relating to financial services  which 
are inconsistent  with paragraph  1 of  Article  II of the Agreement. 

2. 
Notwithstanding  Article XXI of the Agreement,  a Member may,  during a period of 60 days 
beginning  four  months  after  the date of  entry  into  force  of  the WTO Agreement,  improve,  modify 
or withdraw  all- or part of the specific  commitments  on financial services  inscribed  in its Schedule. 

The Council for Trade in Services shall esublish any procedures necessary for the application 

3. 
pf paragraphs  1 and 2. 

Page  312 

ANNEX  ON  NEGOTIATIONS  ON  MARITIME  TRANSPORT  SERVICES 

1.  ' 
Anicle II and the Annex on Article II Exemptions, including the requirement to list in the Annex 
any measure inconsistent with most-favoured-nation treatment that a Member will mainuin, shall enter 
into force  for  international  shipping,  auxiliary  services  and access to and use  of port  facilities  only 
on: 

(a) 

the implemenution date to be determined under paragraph 4 of the Ministerial Decision 
on Negotiations  on Maritime  Transport  Services; or, 

'  (b) 

should the negotiations not succeed, the date of the final report of the Negotiating Group 
on Maritime  Transport  Services provided  for  in that  Decision. 

Paragraph  1  shall not apply to any specific commitment  on maritime transport services which 

2. 
is  inscribed  in a Member's  Schedule. 

3. 
From the conclusion of the negotiations referred to in paragraph 1, and before the implemenution 
date, a Member may improve, modify or withdraw all or part of its specific commitments  in this sector 
without  offering  compensation,  notwithstanding  the provisions  of  Article  XXI. 

ANNEX  ON  TELECOMMUNICATIONS 

Page  313 

1. 

Objectives 

Recognizing  the specificities  of the telecommunications  services sector and, in particular,  its 
dual  role  as  a  distinct  sector  of  economic  activity  and as  the  underlying  transport  means  for  other 
economic aaivities, the Members have agreed to the following Annex with the objective of elaborating 
upon the provisions of the Agreement  with respect to measures  affecting  access to and use of public 
telecommunications.transport  networks  and services.  Accordingly,  this  Annex  provides  notes  and 
supplementary  provisions  to the Agreement. 

2. 

Scope 

(a) 

This Annex shall  apply to all measures  of a Member  that affect  access to and use of 

public  telecommunications  transport networks and services.1 

(b) 

. This  Annex  shall  not apply to measures affecting  the cable or broadcast  distribution 

of  radio or television  programming. 

(c) 

Nothing  in this  Annex shall  be construed: 

(i) 

(ii) 

to  require a Member  to authorize  a service supplier  of  any other Member 
to esublish, construct, acquire, lease, operate, or supply telecommunications 
transport  networks  or services,  other than as provided  for  in its Schedule; 
or 

.  to require a Member (or to require a Member to oblige service suppliers under 
its jurisdiction)  to  establish,  construct,  acquire,  lease,  operate  or  supply 
telecommunications  transport networks or services not offered  to the public 
generally. 

3. 

•  Definitions 

For the purposes  of this  Annex: 

(a) 

"Telecommunications"  means  the  transmission  and  reception  of  signals  by  any 

electromagnetic  means. 

(b) 

"Public telecommunications transport service" means any telecommunications transport 
service required, explicitly or in effect, by a Member to be offered to the public generally.  Such services 
may include, inter alia, telegraph, telephone, telex, and dau transmission typically involving the real-time 
transmission  of  customer-supplied  information  baween  two or more points without  any  end-to-end 
change  in the form  or content of the customer's  information. 

(c) 

"Public telecommunications transport network" means the public telecommunications 
iitfrastructure which permits telecommunications between and among defined network termination points. 

(d) 

"Intra-corporate communications" means telecommunications through which a company 
communicates  within  the  company  or  with  or  among  its  subsidiaries,  branches  and,  subject  to  a 
Member's  domestic  laws and regulations, affiliates.  For these purposes,  "subsidiaries",  "branches" 

This paragraph is understood to mean that each Member shall ensure <»•••  t  - M i g r i o ns of this Annex are applied with 
respect to suppliers of public  telecommunications  transport networks anu ser\^cs  by whatever  measures are  necessary. 

Page  314 

and,  where  applicable,  "affiliates"  shall  be  as  defined  by  each  Member. 
"Intra-corporate 
communications"  in  this  Annex  excludes  commercial  or non-commercial  services  that are supplied 
to companies  that are not related subsidiaries, branches or affiliates,  or that are offered  to.customers 
or potential  customers. 

•  (e) 

Any reference to a paragraph or subparagraph of this Annex includes all subdivisions 

thereof. 

4. 

Transparency 

In the  application  of  Article  III of  the  Agreement,  each  Member  shall  ensure  that  relevant 
information on conditions affecting access to and use of public telecommunications transport networks 
.and  services  is  publicly  available,  including:  uriffs  and  other  terms  and  conditions  of  service; 
•specifications of technical interfaces with such networks and services; information on bodies responsible 
for the preparation and adoption of  standards affecting  such access  and use;  conditions  applying  to 
attachment of terminal  or other equipment;  and-notifications,  registration or licensing requirements, 
if  any. 

5. 

Access  to  and  use of Public Telecommunications Transport Networks  and  Services 

(a) 

Each Member shall ensure that any service supplier of any other Member is accorded 
access to-and use of public telecommunications transport networks and services on reasonable and non 
discriminatory terms and conditions, for the supply of a service included in its Schedule.  This obligation 
shall  be applied*, inter alia,  through paragraphs (b) through  (f).2 

(b) 

Each  Member  shall  ensure that  service  suppliers  of  any  other  Member  have  access 
to and use of any  public telecommunications  transport network or service offered  within or across the 
border  of  that  Member,  including  private  leased  circuits,  and  to  this  end  shall  ensure,  subject  to 
paragraphs (e) and (f).  that such suppliers are permitted: 

(i) 

( i i ) 

(iii) 

to purchase or lease and attach terminal or other equipment which interfaces 
with the network  and which  is  necessary  to supply  a supplier's  services; 

to interconnect private leased or owned circuits with publ ic telecommunications 
transport networks and services or with circuits leased or owned by another 
service supplier; and 

to use operating protocols of  the service supplier's choice  in the supply  of 
any  service,  other  than  as  necessary  to  ensure  the  availability  of 
telecommunications transport networks and services to the public generally. 

(c) 

Each Member shall ensure that service suppliers of any other Member may use public 
telecommunications transport networks and services for the movement of information within and across 
borders,  including  for  intra-corporate communications  of  such service  suppliers,  and  for  access  to 
information  contained  in data bases or otherwise stored  in machine-readable  form  in the territory  of 
any Member.  * Any  new or amended measures of a Member  significantly  affecting  such use shall  be 
notified and shall be subject to consulution, in accordance with relevant provisions of the  Agreement. 

(d) 

Notwithstanding  the preceding paragraph, a Member may uke such measures as are 
necessary to ensure the security and confidentiality  of messages, subject to the requirement that such 

T he  term "non-discriminatory* is understood to refer to most-favoured-nation  and national treatment as defined  m the 
Agreement,  as well as to reflect  sector-specific  usage of the term to mean  "terms and conditions no less  favourable than 
those accorded to any other user of like public telecommunications transport networks or services under like circumstances". 

Page  315 

measures  are  not  applied  in a manner which would  constitute  a means  of  arbitrary  or  unjustifiable 
discrimination  or a disguised  restriction on trade in services. 

. 

(e) 

' Each Member shall ensure that no condition is imposed on access to and use of public 

telecommunications  transport  networks and services  other than as necessary: 

(i) 

(ii) 

(iii) 

to  safeguard  the  public  service  responsibilities  of  suppliers  of  public 
telecommunications transport networks and services, in particular their ability 
to make their networks or services  available to the public  generally; 

to  protect  the  technical  integrity  of  public  telecommunications  transport 
networks or services; or 

to ensure that service suppliers of any other Member do not supply services 
unless permitted pursuant to commitments  in the Member's  Schedule. 

(f) 

Provided  that they satisfy' the criteria set out  in paragraph (e),  conditions  for  access 

to and use  of  public telecommunications  transport networks and services may  include: 

(i) 

(ii) 

(iii) 

(iv) 

( v ) 

restrictions  on resale  or shared use of such services; 

a  requirement  to  use  specified  technical  interfaces,  including  interface 
protocols,  for  inter-connection with such networks and services; 

requirements, where necessary, forthe inter-operability of such services and 
to encourage the achievement  of the goals  set out  in paragraph 7(a); 

type  approval  of  terminal  or  other  equipment  which  interfaces  with  the 
network  and  technical  requirements  relating  to  the  attachment  of  such 
equipment  to such networks; 

restrictions on inter-connection of private leased or owned circuits with such 
networks  or services  or  with  circuits  leased  or owned  by  another  service 
supplier; or 

(vi) 

notification,  registration and licensing. 

(g) 

Notwithstanding the preceding paragraphs of this section, a developing country Member 
may. consistent with its level of development, place reasonable conditions on access to and use of public 
telecommunications 
transport  networks  and  services  necessary  to  strengthen,  its  domestic 
telecommunications  infrastructure and service capacity and to increase its participation in international 
trade in telecommunications  services.  Such conditions shall be specified  in the Member's  Schedule. 

6. 

Technical Cooperation 

(a) 

Members  recognize that an efficient,  advanced telecommunications  infrastructure  in 
countries,  particularly  developing  countries,  is essential  to the expansion of  their trade  in services. 
To  this  end.  Members  endorse  and encourage  the participation,  to the fullest  extent practicable,  of 
developed and developing countries and their suppliers of public telecommunications transport networks 
and services and other entities in the development programmes of international and regional organizations, 
including the International Telecommunication  Union, the United Nations Development Programme, 
and the  International  Bank for Reconstruaion  and Development. 

(b) 

Members shall encourage and support telecommunications cooperation among developing 

countries  at the  international,  regional  and sub-regional  levels. 

Page  316 

(c) 

In co-operation with relevant international organizauon. *.  Members shall make available, 

where  practicable,  to developing  countries  information  with respea  to telecommunications  services 
and developments  in telecommunications  and infonnation  technology  to assist  in strengthening  their 
domestic  telecommunications  services  seaor. 

(d) 

Members shall give special consideration to opportunities for the least-developed countries 

to encourage foreign suppliers of telecommunications  services to assist in the transfer of technology, 
training  and other aaivities  that suppon the development  of their telecommunications  infrastmcture 
and expansion of their telecommunications services trade. 

7. 

Relation  to  International Organizations and Agreements 

(a) 

Members recognize the importance of international standards ibr global  compatibility 

and inter-operability of telecommunication networks and services and undertake to promote such standards 
through the work of relevant international bodies, including the International Telecommunication Union 
and the  International  Organization  for  Standardization. 

(b) 

. Members  recognize  the  role  played  by  intergovernmental  and  non-governmental 
in  ensuring  the  efficient  operation  of  domestic  and  global 
organizations  and  agreements 
telecommunications services, in panicular the International Telecommunication Union.  Members shall 
make appropriate arrangements,  where relevant,  for consultation with such organizations  on matters 
arising  from  the  implementation  of this  Annex. 

Page  317 

ANNEX  ON  NEGOTIATIONS  ON  BASIC  TELECOMMUNICATIONS 

Article  II and the Annex on Article  II Exemptions, including the requirement to list in the Annex 

1.  - 
any measure inconsistent with most-favoured-nation treatment that a Member will mainuin, shall enter 
into force  for basic  telecommunications  only on: 

(a) 

(b) 

the implementation date to be determined under paragraph 5 of the Ministerial Decision 
on  Negotiations  on Basic Telecommunications;  or, 

should the negotiations not succeed, the date of the final report of the Negotiating Group 
on Basic Telecommunications.provided  for  in that  Decision. 

• 

Paragraph  1 shall  not apply to any specific  commitment  on basic telecommunications  which 

2. 
is  inscribed  in a Member's  Schedule. 

Page 318 

Page 319 

ANNEX IC 

AGREEMENT  ON TRADE-RELATED  ASPECTS OF 
INTELLECTUAL  PROPERTY  RIGHTS 

PART I 

GENERAL PROVISIONS AND BASIC PRINCIPLES 

PART II 

STANDARDS  CONCERNING  THE  AVAILABILITY,  SCOPE  AND  USE  OF 
INTELLECTUAL  PROPERTY  RIGHTS 

1. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 

Copyright  and Related Rights 
Trademarks 
Geographical  Indications 
Industrial  Designs 
Patents 
Layout-Designs  (Topographies) of Integrated  Circuits 
Proteaion  of Undisclosed  Information 
Control  of Anti-Competitive  Practices in Contractual  Licences  ' 

PART III 

ENFORCEMENT  OF INTELLECTUAL PROPERTY  RIGHTS 

1. 
2. 
3. 
4. 
5. 

General  Obligations 
Civil  and Administrative  Procedures and Remedies 
Provisional  Measures 
Special  Requirements  Related  to Border Measures 
Criminal  Procedures 

PART IV 

ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS 
AND RELATED INTER-PARTES PROCEDURES 

PART  V 

DISPUTE PREVENTION  AND SETTLEMENT 

PART VI 

TRANSITIONAL  ARRANGEMENTS 

PART VII 

INSTITUTIONAL ARRANGEMENTS;  FINAL PROVISIONS 

Page  320 

Members, 

AGREEMENT  ON TRADE-RELATED  ASPECTS  OF 
INTELLECTUAL  PROPERTY  RIGHTS 

Desiring  to reduce distortions and impediments to international trade, and uking into account 
the  need  to  promote  effective  and adequate protection  of  intellectual  property  rights,  and to ensure 
that measures and procedures to enforce intellectual property rights do not themselves become barriers 
to  legitimate  trade; 

Recognizing,  to this end,  the need for new  mles  and disciplines  concerning: 

(a) 

the applicability of  the basic principles  of GATT  1994 and of  relevant  international 
intellectual  property  agreements  or conventions; 

(b) 

.  the provision of adequate standards and principles concerning the availability,  scope 

and use of  trade-related  intellectual  property rights; 

(c) 

(d) 

(e) 

the provision of effective  and appropriate means for the enforcement  of trade-related 
intellectual  property rights, uking  into account differences  in national legal systems; 

the provision of effective  and expeditious procedures  for the multilateral  prevention 
and senlement  of disputes between governments;  and 

transitional  arrangements  aiming  at  the  fullest  panicipation  in  the  results  of  the 
negotiations: 

Recognizing  the need for a multilateral  framework  of principles, mles and disciplines dealing 

with  international  trade  in counterfeit  goods; 

Recognizing  that  intellectual  property rights are private rights; 

Recognizing  the underlying public policy objectives of national  systems  for the protection of 

intellectual  property,  including  developmental  and technological  objectives; 

Recognizing also the special needs of the least-developed country Members in respea of maximum 
flexibility  in the domestic  implementation  of  laws and  regulations  in order to enable them to  create 
a  sound  and viable  technological  base; 

Emphasizing  the  importance of  reducing  tensions  by reaching strengthened  commitments  to 

resolve disputes  on trade-related  intellectual  property  issues through multilateral  procedures; 

Desiring  to  esublish  a  mutually  supportive  relationship  between  the  WTO  and  the  World 
Intellectual Property Organization (referred to in this Agreement as "WIPO") as well as other relevant 
international  organizations; 

Hereby  agree  as  follows: 

Page 321 

PARTI 

GENERAL PROVISIONS  AND  BASIC  PRINCIPLES 

Article  1 

Nature and Scope of  Obligations 

1. 
Members shall-give effect  to the provisions of this Agreement.  Members  may.  but shall  not 
be obliged to, implement  in their law more extensive protection than is required by this Agreement, 
provided that such protection does not contravene the provisions  of this Agreement.  Members  shall 
be free to determine the appropriate method of implementing the provisions of this Agreement within 
their own  legal  system  and practice. 

For the purposes of this  Agreement,  the term  "intellectual  property"  refers  to all  categories 

2. 
of  intellecnul  property  that are the subject of Sections  1 through  7 of  Part II. 

3. 
Members  shall  accord the treatment provided for in this Agreement  to the nationals of other 
Members.1  In respect of the relevant intellectual property right, the nationals of other Members shall 
be understood as those natural or legal persons that would meet the criteria for eligibility for protection 
provided for in the Pari*? Convention (1967), the Beme Convention (1971), the Rome Convention and 
the Treaty  on Intellectual  Property  in Respect  of Integrated Circuits,  were all  Members  of the WTO 
members of those conventions.2  Any Member availing itself of the possibilities provided in paragraph  3 
of Article 5 or paragraph  2 of Article  6 of the Rome Convention shall make a notification as foreseen 
in those provisions to the Council for Trade-Related Aspeos of Intelleoual Propertv Rights (the "Council 
forTRIPS"). 

" 

s 

Article  2 

Intellectual Property  Conventions 

In respect  of  Parts II.  Ill  and  IV of  this  Agreement,  Members  shall  comply  with  Articles 1 

1. 
through  12, and Article  19. of the Paris Convention  (1967). 

2. 
Nothing in Parts I to IV of mis Agreement shall derogate from existing obligations mat Members 
may have to each other under the Paris Convention, the Beme Convention,  the Rome Convention and 
the Treaty  on  Intellectual  Property  in Respea  of  Integrated Circuits. 

'When  "nationals' are referred  to in this Agreement,  they shall be deemed,  in the case of  a separate customs territory 
Member of  the WTO, to mean persons,  naniral or legal, who are domiciled or who have a real and effective  industrial or 
commercial  establishment  in that customs  territory. 

'In this Agreement.  "Paris Convention" refers to the Paris Convention for the Protection of Industrial  Property;  "Paris 
Convention (1967)" refers to the Stockholm Act of this Convention of  14 July  1967.  'Berne Convention" refers to die Berne 
Convention  for  the  Proteaion  of  Literary'and  Artistic  Works;  "Berne Convention  (1971)"  refers  to the Paris  Act of  this 
Convention of 24  July  1971.  "Rome Convention" refers to the International  Convention for the Protection of  Performers. 
Producers of Phonograms and Broadcasting Organizations, adopted at Rome on 26  October  1961.  "Treaty on Intellectual 
Property hi Respect of Integrated Circuits" (IPIC Treaty) refers to the Treaty on Intellectual Property in Respect of Integrated 
Circuits,  adopted  at Washington  on  26  May  1989.  "WTO Agreement"  refers  to the Agreement  Establishing  the WTO. 

Page  322 

Article  3 

National Treatment 

1. 
Each Member shall accord to the nationals of other Members treatment no less favourable than 
that  it accords  to  its*own nationals  with regard to the protection3 of  intellectual  property,  subject  to 
the  exceptions  already  provided 
in,  respectively,  the  Paris  Convention  (1967),  the  Beme 
Convention  (1971), the Rome Convention or the Treaty on Intellectual Property in Respea of Integrated 
Circuits.  In  respea  of  performers,  producers  of  phonograms  and broadcasting  organizations,  this 
obligation only applies in respect of the rights provided under this Agreement.  Any Member availing 
itself  of the  possibilities  provided  in Article 6  of the Beme  Convention  (1971) or paragraph  1(b) of 
Article  16 of  the  Rome  Convention  shall  make a notification  as foreseen  in those provisions  to the 
Council  for TRIPS. 

. 

Members  may  avail  themselves  of  the exceptions permitted under paragraph  1 in relation to 
2. 
judicial  and  administrative  procedures,  including  the  designation  of  an  address  for  service  or  the 
appointment of an agent within the jurisdiction of a Member, only where such exceptions are necessary 
to secure compliance with laws and regulations which are not inconsistent with the provisions of this 
Agreement  and where such practices are not applied in a manner which would  constitute a disguised 
restriction  on trade. 

Article  4 

Most-Favoured-Nation  Treatment 

With  regard  to  the  protection  of  intellectual  property,  any  advantage,  favour,  privilege  or 
immunity  granted  by a Member to the nationals of any other country shall be accorded  immediately 
and  unconditionally  to  the  nationals  of  all  other  Members.  Exempted  from  this  obligation  are any 
advantage,  favour,  privilege  or  immunity  accorded  by a Member: 

(a) 

( b ) 

(c) 

(d ) 

deriving  from  international  agreements  on judicial  assistance  or law enforcement  of 
a general nature and not particularly confined to the proteaion of intellectual property; 

granted in accordance with the provisions of the Beme Convention ( 1971 ) or the Rome 
Convention  authorizing  that  the  treatment  accorded  be  a  function  not  of  national 
treatment  but of  the treatment  accorded  in another country; 

in  respect  of  the  rights  of  performers,  producers  of  phonograms  and  broadcasting 
organizations  not provided under this  Agreement; 

deriving from international agreements related to the proteaion of intellectual property 
which entered into force prior to the entry into force of the WTO Agreement, provided 
that such agreements are notified  to the Council  for TRIPS and do not constitute an 
arbitrary or unjustifiable  discrimination  against nationals of other Members. 

'For die purposes of Anicles  3 and 4.  "protection" shall  include  matters affecting  die availability,  acquisition,  scope, 
maintenance and enforcement of intellectual property rights as well as those matters affecting  the use of intellectual property 
rights  specifically  addressed  in this  Agreement. 

Page  323 

Article  5 

Multilateral Agreements on Acquisition  or 
Maintenance of Protection 

The  obligations  under  Articles  3 and 4  do  not  apply  to  procedures  provided  in  multilateral 
agreements  concluded  under  the  auspices  of  WIPO  relating  to  the  acquisition  or  maintenance  of 
intellectual  property  rights. 

Article  6 

Exhaustion 

For  the  purposes  of  dispute  senlement  under  this  Agreement,  subject  to  the  provisions  of 
Articles  3 -and  4  nothing  in this  Agreement  shall  be used  to  address  the  issue  of  the  exhaustion  of 
intellectual  property  rights. 

Article  7 

Objectives 

The protection and enforcement of intellectual property rights should contribute to the promotion 
of technological innovation and to the transfer and dissemination of technology, to the mutual advantage 
of producers and users of technological  knowledge and in a manner conducive to social and economic 
welfare,  and to a balance of  rights  and obligations. 

Article  8 

Principles 

1. 
Members may, in formulating or amending their laws and regulations, adopt measures necessary 
to protect public health and nutrition, and to promote the public interest in sectors of vital  importance 
to  their socio-economic  and technological  development,  provided  that  such measures  are  consistent 
with  the provisions  of  this  Agreement. 

Appropriate measures, provided that they are consistent with the provisions of this Agreement, 
2. 
may  be  needed  to prevent  the abuse of  intellectual  property  rights  by  right  holders  or the  resort  to 
practices which unreasonably restrain trade or adversely affect the international transfer of technology. 

Page  324 

PART II 

STANDARDS  CONCERNING  THE AVAILABILITY,  SCOPE 
AND  USE OF INTELLECTUAL  PROPERTY  RIGHTS 

SECTION  1:  COPYRIGHT  AND  RELATED  RIGHTS 

Article  9 

Relation to  the Berne Convention 

1. 
Members  shall  comply  with Articles  1 through 21  of  the  Beme  Convention  (1971)  and the 
Appendix thereto.  However,  Members shall  not have rights or obligations under this Agreement  in 
respect of the rights conferred under Article 6bis of that Convention or of the rights derived therefrom. 

Copyright  protection  shall  extend  to  expressions  and  not  to  ideas,  procedures,  methods  of 

2. 
operation or mathematical  concepts  as such. 

Article  10 

Computer Programs and  Compilations of  Data 

Computer  programs,  whether  in source or object code,  shall  be protected  as  literary  works 

1. 
under the  Beme  Convention  ( 1971 ). 

2. 
Compilations  of data or other material, whether in machine readable or other form,  which by 
reason of the selection or arrangement of their contents constitute intellectual creations shall be protected 
as such.  Such protection, which shall not extend to the data or material itself, shall be without prejudice 
to  any  copyright  subsisting  in the data or material  itself. 

Article  11 

Rental Rights 

In respect of at least computer programs and cinematographic works, a Member shall provide 
authors and their successors  in title the right to authorize or to prohibit the commercial  rental to the. 
public of originals or copies of their copyright works.  A Member shall be excepted from this obligation 
in respect of  cinematographic works unless such rental has led to widespread copying of such works 
which is materially  impairing the exclusive right of reproduction conferred in that Member on authors 
and their successors in title.  In respea of computer programs, this obligation does not apply to renuls 
where the program  itself  is not the essential  object of the rental. 

Article  12 

Term of Protection 

Whenever the term of protection of a work, other than a photographic work or a work of applied 
art, is calculated on a basis other than the life of a natural person, such term shall be no less than 50 

(21 

years from the end of the calendar year of authorized publication, or, failing such authorized publication 
within 50 years from the making of the work,  50 years from the end of the calendar year of making. 

Page  325 

Article  13 

Limitations  and Exceptions 

Members shall confine limitations or exceptions to exclusive rights to certain special cases which 
do not conflia with a normal exploitation of the work and do not unreasonably prejudice the legitimate 
interests  of the right holder. 

Article  14 

Protection  of Performers,  Producers of Phonograms 
(Sound Recordings)  and Broadcasting  Organizations 

1. 
In  respect  of  a  fixation  of  their  performance  on  a  phonogram,  performers  shall  have  the 
possibility of preventing the following  acts when undertaken without their authorization:  the fixation 
of  their unfixed  performance  and the reproduction of such fixation.  Performers  shall  also have the 
possibility of preventing die following acts when-undertaken without their authorization:  the broadcasting 
by wireless  means  and the communication  to the public of their live  performance. 

Producers of phonograms  shall  enjoy the right to authorize or prohibit  the direct  or indirect 

2. 
reproduction of  their phonograms. 

3. 
Broadcasting organizations shall have the right to prohibit the following acts when undertaken 
without their authorization:  the fixation, the reproduaion of fixations, and the rebroadcasting by wireless 
means of broadcasts, as well as the communication to the public of television broadcasts of the same. 
Where  Members  do  not  grant  such  rights  to  broadcasting  organizations,  they  shall  provide  owners 
of copyright in the subject maner of broadcasts with the possibility of preventing the above acts, subject 
to the provisions  of  the  Beme  Convention  (1971). 

The  provisions  of  Article  11  in respect  of computer  programs  shall  apply  mutatis mutandis 
4. 
to producers of phonograms and any other right holders in phonograms as daermined  in a Member's 
law.  If on  15 April  1994 a Member has in force a system of equitable remuneration of right holders 
in respea of the rental of phonograms, it may maintain such system provided that the commercial rental 
of phonograms  is  not giving  rise to the material  impairment  of  the exclusive  rights  of  reproduaion 
of right holders. 

The  term  of  the protection available  under this  Agreement  to performers  and  producers  of 
5. 
phonograms shall last at least until the end of a period of 50 years computed from the end of the calendar 
year in which the fixation  was made or the performance took place.  The term of protection granted 
pursuant to paragraph 3 shall last for at least 20 years from the end of the calendar year in which the 
broadcast took  place. 

6. 
Any  Member  may,  in relation to the rights conferred  under paragraphs  1,  2  and 3,  provide 
for conditions, limitations, exceptions and reservations to the extent permitted by the Rome Convention. 
However, the provisions of Anicle  18 of the Berne Convention (1971) shall also apply, mutatis mutandis, 
to the rights  of performers  and producers of phonograms  in phonograms. 

Page  326 

SECTION  2:  TRADEMARKS 

Article  15 

Protectable  Subjea  Matter 

Any sign, or any combination of signs, capable of distinguishing the goods or services of one 
1. 
undertaking from those of other undertakings, shall be capable of constituting a trademark.  Such signs, 
in panicular words including personal names, letters, numerals, figurative elements and combinations 
of colours as well  as any combination of such signs,  shall  be eligible  for  registration as trademarks. 
Where signs are not inherently capable of distinguishing the relevant goods or services. Members may 
make registrability depend on distinaiveness acquired through use.  Members may require, as a condition 
of  registration,  that signs  be visually  perceptible. 

Paragraph  1 shall  not  be  understood  to'prevent  a  Member  from  denying  registration  of  a 
2. 
trademark  on  other  grounds,  provided  that  they  do  not  derogate  from  the  provisions  of  the  Paris 
Convention  (1967). 

3. 
Members  may  make registrability depend on use.  However,  actual use of a trademark shall 
not be a condition for filing an application for registration.  An application shall not be refused solely 
on the ground that intended use has not taken place before the expiry of a period of three years  from 
the date of  application. 

The nature of the goods or services to which a trademark is to be applied shall in no case form 

4. 
an obstacle  to  registration  of  the trademark. 

5. 
Members  shall  publish  each trademark  either  before  it  is  registered  or  promptly  after  it  is 
registered and shall afford a reasonable opportunity for petitions to cancel the registration.  In addition. 
Members  may  afford  an opportunity  for the registration of a trademark  to be  opposed. 

Article  16 

Rights Conferred 

1. 
The owner of a registered trademark shall have the exclusive right to prevent all third parties 
not having the owner's consent from using  in the course of trade identical  or similar signs for  goods 
or services which are identical or similar to those in respect of which the trademark is registered where 
such use would result  in a likelihood of confusion.  In case of the use of an identical sign for identical 
goods or services, a likelihood of confusion shall be presumed.  The rights described above shall not 
prejudice  any  existing  prior  rights,  nor shall  they  affect  the possibility  of  Members  making  rights 
available  on the basis of use. 

2. 
Article  6bis  of  the  Paris Convention  (1967)  shall  apply,  mutatis  mutandis,  to  services.  In 
daermining whether a trademark is well-known. Members shall uke account of the knowledge of the 
trademark  in the relevant sector of the public,  including  knowledge  in the Member concerned which 
has been obuined  as a result of  the promotion of  the trademark. 

Anicle 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services 
3. 
which are not similar to those in respea of which a trademark  is registered, provided that use of that 
trademark  in relation to those goods or services would  indicate a connection between those goods or 

services and the owner of the registered trademark and provided that the interests of the owner of the 
registered  trademark  are likely  to be damaged  by such use. 

Page  327 

Article  17 

Exceptions 

Members may provide limited exceptions to the rights conferred by a trademark,  such as fair 
use of descriptive terms, provided that such exceptions uke account of the legitimate  interests of the 
owner of  the trademark  and of third parties. 

Article  18 

Term of  Protection 

Initial  registration, and each renewal of registration, of a trademark shall be for a term of no 

less  than seven  years.  The  registration of  a trademark shall be renewable  indefinitely. 

Article  19 

Requirement  of  Use 

If use  is  required  to maintain a registration, the registration may  be cancelled  only  after an 
1. 
uninterrupted  period  of  at  least three years of  non-use,  unless  valid  reasons based  on the  existence 
of obstacles to such use are shown by the trademark owner.  Circumstances  arising independently  of 
the will  of the owner of the trademark  which constitute an obstacle to the use of the trademark,  such 
as  import  restrictions  on or other  government  requirements  for  goods  or services protected  by  the 
trademark,  shall  be  recognized  as valid  reasons for non-use. 

When  subject  to  the  control  of  its  owner,  use  of  a trademark  by  another  person  shall  be 

2. 
recognized  as use of the trademark  for the purpose of mainuining  the registration. 

Article  20 

Other Requirements 

The use of a trademark in the course of trade shall not be unjustifiably encumbered by special 
requirements, such as use with another trademark, use in a special form or use in a manner detrimental 
to its capability to distinguish the goods or services of one undertaking from those of other undertakings. 
This will not preclude a requirement prescribing the use of the trademark identifying the undertaking 
producing  the goods  or services  along with,  but without  linking  it to,  the trademark  distinguishing 
the specific  goods  or services  in question of that undertaking. 

Page  328 

Article  21 

Licensing and Assignment 

Members  may  determine conditions on the licensing  and assignment  of trademarks,  it being 
understood that the compulsory  licensing  of trademarks shall  not be permitted  and that the owner of 
a registered trademark shall have the right to assign the trademark with or without the transfer of the 
business  to which the trademark  belongs. 

SECTION  3:  GEOGRAPHICAL  INDICATIONS 

Article  22 

Protection of Geographical Indications 

Geographical  indications are, for the purposes of this Agreement,  indications  which  identify 

1. 
a good  as originating  in the territory  of a Member,  or a region or locality  in that territor.  where  a. 
given quality, reputation or other characteristic of the good is essentially attributable to its geographical 
origin. 

In respect  of  geographical  indications.  Members  shall  provide the legal  means for interested 

2. 
panics  to prevent: 

(a) 

the  use  of  any means  in the  designation  or presenution  of  a good  that indicates  or 
suggests that the good in question originates in a geographical area other than the true 
place'of origin  in a manner which  misleads  the public as to the geographical  origin 
of the good; 

(b) 

any  use  which  constitutes  an  act  of  unfair  competition  within  the  meaning  of 
Article  \0bis  of the Paris Convention  (1967). 

A Member shall, ex officio if its legislation so permits or at the request of an interested party, 
3. 
refuse or inval idate the registration of atrademark which contains or consists of a geographical indication 
with respect to goods not originating in the territory indicated, if use of the indication in the trademark 
for such goods in that Member is of such a nature as to mislead the public as to the tme place of origin. 

4. 
The protection under paragraphs 1,2 and 3 shall be applicable against a geographical  indication 
which, although literally tme as to the territory, region or locality in which the goods originate, falsely 
represents to the public  that the goods originate  in another territory. 

Page  329 

Article  23 

Additional  Proteaion for  Geographical  Indications 
for  Wines and Spirits 

. 

1. 
Each Member shall provide the legal means for interested parties to prevent use of a geographical 
indication identifying  wines for wines not originating in the place indicated by the geographical  indication 
in question or identifying  spirits for spirits not originating  in the place indicated by the geographical 
indication in question, even where the tme origin of the goods is indicated or the geographical indication 
is used  in translation or accompanied  by expressions  such as  "kind",  "type",  "style",  "imitation"  or 
the  like.4 

2. 
The registration of a trademark for wines which contains or consists of a geographical indication 
identifying wines or for spirits which contains or consists of a geographical indication identifying spirits 
shall  be refused  or invalidated, ex officio if a Member's  legislation so permits or at the request of an 
interested  party,  with  respect  to such wines or spirits  not having this origin. 

3. 
In the case of  homonymous geographical  indications  for wines, proteaion  shall  be accorded 
to each indication, subject to the provisions of paragraph 4 of Article 22. Each Member shall determine 
the practical  conditions  under  which  the homonymous  indications  in question  will  be  differentiated 
from each other, uking into account the need to ensure equiuble treatment of the producers concerned 
and that consumers  are not  misled. 

4. 
In order to  facilitate  the protection  of  geographical  indications  for  wines,  negotiations  shall 
be  undertaken  in  the  Council  for  TRIPS  concerning  the  establishment  of  a  multilateral  .system  of 
notification and registration of geographical indications for wines eligible for proteaion in those Members 
participating  in the  system. 

Article  24 

International Negotiations;  Exceptions 

Members  agree  to  enter  into  negotiations  aimed  at  increasing  the  protection  of  individual 
1. 
geographical  indications under Article 23.  The provisions of paragraphs 4 through 8 below shall  not 
be used by a Member to refuse to conduct negotiations or to conclude bilateral or-multilateral agreements. 
In the context of  such negotiations/Members  shall  be willing  to consider the continued  applicability 
of these provisions to individual geographical indications whose use was the subject of such negotiations. 

2. 
The Council for TRIPS shall keep under review the application of the provisions of this Section; 
the first such review shall take place within two years of the entry into force of the WTO Agreement. 
Any matter affecting  the compliance with the obligations under these provisions may be drawn to the 
attention of the Council, which, at the request of a Member, shall consult with any Member or Members 
in respect  of  such  matter  in respect of  which it has not been possible  to  find  a satisfactory  solution 
through bilateral or plurilateral consultations between the Members concerned.  The Council shall uke 
such action as may  be agreed  to faciliute  the operation and further  the objectives  of  this  Section. 

3. 
In  implementing  this  Section,  a  Member  shall  not  diminish  the  protection  of  geographical 
indications that existed  in that Member  immediately prior to the date of entry  into force of the WTO 
Agreement. 

'Notwithstanding the first sentence of Anicle  42.  Members may. with respect to these obligations,  instead provide for 

enforcement  by administrative  action. 

Page  330 

4. 
Nothing  in  this  Section  shall  require  a  Member  to  prevent  continued  and  similar  use  of  a 
particular geographical  indication of another Member identifying  wines or spirits in connection with 
goods  or services by any of its nationals or domiciliaries who have used that geographical  indication 
in a continuous  manner  with  regard to the same or related goods  or services  in the territory  of  that 
Member  either (a)  for  at least  10 years preceding  15 April  1994 or (b)  in good  faith  preceding that 
date. 

Where  a  trademark  has  been  applied  for  or  registered  in  good  faith,  or  where  rights  to  a 

5. 
trademark  have been acquired  through  use  in good faith either: 

(a) 

before the date of application of these provisions in that Member as defined in Part VI ; 
or 

(b) 

before  the geographical  indication is protected  in its country  of  origin; 

measures  adopted  to  implement  this  Section shalf not prejudice  eligibility  for  or the  validity  of  the 
registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical 
with,  or similar  to,  a geographical  indication. 

6. 
Nothing in this Section shall require a Member to apply its provisions in respea of a geographical 
indication  of any  other  Member  with  respect to goods  or services  for  which the  relevant  indication 
is identical with the term customary in common language as the common name for such goods or services 
in the territory of that Member.  Nothing in this Section shall require a Member to apply its provisions 
in respect of a geographical  indication of any other Member with respect to products of the vine  for 
which  the relevant  indication  is  identical  with the customary  name of a grape variety  existing  in the 
territor}' of  that  Member  as of  the date of entry  into force  of the WTO  Agreement. 

7. 
A  Member  may  provide that any request made under this Section in connection with the use 
or registration of a trademark must be presented within five years after the adverse use of the protected 
indication has become generally known in that Member or after the date of registration of the trademark 
in that  Member  provided  that the  trademark  has been published  by  that date,  if  such  date  is  earlier 
than the  date  on which  the adverse  use  became  generally  known  in that  Member,  provided  that  the 
geographical  indication  is not used or registered  in bad faith. 

8. 
Theprovisions of this Section shall in no way prejudice the right of any person to use, in the 
course of trade, that person's name or the name of that person's predecessor in business, except where 
such name  is used  in such a manner as to mislead  the public. 

9. 
There shall  be no obligation under this Agreement  to protect geographical  indications  which 
are not  or cease  to  be  protected  in  their country  of origin,  or which  have  fallen  into disuse  in that 
country. 

SECTION 4:  INDUSTRIAL  DESIGNS 

Article  25 

Requirements for  Protection 

1. 
Members shall provide for the protection of independently  created industrial designs that are 
new or original.  Members may provide that designs are not new or original if they do not significantly 

Page 331 

differ  from  known  designs  or  combinations  of  known design  feamres.  Members  may  provide that 
such proteaion shall not extend to designs dictated essentially by technical or functional considerations. 

Each  Member  shall  ensure  that  requirements  for  securing  protection  for  textile  designs,  in 
2. 
panicular in regard to any cost, examination or publication, do not unreasonably impair the opportunity 
to seek and obuin such protection.  Members  shall be free to meet this obligation through industrial 
design  law or through copyright  law. 

Article  26 

Protection 

1 > 
The owner of a protected industrial design shall have the right to prevent third parties not having 
the owner's consent from making, selling or importing articles bearing or embodying  a design which 
is a copy, or substantially a copy, of the protected design, when such acts are undertaken for commercial 
purposes. 

Members may provide limited exceptions to the protection of industrial designs, provided that 
2. 
such exceptions do not unreasonably conflict with the normal exploitation of protected industrial designs 
and do not unreasonably prejudice the legitimate interests of the owner of the  protected design, uking 
account  of .the legitimate  interests of third parties. 

3. 

'  The duration of protection available  shall  amount  to at least  10 years. 

SECTIONS:  PATENTS 

Article  27 

Patentable Subjea  Matter 

Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, 
1. 
whether  products  or  processes,  in all  fields  of  technology,  provided  that  they  are  new,  involve  an 
inventive  step  and  are  capable  of  industrial  application.5  Subject  to  paragraph 4  of  Article 65, 
paragraph  8 of  Anicle  70 and paragraph 3 of this Article, patents shall be available and patent rights 
enjoyable without discrimination as to the  place of invention, the field of technology and  whether products 
are  imported  or  locally  produced. 

2. 
Members  may exclude from patentability  inventions,  the prevention within their territory  of 
the commercial  exploitation  of  which  is  necessary  to protect  ordre public  or morality,  including  to 
protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided 
that such  exclusion  is not made merely  because the exploitation  is prohibited  by their law. 

3. 

Members  may  also exclude  from  patentability: 

(a) 

diagnostic, therapeutic and surgical methods for me treatment of humans or animals; 

'For the purposes of this Article, the terms  "inventive step" and "capable of industrial application" may be deemed by 

a  Member to be synonymous  with the terms  "non-obvious" and "useful"  respectively. 

Page  332 

(b) 

plants and animals other than micro-organisms,  and essentially  biological  processes 
foi* the produaion of plants or animals other than non-biological and microbiological 
processes.  However,  Members shall provide for the protection ofplant varieties either 
by patents or by an effective  sut generis  system or by any combination thereof.  The 
provisions of  this subparagraph shall  be  reviewed  four  years after  the date of  entry 
into force  of the WTO Agreement. 

Article  28 

Rights Conferred 

1. 

A patent shall  confer  on its owner the following  exclusive  rights: 

(a) 

(b) 

where the subjea  matter of  a patent is a produa,  to prevent third parties not  having 
the  owner's  consent  from  the acts  of:  making,  using,  offering  for  sale,  selling,  or 

.  importing6  for these purposes that produa; 

where the subject maner of a patent  is a process,  to prevent  third parties not having 
the owner's  consent  from  the act of using the process,  and from the acts of:  using, 
offering  for sale, selling, or imponing for these purposes at least the product obuined 
directly  by that process. 

Patent owners shall also have the right to assign, or transfer by succession, the patent and to 

2. 
conclude  licensing  contracts. 

Article  29 

Conditions on Patent  Applicants 

1. 
Members  shall  require that an applicant for a patent shall disclose the invention in a manner 
sufficiently  clear and complete  for the  invention to be carried out by a person skilled  in the an  and 
may require the applicant to indicate the  best mode for carrying out the invention known to the inventor 
at the  filing  date or,  where priority  is claimed,  at the priority  date of the application. 

Members may require an applicant for a patent to provide information concerning the applicant's 

2. 
corresponding  foreign applications and grants. 

Article  30 

Exceptions to  Rights Conferred 

Members may provide limited exceptions to the exclusive rights conferred by a patent, provided 
that such exceptions do not unreasonably conflict with a normal exploitation of the  patent arid do not 
unreasonably  prejudice the legitimate  interests of the patent owner,  uking  account  of the  legitimate 
interests of  third parties. 

•This right, like all other rights conferred under this Agreement in respect of the use, sale, importation or other distribution 

of  goods,  is subject  to the  provisions  of Anicle  6. 

Page  333 

Article  31 

Other  Use Without Authorization of the  Right  Holder 

Where the  law  of  a Member  allows  for  other use7  of  the subject  matter  of  a patent  without 
the authorization of the right holder,  including use by the government  or third parties authorized by 
the government,  the following  provisions  shall  be respected: 

(a) 

authorization of  such use shall  be considered  on its  individual  merits: 

(b) 

such use may only be permitted if, prior to such use, the proposed user has made efforts 
to  obuin  authorization  from  the  right  holder  on  reasonable  commercial  terms  and 
conditions  and that such efforts  have not been successful  within a reasonable period 
of  time.  This  requirement  may  be  waived  by  a Member  in  the  case  of  a  national 
emergency  or  other  circumstances  of  extreme  urgency  or  in  cases  of  public  non 
commercial use.  In situations of national emergency or other circumstances of extreme 
urgency,  the  right  holder  shall,  nevertheless,  be  notified  as  soon  as  reasonably 
practicable.  In  the  case  of  public  non-commercial  use,  where  the  government  or 
.  contractor,  without  making  a patent  search,  knows  or has  demonstrable  grounds  to 
know that a valid patent is or will be used by or for the government,  the right holder 
shall  be  informed  promptly; 

(c) 

the scope  and  duration of  such  use  shall  be  limited  to the purpose  for  which  it  was 
authorized, and in the case of semi-conductor technology shall only be for public non-
.  commercial  use  or  to  remedy  a practice determined  after judicial  or  administrative 

process  to be ami-competitive; 

(d) 

such use  shall  be non-exclusive; 

(e) 

(f) 

(g) 

(h) 

(i) 

such  use shall  be non-assignable,  except  with that part of  the enterprise  or goodwill 
which  enjoys  such use; 

any such use shall be authorized predominantly for the supply of the  domestic market 
of  the  Member  authorizing  such use; 

authorization for such use shall be liable, subject to adequateprotection of the legitimate 
interests of the persons so authorized, to be terminated if and  when the circumstances 
which ied to it cease to exist and are unlikely to recur.  The competent authority shall 
have the authority to review, upon motivated request, the continued existence of these 
circumstances; 

the right holder shall be paid adequate remuneration in the circumstances of each case, 
uking  into account  the economic  value of  the authorization; 

the legal validity of any decision relating to the authorization of such use shall be subject 
to judicial  review  or other  independent  review  by a distinct  higher  authority  in that 
Member; 

"Other  use"  refers  to use other than that allowed  under  Anicle 30. 

Page  334 

(j) 

(k) 

any decision relating to the remuneration provided in respea of such use shall be subject 
to judicial  review  or other independent  review  by a distinct  higher authority  in that 
Member; 

Members are not obliged to apply the conditions sa  forth in subparagraphs  (b) and  (f) 
where  such  use  is  permitted  to  remedy  a  practice  determined  after  judicial  or 
administrative  process to be anti-competitive.  The need to correct anti-competitive 
practices may be uken into account in daermining the amount of remuneration in such 
cases.  Competent  authorities  shall  have  the  authority  to  refuse  termination  of 
authorization if and  when the conditions which led to such authorization are likely to 
recur; 

(1) 

where such use is authorized to permit the exploitation of a patent ( "the second patent " ) 
which  cannot  be exploited  without  infringing  another patent  ("the  first  patent"), the 
following  additional  conditions shall  apply: 

(i) 

(ii) 

(iii) 

the invention claimed in the second patent shall involve an important technical 
advance  of  considerable  economic  significance  in  relation  to  the  invention 
claimed  in the first  patent; 

the owner of the first patent shall be entitled to a cross-licence on reasonable 
terms  to use the invention claimed  in the second patent;  and 

the use authorized in respea of the  first patent shall be non-assignable except 
with the assignment  of the second patent. 

Article  32 

Revocation/Forfeiture 

An opportunity for judicial review of any decision to revoke or forfeita patent shall be available. 

Article  33 

Term of  Protection 

The term of protection available shall not end before the expiration of a period of twenty years 

counted  from  the filing  date.* 

'It is understood that those Members which do not have a system of original grant may provide that the term of protection 

shall  be computed  from  the filing  date  in the system of original  grant. 

Page  335 

Article  34, 

Process  Patents:  Burden of Proof 

1. 
For the purposes of civil proceedings in respect of the infringement  of the rights of the  owner 
referred to in paragraph  1(b) of Anicle  28; if the subject maner of a patent is a process for obtaining 
a product, the judicial authorities shall have the authority to order the defendant to prove that the process 
to obuin an identical product is different from the patented process.  Therefore, Members shall provide, 
in at least one of the following  circumstances,  that any identical product when produced without the 
consent  of  the patent  owner shall,  in the absence  of proof  to the contrary,  be deemed  to have been 
obuined  by the patented process: 

(a) 

if the product obuined by the patented process  is new; 

(b) 

if there is a substantial  likelihood that the identical product was made by the process 
and the owner of the patent has been unable through reasonable  efforts  to determine 
the process acmally  used. 

Any Member  shall be free to provide that the burden of proof indicated in paragraph  1 shall 
2. 
be on the alleged  infringer  only  if the condition referred  to in subparagraph (a) .is fulfilled  or only  if 
the condition  referred  to  in subparagraph (b) is  fulfilled. 

In the adduction of proof to the contrary, the legitimate  interests of defendants  in protecting 

3. 
their manufacturing  and business  secrets  shall  be uken  into account. 

SECTION  6:  LAYOUT-DESIGNS  (TOPOGRAPHIES)  OF INTEGRATED  CIRCUITS 

Article 35 

Relation to the IPIC Treaty 

Members agree to provide protection to the layout-designs (topographies) of integrated circuits 
(referred to in this Agreement as "layout-designs") in accordance with Articles  2 through 7 (other than 
paragraph  3 of Anicle  6), Article  12 and paragraph 3 of Article  16 of the Treaty on Intellectual Property 
in Respea  of  Integrated  Circuits  and,  in addition, to comply  with the following  provisions. 

Article  36 

Scope of the Protection 

Subject to the provisions of paragraph  1 of Article 37, Members  shall consider unlawful  the 
following acts if performed without the authorization of the right holder:9  importing, selling, or otherwise 
distributing for commercial purposes a proteaed layout-design, an integrated circuit in which aprotected 
layout-design is  incorporated, or an article  incorporating such an integrated circuit only  in so  far as 
it continues to contain an unlawfully  reproduced layout-design. 

T he  term "right holder* in this Section shall be understood as having the same meaning as the term "holder of the right' 

in the IPIC  Treaty. 

Page  336 

Article  37 

Aas  Not Requiring the Authorization  of the Right  Holder 

1. 
Notwithstanding  Anicle  36,  no Member shall  consider unlawful  the performance  of  any of 
the  acts  referred  to  in  that  Anicle  in  respect  of  ah  integrated  circuit  incorporating  an  unlawfully 
reproduced  layout-design  or  any  anicle  incorporating  such  an  integrated  circuit  where  the  person 
performing or ordering such acts did not know and had no reasonable ground to know, when acquiring 
the integrated circuit or anicle incorporating such an integrated circuit, that it incorporated an unlawful ly 
reproduced  layout-design.  Members shall provide that, after the time that such person has received 
sufficient  notice  that the  layout-design  was unlawfully  reproduced, that person may  perform  any  of 
the acts with  respect  to the stock  on hand or ordered  before such time,  but shall  be liable  to pay to 
the  right  holder  a sum  equivalent  to  a reasonable  royalty  such  as  would  be  payable  under  a  freely 
negotiated  licence  in respect of such a layout-design. 

The conditions set out in subparagraphs ta) through (k) of Article 31 shall apply mutatis mutandis 

2. 
in the event of any  non-voluntary  licensing  of a layout-design or of  its use by or for the government 
without  the authorization  of the right holder. 

Article  38 

Term of  Protection 

1. 
In Members requiring registration as a condition of protection, the term of protection of layout-
designs  shall  not  end before the expiration of a period of  10 years counted from the date-of filing  an 
application for registration or from the first commercial  exploiution wherever in the world it occurs. 

2. 
In Members  not  requiring  registration  as a condition  for protection,  layout-designs  shall  be 
protected for a term of no less than 10 years from the date of the first commercial exploitation wherever 
in the  world  it occurs. 

Notwithstanding  paragraphs  1 and 2,  a Member  may  provide  that proteaion  shall  lapse  15 

3. 
years after  the creation of the layout-design. 

SECTION  7:  PROTECTION  OF UNDISCLOSED  INFORMATION 

Article  39 

In  the  course  of  ensuring  effeaive  proteaion  against  unfair  competition  as  provided  in 
1. 
Anicle  106/5  of  the  Paris  Convention  (1967),  Members  shall  protect  undisclosed  information  in 
accordance with paragraph 2 and dau submined to governments or govemmenul agencies in accordance 
with paragraph 3. 

2. 
Naniral and legal persons shall have the possibility of preventing infonnation lawfully within 
their control from being disclosed to, acquired by, or used by others without their consent in a manner 
contrary' to honest  commercial  practices10 so long  as such  information: 

"For  the purpose of this provision, "a manner contrary to honest commercial practices" shall mean at least practices 
such as breach  of  contract, breach of confidence  and inducement to breach, and includes the acquisition of undisclosed 
information  by third panics who knew, or were grossly negligent in failing  to know, that such practices were involved in 

Page  337 

(a) 

is secret in the sense that it is not,  as a body or in the precise configuration and  assembly 
of its components, generally known among or readily accessible to persons within the 
circles  that normally  deal  with the kind pf information  in question; 

(b) 

has commercial  value because  it is secret;  and 

(c) 

has been subject to reasonable steps under the circumstances,  by the person  lawfully 
in control  of the  information,  to keep  it secret. 

3. 
Members,  when-requiring,  as a condition  of  approving  the  marketing  of  pharmaceutical  or 
of agricultural  chemical  products which utilize new chemical  entities,  the submission  of  undisclosed 
test or other data, the origination of which involves a considerable effort, shall protect such data against 
unfair commercial  use.  In addition. Members shall protect such data against disclosure, except where 
necessary  to protect the public,  or unless steps are uken to ensure that the data are protected against 
unfair  commercial  use. 

SECTION  8:  CONTROL  OF ANTI-COMPETITIVE  PRACTICES 
IN CONTRACTUAL  LICENCES 

Article  40 

Members  agree that some licensing practices or conditions peruining to intellectual  property 
1. 
rights which restrain competition may have adverse effects  on trade and may  impede the transfer and 
dissemination  of  technology. 

2. 
Nothing in this Agreement shall prevent Members from specifying in their legislation licensing 
practices or conditions  that may  in particular cases constitute an abuse of  intellectual  property  rights 
having  an adverse effect  on competition  in the relevant market.  As  provided  above,  a Member may 
adopt,  consistently  with the other provisions  of  this Agreement,  appropriate  measures  to prevent  or 
control  such  practices,  which  may  include  for  example  exclusive  grantback  conditions,  conditions 
preventing  challenges to validity and coercive package licensing,  in the light of the relevant laws and 
regulations  of  that  Member. 

3. 
Each Member shall enter, upon request, into consulutions  with any other Member which has 
cause to believe that an intellectual property right owner that is a national or domiciliary of the Member 
to which the request  for consulutions  has been addressed  is undertaking practices  in violation of the 
requesting Member's  laws and regulations on the subject matter of this Section, and which wishes to 
secure compliance  with such legislation,  without prejudice to any action under the law and to the full 
freedom  of  an  ultimate  decision  of  either  Member.  The  Member  addressed  shall  accord  full  and 
sympathetic consideration to. and shall afford adequate opportunity for, consultations with the requesting 
Member,  and  shall  cooperate  through  supply  of  publicly  available  non-confidential  information  of 
relevance to the matter in question and of other information available to the Member, subject to domestic 
law  and  to  the  conclusion  of  mutually  satisfactory  agreements  concerning  the  safeguarding  of  its 
confidentiality  by the  requesting  Member. 

4. 
A  Member  whose  nationals  or domiciliaries  are subject  to  proceedings  in another  Member 
concerning alleged violation of that other Member's laws and regulations on the subject matter of this 

the  acquisition. 

Page  338 

Section shall,  upon request, be granted an opportunity  for consulutions  by the other Member  under 
the same  conditions  as those  foreseen  in paragraph 3. 

PART III 

ENFORCEMENT  OF INTELLECTUAL  PROPERTY  RIGHTS 

SECTION  1:  GENERAL  OBLIGATIONS 

Article  41 

Members shall ensure that enforcement procedures as specified  in this Part are available under 
1. 
their law so as to permit effective  action against any act of infringement  of intellectual property rights 
covered by this Agreement, including expeditious remedies to prevent infringements and remedies which 
constitute  a deterrent  to further  infringements.  These procedures  shall  be applied in such a manner 
as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse. 

2. 
Procedures concerning the enforcement of intellectual property rights shall be fair and equiuble. 
They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted 
delays. 

3. 
Decisions  on the merits of a case shall preferably  be in writing and reasoned.  They shall  be 
made available at least to the parties to the proceeding without undue delay.  Decisions on the merits 
of  a case shall  be based only on evidence  in respect of which parties were offered  the opportunity  to 
be heard. 

4. 
Parties to  a proceeding  shall  have an opportunity  for  review  by  a judicial  authority  of  final 
administrative  decisions  and,  subject  to jurisdictional  provisions  in a Member's  law  concerning  the 
importance  of a case,  of at least the legal aspects of  initial judicial  decisions  on the merits  of a case. 
However,  there shall  be no obligation to provide an opportunity  for review  of acquittals  in criminal 
cases. 

5. 
It is understood that this Part does not create any obligation to put in place a judicial  system 
for the enforcement of intellectual property rights distinct from mat for the enforcement of law in general, 
nor does it affect  the capacity of Members to enforce their law in general.  Nothing in this Part creates 
any obligation with respect to the distribution of resources as between enforcement of intellectual property 
rights  and the enforcement  of  law  in general. 

SECTION  2:  CIVIL AND  ADMINISTRATIVE  PROCEDURES  AND  REMEDIES 

Page  339 

Article  42 

T,  •  > 

• 

• 

Fair and.Equitable  Procedures 

Members  shall  make  available  to  right  holders11  civil  judicial  procedures  concerning  the 
enforcement  of any intellectual property right covered by this Agreement.  Defendants shall have the 
right to written notice which is timely and contains sufficient  deuil,  including the basis of the claims. 
Parties shall be allowed to be represented by independent legal counsel, and procedures shall not impose 
overly  burdensome  requirements  concerning  mandatory  personal  appearances.  All  parties  to  such 
procedures shall be duly entitled to substantiate their claims and to present all relevant evidence.  The 
procedure  shall  provide a means  to identify  and protect  confidential  information,  unless  this  would 
be contrary  to existing  constitutional  requirements. 

Article  43 

Evidence 

1. 
The judicial authorities shall have the authority, where a party has presented reasonably available 
evidence sufficient to suppon its claims and has specified evidence relevant to substantiation of its claims 
which lies in the control of the opposing party, to order that this evidence be produced by the opposing 
party, subjea in appropriate cases to conditions which ensure the protection of confidential  information. 

In cases in which a party to a proceeding voluntarily  ana\without good  reason refuses  access 
2 
to.  or otherwise  does not provide  necessary  information  within a reasonable period, or  significantly 
impedes a procedure relating to an enforcement  action, a Member may accord judicial authorities the 
authority  to make  preliminary  and final  determinations,  affirmative  or negative,  on the basis  of the 
information presented to them, including the complaint or the allegation presented by the party adversely 
affected  by  the denial  of access to  information,  subject  to providing the parties an opportunity  to be 
heard on the allegations  or evidence. 

Article  44 

Injunctions 

1 
The judicial authorities shall have the authority to order a party to desist from an infringement, 
inter alia  to prevent the entry  into the channels of commerce  in their jurisdiction of  imported  goods 
that  involve  the  infringement  of  an intellectual  property  right,  immediately  after  customs  clearance 
of such goods.  Members are not obliged to accord such authority in respea of protected subject matter 
acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing 
in such subjea  matter would  enuil  the infringement  of an intellectual  property  right. 

2. 
Notwithstanding  the other provisions of this Part and provided that the provisions  of Part II 
specifically  addressing use by governments,  or by third parties authorized by a government,  without 
the authorization  of  the right  holder  are complied  with.  Members  may  limit  the  remedies  available 
against such.use to payment  of  remuneration  in accordance with subparagraph  (h) of  Article  31.  In 

"For die purpose of this Pan. the term "right holder" includes federations and associations having legal standing to assert 

such  rights. 

Page  340 

other cases,  the remedies  under this Part shall  apply  or,  where  t:>'cse remedies  are inconsistent  with 
a  Member's  law,  declaratory judgments  and adequate compensation  shall  be available. 

Article  45 

Damages 

1. 
The judicial  authorities shall have the authority to order the infringer to pay the right holder 
damages adequate to compensate for the injury the right holder has suffered because of an infringement 
of that person's intellectual property right by an infringer who knowingly, or with reasonable grounds 
to  know,  engaged  in infringing  aaivity. 

2. 
The judicial authorities shall also have the authority to order the infringer to pay the right holder 
expenses, which may include appropriate attorney's fees.  In appropriate cases, Members may authorize 
the judicial  authorities to order recover}' of profits  and/or payment  of pre-established damages  even 
where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity. 

Article  46 

Other Remedies 

In order to create an effective  deterrent to infringement,  the judicial authorities' shall have the 
authority  to order that goods that they have found to be infringing  be,  without compensation  of any 
sort, disposed  of outside the channels of commerce  in such a manner as to avoid any harm caused to 
the right holder, or, unless this would be contrary to existing constitutional  requirements, destroyed. 
The  judicial  authorities  shall  also  have  the  authority  to  order  that  materials  and  implements  the 
predominant  use of which has been in the creation of the infringing  goods be, without  compensation 
of any sort, disposed of outside the channels of commerce  in such a manner as to minimize  the risks 
of  further  infringements.  In  considering  such  requests,  the  need  for  proportionality  between  the 
seriousness  of the infringement  and the remedies ordered as well as the interests of third parties shall 
be taken into account.  In regard to counterfeit trademark goods, the simple removal  of the trademark 
unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the goods 
into the channels  of  commerce. 

Article  47 

Right of Information 

Members  may provide that the judicial authorities shall have the authority, unless this would 
be out of proportion to the seriousness of the infringement,  to order the infringer to inform the right 
holder of the identity of third persons involved in the produaion and distribution of the infringing goods 
or services  and of their channels of distribution. 

(2i 

Page 341 

Article  48 

Indemnification  of the Defendant 

1. 
The judicial  authorities  shall have the authority  to order a party at whose  request  measures 
were taken and  who  has abused  enforcement  procedures  to provide  to  a party  wrongfully  enjoined 
or  restrained  adequate  compensation  for  the  injury  suffered  because  of  such  abuse.  The  judicial 
authorities  shall also have the authority to order the applicant  to pay the defendant  expenses,  which 
may  include appropriate attorney's  fees. 

2. 
In  respect  of  the  administration  of  any  law  pertaining  to  the  protection  or  enforcement  of 
intellectual property rights. Members shall only exempt both public authorities and officials  from liability 
to appropriate  remedial  measures  where actions are taken or intended  in good  faith  in the course  of 
the administration  of  that law. 

Article  49 

Administrative  Procedures 

To  the  extent  that  any civil  remedy  can be ordered  as  a result of  administrative  procedures 
on the merits of a case, such procedures shall conform to principles equivalent  in substance to those 
set  forth  in this  Section. 

SECTION  3:  PROVISIONAL  MEASURES 

Article  50 

The judicial  authorities  shall  have  the  authority  to  order  prompt  and  effective  provisional 

1. 
measures: 

(a) 

to  prevent  an infringement  of any  intellectual  property  right  from occurring,  and in 
panicular to prevent the entry  into the channels of commerce  in their jurisdiction of 
goods,  including  imported  goods  immediately  after customs  clearance; 

(b) 

to preserve  relevant  evidence  in regard to the alleged  infringement. 

2. 
The judicial authorities shall have the authority to adopt provisional measures inaudita  altera 
parte  where appropriate, in particular where any delay  is likely to cause irreparable harm to the right 
holder,  or where there  is a demonstrable  risk of evidence  being  destroyed. 

3. 
The judicial authorities shall have the authority to require the applicant to provide any reasonably 
available evidence in order to satisfy themselves with a sufficient  degree of ceruinty that the applicant 
is the right holder and that the applicant's right is being infringed or that such infringement is imminent, 
and to order the applicant to provide a security or equivalent assurance sufficient to protect the defendam 
and to prevent  abuse. 

Where provisional measures have been adopted inaudita altera parte,  the parties affected shall 
4. 
be given notice, without delay after the execution of the measures at the latest.  A review,  including 
a right to be heard, shall  uke  place upon request of the defendant  with a view  to deciding,  within a 

Page  342 

reasonable  period  after  the notification  of  the measures,  whether  these  measures  shall  be  modified, 
revoked  or  confirmed. 

5. 
the  goods 

The applicant may be required to supply other information necessary for the identification  of 
ds concerned  by the authority  that will  execute the provisional  measures. 

6. 
Without  prejudice  to paragraph 4,  provisional  measures  uken  on the basis  of  paragraphs 1 
and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect,  if proceedings 
leading  to  a decision  on  the  merits  of  the  case  are  not  initiated  within  a  reasonable  period,  to  be 
determined  by the judicial  authority  ordering the measures  where a Member's  law  so permits  or,  in 
the absence of such a determination,  not to exceed 20  working days or 31 calendar days,  whichever 
is the  longer. 

7. 
Where the provisional  measures are revoked or where they  lapse due to any act or omission 
by  the applicant,  or where  it  is subsequently  found  that there has  been no  infringement  or threat  of 
infringement  of an intellectual  property right, the judicial authorities shall have the authority to order 
the applicant,  upon  request of  the defendant,  to provide the defendant  appropriate  compensation  for 
any  injury  caused  by these measures. 

8. 
To  the  extent  that  any  provisional  measure  can  be  ordered  as  a  result  of  administrative 
procedures,  such procedures shall  conform to principles equivalent  in substance to those set  forth in 
this Section.  •  . 

SECTION  4:  SPECIAL  REQUIREMENTS  RELATED  TO BORDER  MEASURES12 

Article  51 

Suspension of Release by  Customs Authorities 

Members shall,  in conformity  with the provisions set out below, adopt procedures13 to enable 
a  rip-»i holder,  who has valid grounds for suspecting that the importation of counterfeit  trademark or 
pirated copyright goods'4 may take place, to lodge an application in writing with competent authorities, 
administrative or judicial. for the suspension by the customs authorities of the release into free circulation 
of such goods.  Members may enable such an application to be made in respea of goods which involve 
other  infringements  of  intellectual  property  rights, provided that the requirements of this Section are 

"Where a Member has dismantled substantially all controls over movement of goods across its border with another Member 
with which  it lorms nan of  a customs union,  it shall  not be required  to apply  the provisions of  this Section at that border.' 

"Ii  IN understood  that  there  shall  he  no obligation  to apply  such procedures  to imports of  goods  put on the market  in 

another  country  by  or  with  the consent  of  the  right  holder,  or to goods  in transit. 

"For  the purposes of  this  Agreement: 

(a) 

(b) 

"counterfeit trademark goods" shall mean any goods, including packaging, bearing without authorization 
a  trademark  which  is  identical  to the trademark  validly  registered  in respect of  such  goods,  or  which 
cannot be distinguished  in its essential aspects from such a trademark,  and which thereby  infringes  the 
rights of  the owner  of  the trademark  in question  under the  law  of  the country  of  importation; 

'  "pirated copyright goods" shall mean any goods which are copies made without the consent of the right 
holder or person duly authorized by the right holder in the country of  production and which are made 
directly or indirectly from an article where die making of that copy would have constituted an infringement 
of  a copyright or a related  right under the  law of  the country  of  importation. 

met.  Members may also provide for corresponding procedures concerning the suspension by the customs 
authorities  of the  release of  infringing  goods destined for exportation from  their territories. 

Page  343 

Article  52 

Application 

Any right holder initiating the procedures under Anicle 51 shall be required to provide adequate 
evidence to satisfy  the competent authorities that, under the laws of the country of importation, there 
is prima facie an infringement of the right holder's intellectual property right and to supply a sufficiently 
detailed description of the goods to make them readily recognizable by the customs  authorities.  The 
competent authorities shall inform the applicant within a reasonable period whether they have accepted 
the application and, where determined by the competent authorities, the period for which the customs 
authorities  will  uke  action. 

Article  53 

Security or Equivalent Assurance 

1. 
The competent authorities shall have the authority to require an applicant to provide a security 
or equivalent assurance sufficient  to protect the defendant and the competent authorities and to prevent 
abuse.  Such security or equivalent assurance shall not unreasonably deter recourse to these procedures. 

2. 
Where pursuant to an application under this Section the release of goods involving  industrial 
designs,  patents,  layout-designs  or undisclosed  information  into free circulation has been suspended 
by customs authorities on the basis of a decision other than by a judicial or other independent authority, 
and the period provided for in Article 55 has expired without the granting of provisional relief by the 
duly empowered  authority, and provided mat all other conditions for importation have been complied 
with, the owner, importer, or consignee of such goods shall be entitled to their release on the posting 
of a security in an amount sufficient  to protect the right holder for any infringement.  Payment of such 
security  shall  not prejudice any other remedy  available to the right holder,  it being  understood that 
the security shall  be released  if the right holder fails to pursue the right of aaion within a reasonable 
period  of  time. 

Article  54 

Notice of Suspension 

The importer and the applicant shall be promptly notified  of the suspension of the release of 

goods according  to Article  51. 

Page  344 

Article  55 

Duration of Suspension 

If,  within a period not exceeding  10 working days after the applicant has been served  notice 
pf the suspension, the customs authorities have not been informed that proceedings leading to a decision 
on  the  merits  of  the  case  have  been  initiated  by a party  other than the defendant,  or that  the  duly 
empowered authority has uken provisional measures prolonging the suspension  of the release of the 
goods, the goods  shall  be released, provided that all other conditions  for  importation  or exportation 
have been complied with;  in appropriate cases, this time-limit may be extended by another 10 working 
days.  If proceedings  leading  to a decision  on the  merits  of  the  case  have  been  initiated,  a  review, 
including a right to be heard, shall uke place upon request of the defendant with a view to deciding, 
within  a  reasonable  period,  whether  these  measures  shall  be  modified,  revoked  or  confirmed. 
Notwithstanding  the above, where the suspension of the release of goods  is carried out or continued 
in accordance  with a provisional judicial  measure,  the provisions  of paragraph 6 of  Article  50 shall 
apply. 

Article  56 

Indemnification  of the Importer 
and of the  Owner of the Goods 

Relevant  authorities  shall  have the authority  to order the applicant to pay  the  importer,  the 
consignee and the owner of the goods appropriate compensation for any injury caused to them through 
the wrongful  detention of goods  or through the detention of goods  released pursuant  to Article  55. 

Article  57 

Right of Inspeaion  and Information 

Without  prejudice to the proteaion  of  confidential  information.  Members  shall  provide  the 
competent authorities the authority to give the right holder sufficient  opportunity  to have any  goods 
detained by the customs authorities  inspected  in order to substantiate the right holder's claims.  The 
competent authorities shall also have authority to give the importer an equivalent opportunity to have 
any  such goods  inspected.  Where a positive  determination  has been  made  on the merits  of  a case. 
Members may provide the competent authorities the authority to inform the right holder of the names 
and addresses  of  the consignor,  the  importer  and the  consignee  and of  the quantity  of  the goods  in 
question. 

Article  58 

Ex Officio  Aaion 

Where Members require competent authorities to act upon their own initiative and to suspend 
the release of  goods  in respect of which they  have acquired prima facie  evidence  that an intellectual 
property  right  is being  infringed: 

(a) 

the competent authorities may at any time seek from the right holder any information 
that may  assist  them to exercise these powers; 

Page  345 

(b) 

(c) 

the importer and the fight holder shall be promptly notified of the suspension.  Where 
the importer has lodged an appeal against the suspension with the competent authorities, 
the suspension shall be subjea to the conditions, mutatis mutandis, set out at Article  55 ; 

Members  shall  only  exempt  both  public  authorities  and  officials  from  liability  to 
appropriate  remedial  measures  where actions  are uken  or intended  in good  faith. 

Article  59 

Remedies 

Without  prejudice  to other  rights  of  aaion  open to the right  holder  and subject  to  the right 
of the defendant to seek review by a judicial authority, competent authorities shall have the authority 
to order the destmction  or disposal  of  infringing  goods  in accordance  with the principles  sa  out  in 
Anicle 46.  In regard to counterfeit trademark goods, the authorities shall not allow the re-exportation 
of the infringing  goods  in an unaltered sute  or subject them to a different  customs  procedure,  other 
than in exceptional  circumstances. 

Article  60 

De Minimis Imports 

Members may exclude from the application of the above provisions small quantities of goods 
of a non-commercial  nature contained  in travellers' personal  luggage or sent  in small  consignments. 

SECTION  5:  CRIMINAL  PROCEDURES 

Article  61 

Members  shall  provide  for  criminal  procedures  and penalties  to be  applied  at  least  in cases 
of wilful trademark counterfeiting or copyright piracy on a commercial scale.  Remedies available shall 
include  imprisonment  and/or  monetary fines sufficient  to provide  a deterrent,  consistently  with  the 
level of penalties applied for crimes of a corresponding gravity.  In appropriate cases, remedies available 
shall  also  include the seizure,  forfeiture  and destmction of the infringing  goods and of  any materials 
and implements  the predominant  use of which has been in the commission of the offence.  Members 
may  provide  for  criminal  procedures  and  penalties  to  be  applied  in other  cases  of  infringement  of 
intellectual property rights, in particular where they are committed wilfully and on a commercial scale. 

Page  346 

PART IV 

ACQUISITION  AND  MAINTENANCE  OF INTELLECTUAL  PROPERTY 
RIGHTS  AND  RELATED INTER-PARTES PROCEDURES 

Article  62 

1. 
Members may require, as a condition of the acquisition or maintenance of the intellectual property 
rights provided for under Sections 2 through 6 of Part II, compliance with reasonable procedures and 
formalities.  Such procedures and formalities shall be consistent with the provisions of this Agreement. 

2. 
Where the acquisition of an intellectual property right is subjea to the right being granted or 
registered. Members shall  ensure that the procedures for grant or registration, subjea  to compliance 
with the substantive  conditions for acquisition of the right, permit the granting or registration of the 
right  within  a  reasonable  period  of  time  so  as'to  avoid  unwarranted  curtailment  of  the  period  of 
proteaion. 

3. 

Article 4  of  the  Paris Convention  (1967) shall  apply mutatis mutandis  to service marks. 

4. 
Procedures concerning the acquisition or maintenance of intellectual property rights and, where 
a  Member's  law provides for such procedures, administrative  revocation and inter partes  procedures 
such  as opposition,  revocation  and cancellation,  shall  be governed  by the general  principles  sa  out 
in paragraphs  2  and 3 of  Article  41. 

5. 
Final  administrative  decisions  in any of  the procedures  referred  to under paragraph 4  shall 
be subject  to review  by a judicial  or quasi-judicial  authority.  However,  there shall  be no obligation 
to  provide  an  opportunity  for  such  review  of  decisions  in  cases  of  unsuccessful  opposition  or 
administrative revocation, provided that the grounds for such procedures can be the subjea of invalidation 
procedures. 

PART V 

DISPUTE PREVENTION  AND  SETTLEMENT 

Article  63 
Transparency 

1. 
Laws  and  regulations,  and  final  judicial  decisions  and  administrative  mlings  of  general 
application,  made  effective  by  a  Member  pertaining  to  the  subject  maner  of  this  Agreement  (the 
availability, scope, acquisition, enforcement and prevention of the abuse of intellectual property rights) 
shall be published, or where such publication is not practicable made publicly available, in a national 
language,  in such a manner as  to enable governments  and right holders  to become  acquainted  with 
them.  Agreements  concerning  the subject matter of this  Agreement  which are in force between the 
government  or a governmental  agency  of a Member  and the government  or a govemmenul  agency 
of another  Member  shall  also be published. 

Members  shall  notify  the laws and regulations referred  to in paragraph  1 to the Council  for 
2. 
TRIPS  in order to assist that Council  in its review of the operation of this Agreement.  The Council 
shall  attempt  to minimize  the burden on Members  in carrying  out this obligation and may decide  to 
waive  the obligation to notify  such laws and regulations directly to the Council  if consulutions  with 

Page  347 

WIPO on the esublishment of a common register conuining these laws and regulations are successful. 
The Council shall also consider in this connection any aaion required regarding notifications pursuant 
to  the  obligations  under  this  Agreement  stemming  from  the provisions  of  Anicle  6ter  of  the  Paris 
Convention  (1967). 

'3. 
Each Member shall be prepared to supply, in response to a written request from another Member, 
information of the son referred to in paragraph 1.  A Member, having reason to believe that a specific 
judicial decision or administrative ruling or bilateral agreement in the area of intellectual property  rights 
affects its rights under this Agreement, may also request in writing to be given access to or be informed 
in sufficient  detail of such specific judicial decisions or administrative mlings or bilateral agreements. 

Nothing in paragraphs  1, 2 and 3 shall require Members to disclose confidential  information 
4. 
which would impede law enforcement or otherwise be contrary to the public interest or would prejudice 
the legitimate  commercial  interests of particular enterprises, public or private. 

Article  64 

Dispute Settlement 

1. 
The provisions  of  Articles XXII and XXIII of GATT  1994 as elaborated  and applied by the 
Dispute  Settlement  Understanding  shall  apply  to consulutions  and the settlement  of  disputes  under 
this Agreement  except  as otherwise specifically  provided herein. 

2. 
Subparagraphs  1(b) and  1(c) of Article XXIII of GATT  1994 shall not apply to the settlement 
of  disputes  under  this  Agreement  for a period  of five  years from  the date of  entry  into force  of the 
WTO  Agreement. 

3. 
During the time period  referred to in paragraph 2,  the Council  for TRIPS shall  examine the 
scope  and modalities  for  complaints  of  the type provided  for under subparagraphs  1(b) and  1(c) of 
Article  XXIII  of GATT  1994 made pursuant to this Agreement,  and submit  its recommendations  to 
the Ministerial  Conference  for approval.  Any decision of the Ministerial Conference to approve such 
recommendations or to extend the period in paragraph 2 shall be made only by consensus, and approved 
recommendations  shall  be effeaive  for all  Members  without  further  formal  acceptance process. 

PART VI 

TRANSITIONAL  ARRANGEMENTS 

Article  65 

Transitional Arrangements 

Subject to the provisions of paragraphs 2, 3 and 4, no Member shall be obliged to apply the 
1. 
provisions  of this Agreement  before the expiry of a general period of one year following  the date of 
entry  into force  of the WTO Agreement. 

A developing  country Member  is entitled to delay for a further period of four years the date 
2. 
of application,  as defined  in paragraph  1, of the provisions of this Agreement  other than Articles  3, 
4  and 5. 

Page  348 

3. 
Any  other  Member  which  is  in the process  of  transformation  from  a centrally-planned  into 
a market, free-enterprise economy and which is undertaking stmctural reform of its intellectual property 
system and facing special problems in the preparation and implemenution of intellectual property laws 
and regulations,  may  also benefit  from  a period of delay  as foreseen  in paragraph 2. 

4.  ' 
To the extent that a developing country Member is obliged by this Agreement to extend product 
patent  proteaion  to  areas  of  technology  not  so  protecuble  in  its  territory  on  the  general  date  of 
application of this Agreement for that Member, as defined in paragraph 2, it may delay the application 
of the provisions on product patents of Section 5 of Part II to such areas of technology for an additional 
period  of  five  years. 

r 
5. 
A  Member  availing  itself of a transitional period under paragraphs  1, 2,  3 or 4  shall  ensure 
that any changes in its laws, regulations and practice made during that period do not result in a lesser 
degree of  consistency  with the provisions of this  Agreement. 

Article  66 

Least-Developed  Country Members 

1. 
In  view  of  the  special  needs  and  requirements  of  least-developed  country  Members,  their 
economic,  financial  and  administrative  constraints,  and their  need  for  flexibility  to  create  a  viable 
technological  base,  such  Members  shall  not be required to apply the provisions  of  this  Agreement, 
other than Articles  3,  4  and 5.  for a period ôf  10 years from the date of application as defined  under 
paragraph  1 of  Anicle  65.  The  Council  for  TRIPS  shall,  upon duly  motivated  request  by  a  least-
developed  country  Member,  accord extensions  of this period. 

2. 
Developed  country  Members  shall provide  incentives  to enterprises  and institutions  in their 
territories for the purpose of promoting and encouraging technology transfer to least-developed country 
Members  in order to enable them to create a sound and viable technological  base. 

Article  67 

Technical Cooperation 

In order to faciliute the implemenution of this Agreement, developed country Members shall 
provide, on request and on mutually agreed terms and conditions, technical and financial  cooperation 
in favour of developing and least-developed country Members.  Such cooperation shall include assistance 
in the preparation of  laws and regulations on the proteaion  and enforcement  of  intellectual  property 
rights as well as on the prevention of their abuse, and shall include support regarding the esublishment 
or reinforcement  of domestic offices  and agencies relevant to these maners,  including the training  of 
personnel. 

Page  349 

PART VII 

INSTITUTIONAL  ARRANGEMENTS;  FINAL  PROVISIONS 

Article  68 

Council for  Trade-Related Aspeas  of 
Intelleaual  Property Rights 

The  Council  for  TRIPS  shall  monitor  the  operation  of  this  Agreement  and,  in  particular, 
Members' compliance with -their obligations hereunder, and shall afford  Members the opportunity of 
consulting on matters relating to the trade-related aspects of intellectual property rights.  It shall carry 
out such other  responsibilities  as assigned  to  it by the Members,  and  it shall,  in particular,.provide 
any assisunce  requested by them in the context of dispute settlement procedures.  In carrying out its 
functions,  the  Council  for TRIPS  may  consult  with and seek  information  from  any  source  it deems 
appropriate.  In consulution  with WIPO, the Council  shall  seek  to  esublish,  within  one year  of  its 
first  meeting,  appropriate arrangements  for cooperation with bodies  of  that  Organization. 

Article  69 

International Cooperation 

Members  agree to cooperate with each other with a view to eliminating  international  trade in 
goods infringing  intellectual property rights.  For this purpose, they shall esublish and notify  contact 
points  in  their  administrations  and  be  ready  to  exchange  information  on  trade  in  infringing  goods. 
They  shall,  in  particular,  promote  the  exchange  of  information  and  cooperation  between  customs 
authorities  with  regard to trade in counterfeit  trademark  goods and pirated  copyright  goods. 

Article  70 

Protection  of Existing Subject Matter 

This Agreement does not give rise to obligations in respea  of acts which occurred  before the 

1. 
date of  application  of  the  Agreement  for the  Member  in question. 

2. 
Except as otherwise provided for in this Agreement,  this Agreement  gives rise to obligations 
in respect  of  all  subject matter existing at the date of application  of  this  Agreement  for  the Member 
in  question,  and  which  is  protected  in  that  Member  on  the  said  date,  or  which  meets  or  comes 
subsequently to meet the criteria for protection under the terms of this Agreement.  In respect of this 
paragraph and paragraphs 3 and 4, copyright obligations with respect to existing works shall be solely 
determined under Anicle  18 of the Beme Convention (1971), and obligations with respect to the rights 
of producers of phonograms and performers  in existing phonograms shall be determined solely under 
Anicle  18 of the Beme Convention (1971) as made applicable under paragraph  6 of Anicle  14 of this 
Agreement. 

There  shall  be  no  obligation  to  restore  protection  to  subject  matter  which  on  the  date  of 

3. 
application of this  Agreement  for the  Member  in question has fallen  into the public domain. 

4. 
In respect of any acts in respect of specific objects embodying protected subject maner which 
become  infringing under the terms of legislation in conformity  with this Agreement,  and which were 

Page  350 

commenced,  or in respect of which.a significant  investment  was made,  before  the date of  acceptance 
of the WTO Agreement  by that Member,  any Member  may provide for a limitation  of the remedies 
available to the right holder as to the continued performance  of such acts after the date of application 
of this  Agreement  for that Member.  In such cases the  Member  shall,  however,  at least provide  for 
the payment  of  equiuble  remuneration., 

5. 
A Member is not obliged to apply the provisions of Article  11 and of paragraph 4 of Anicle  14 
with  respect  to  originals  or copies  purchased prior to  the date  of  application  of  this  Agreement  for 
that  Member. 

Members  shall  not  be  required  to  apply  Anicle  31,  or  the  requirement  in  paragraph  1  of 
6. 
Article 27  that patent  rights shall  be enjoyable without discrimination  as to the field  of  technology, 
to use without  the authorization of  the right holder where authorization for such use was granted by 
the government  before  the date this Agreement  became known. 

7. 
In the case of intellectual property rights for which proteaion is conditional upon registration, 
applications for protection which are pending on the date of application of this Agreement for the Member 
in question  shall  be  permitted  to be amended  to .claim any enhanced  proteaion provided  under the 
provisions  of  this  Agreement.  Such amendments  shall  not  include  new matter. 

8. 
Where  a  Member  does  not  make  available  as  of  the  date  of  entry'into  force  of  the  WTO 
Agreement patent protection for pharmaceutical and agricultural chemical products commensurate with 
its obligations  under  Article  27,  that Member shall: 

(a) 

(b) 

(c) 

notwithstanding the provisions of Part VI, provide as from the date of entry into force 
of the WTO Agreement a means by which applications for patents for such inventions 
can be  filed; 

apply to these applications, as of the date of application of this Agreement, the criteria 
for patentât-liny as laid down in this Agreement as if those criteria were being applied 
on  the date of  filing  in that Member  or,  where priority  is available and claimed,  the 
priority  date of  the application;  and 

provide patent protection in accordance with this Agreement  as from the grant of the 
patent  and  for  the  remainder  of  the  patent  term,  counted  from  the  filing  date  in 
accordance with Article 33 of this Agreement, for those of these applications that meet 
the criteria  for proteaion  referred  to  in subparagraph  (b). 

9. 
Where  a  product  is  the  subjea  of  a  patent  application  in  a  Member  in  accordance  with 
paragraph  8(a). exclusive marketing rights shall be granted, notwithstanding the provisions of Pan  VI, 
for a period of five years after obtaining marketing approval  in that Member or until a produa patent 
is granted or rejected  in that Member,  whichever period  is shorter, provided that, subsequent to the 
entry' into force  of  the WTO Agreement, a patent application has been filed  and a patent granted for 
that product  in another  Member  and marketing  approval  obuined  in such other Member. 

Article  71 

Review and Amendment 

1. 
The Council for TRIPS shall review the implemenution of this Agreement after the  expiration 
of the transitional  period referred  to in paragraph 2 of  Anicle  65.  The Council  shall, having regard 
to the  experience  gained  in  its  implemenution,  review  it  two years  after  that date,  and at  identical 

Page 351 

intervals  thereafter.  The  Council  may  also  undertake  reviews  in  the  light  of  any  relevant  new 
developments  which might  warrant modification  or amendment  of  this Agreement. 

Amendments merely serving the purpose of adjusting to higher levels of protection of intelleoual 
2. 
property  rights  achieved,  and  in  force,  in  other  multilateral  agreements  and  accepted  under  those 
agreements by all  Members of the WTO may be referred  to the Ministerial  Conference  for action in 
accordance with paragraph 6 of Article. X of the WTO Agreement on the basis of a consensus proposal 
from  the Council  for TRIPS. 

Article  72 

Reservations 

Reservations may not be entered in respect of any of the provisions of this Agreement without 

the consent  of the other Members. 

Article  73 

Security Exceptions 

Nothing  in this  Agreement  shall  be construed: 

(a) 

(b) 

to  require a Member to furnish  any information the disclosure  of which  it considers 
contran.  to  its essential  security interests;  or 

to  prevent  a  Member  from  taking  any  action  which  it  considers  necessary  for  the 
protection of  its essential  security  interests; 

(i) 

relating to fissionable materials or the materials from which they are derived; 

( ii ) 

relating to the traffic  in arms, ammunition and implements of war and to such 
traffic  in other goods and materials as is carried on directly or indirectly  for 
the purpose of  supplying  a military  establishment; 

(iii) 

uken  in time of  war or other emergency  in international  relations;  or 

(c) 

to prevent a Member from taking any action in pursuance of its obligations under the 
United  Nations Charter  for the maintenance  of  international  peace and security. 

Page 352 

Page  353 

ANNEX. 2 

UNDERSTANDING  ON  RULES  AND  PROCEDURES 
GOVERNING  THE  SETTLEMENT  OF  DISPUTES 

Members  hereby  agree  as  follows: 

•  • 

Article  1 

Coverage and  Application 

The mles  and procedures  of this  Undersunding  shall  apply  to disputes  brought  pursuant  to 
1. 
the  consultation  and  dispute  settlement  provisions  of  the  agreements  listed  in  Appendix  1  to  this 
Undersunding (referred to in this Undersunding as the "covered agreements'').  The mles and procedures 
of this Undersunding shall also apply to consulutions and the settlement of disputes between Members 
concerning their rights and obligations under the provisions of the Agreement Establishing the World 
Trade  Organization  (referred  to  in  this  Undersunding  as  the  "WTO  Agreement")  and  of  this 
Understanding  taken-in  isolation  or in combination  with any other covered  agreement. 

2. 
The rules and procedures of this Understanding shall apply subjea to such special or additional 
mles  and procedures  on dispute settlement  conuined  in the covered  agreements  as are.identified  in 
Appendix  2  to  this  Undersunding.  To the  extent  that  there  is  a difference  between  the  mles  and 
procedures  of  this  Undersunding  and  the  special  or  additional* mles  and  procedures  set  forth  in 
Appendix  2,  the special  or additional  mles  and procedures  in Appendix  2 shall  prevail.  In disputes 
involving mles and procedures under more than one covered agreement, if there is a conflict  between 
special  or additional  mles and procedures of such agreements under review, and where the parties to 
the dispute cannot agree on mles and procedures within 20 days of the esublishment  of the panel, the 
Chairman of the Dispute Settlement Body provided for in paragraph  1  of Article 2 (referred to in this 
Understanding as the "DSB"), in consulution with the parties to the dispute, shall determine the rules 
and procedures to be followed  within  10 days after a request by either Member.  The Chairman shall 
be guided by the principle that special or additional mles and procedures should be used where possible, 
and the mles and procedures set out in this  Understanding  should  be used to the extent  necessary  to 
avoid  conflict. 

Article  2 

Administration 

1. 
The Dispute Settlement  Body is hereby established  to administer these mles and procedures 
and,  except  as  otherwise  provided  in a covered  agreement,  the consulution  and dispute  settlement 
provisions of the covered agreements.  Accordingly, the DSB shall have the authority to esublish panels, 
adopt  panel  and  Appellate  Body  reports,  mainuin  surveillance  of  implemenution  of  mlings  and 
recommendations,  and authorize suspension of  concessions  and other obligations under the covered 
agreements.  With respect to disputes arising under a covered agreement which is a Plurilateral Trade 
Agreement,  the term  "Member" as used herein shall  refer only to those Members that are panies to 
the relevant Plurilateral Trade Agreement.  Where the DSB administers the dispute settlement provisions 
of a Plurilateral Trade Agreement, only those Members that are parties to that Agreement may participate 
in decisions  or actions uken  by the DSB with respect to that dispute. 

Page  354 

The  DSB  shall  inform  the  relevant  WTO Councils  and Committees  of  any developments  in 

2. 
disputes  related to provisions  of  the  respective  covered agreements. 

The  DSB  shall  meet  as often  as  necessary  to carry  out  its  functions  within  the  time-frames 

3. 
provided  in this  Undersunding. 

Where the mles and procedures of this Understanding provide for the DSB to uke a decision, 

4. 
it shall  do  so  by  consensus.' 

Article  3 

General Provisions 

Members  affirm  their adherence to the principles for the management  of disputes  heretofore 

1. 
applied under Articles XXII and XXIII of GATT 1-947, and .the mles and procedures as further elaborated 
and modified  herein. 

The  dispute  settlement  system  of  the  WTO  is  a  central  element  in  providing  security  and 
2. 
predictability  to  the multilateral  trading  system.  The Members  recognize  that  it  serves  to preserve 
the rights and obligations of Members under the covered agreements, and to clarify the existing provisions 
of  those agreements  in accordance with customary mles of interpreution of public international  law. 
Recommendations and mlings of the DSB cannot add to or diminish the rights and obligations provided 
io the covered  agreements. 

3. 
The prompt settlement  of situations  in which a Member considers that any benefits  accruing 
to it directly or indirectly under the covered agreements are being impaired by measures uken by another 
Member  is essential to the effective  functioning  of the WTO and the maintenance of a proper balance 
between the  rights and obligations  of  Members. 

4. 
Recommendations  or  mlings  made  by  the  DSB  shall  be  aimed  at  achieving  a  satisfactory 
settlement  of  the matter  in accordance  with the  rights and obligations  under this  Undersunding  and 
under the covered  agreements. 

5. 
All solutions to matters formally raised under the consulution and dispute settlement provisions 
of  the  covered  agreements,  including  arbitration  awards,  shall  be consistent  with  those  agreements 
and shall  not  nullify  or impair benefits  accruing to any Member under those agreements, nor impede 
the attainment  of  any objective of  those agreements. 

6 
Mutually agreed solutions to matters formally raised under the consulution and dispute settlement 
provisions  of  the  covered  agreements  shall  be  notified  to  the  DSB  and  the  relevant  Councils  and 
Committees,  where any  Member  may  raise any point  relating thereto. 

7. 
Before bringing a case, a Member shall exercise its judgement as to whether aaion under these 
procedures  would  be fruitful.  The aim of the  dispute settlement  mechanism  is to secure a positive 
solution  to a dispute.  A solution mutually  accepuble  to the parties to a dispute and consistent  with 
the covered  agreements  is clearly  to be preferred.  In the absence  of  a mutually  agreed solution,  the 
first objective of the dispute settlement mechanism is usually to secure the withdrawal of the measures 
concerned  if these are found to be inconsistent  with the provisions of any of the covered agreements. 
The provision of compensation should be resorted to only if the immediate withdrawal of the measure 

The  DSB  shall  be deemed  to  have decided  by consensus on a matter submitted  for  its consideration,  if no Member, 

present at the  meeting  of  the  DSB  when the decision  is uken.  formally  objects  to the proposed  decision. 

Page  355 

is impracticable and as a temporary measure pending the withdrawal of the  measure which is  inconsistent 
with a covered agreement.  The last resort which this Undersunding provides to the Member invoking 
t^e dispute settlement procedures is the possibility of suspending the application of concessions or other 
obligations under the covered agreements on a discriminatory basis vis-à-vis the other Member, subject 
to authorization by the DSB of such measures. 

8. 
In cases where there is an infringement of the obligations assumed under a covered agreement, 
the action is considered prima facie  to constitute a case of nullification  or impairment.  This means 
that there is normally a presumption that a breach of the mles has an adverse impact on other Members 
panies to that covered agreement,  and in such cases, it shall be up to the Member  against whom the 
complaint  has been brought  to rebut the charge. 

. 9. 
The provisions of this Undersunding  are without prejudice to the rights of Members  to seek 
.authoritative interpretation of provisions of a covered agreement through decision-making  under the 
WTO Agreement  or a covered agreement  which  is a Plurilateral  Trade Agreement. 

10. 
It is understood that requests for conciliation and the use of the dispute settlement  procedures 
should not be intended or considered as contentious acts and that, if a dispute arises, all Members will 
engage  in these procedures in good faith in an effort  to resolve the dispute.  It is also understood that 
complaints  and counter-complaints  in regard to distinct matters should  not be linked. 

11. 
This Understanding shall be applied only with respect to new requests for consultations under 
the consultation provisions  of  the covered  agreements  made on or after the date of  entry  into  force 
of  the WTO Agreement.  With respect  to disputes for which the request for consulutions was made 
under GATT  1947 or under any  other predecessor  agreement  to the covered  agreements  before  the 
date of entry  into force of the WTO Agreement, the relevant dispute satlement  mles and procedures 
in effect  immediately  prior  to the date of  entry  into force  of  the-WTO Agreement  shall  continue  to 
appl>-: 

12. 
Notwithstanding paragraph 11. if a complaint based on any of the covered agreements is brought 
by a.developing  country  Member  against a developed  country Member,  the complaining  party shall 
have  the  right  to  invoke,  as  an alternative  to the provisions  conuined  in Articles 4,  5,  6  and  12 of 
this Undersunding. the corresponding provisions of the Decision of 5 April  1966 (BISD 14S/18), except 
that  where  the  Panel  considers  that the  time-frame  provided  for  in paragraph 7  of  that  Decision  is 
insufficient  to provide its report and with the agreement of the complaining party, that time-frame may 
be extended.  To the extent that there is a difference  between the mles and procedures of Articles  4, 
5.  6 and  12  and the corresponding  mles  and procedures of the Decision,  the latter shall  prevail. 

Article  4 

Consultations 

Members affirm their resolve to strengthen and improve the effectiveness  of the consulution 

1. 
procedures employed  by Members. 

This  paragraph shall also be applied to disputés on which panel reports have not been adopted or fully  implemented. 

Page  356 

Each Member underukes to accord sympathetic consideration to and afford adequate opportuniry 
2. 
for consulution regarding any represenutions made by another Member concerning measures affecting 
the operation of  any covered  agreement uken within the territory  of  the  former.3 

3. 
If a request for consultations is made pursuant to a covered agreement, the Member to which 
the request is made shall, unless otherwise .mutually agreed,  reply to the request within  10 days after 
the date of  its receipt and shall enter into consulutions in good faith within a period of no more than 
30 days after the date of receipt of the request, with a view to reaching a mutually satisfactory solution. 
If the  Member  does  not  respond  within  10 days after the date of  receipt of  the request,  or does not 
enter into consulutions within a period of no more than 30 days, or a period otherwise mutually agreed, 
after  the date of  receipt  of  the request,  then the Member  that requested  the holding  of  consulutions 
may  proceed  directly  to request the esublishment  of  a panel. 

4. 
All such requests for consulutions shall be notified to the DSB and the relevant Councils and 
Committees  by  the  Member  which  requests  consulutions.  Any  request  for  consultations  shall  be 
submitted in writing and shall give the reasons for the request, including identification of the measures 
at issue and an indication of  the legal basis for the complaint. 

In the course of consulutions in accordance with the provisions of a covered agreement. before 
5. 
resorting  to further action under this Understanding,  Members  should attempt  to obtain  satisfactory 
adjustment  of  the matter. 

Consulutions  shall be confidential,  and without prejudice to the rights of any Member in any 

6. 
further proceedings. 

7. 
If the consulutions fail to settle a dispute within 60 days after the date of receipt of the request 
for consultations,  the complaining  party may request the esublishment  of a panel.  The complaining 
party  may  request  a  panel  during  the  60-day  period  if  the  consulting  parties jointly  consider  that 
consulutions  have  failed  to settle the dispute. 

In cases  of  urgency,  including  those  which  concern perishable  goods.  Members  shall  enter 
8. 
into  consultations  within  a period  of  no more  than  10 days  after  the date of  receipt  of  the  request. 
If the consultations have failed to settle the dispute within a period of 20 days after the date of receipt 
of the  request,  the complaining  party.may request the establishment  of  a panel. 

9. 
In cases of urgency, including those which concern perishable goods, the parties to the dispute, 
panels  and the  Appellate  Body  shall  make every  effort  to accelerate  the proceedings  to the  greatest 
extent  possible. 

During  consultations  Members  should  give  special  attention to  the particular problems  and 

10. 
interests  of developing  country  Members. 

11.  Whenever a Member other than the consulting Members considers that it has a substantial trade 
interest in consulutions being held pursuant to paragraph 1 of Anicle XXII of GATT 1994, paragraph 1 
of Anicle XXII of GATS, or the corresponding provisions in other covered agreements4, such Member 

'Where the provisions of any other covered agreement concerning measures uken by regional or local governments or 
authorities within the territory of a Member conuin provisions different  from the provisions of this paragraph, the provisions 
of  such  other covered  agreement  shall  prevail. 

T he corresponding consulution provisions in the covered agreements are listed hereunder:  Agreement on Agriculture. 
Anicle  19;  Agreement on the Application of Saniury and Phytosaniury  Measures, paragraph  1  of Article  11:  Agreement 
on Textiles and Clothing, paragraph 4 of Article 8;  Agreement on Technical Barriers to Trade, paragraph  1  of Article  14: 

(23 

Page  357 

may  notify  the consulting  Members-and the DSB,  within  10 days after  the date of  the circulation  of 
the request  for consulutions  under said Anicle,  of  its desire to be joined  in the consultations.  Such 
Member  shall  be joined  in  the  consultations,  provided  that  the  Member  to  which  the  request  for 
consulutions was addressed agrees that the claim of substantial interest is well-founded.  In that event 
they  shall  so  inform  the  DSB.  If  the  request  to be joined  in the consulutions  is  not  accepted,  the 
applicant Member shall be free to request consulutions under paragraph 1 of Article XXII or paragraph 1 
of Article XXIII of GATT 1994, paragraph 1 of Anicle XXII or paragraph 1 of Article XXIII of GATS, 
or the corresponding  provisions  in other covered  agreements. 

Article  5 

Good  Offices,  Conciliation and Mediation 

Good offices,  conciliation and mediation are procedures that are undertaken voluntarily  if the 

1. 
panies  to the dispute  so  agree. 

2. 
Proceedings involving good offices, conciliation and mediation, and inparticular positions taken 
by the parties to the dispute during these proceedings,  shall be confidential,  and without prejudice to 
the rights of  either party  in any  further proceedings  under these procedures. 

3. 
Good offices,  conciliation or mediation may be requested at any time by any party to a dispute. 
They  may  begin  at  any  time  and  be  terminated  at  any  time.  Once  procedures  for  good  offices, 
conciliation  or mediation  are  terminated,  a complaining  party may  then proceed  with  a request  for 
the establishment  of  a panel. 

When  good  offices,  conciliation  or mediation are entered  into within  60  days  after  the  date 
4. 
of  receipt  of  a request  for consulutions,  the complaining  party must allow  a period  of 60 days  after 
the date of receipt of the request for consultations before requesting the establishment of a panel.  The 
complaining  party may  request the establishment  of a panel during the 60-day  period if the parties to 
the dispute jointly consider that the good offices,  conciliation or mediation process has failed to settle 
the dispute. 

If the parties to a  dispute  agree, procedures  for good  offices,  conciliation  or mediation  may 

5. 
continue  while  the panel  process proceeds. 

The  Director-General  may.  acting  in an ex officio capacity,  offer  good  offices,  conciliation 

6. 
or mediation  with  the view  to assisting  Members  to settle a dispute. 

Agreement on Trade-Related  Investment Measures. Anicle 8;  Agreement on Implemenution of Anicle VI of GATT  1994, 
paragraph 2 of Anicle  17; Agreement on Implemenution of Anicle VII of G ATT 1994, paragraph 2 of Anicle 19;  Agreement 
on Preshipment Inspection, Anicle 7;  Agreement on Rules of Origin. Anicle 7;  Agreement on Impon Licensing Procedures, 
Anicle 6:  Agreement on Subsidies and Countervailing  Measures, Article 30;  Agreement on Safeguards,  Article  14;  Agreement 
on Trade-Related  Aspects of Intellectual  Property  Rights.  Anicle  64.1; and any corresponding  consulution  provisions in 
Plurilateral  Trade  Agreements  as determined  by the competent  bodies of each  Agreement and as notified  to the DSB. 

Page  358 

Article  6 

Establishment of  Panels 

1. 
If the complaining party so requests, a panel shall be esublished at the latest at the DSB meeting 
following that at which the request first appears as an item on the DSB's agenda, unless at that meeting 
the DSB  decides  by consensus not to establish  a panel.5 

2. 
The request for the esublishment of a panel shall be made in writing.  It shall indicate whether 
consulutions  were  held,  identify  the specific  measures  at issue  and provide  a brief  summary  of the 
legal  basis of  the complaint  sufficient  to present the problem  clearly.  In case the applicant  requests 
the esublishment of a panel with other than standard terms of reference, the written request shall include 
the proposed  text  of  special  terms of  reference. 

Article  7 

Terms of Reference of  Panels 

Panels shall have the following terms of reference unless the parties to the dispute agree otherwise 

1. 
within  20 days  from  the establishment  of the panel: 

.  "To examine, in the light of the relevant provisions in (name of the covered agreement(s) 
cited  by  the  parties  to  the  dispute),  the  matter  referred  to  the  DSB  by  (name  of  party)  in 
document... and to make such findings as will assist the DSB in making the recommendations 
or  in giving  the  mlings  provided  for  in that/those agreement(s)." 

Panels shall address the relevant provisions in any covered agreement or agreements cited by 

2. 
the parties  to the dispute. 

3. 
In establishing a panel, the DSB may authorize its Chairman to draw up the terms of reference 
of  the panel  in consultation  with the parties to the dispute,  subject to the provisions  of paragraph  1. 
The terms of reference thus drawn up shall be circulated to all Members.  If other than standard terms 
of  reference  are agreed  upon,  any  Member may  raise any point relating thereto in the DSB. 

Article  8 

Composition of  Panels 

Panels shall be composed of well-qualified governmental and/or non-governmental individuals, 
1. 
including  persons  who  have  served  on or presented  a case to a panel,  served  as  a represenutive  of 
a Member or of a contracting party to GATT  1947 or as a represenutive to the Council or Committee 
of any covered agreement  or its predecessor agreement,  or in the Secreuriat,  uught or published on 
international  trade  law or policy,  or served as a senior trade policy  official  of  a Member. 

Panel members  should be selected with a view to ensuring the independence of the members, 

2. 
a sufficiently  diverse  background  and a wide spectmm of  experience. 

*If the complaining party so requests, a meeting of the DSB shall be convened for this purpose within 15 days of the 

request; provided  that at least  10 days'  advance  notice of the meeting  is given. 

Page  359 

Citizens of Members whose governments6 are parties to the dispute or third parties as defined 
3. 
in paragraph 2 of Article  10 shall not serve on a panel concerned with that dispute, unless the parties 
tp the dispute agree otherwise. 

4. 
To  assist  in  the  selection  of  panelists,  the  Secreuriat  shall  mainuin  an  indicative  list  of 
govemmenul  and non-governmental  individuals  possessing  the qualifications  outlined  in paragraph 
1,  from  which  panelists  may  be  drawn as  appropriate.  That  list  shall 
include  the  roster  of  non 
governmental panelists esublished on 30 November 1984 (BISD 3 IS/9), and other rosters and indicative 
lists esublished under any of the covered agreements, and shall retain the names of persons on those 
rosters  and  indicative  lists  at the  time of  entry  into force  of  the WTO  Agreement.  Members  may 
periodically  suggest  names  of  govemmenul  and non-governmental  individuals  for  inclusion on the 
indicative list, providing relevant information on their knowledge of international trade and of the seaors 
•or subject matter of the  covered agreements, and those names shall be added to the list upon approval 
by the DSB.  For each of the individuals on the list, the list shall indicate specific areas of experience 
or expertise of the individuals  in the sectors  or subject matter of the covered  agreements. 

5. 
Panels shall be composed of three panelists unless the parties to the dispute agree, within  10 
days  from  the esublishment  of  the panel, to a panel  composed  of five  panelists.  Members shall  be 
informed  promptly  of  the composition  of the panel. 

The Secretariat shall propose nominations for the panel to the parties to the dispute.  The parties 

6. 
to the dispute  shall  not oppose  nominations  except  for compelling  reasons. 

7. 
If there is no agreement  on the panelists within 20 days after the date of the esublishment  of 
a panel, at the request of either party, the Director-General,  in consulution with the Chairman of the 
DSB and the Chairman of the relevant Council  or Committee,  shall determine the composition of the 
panel by appointing the panelists whom the Director-General considers most appropriate in accordance 
with  any  relevant  special  or  additional  mles  or  procedures  of  the  covered  agreement  or  covered 
agreements  which  are at  issue  in the  dispute,  after  consulting  with the  parties  to the  dispute.  The 
Chairman of the  DSB shall inform the Members of the  composition of the panel thus formed no later 
than  10 days after  the date the Chairman  receives  such a request. 

8. 

Members  shall  undertake,  as a general  mle,  to permit their officials  to serve as panelists. 

9. 
Panelists shall serve in their individual  capacities and not as government  represenutives,  nor 
as representatives of any organization.  Members shall therefore not give them instmaions  nor seek 
to  influence  them as  individuals  with regard to matters before  a panel. 

10.  When a dispute  is between a developing  country Member and a developed  country Member 
the panel  shall,  if  the developing  country  Member  so  requests,  include  at least  one  panelist  from  a 
developing  country  Member. 

11. 
Panelists'  expenses,  including travel and subsistence allowance, shall be met from the WTO 
budget  in accordance with criteria to be adopted by the General Council, based on recommendations 
of  the Committee  on Budget,  Finance and Administration. 

*In the case where customs unions or common markets are panies to a dispute, this provision applies to citizens of all 

member countries of the customs unions or common markets. 

Page  360 

Article  9 

Procedures for  Multiple  Complainants 

1. 
Where more than one Member requests the esublishment of a panel related to the same matter, 
a  single  panel  may  be esublished  to  examine  these  complaints  uking  into  account  the rights of  all 
Members concerned.  A single panel should be esublished to examine such complaints whenever feasible. 

The  single  panel  shall  organize  its examination  and present  its  findings  to the  DSB  in such 

2. 
a manner that the rights which the parties to the dispute would have enjoyed had separate panels examined 
the complaints are in no way impaired.  If one of the parties to the dispute so requests, the panel shall 
submit separate reports on the dispute concerned.  The written submissions by each of the complainants 
shall be made available to the other complainants, and each complainant shall have the right to be present 
when any one of  the other complainants  presents  its views to the panel. 

3. 
If more  than one panel  is esublished to  examine  the complaints  related  to the  same  matter. 
to the greatest extent possible the same persons shall serve as panelists on each of the separate panels 
and the timetable  for the panel process  in such disputes shall  be harmonized. 

Article  10 

Third Parties 

The interests of the panies to a dispute and those of other Members under a covered agreement 

1. 
at issue  in the dispute shall  be fully  uken  into account during the panel process. 

2. 
Any  Member  having a substantial  interest  in a matter before a panel  and having  notified  its 
interest  to the  DSB  (referred  to in this  Understanding  as a  "third party") shall  have an opportunity 
to be heard by the panel and to make written submissions to the panel.  These submissions  shall  also 
be given  to the parties to the dispute and shall  be reflected  in the panel  report. 

Third parties shall receive the submissions of the parties to the dispute to the first meeting  of 

3. 
the panel. 

4. 
If a third  party  considers  that  a measure  already  the subject  of  a panel  proceeding  nullifies 
or  impairs  benefits  accming  to it under any covered agreement,  that Member  may  have recourse  to 
normal  dispute satlement  procedures under this  Undersunding.  Such a dispute shall  be referred  to 
the original  panel  wherever possible. 

Article  11 

Funaion  of Panels 

The  function  of  panels  is  to  assist  the  DSB  in  discharging  its  responsibilities  under  this 
Understanding and the covered agreements.  Accordingly, a panel should make an objective assessment 
of the matter before  it. including an objective assessment of the facts of the case and the applicability 
of and conformity  with the relevant covered agreements, and make such other findings as will  assist 
the DSB in making the recommendations or in giving the mlings provided for in the covered agreements. 
Panels should consult  regularly with the panies to the dispute and give them adequate opportunity to 
develop a mutually  satisfactory  solution. 

Page  361 

Article  12 

Panel Procedures 

Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise 

1. 
after  consulting  the parties to the dispute. 

Panel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, 

2. 
while  not unduly  delaying  the panel process. 

3. 
After consulting the parties to the dispute, the panelists shall, as soon as practicable and whenever 
possible within one week after the composition and terms of reference  of the panel  have been agreed 
upon,  fix  the  timetable  for  the  panel  process,  uking  into account  the  provisions  of  paragraph  9  of 
Anicle  4,  if  relevant. 

In determining  the timetable for the panel process, the panel  shall provide sufficient  time  for 

4. 
the parties  to the dispute to prepare their submissions. 

Panels should set precise deadlines for written submissions by the parties and the parties should 

5. 
respect  those  deadlines. 

6. 
Each party to the dispute shall deposit its written submissions with the Secreuriat for immediate 
transmission to the panel and to the other party or parties to the dispute.  The complaining party shall 
submit its first submission in advance of the responding party's first submission unless the panel decides, 
in fixing the timetable referred to in paragraph 3 and after consulutions with the parties to the dispute, 
that  the  parties  should  submit  their  first  submissions  simultaneously.  When  there  are  sequential 
arrangements for the deposit of first submissions, the panel shall establish a firm time-period for receipt 
of  the  responding  party's  submission.  Any  subsequent  written  submissions  shall  be  submitted 
simultaneously. 

Where  the parties to the dispute have  failed  to develop  a mutually  satisfactory  solution,  the 
7. 
panel  shall  submit  its findings  in the form  of a written report to the  DSB.  In such cases,  the  report 
of a panel shall set out the findings of fact, the applicability of relevant provisions and the basic rationale 
behind any findings  and recommendations  that it makes.  Where a settlement of the matter among the 
parties to the dispute  has been found,  the report of the panel  shall  be confined  to a brief description 
of  the case  and to reporting  that a solution  has been reached. 

In order to make the procedures  more  efficient,  the period  in which the panel  shall  conduct 
8. 
its examination, from the date that the composition and terms of reference of the panel have been agreed 
upon until the date the final report  is issued to the parties to the dispute,  shall, as a general  mie,  not 
exceed  six months.  In cases of urgency,  including those relating to perishable goods, the panel  shall 
aim  to  issue  its  report to the parties to the dispute  within three months. 

9. 
When the panel considers that it cannot issue its report within six months, or within three months 
in cases of urgency,  it shall  inform  the DSB  in writing of the reasons for the delay together with an 
estimate  of  the period  within  which  it  will  issue  its  report.  In no case  should  the period  from  the 
establishment  of the panel  to the circulation  of the report to the Members  exceed  nine months. 

10. 
In the context of  consulutions  involving  a measure uken by a developing  country  Member, 
the panies  may  agree to extend  the periods  established  in paragraphs 7 and 8  of  Anicle 4.  If,  after 
the relevant period has elapsed, the consulting parties cannot agree that the consulutions have concluded, 
the Chairman of the DSB shall decide, after consulution with the panies, whether to extend the relevant 
period  and,  if so,  for how  long.  In addition,  in examining  a complaint  against a developing  country 

Page  362 

Member,- the panel shall accord sufficient  time for the developing country Member to prepare and present 
its argumenution.  The provisions of paragraph  1 of Anicle  20 and paragraph 4 of Anicle 21 are not 
affected  by  any action pursuant  to this paragraph. 

11.  Where  one  or more  of the panies  is a developing  country  Member,  the panel's  report shall 
explicitly  indicate the form in which account has been uken of relevant provisions on differential  and 
more-favourable  treatment for developing country Members that form part of the covered agreements 
which  have  been  raised  by  the developing  country  Member  in the  course  of  the  dispute  settlement 
procedures. 

12. 
The panel may suspend its Work at any time at the request of the complaining party for a period 
not  to exceed  12 months.  In the event  of  such a suspension,  the time-frames  set  out  in paragraphs 
8  and 9  of  this  Article,  paragraph  1 of  Article 20,  and paragraph 4  of  Article 21  shall  be  extended 
by the amount of time that the work was suspended.  If the work of the panel has been suspended for 
more  than  12 months,  the authority  for esublishment  of  the panel shall  lapse. 

Article  13 

Right to  Seek Information 

1. 
' Each panel  shall  have the right to seek  information and technical  advice from any  individual 
or body which  it deems appropriate. However,  before a panel seeks sucti information or advice from 
any individual or body within the jurisdiction of a Member it shall inform the authorities of that Member. 
A  Member  should  respond promptly  and ftiily to any request by a panel  for such information as the 
panel  considers  necessary  and appropriate.  Confidential  information  which  is provided  shall  not be 
revealed without formal authorization from the individual, body, or authorities of the Member providing 
the  information. 

Panels may seek information from any relevant source and may consult experts to obuin their 
2.  * 
opinion on certain aspects of the matter.  With respect to a factual issue concerning a scientific or other 
technical  matter raised by a party to a dispute, a panel may request an advisory report in writing from 
an expert  review group.  Rules for the establishment  of such a group and its procedures are set  forth 
in Appendix  4. 

Article  14 

Confidentiality 

1. 

Panel  deliberations  shall  be  confidential. 

The reports of panels shall  be drafted without the presence of the parties to the dispute in the 

2. 
light  of  the  information  provided  and the sutements  made. 

3. 

Opinions expressed  in the panel  report by  individual  panelists shall  be anonymous. 

Page  363 

Article  15 

Interim Review Stage 

1. 
Following  the consideration of rebuttal submissions and oral arguments,  the panel shall  issue 
the descriptive (factual and argument) sections of its draft report to the parties to the dispute.  Within 
a period of  time  set  by the panel,  the.parties shall  submit their comments  in writing. 

Following  the expiration  of the set period of  time for  receipt of  comments  from  the parties 

2. 
to the dispute, the panel shall issue an interim report to the parties, including both the descriptive sections 
and the panel's findings and conclusions.  Within a period of time set by the panel, a party may submit 
a  written  request  for the panel  to review precise aspects of the interim report prior to circulation of 
the final report to the Members.  At the request of a party, the panel shall hold a further meeting with 
the panies  on the issues  identified  in the written comments.  If no comments  are received  from any 
party  within the  comment  period,'the  interim  report shall  be  considered  the final panel  report and 
circulated  promptly  to the Members. 

3. 
The findings of the final panel report shall  include a discussion of the arguments made at the 
interim  review  stage.  The  interim review suge  shall be conducted within the time-period  set out in 
paragraph  8 of  Article  12. 

Article  16 

Adoption of Panel Reports 

In order to provide sufficient  time for the Members to consider panel reports, the reports shall 
1. 
not  be considered for  adoption by the DSB until  20 days after the date they have been circulated  to 
the  Members. 

Members having objections to a panel report shall give written reasons to explain their objeaions 
2. 
for circulation at least  10 days prior to the DSB meeting at which the panel report will be considered. 

The parties to a dispute shall have the right to participate fully in the consideration of the panel 

3. 
report  by the  DSB.  and their views shall  be fully  recorded. 

4. 
Within 60 days after the date of circulation of a panel report to the Members, the report shall 
be adopted at a DSB meeting7  unless a party to the dispute formally  notifies  the DSB of  its  decision 
to appeal or the DSB decides by consensus not to adopt the report.  If a party has notified  its decision 
to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion 
of  the appeal.  This adoption procedure is without prejudice to the right of Members  to express their 
views  on a panel  report. 

If  a meeting of the DSB is not scheduled within this period at a time that enables the requirements of paragraphs  1 and  4 

of  Anicle  16 to be  met,  a meeting  of  the  DSB shall  be held for  this purpose. 

Page  364 

Standing Appellate  Body 

Article  17 

Appellate  Review 

1. 
A  standing  Appellate  Body  shall be esublished by  the DSB.  The Appellate Body  shall  hear 
appeals from panel  cases.  It shall  be composed  of seven persons, three of whom  shall  serve on any 
one  case.  Persons  serving  on  the  Appellate  Body  shall  serve  in  roution.  Such  roution  shall  be 
determined  in the working  procedures of the Appellate  Body. 

2. 
The DSB shall appoint persons to serve on the Appellate Body for a four-year term, and each 
person  may  be  reappointed  once.  However,  the  terms  of  three  of  the  seven  persons  appointed 
immediately  after  the entry  into force  of  the WTO  Agreement  shall  expire at the end of two  years. 
to be determined by lot.  Vacancies shall be filled as they arise.  A person appointed to replace a person 
whose  term of  office  has not expired shall  hold office  for  the remainder  of the predecessor's  term. 

3. 
The Appellate Body shall comprise persons of recognized authority, with demonstrated expertise 
in law,  international  trade and the subject matter of the covered agreements generally.  They shall be 
unaffiliated  with any government.  The Appellate  Body membership  shall  be broadly  representative 
of membership  in the WTO.  All persons serving on the Appellate Body shall be available at all times 
and on short notice, and shall stay abreast of dispute settlement aaivities and other relevant activities 
of the WTO.  They shall not participate in the consideration of any disputes that would create a direct 
or  indirect  conflict  of  interest. 

4. 
Only parties to the dispute, not third parties, may appeal a panel report.  Third parties which 
have notified the DSB of a substantial  interest in the matter pursuant to paragraph 2 of Anicle  10 may 
make  written submissions  to.  and be given an opportunity  to be heard by,  the Appellate  Body. 

As a general  mle. the proceedings shall not exceed 60 days from the date a party to the dispute 
5. 
formally  notifies  its decision to appeal  to the date the Appellate Body circulates  its report.  In fixing 
its  timetable  the  Appellate  Body  shall  take  into account  the provisions  of paragraph 9  of  Article  4. 
if  relevant.  When  the  Appellate Body  considers that  it cannot  provide  its  report  within 60  days,  it 
shall  inform  the  DSB  in writing of the reasons for the delay  together with an estimate  of  the period 
within which  it  will  submit  its  report.  In no case shall  the proceedings  exceed  90 days. 

An appeal shall be limited to issues of law covered in the panel report and legal interpretations-

6. 
developed  by the panel. 

The  Appellate  Body  shall  be provided  with appropriate administrative  and  legal  support  as 

7. 
it requires. 

8. 
The  expenses  of  persons  serving  on  the  Appellate  Body,  including  travel  and  subsistence 
allowance, shall be met from the WTO budget in accordance with criteria to be adopted by the General 
Council,  based  on  recommendations  of  the Committee  on Budget,  Finance and Administration. 

Procedures for  Appellate  Review 

Working procedures shall be drawn up by the Appellate Body in consulution with the Chairman 

9. 
of  the  DSB  and the  Director-General, and communicated  to the Members  for their  information. 

Page  365 

10. 
The  proceedings  of  the  Appellate  Body  shall  be  confidential.  The  reports  of  the  Appellate 
Body shall be drafted without the presence of the parties to the dispute and in the light pf the information 
provided  and the sutements  made. 

Opinions expressed in the Appellate Body report by individuals serving on the Appellate Body 

11. 
shall  be anonymous. 

The  Appellate  Body  shall  address  each  of  the  issues  raised  in accordance  with  paragraph  6 

12. 
during  the appellate  proceeding. 

The Appellate Body may uphold, modify  or reverse the legal  findingsand  conclusions  of the 

13. 
panel: 

Adoption  of Appellate  Body Reports 

An  Appellate  Body  report shall  be adopted by  the DSB  and unconditionally  accepted  by the 
14. 
parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 
30 days  following  its  circulation  to the Members.8  This  adoption  procedure  is  without  prejudice  to 
the right of  Members  to express their views  on an Appellate  Body  report. 

•  " 

Article  18 

Communications  with the Panel or Appellate  Body 

There shall be no ex parte communications with the panel or Appellate Body concerning matters 

1. 
under consideration  by  the panel  or Appellate  Body; 

2. 
Written  submissions  to the panel  or the Appellate  Body  shall  be  treated  as confidential,  but 
shall  be  made  available  to  the parties  to the dispute.  Nothing  in this  Understanding  shall  preclude 
a party to a dispute from disclosing statements of its own positions to the public.  Members shall treat 
as confidential  information  submitted  by another Member  to the panel  or the  Appellate  Body  which 
that Member has designated as confidential.  A party to a dispute shall also, upon request of a Member, 
provide a non-confidential summary of the information contained in its written submissions that could 
be disclosed  to the public. 

Article  19 

Panel and Appellate  Body Recommendations 

1. 
Where a panel or the Appellate Body concludes that a measure  is inconsistent  with a covered 
agreement,  it shall  recommend  that the Member  concerned4 bring  the measure  into conformity  with 
that agreement.10  In addition to its recommendations, the panel or Appellate Body may suggest  ways 
in which the Member  concerned  could  implement  the  recommendations. 

•if a meeting of  the DSB is not scheduled during this period, such a meeting of the DSB shall be held for this purpose. 

The  "Member concerned" is the party to the dispute to which the panel or Appellate Body recommendations are directed. 

"With respect to recommendations  in cases not involving a violation  of  GATT  1994 or any  other covered  agreement, 

see  Anicle  26. 

Page  366 

2. 
In accordance with paragraph 2 of Anicle 3, in their findings and recommendations,  the panel 
and  Appellate  Body  cannot  add  to  or  diminish  the rights and  obligations  provided  in  the  covered 
agreements. 

Article  20 

Time-frame for  DSB Decisions 

Unless otherwise agreed to by the panies to the dispute, the period from the date of esublishment 
of  the panel  by  the DSB until  the date the DSB  considers the panel or appellate report  for. adoption 
shall  as a general  mle  not  exceed  nine months  where the panel  report  is not appealed  or  12 months 
where  the  report  is  appealed.  Where  either  the panel  or the Appellate  Body  has acted,  pursuant  to 
paragraph 9  of  Article  12 or paragraph  5 of  Article  17,  to extend  the time  for providing  its report, 
the additional  time  uken  shall  be added to the above periods. 

Article  21 

Surveillance  of Implementation  of Recommendations and Rulings 

Prompt compliance with recommendations or mlings of the DSB is essential in order to ensure 

1. 
effective  resolution  of disputes  to the benefit  of all  Members. 

Particular  attention  should  be  paid  to  matters  affecting  the  interests  of  developing  country 

2. 
Members  with  respect  to measures  which  have been subject to dispute settlement. 

3. 
At  a DSB  meeting  held  within 30 days" after  the date of adoption of the panel  or  Appellate 
Body report, the Member concerned shall inform the DSB of its intentions in respea of implemenution 
of  the recommendations  and  mlings  of  the DSB.  If it  is  impracticable to comply  immediately  with 
the  reconunendations  and  mlings.  the  Member  cdncemed shall  have a reasonable  period  of time  in 
which  to do  so.  The  reasonable period  of  time shall be: 

(a) 

(b) 

(c) 

the period of time proposed  by the Member concerned, provided that such period  is 
approved  by  the  DSB:  or.  in the absence of such approval, 

a period of time mutually agreed by the parties to the dispute within 45 days after the 
date  of  adoption  of  the  recommendations  and  mlings;  or,  in  the. absence  of  such 
agreement, 

a period of time daermined  through binding arbitration within 90 days after the date 
of adoption of the  recommendations and mlings.12  In such arbitration, a guideline for 
the  arbitrator" should  be  that the reasonable  period  of  time  to  implement  panel  or 
Appellate Body recommendations should not exceed  15 months from the date of adoption 
of a panel or Appellate  Body  report.  However,  that time may be shorter or longer, 
depending  upon the panicular  circumstances. 

"If a meeting of the DSB is not scheduled during this period, such a meeting of the DSB shall be held for this purpose. 

"If the panies cannot agree on an arbitrator within ten days after referring the maner to arbitration, the arbitrator shall 

be  appointed  by the Director-General  within  ten days,  after  consulting  the parties. 

"The  expression  "arbitrator" shall  be interpreted as referring  either to an individual or a group. 

Page  367 

4. 
Except where the panel or the Appellate Body has extended, pursuant to paragraph 9 of Article  12 
or paragraph 5 of Article  17, the time of providing its report, the period from the date of esublishment 
of the panel by the DSB until the date of determination of the reasonable period of time shall not exceed 
15 months unless the parties to the dispute agree otherwise.  Where either the panel or the Appellate 
Body  has acted to extend the time of providing  its report, the additional  time uken shall be added to 
the  15-month period; provided  that unless-the parties to the dispute agree that there are exceptional 
circumstances,  the total  time shall  not exceed  18 months. 

5. 
Where  there is disagreement  as to the existence  or consistency  with a covered agreement  of 
measures taken to comply with the recommendations and mlings such dispute shall be decided through 
recourse to these disputé settlement procedures, including wherever possible resort to the original panel. 
The panel shall  circulate its report within 90 days after the date of  referral of the matter to it.  When 
-the panel  considers  that  it cannot provide  its report within this  time  frame,  it shall  inform  the  DSB 
m writing of the reasons for the delay together with an estimate of the period within which it will submit 
its  report. 

6. 
The  DSB  shall  keep under surveillance  the  implemenution  of  adopted  recommendations  or 
mlings.  The  issue of  implementation  of the recommendations  or mlings  may be raised at the  DSB 
by any  Member at any time  following  their adoption.  Unless the  DSB decides  otherwise,  the  issue 
of implementation of the recommendations or mlings shall be placed on the agenda of the DSB meeting 
after  six  months  following  the  date  of  esublishment  of  the  reasonable  period  of  time  pursuant  to 
paragraph 3 and shall  remain on the DSB's agenda until the issue is resolved.  At least  10 days prior 
to each such DSB meeting, the Member concerned shall provide the DSB with a sums report in writing 
of  its progress  in the implementation  of the recommendations  or mlings. 

If the matter  is one  which has been raised by a developing  country' Member,  the DSB  shall 

7. 
consider  what  further  action  it might  uke  which  would  be appropriate to the  circumstances. 

8. 
If the case is one brought by a developing country  Member,  in considering  what appropriate 
action  might  be  taken,  the  DSB  shall  take  into  account  not  only  the  trade  coverage  of  measures 
complained  of.  but  also their  impact  on the economy  of developing  country  Members  concerned. 

Article  22 

Compensation and the Suspension of Concessions 

Compensation and the suspension of concessions or other obligations are temporary measures 
1. 
available  in the event that the recommendations  and mlings are not implemented  within a reasonable 
period of time.  However, neither compensation nor the suspension of concessions or other obligations 
is preferred to full  implementation of a recommendation  to bring a measure  into conformity  with the 
covered agreements.  Compensation is volunury and, if granted, shall be consistent with the covered 
agreements. 

2. 
If the  Member concerned  fails to bring the measure found to be  inconsistent  with a covered 
agreement into compliance therewith or otherwise comply with the recommendations and mlings within 
the reasonable period of time determined pursuant to paragraph 3 of  Anicle 21, such Member  shall, 
if so requested,  and no later than the expiry of the reasonable period of time,  enter into negotiations 
with any party having invoked the dispute settlement procedures, with a view to developing  mutually 
acceptable compensation.  If no satisfactory  compensation  has been  agreed  within 20 days  after the 
date  of  expiry  of  the  reasonable  period  of  time,  any  party  having  invoked  the  dispute  settlement 
procedures may request authorization from the DSB to suspend the application to the Member concerned 
of  concessions  or other obligations under the covered  agreements. 

Page  368 

In considering  what concessions  or other obligations to suspend, the complaining party shall 

3. 
apply the following  principles  and procedures: 

. 

(a) 

the  general  principle  is  that  the  complaining  party  should  first  seek  to  suspend 
concessions  or other obligations  with  respea  to the same  sector(s)  as that  in which 
the panel or Appellate Body has found a violation or other nullification or impairment ; 

(b) 

(c) 

if that party considers that it is not practicable or effective  to suspend concessions or 
other obligations  with respect to the same sector(s), it may  seek to suspend concessions 
or other obligations  in other sectors under the same agreement; 

if that party considers that it is not practicable or effective  to suspend concessions or 
other obligations with respea to other sectors under the same agreement, and that the 
circumstances  are  serious  enough,  it  may  seek  to  suspend  concessions  or  other 
obligations  under another covered  agreement; 

(d) 

in applying  the above principles, that pany shall uke  into account: 

(i) 

(ii) 

the  trade  in  the  sector  or  under  the  agreement  under  which  the  panel  or 
Appellate Body has found a violation or other nullification or impairment, and 
the  importance  of such trade to that party; 

the broader economic elements related to the nullification  or impairment and 
the broader economic consequences of the suspension of concessions or other 
obligations; 

(e) 

if that pany decides to request authorization to suspend concessions or other obligations 
pursuant to subparagraphs (b) or (c), it shall sute  the reasons therefor  in its request. 
At the same time  as the request  is forwarded  to the DSB,  it also shall be  forwarded 
to the relevant Councils and also,  in the case of a request pursuant to subparagraph  (b). 
the  relevant  sectoral  bodies; 

(f) 

for purposes  of this paragraph,  "sector" means: 

(i) 

with respect  to goods,  all  goods; 

(ii) 

(iii) 

with respect to services, a principal sector as identified in the current "Services 
Sectoral  Classification  List" which  identifies  such seaors:14 

with respect to trade-related intellectual property rights, each of the categories 
of intellectual property rights covered in Section 1, or Section 2. or Section  3. 
or  Section 4,  or  Section 5,  or  Section 6,  or  Seaion  7  of  Part  II.  or  the 
obligations  under Part III, or Pan IV of the Agreement  on TRIPS:. 

(g) 

for purposes  of this paragraph,  "agreement" means: 

(i) 

with  respea  to  goods,  the  agreements  listed  in  Annex  1A  of  the  WTO 
Agreement, uken as a whole as well as the Plurilateral Trade Agreements  in 
so  far as the relevant panies to the dispute are panies  to these agreements; 

(ii) 

with respea  to services, the GATS; 

"The  list in document  MTN.GNS/W/120  identifies  eleven  sectors. 

Page  369 

(iii) 

with  respect  to intellectual  property  rights,  the  Agreement  on TRIPS. 

The level  of the suspension of  concessions  or other obligations  authorized  by the DSB  shall 

4. 
be equivalent  to the level  of the nullification  or  impairment. 

-  The DSB shall not authorize suspension of concessions or otrier obligations if a covered agreement 

5. 
prohibits  such suspension. 

6. 
When  the  situation  described  in  paragraph  2  occurs,  the  DSB,  upon .request,  shall  grant 
authorization to suspend concessions or other obligations within 30 days of the expiry of the reasonable 
period  of time unless the DSB decides by consensus  to reject the request.  However,  if the Member 
concerned  objects to the  level  of  suspension proposed,  or claims  that the  principles  and procedures 
set forth in paragraph 3 have not been followed where a complaining pany  has requested authorization 
to suspend concessions or other obligations pursuant to paragraph 3(b) or (c),  the matter shall be referred 
to arbitration.  Such arbitration shall  be carried  out by the original  panel,  if members  are available. 
or by an arbitrator13 appointed by the Director-General  and shall  be completed  within  60 days  after 
the  date  of  expiry  of  the  reasonable  period  of  time.  Concessions  or  other  obligations  shall  not  be 
suspended during the course of  the arbitration. 

The arbitrator16 acting pursuant to paragraph 6 shall not examine the nature of the  concessions 
7. 
or other obligations to be suspended but shall determine whether the level of such suspension is equivalent, 
to the level, of nullification or impairment.  The arbitrator may  also determine if the proposed suspension 
of concessions  or other obligations  is allowed  under the covered agreement.  However,  if the matter 
referred to arbitration includes a claim that the principles and procedures set forth in paragraph 3 have 
not been followed,  the arbitrator shall examine that claim.  In the event the arbitrator determines that 
those principles and procedures have not been followed, the complaining party shall apply them consistent 
with paragraph 3.  The parties shall accept the arbitrator's decision as final and the parties concerned 
shall not seek a second arbitration.  The DSB shall be informed promptly of the decision of the arbitrator 
and  shall upon request, grant authorization to suspend concessions or other obligations where the request 
is consistent with the decision of the arbitrator, unless the  DSB  decides by consensus to reject the request. 

8. 
The suspension of concessions or other obligations shall be temporary and shall only be applied 
until such time as the measure  found to be inconsistent  with a covered  agreement  has been removed, 
or the Member that must implement recommendations or mlings provides a solution to the nullification 
or impairment of benefits, or a mutually satisfactory solution is reached.  In accordance with paragraph  6 
of  Anicle  21.  the  DSB  shall  continue  to  keep  under  surveillance  the  implementation  of  adopted 
recommendations or mlings. including those cases where compensation has been provided or concessions 
or other obligations have been suspended but the recommendations  to bring a measure into conformity 
with the covered  agreements have not been  implemented. 

9. 
The  dispute  settlement  provisions  of  the  covered  agreements  may  be  invoked  in respect  of. 
measures affecting  their observance uken by regional or local  governments  or authorities  within the 
territory of a Member.  When the DSB has mled that a provision of a covered agreement has not been 
observed,  the  responsible  Member  shall  take such  reasonable measures  as  may  be available  to  it  to 
ensure  its observance.  The provisions of the covered agreements and this Understanding  relating to 

,sThe  expression'arbitrator*  shall  be interpreted  as referring  either  to an  individual  or a group. 

"The expression  "arbitrator" shall  be interpreted as referring  either to an individual  or a group or to the members of 

the original  panel  when  serving  in the  capacity  of arbitrator. 

Page  370 

compensation and suspension of concessions or other obligations appl)  m cases where it has not been 
possible  to secure  such  observance.17 

Article  23 

Strengthening of the Multilateral  System 

1. 
When Members seek the redress of a violation of obligations or other nullification or impairment 
of benefits  under the covered  agreements or an impediment  to the attainment  of any objective of the 
covered  agreements,  they  shall  have  recourse  to,  and  abide  by,  the  mles  and  procedures  of  this 
Undersunding. 

2. 

In such  cases,  Members shall: 

(a) 

(b) 

(c) 

not make a determination to the effect that a violation has occurred, that benefits have 
been  nullified  or  impaired  or  that  the  attainment  of  any  objective  of  the  covered 
agreements  has  been  impeded,  except  through  recourse  to  dispute  settlement  in 
accordance  with the mles and procedures of this Undersunding,  and shall  make any 
such  determination  consistent  with the findings  conuined  in the  panel  or  Appellate 
Body  report  adopted  by  the  DSB  or  an  arbitration  award  rendered  under  this 
Understanding; 

follow the procedures set forth in Article 21  to determine the reasonable period of time 
for  the  Member concerned to implement  me recommendations  and mlings;  and 

follow  the procedures set  forth  in Anicle 22 to determine  the level  of suspension of 
concessions or other obligations and obtain DSB authorization in accordance with those 
procedures  before  suspending  concessions  or  other  obligations  under  the  covered 
agreements  in  response  to  the  failure  of  the  Member  concerned  to  implement  the 
recommendations  and  mlings  within that reasonable period  of time. 

Article  24 

Special  Procedures  Involving Least-Developed  Country Members 

At all stages of the determination of the causes of a dispute and of dispute settlement procedures 
1. 
involving  a  least-developed  country  Member,  particular consideration  shall  be  given  to  the  special 
situation  of  least-developed  country  Members.  In this regard. Members shall  exercise due restraint 
in raising matters under these procedures involving a least-developed country Member.  If nullification 
or impairment is found to result from a measure uken by a least-developed country Member, complaining 
parties shall exercise due restraint in asking for compensation or seeking authorization to suspend the 
application  of concessions or other obligations pursuant to these procedures. 

In dispute settlement cases involving a least-developed country Member, where a satisfaaory 
2. 
solution has  not  been  found  in the course of  consulutions  the Director-General  or the Chairman  of 
the DSB shall, upon request by a least-developed country Member offer their good offices,  conciliation 
and mediation  with  a view  to assisting  the panies  to settle the dispute,  before  a request for  a panel 

"Where the provisions of any covered agreement concerning measures taken by regional or local governments or authorities 
within the territory of a Member conuin  provisions different  from  the provisions of mis paragraph, the provisions of such 
covered  agreement  shall  prevail. 

is made. The Director-General  or-the Chairman of the DSB,  in providing  the above assisunce,  may 
consult  any source which either deems appropriate. 

Page  371 

Article  25 

Arbitration 

Expeditious arbitration within the WTO as an alternative means of dispute settlement can faciliute 

1. 
the solution  of  ceruin disputes that concern issues that are clearly defined  by both parties. 

Except as otherwise provided in this Undersunding,  resort to arbitration shall  be subject to 
2. 
mutual agreement  of the parties which shall agree on the procedures to be followed.  Agreements  to 
«sort to arbitration shall be notified to all Members sufficiently in advance of the actual commencement 
of the arbitration process. 

3. 
Other Members  may become  party to an arbitration proceeding  only  upon the agreement  of 
the panies which have agreed to have recourse to arbitration.  The parties to the proceeding shall agree 
to abide by  the  arbitration award.  Arbitration awards shall be notified  to the  DSB  and the Council 
or Committee  of  any  relevant  agreement  where any  Member  may  raise  any point  relating thereto. 

4. 

Anicles 21 and 22 of this Undersunding shall apply mutatis mutandis to arbitration awards. 

Article  26 

1. 

Non-Violation  Complaints  of 
GATT 1994 

the  Type Described  in  Paragraph  1(b)  of  Article  XXIII of 

Where  the provisions  of paragraph  1(b) of  Anicle  XXIII  of  GATT  1994  are applicable  to a 
covered agreement, a panel or the Appellate Body may only make mlings and recommendations where 
a pany to the dispute considers that any benefit  accming to it directly or indirectly under the relevant 
covered agreement  is being nullified or impaired or the attainment of any objective of that Agreement 
is being impeded as a result of the application by a Member of any measure, whether or not it conflicts 
with the provisions of that Agreement.  Where and to the extent that such party considers and a panel 
or the Appellate Body determines that a case concerns a measure that does not conflict with the provisions 
of  a covered  agreement  to which the provisions  of paragraph  1(b) of  Article  XXIII  of  GATT  1994 
are applicable,  the procedures  in this  Undersunding  shall  apply, subject to the  following: 

(a) 

(b) 

(c) 

the complaining party shall present a deuiled justification in support of any complaint 
relating  to a measure  which does  not conflict  with the relevant  covered  agreement; 

where  a measure  has been found  to nullify  or impair benefits  under,  or  impede  the 
attainment of objectives, of the relevant covered agreement without violation thereof, 
there  is  no obligation to withdraw  the measure.  However,  in such  cases, the panel 
or the Appellate Body shall recommend that the Member concerned make a mutually 
satisfactory  adjustment; 

notwithstanding the provisions of Article 21, the arbitration provided for in paragraph 3 
of  Article  21, upon request of either party, may  include a determination  of the level 
of benefits which have been nullified or impaired, and may also suggest ways and means 
of reaching a mutually satisfactory adjustment;  such suggestions shall not be binding 
upon the parties to the dispute; 

Page  372 

(d) 

notwithsunding  the provisions  of  paragraph  1 of  Article  22,  compensation  may  be 
pan  of  a mutually  satisfactory  adjustment  as final  settlement  of  the dispute. 

2. 

Complaints  of the  Type Described  in Paragraph  1 (c) of Article  iXlll  of  GATT 1994 

Where  the provisions  of paragraph  1(c) of Article XXIII of  GATT  1994 are applicable  to a 
covered agreement, a panel may only make mlings and recommendations where a party considers that 
any benefit accming to it directly or indirectly under the relevant covered agreement is being  nullified 
or impaired  or the atuinment  of any objective of that Agreement  is being impeded as a result of the 
existence  of  any  situation  other  than  those  to which  the provisions  of  paragraphs  1(a)  and  1(b)  of 
Article XXIII of  GATT  1994 are applicable.  Where and to the extent that such pany  considers and 
a panel determines that the matter is covered by this paragraph, the procedures of this  Undersunding 
shall  apply  only  up to  and  including  the point  in  the proceedings  where  the panel  report  has  been 
circulated  to  the  Members.  The dispute settlement  mles  and procedures  contained  in the  Decision 
of  12 April  1989  (BISD  36S/61-67)  shall  apply  to consideration  for adoption,  and surveillance  and 
implemenution  of  recommendations  and mlings.  The following  shall  also apply: 

(a) 

(b) 

the complaining party shall present a deuiled justification in support of any argument 
made  with respea  to issues covered under this paragraph: 

in cases  involving  matters covered by this paragraph,  if a panel finds that cases  also 
involve dispute satlement matters other than those covered by this paragraph, the panel 
shall  circulate a report to the DSB addressing any such matters and a separate report 
on matters  falling  under this paragraph. 

Article  27 

Responsibilities  of the Secretariat 

1. 
The Secreuriat shall have the responsibility of assisting panels, especially on the legal. historical 
and procedural  aspects of the matters dealt with, and of providing  secretarial  and technical  support. 

While the Secretariat  assists Members  in respect of dispute settlement at their request, there 
2. 
may  also be a need to provide additional  legal  advice and assisunce  in respect  of dispute  settlement 
to developing  country  Members.  To this end, the  Secreuriat  shall  make available  a qualified  legal 
expert  from  the  WTO  technical  cooperation  services  to  any  developing  country  Member  which  so 
requests. This expert shall assist the developing country Member in a manner ensuring the continued 
impartiality  of  the  Secretariat. 

3. 
The Secreuriat shall conduct special training courses for interested Members concerning these 
dispute  satlement  procedures  and practices  so as to enable  Members* experts  to be better  informed 
in this  regard. 

(»• 

Page  373 

APPENDIX  1 

AGREEMENTS  COVERED  BY THE  UNDERSTANDING 

(A) 

•  Agreement  Esublishing  the World Trade Organization 

(B)  Multilateral  Trade  Agreements 

Annex  1A:  Multilateral  Agreements  on Trade  in Goods 
Annex  IB: 

General  Agreement  on Trade  in  Services 

Annex  IC: 

Agreement  on Trade-Related  Aspects  of  Intellectual  Property  Rights 

Annex  2: 

Undersunding onRules and Procedures Governing the Settlement  of.Disputes 

(C) 

Plurilateral  Trade  Agreements 

Annex 4: 

Agreement  on Trade  in Civil  Aircraft 
Agreement  on Government  Procurement 
International  Dairy  Agreement 
International  Bovine  Meat  Agreement 

The applicability  of this Understanding to the Plurilateral Trade Agreements  shall  be subject 
to the adoption of a decision by the parties to each agreement setting out the terms for the application 
of the Understanding to the individual agreement, including any special or additional mles or procedures 
for  inclusion  in  Appendix  2.  as notified  to the DSB. 

Page 374 

APPENDIX 2 

SPECIAL OR ADDITIONAL RULES AND PROCEDURES 
CONTAINED IN THE COVERED AGREEMENTS 

Agreement 

Rules and Procedures 

Agreement on the Application of Saniury 
and Phytosaniury Measures 

11.2 

Agreement on Textiles and Clothing 

Agreement on Technical  Barriers to Trade 

Agreement  on Implemenution of Article VI 

of GATT 1994 

Agreement  on Implementation of Article VII 

of GATT 1994 

2.14,2.21,4.4,5:2,5.4,5.6,6.9, 
6.10,6.11,  8.1  through 8.12 

14.2 through  14.4,  Annex 2 

17.4 through 17.7 

19.3 through  19.5, Annex 11.2(f). 3, 9, 21 

Agreement on Subsidies and Countervailing  Measures  4.2 through 4.12,6.6,7.2 through 7.10,8.5, 

footnote 35, 24.4, 27.7, Annex V 

General  Agreement on Trade in Services 

Annex on Financial Services 
Annex on Air Transport Services 

XXH:3, XXni:3 
4 
4 

Decision on Certain Dispute Settlement 

Procedures for the GATS 

1 through 5 

The list of mles and procedures in this Appendix includes provisions where only a part of the 

provision may be relevant  in this context. 

Any special or additional mles or procedures in the Plurilateral Trade Agreements as determined 

by the competent bodies of each agreement and as notified  to the DSB. 

Page  375 

APPENDIX  3 

WORKING  PROCEDURES 

, In its proceedings the panel shall follow the relevant provisions of this Uriderstartding.  In addition, 

1. 
the following  working  procedures  shall apply. 

The panel shall meet in closed session.  The panies to the dispute, and interested panies, shall 

2. 
be present at the meetings  only  when invited by the panel to appear before  it. 

The  deliberations  of  the panel  and the documents  submitted  to  it shall  be  kept  confidential. 
3. 
Nothing in this Undersunding shall preclude a party to a dispute from disclosing sutements of its own 
positions to the public.  Members shall treat as confidential  information submitted by another Member 
to the panel which that Member has designated as confidential.  Where a pany  to a dispute submits 
a confidential  version of its written submissions to the panel, it shall also, upon request of a Member, 
provide  a  non-confidential  summary  of  the  information  conuined  in  its  submissions  that  could  be 
disclosed to the public. 

Before the first substantive meeting of the panel with the panies, the panies to the dispute shall 

4. 
transmit to the panel written submissions in which they present the facts of the case and their arguments. 

At its first substantive meeting with the parties, the panel shall ask the party which has brought 
5. 
the complaint to present its case.  Subsequently, and still at the same meeting, the party.against which 
the complaint  has been brought  shall be asked to present  its point of  view. 

All  third panies which have notified their interest in the dispute to the DSB shall  be invited in 
6 
writing  to present  their views during a session of the first  substantive meaing  of the panel  set aside 
for  that purpose.  All  such third panies  may be present during the entirety of  this session. 

Formal rebuttals shall be made at a second substantive meaing of the panel.  The party complained 
7. 
against shall have the right to take the floor first to be followed by the complaining party.  The panies 
shall  submit,  prior to that meeting,  written rebuttals to the panel. 

The panel  may at any time put questions to the panies and ask them for explanations either in 

8. 
the  course  of  a meeting  with the panies or in writing. 

The panies  to the dispute and any third pany  invited to present  its views  in accordance  with 

9. 
Anicle  10 shall  make available to the panel a written version of their oral  sutements. 

10. 
In the  interest  of  full  transparency,  the presentations,  rebuttals  and sutements  referred  to  in 
paragraphs 5  to 9  shall  be  made  in  the  presence  of  the  panies.  Moreover,  each  party's  written 
submissions, including any comments on the descriptive pan of the repon and responses to questions 
put by the panel,  shall  be made available to the other party or panies. 

11.  Any additional  procedures specific  to the panel. 

Page  376 

12. 

Proposed timeuble  for panel* work: 

(a) 

Receipt  of first written submissions  of  the panies: 

(1) 
(2) 

complaining  Party: 
Party  complained  against: 

(b)  Date, time and place of first substantive  meaing 

with the panies;  third party session: 

(c) 

Receipt  of  written rebuttals of the parties: 

(d)  Date, time  and place of second  substantive 

meeting  with the parties: 

(e) 

Issuance of descriptive part of the repon to the panies: 

(f) 

(g) 

Receipt  of comments by  the panies on the 
descriptive'pan of the report: 

Issuance of the interim report,  including the 
findings  and conclusions,  to the panies: 

(h)  Deadline  for party  to request review of part(s) of  report: 

(i) 

Period  of  review  by panel,  including  possible 
additional  meeting  with parties: 

(j) 

Issuance of  final  report to parties to dispute: 

(k)  Circulation  of  the final report to the Members: 

3-6 weeks 
2-3 weeks 

1-2 weeks 

2-3 weeks 

• 

1-2 weeks 

2-4 weeks 

2  weeks 

2-4 weeks 

1 week 

2  weeks 

2  weeks 

3  weeks 

The above calendar may be changed in the light of unforeseen developments. Additional meetings 

with the parties shall  be scheduled  if required. 

Page  377 

APPENDIX  4 

EXPERT REVIEW  GROUPS 

The following mles and procedures shall apply to expert review groups esublished in accordance 

with the provisions  of paragraph 2 of  Article  13. 

Expert  review  groups  are under the panel's authority.  Their terms  of  reference  and detailed 

1. 
working  procedures  shall  be decided by the panel,  and they  shall  report to the panel. 

Participation in expert review groups shall be restricted to persons of professional  standing and 

2. 
experience  in the  field  in question. 

Citizens  of  parties  to the dispute  shall  not serve  on an expert  review  group without  the joint 
3. 
agreement  of the parties to the dispute, except in exceptional  circumstances when the panel  considers 
that the need  for  specialized  scientific  expertise  cannot  be fulfilled  otherwise.  Government  officials 
of panies to the dispute shall not serve on an expert review group.  Members of expert review groups 
shall serve in their individual capacities and not as government  representatives, nor as representatives 
of  any  organization.  Governments  or organizations  shall  therefore  not give  them  instmaions  with 
regard to matters  before  an expert  review group. 

Expert review groups may consult and seek information  and technical  advice from any source 
4. 
they deem appropriate.  Before an expert review group seeks such information or advice from a source 
within the jurisdiction of a Member,  it shall  inform the government  of that Member.  Any  Member 
shall  respond  promptly  and  fully  to any  request  by an expert  review  group for  such  information  as 
the expert  review  group considers  necessary  and appropriate. 

5. 
The parties to a dispute shall have access to all relevant information provided to an expert review 
group,  unless  it  is of  a confidential  nature.  Confidential  information  provided  to the expert  review-
group shall not be released without formal authorization from the government, organization or person 
providing  the  information.  Where, such  information  is  requested  from  the  expert  review  group but 
release of such information  by the expert review group is not authorized, a non-confidential  summary 
of the information will be provided by the government, organization or person supplying the information. 

ii. 
The  expert review  group shall  submit  a draft  report  to the parties  to  the  dispute  with  a view 
to obtaining their comments,  and taking them into account, as appropriate,  in the final report,  which 
shall  also be  issued  to  the parties to the dispute  when it  is  submitted  to the panel.  The final report 
of  the expert  review  group shall  be advisory  only. 

Page 378 

Page  379 

ANNEX  3 

TRADE  POLICY  REVIEW  MECHANISM 

Members  hereby agree  as  follows: 

A. 

Objectives 

(i) 

The  purpose  of  the Trade Policy  Review  Mechanism  ("TPRM")  is  to contribute  to 
•improved adherence by all Members to rales, disciplines and commitments made under the Multilateral 
Trade Agreements and, where applicable, the Plurilateral Trade Agreements, and hence to the smoother 
functioning of the multilateral trading system, by achieving greater transparency in, and undersunding 
of. the trade policies and practices of Members.  Accordingly, the review mechanism enables the regular 
collective appreciation and evaluation of the full range of individual Members' trade policies and practices 
and their  impact  on the functioning  of  the multilateral  trading system.  It is not, however,  intended 
to  serve  as a basis  for  the enforcement  of  specific  obligations  under the Agreements  or  for  dispute 
settlement  procedures,  or to  impose  new policy  commitments  on Members. 

(ii) 

.  The  assessment  carried  out  under the  review  mechanism  takes  place,  to  the  extent 
relevant, against the background of the wider economic and developmental needs, policies and objeaives 
of the Member concerned, as well as of its external environment.  However, the funaion of the review 
mechanism  is to  examine  the  impact  of  a Member's  trade policies  and practices  on the multilateral 
trading  system! 

B. 

Domestic  transparency 

Members recognize the inherent value of domestic transparency of government decision-making 
on trade policy matters for both Members' economies and the multilateral trading system,  and agree 
to  encourage  and  promote  greater  transparency  within  their  own  systems,  acknowledging  that  the 
implemenution of domestic transparency must be on a volunury basis and uke account of each Member's 
legal  and political  systems. 

Procedures for  review 

(i ) 

The Trade Policy Review Body (referred to herein as the "TPRB") is hereby esublished 

to cany* out trade policy  reviews. 

(ii) 

The trade policies and practices of all  Members shall  be subjea  to periodic  review. 
The  impact of  individual  Members  on the functioning  of  the multilateral  trading system,  defined  in 
terms of  their share  of  world trade in a recent  represenutive period,  will  be the determining  faaor 
in deciding  on the  frequency  of  reviews.  The first  four  trading entities  so  identified  (counting  the 
European Communities as one) shall be subjea to review every two years. The next 16 shall be reviewed 
every four years.  Other Members shall be reviewed every six years, except that a longer period may 
be fixed for  least-developed country  Members.  It is understood that the review of  entities having a 
common external policy covering more than one Member shall cover all components of policy affecting 
trade including relevant policies and practices of the individual Members.  Exceptionally, in the event 
of changes in a Member's trade policies or practices that may have a significant impaa on its trading 
panners, the Member concerned may be requested by the TPRB, after consulution, to bring forward 
its next  review. 

Page  380 

(iii) 

Discussions in the meetings of the TPRB shall be governed by the objectives set forth 
in paragraph A.  The focus of these discussions shall be on the Member's trade policies and practices, 
which are the subject of  the assessment  under the review  mechanism. 

(iv) 

The TPRB shall esublish a basic plan for the conduct of the reviews.  It may also discuss 
and uke  note of update  reports from  Members.  The TPRB shall  esublish  a programme  of  reviews 
for each year in consulution with the Members directly concerned.  In consulution with the Member 
or Members under review, the Chairman may choose discussants who, aaing in their personal capacity, 
shall  introduce the discussions  in the TPRB. 

(v) 

The TPRB  shall  base  its work on the following  documenution: 

(a) 

(b) 

a full repon, referred to in paragraph D, supplied by the Member or Members 
under review; 

a repon,  to be drawn up by the Secretariat  on  its own  responsibility,  based 
on the information available to it and that provided by the Member or Members 
concemed.  The  Secreuriat  should  seek  clarification  front  the  Member  or 
Members concerned of their trade policies  and practices. 

(vi) 

The reports by the Member under review and by the Secreuriat, together with the minutes 

of the respective meeting  of the TPRB, shall  be published promptly after the review. 

(vii) 
note of  them. 

These documents will be forwarded  to the Ministerial  Conference,  which shall  uke 

D. 

.  Reporting 

In order to achieve the fullest possible degree of transparency, each Member shall report regularly 
to the TPRB.  Full répons shall describe the trade policies and praaices pursued by the Member  or 
Members  concerned, based on an agreed format to be decided upon by the TPRB.  This format  shall 
initially be based on the Outline Format for Country Reports esublished by the Decision of 19 July  1989 
(BISD  36S/406-409).  amended  as necessary to extend the coverage of reports to all aspects of trade 
policies covered by the Multilateral Trade Agreements in Annex  land, where applicable, the Plurilateral 
Trade Agreements.  This format  may  be revised  by  the TPRB  in the light  of  experience.  Between 
reviews.  Members  shall  provide  brief  reports when there are any  significant  changes  in their trade 
policies;  an annual update of sutistical  information will be provided according to the agreed format. 
Panicular  account  shall  be  *ak*n of  difficulties  presented  to  least-developed  country  Members  in 
compiling their reports.  The Sc^euriat shall make available technical assistance on request to developing 
country  Members, and in panicular to the least-developed country Members.  Information contained 
in reports should to the greatest extent possible be coordinated with notifications made under provisions 
of  the Multilateral  Trade Agreements  and. where applicable,  the Plurilateral  Trade Agreements. 

£. 

Relationship  with the balance-of-payments provisions  of GATT 1994  and  GA TS 

Members  recognize  the  need  to  minimize  the  burden tor  governments  also  subjea  to  full 
consultations  under the balance-of-payments provisions of GATT  1994 or GATS.  To this end.  the 
Chairman of the TPRB shall,  in consultation with the Member or Members concerned, and with the 
Chairman of the Committee on Balarice-of-Payments Restrictions, devise administrative arrangements 
that harmonize the normal rhythm oftrie trade policy reviews wim the timeublef^ 
consulutions  but do not postpone the trade policy  review by more than  12 months. 

Page 381 

F. 

Appraisal of the Mechanism 

The TPRB shall undertake an appraisal of the operation of the TPRM not more than five years 
after  the entry  into force of the Agreement Esublishing the WTO.  The results of the appraisal will 
be presented to the Ministerial  Conference.  It may subsequently undertake appraisals of the TPRM 
at intervals to be determined  by it or as requested by the Ministerial  Conference. 

G. 

Overview of Developments in the International Trading Environment 

An annual overview of developments in the international trading environment which are having 
an impact  on the multilateral  trading  system shall also be undertaken by the TPRB.  The overview 
is to be assisted by an annual report by the Director-General setting out major  activities of the WTO 
and highlighting significant  policy  issues affecting  the trading system. 

Page 382 

Page 383 

ANNEX 4 

PLURILATERAL  TRADE AGREEMENTS 

AGREEMENT  ON TRADE IN CIVIL AIRCRAFT 

The Agreement on Trade in Civil Aircraft, done at Geneva on 12 April 1979 (BISD 26S/162). 

as subsequently modified,  rectified  or amended. 

AGREEMENT ON GOVERNMENT PROCUREMENT 

The Agreement  on Government  Procurement  done at Marrakesh  on  15 April  1994. 

INTERNATIONAL DAIRY AGREEMENT 

The International  Dairy Agreement done at Marrakesh on  15 April  1994. 

INTERNATIONAL  BOVINE MEAT AGREEMENT 

The International  Bovine Meat Agreement done at Marrakesh on  15 April  1994. 

Page 384 

Page  385 

DECISION  ON  MEASURES  IN FAVOUR  OF LEAST-DEVELOPED  COUNTRIES 

Ministers, 

Recognizing  the plight of the least-developed countries and the need to ensure their  effective 
participation  in  the  world  trading  system,  and  to  uke  further  measures  to  improve  their  trading 
opportunities; 

Recognizing  the  specific  needs  of the least-developed countries  in the area of  market  access 
where continued preferential  access remains an essential means for improving their trading opportunities; 

Reaffirming their commitment to implement fully the provisions concerning the least-developed 
countries conuined  in paragraphs 2(d),  6 and 8 of the Decision of 28 November  1979 on  Differentia] 
and More  Favourable Treatment,  Reciprocity  and Fuller Participation  of  Developing  Countries; 

Having regard  to the commitment  of the participants as set out in Section B (vii)  of Part I of 

the Puma del  Este  Ministerial  Declaration; 

Decide that, if not already provided for in the instruments negotiated in the course of the Uruguay 

1. 
Round, notwithstanding their accepunce of these instruments, the least-developed countries, and for 
so long as they remain in that category, while complying with the general mles set out in the aforesaid 
instruments, will only be-required to undertake commitments and concessions to the extent consistent 
with their individual  development] financial  and trade needs, or their administrative  and institutional 
capabilities. The least-developed countries shall be given additional time ofone year from 15 April  1994 
to  submit  their  schedules  as  required  in Article  XI of  the Agreement  Esublishing  the World  Trade 
Organization. 

v 

2. 

Agree thai: 

(i) 

'  (ii) 

(iii) 

(iv) 

Expeditious  implementation  of  all  special  and differential  measures  taken  in  favour 
of  least-developed countries  including those uken within the context  of the Uruguay 
Round  shall  be ensured through,  inter alia,  regular reviews. 

To the extent possible.  MFN concessions  on uriff  and non-tariff  measures agreed  in 
the Uruguay Round on products of export interest to the least-developed countries may 
ix  implemented  autonomously,  in advance and without staging.  Consideration  shall 
be given to further improve GSP and other schemes for products of particular export 
interest  to  least-developed  countries. 

The  mles  set  out  in  the  various  agreements  and  instruments  and  the  transitional 
provisions in the Uruguay Round should be applied in a flexible and supportive manner 
for the least-developed countries.  To this effect,  sympathetic consideration  shall  be 
given  to  specific  and motivated  concerns raised by the  least-developed  countries  in 
the appropriate Councils  and Committees. 

In  the  application  of  import  relief  measures  and  other  measures  referred  to  in 
paragraph  3(c)  of  Article  XXXVII  of  GATT  1947  and the corresponding  provision 
of  GATT  1994,  special  consideration  shall  be  given to the export  interests of  least-
developed  countries. 

(v) 

Least-developed countries shall be accorded substantially increased technical assisunce 
in the development,  strengthening"and diversification  of their production and export 

Page  386 

bases  including  those  of  services,  as  well  as  in trade promotion,  to enable  them  to 
maximize  me benefits  from  liberalized  access to markets. 

Agree to keep under review the specific needs of the least-developed countries and to continue 
3. 
to  seek  the  adoption  of  positive  measures  which  faciliute  the expansion  of  trading  opportunities  in 
favour  of these  countries. 

Page  387 

DECLARATION  ON THE  CONTRIBUTION  OF  THE 
WORLD  TRADE  ORGANIZATION  TO  ACHIEVING  GREATER 
COHERENCE  IN  GLOBAL  ECONOMIC  POLICYMAKING 

1. 
Ministers  recognize  that  the  globalization  of  the  world  economy  has  led  to  ever-growing 
interaaions between the economic policies pursued by individual countries, including interactions between 
the stmctural,  macroeconomic,  trade, financial  and development  aspects of economic  policymaking. 
The task of achieving harmony between these policies falls primarily  on governments  at the national 
level,  but  their  coherence  internationally  is  an  important  and  valuable  element  in  increasing  the 
effectiveness  of these policies at national level.  The Agreements reached in the Uruguay Round show 
that all the participating governments recognize the contribution that liberal trading policies can make 
to the healthy growth and development of their own economies and of the world economy as a whole. 

2. 
Successful  cooperation in each area of economic policy contributes to progress in other areas. 
Greater exchange rate stability, based on more orderly underlying economic and financial conditions, 
should contribute towards the expansion of trade, sustainable growth and development, and the correction 
of external imbalances.  There is also a need for an adequate and timely flow of concessional and non-
concessional  financial  and real  investment  resources  to developing  countries  and  for  further  efforts 
to address debt problems, to help ensure economic growth and development.  Trade liberalization forms 
an increasingly important component in the success of the adjustment programmes that many countries 
are undertaking, often involving significant transitional social costs.  In this connection. Ministers note 
the  rôle of  the World  Bank and the IMF  in supporting  adjustment  to trade liberalization,  including 
suppon  to net  food-importing  developing  countries  facing short-term costs arising from  agricultural 
trade  reforms.  • 

The positive outcome  of the Uruguay  Round  is a major contribution  towards more coherent 
3. 
and  complementary  international  economic  policies.  The  results  of  the  Uruguay  Round  ensure an 
expansion  of  market  access  to  the  benefit  of  ail  countries,  as  well  as  a framework  of  strengthened 
multilateral  disciplines  for trade.  They also guarantee  that trade policy  will  be conducted  in a more 
transparent manner and with greater awareness of the benefits for domestic competitiveness of an open 
trading environment.  The strengthened multilateral trading system emerging from the Uruguay Round 
has  the  capacity  to  provide  an  improved  forum  for  liberalization,  to  contribute  to  more  effective 
surveillance,  and  to ensure  strict  observance  of  multilaterally  agreed  mles  and disciplines.  These 
improvements  mean  that  trade policy  can  in the  future  play  a more  substantial  rôle  in ensuring  the 
coherence of  global  economic  pol icymaking. 

4 
Ministers recognize,  however, that difficulties  the origins of which lie outside the trade field 
cannot be redressed through measures uken in the trade field alone.  This underscores the importance 
of  efforts  to  improve  other elements  of  global  economic policymaking  to complement  the  effective 
implementation  of  the  results achieved  in the  Uruguay  Round. 

5. 
The interlinkages between the different aspects of economic policy require that the international 
institutions with responsibilities in each of these areas follow consistent and mutually supportive policies. 
The World Trade Organization should therefore pursue and develop cooperation with the international 
organizations  responsible  for  moneury  and  financial  matters,  while  respecting  the  mandate,  the 
confidentiality  requirements  and  the  necessary  autonomy  in  decision-making  procedures  of  each 
institution, and avoiding the imposition on governments of cross-conditional ity or additional conditions. 
Ministers  further  invite the  Direaor-General  of  the WTO to review  with the Managing  Direaor  of 
the International  Moneury Fund and the President of the World Bank, the implications of the WTO's 
responsibilities  for  its  cooperation  with  the  Bretton  Woods  institutions,  as  well  as  the  forms  such 
cooperation might uke, with a view to achieving greater coherence in global economic policymaking. 

Page 388 

(23 

Page  389 

DECISION  ON  NOTIFICATION  PROCEDURES 

-

'

'

•

•

•• 

' 

; 

• 

. -. 

i> 

•  * 

-

Ministers  decide  to  recommend  adoption  by  the  Ministerial  Conference  of  the decision  on 

improvement  and review  of notification procedures set out  below. 

Members, 

Desiring to. improve the operation of notification procedures under the Agreement Esubl ishing 
the  World  Trade  Organization  (hereinafter  referred  to  as  the  "WTO  Agreement"),  and  thereby  to 
contribute  to  the  transparency  of  Members'  trade  policies  and  to  the  effectiveness  of  surveillance 
arrangements  esublished  to that end; 

Recalling  obligations under the WTO Agreement to publish and notify,  including  obligations 
assumed  under the terms of  specific  protocols  of  accession,  waivers,  and other agreements  entered 
into by  Members; 

Agree  as  follows: 

I. 

General  obligation  to notify 

Members affirm their commitment to obligations under the Multilateral Trade Agreements and, 

where applicable,  the  Plurilateral  Trade Agreements,  regarding  publication  and  notification. 

Members  recall  their  undertakings  set  out  in  the  Understanding  Regarding  Notification. 
Consultation,  Dispute  Settlement  and Surveillance adopted  on 28  November  1979 (BISD  26S/210). 
With regard to their underuking therein to notify,  to the maximum extent possible,  their adoption of 
trade measures affecting  the operation of GATT  1994. such notification  itself being without prejudice 
to  views  on  the  consistency  of  measures  with or their  relevance  to  rights  and  obligations  under the 
Multilateral  Trade  Agreements  and, where applicable,  the Plurilateral  Trade  Agreements.  Members 
agree to  be guided,  as appropriate,  by the annexed  list  of  measures.  Members  therefore  agree that 
the introduction or modification of such measures is subject to the notification requirements of the 1979 
Understanding. 

II. 

Central  registry  of notifications 

A central registry of notifications shall be established under the responsibility of the Secreuriat. 
While Members  will  continue to follow  existing  notification  procedures, the Secretariat shall  ensure 
that the central registry records such elements of the information provided on the measure by the Member 
concerned  as  its purpose,  its trade coverage, and the  requirement  under which  it has  been  notified. 
The central  registry  shall  cross-reference  its records of  notifications  by  Member  and obligation. 

The central registry shall inform each Member annually of the regular notification  obligations 

to which  that  Member  will  be expected  to respond  in the course of the following  year. 

.  . 

The  central  registry  shall  draw the  attention  of  individual  Members  to  regular  notification 

requirements  which  remain  unfulfilled. 

Information in the central  registry  regarding  individual  notifications  shall  be made available 

on  request to any  Member  entitled  to receive the notification  concerned. 

Page  390 

HI. 

Review  of notification  obligations  and  procedures 

The Council for Trade in Goods will undertake a review of notification obligations and procedures 
under the  Agreements  in  Annex  1A of  the WTO Agreement.  The  review  will  be  carried  out  by  a 
working  group,  membership  in which  will  be open to all  Members.  The  group will  be  esublished 
immediately  after  the date of  entry  into force  of the WTO  Agreement. 

The terms  of  reference  of  the working  group will  be: 

— 

to  undertake  a thorough  review  of  all  existing  notification  obligations  of  Members 
established  under the Agreements  in Annex  1A of the WTO Agreement,  with a view 
to simplifying.  standardizing and consolidating these obligations to the greatest extent 
practicable, as well as to improving compliance with these obligations, bearing in mind 
the overall  objective of improving  the transparency of the trade policies of  Members 
and  the effectiveness  of  surveillance  arrangements  esublished  to this  end,  and  also 
. bearing in mind the possible need of some developing country Members for assisunce 
in meeting  their notification  obligations; 

— 

to make recommendations  to the Council  for Trade in Goods not later than two years 
after  the entry  into force  of the WTO  Agreement. 

Page  391 

ANNEX 

INDICATIVE  LIST' OF NOTIFIABLE  MEASURES 

Tariffs (including range and scope of bindings, GSP provisions, rates applied to members of free-trade 
areas/customs  unions,  other preferences) 

Tariff  quotas  and surcharges 

Quantitative  restrictions,  including  voluntary  export  restraints and orderly  marketing  arrangements 
affecting  imports 

Other  non-tariff  measures  such as  licensing  and mixing  requirements;  variable  levies 

Customs  valuation 

Rules  of  origin . 

Government  procurement 

Technical* barriers 

Safeguard  actions 

Anti-dumping  actions 

Countervailing  actions 

Export  taxes 

Export  subsidies, tax  exemptions  and concessionary  export  financing 

Free-trade  zones,  including  in-bond  manufacturing 

Export  restrictions,  including  voluntary  export restraints and orderly  marketing  arrangements 

Other government  assistance,  including  subsidies, ux  exemptions 

Role  of  state-trading  enterprises 

Foreign  exchange controls  related to imports and exports 

Government-mandated  countertrade 

Any other measure covered by the Multilateral Trade Agreements in Annex 1A to the WTO Agreement 

'This  list does  not alter existing  notification  requirements in the  Multilateral  Trade  Agreements  in Annex  1A to the 

WTO  Agreement  or.  where  applicable, the  Plurilateral  Trade Agreements  in Annex 4 of the  WTO  Agreement. 

Page 392 

Page 393 

DECLARATION  ON THE  RELATIONSHIP  OF THE 
WORLD TRADE ORGANIZATION  WITH THE 
INTERNATIONAL  MONETARY  FUND 

Ministers, 

Noting the close relationship between the CONTRACTING PARTIES to the GATT  1947 and 
the International Moneury  Fund, and the provisions of the GATT  1947 governing that relationship, 
in particular  Article XV of the GATT  1947; 

Recognizing the desire of participants to base the relationship of the World Trade Organization 
with  the  International  Monetary  Fund,  with  regard  to the areas  covered  by  the  Multilateral  Trade 
Agreements in Annex  1A of the WTO Agreement, on the provisions that have governed the relationship 
of the CONTRACTING  PARTIES to the GATT  1947 with the International  Monetary  Fund; 

Hereby reaffirm that, unless otherwise provided  for  in the Final  Act. the relationship of the 
WTO with the International Moneury Fund, with regard to the areas covered by the Multilateral Trade 
Agreements in Annex  1A of the WTO Agreement, will be based on the provisions that have governed 
the relationship of the CONTRACTING PARTIES to the GATT  1947 with the International Monetary 
Fund. 

Page 394 

Page  395 

DECISION  ON  MEASURES  CONCERNING 
THE  POSSIBLE  NEGATIVE  EFFECTS  OF  THE 
REFORM  PROGRAMME  ON  LEAST-DEVELOPED  AND 
NET  FOOD-IMPORTING  DEVELOPING  COUNTRIES 

Ministers  recognize that the progressive  implemenution of the results of the Uruguay Round 
1. 
whole will generate increasing opportunities for trade expansion and economic growth to the benefit 
asa 
ill participants. 
of  all  participants 

2. 
Ministers recognize that during the reform programme leading to greater liberalization of trade 
in agriculture  least-developed and net food-importing  developing  countries may experience  negative 
effects  in terms  of  the availability  of adequate supplies  of basic  foodstuffs  from  external  sources on 
reasonable terms and conditions, including short-term difficulties in financing normal levels of commercial 
impons  of  basic  foodstuffs. 

3. 
Ministers accordingly agree to esublish appropriate mechanisms to ensure that the implemenution 
of the results of  the Uruguay Round on trade in agriculture does not adversely  affect  the availability 
of  food  aid at a level  which  is sufficient  to continue to provide assisunce  in meeting  the food  needs 
of developing countries, especially  least-developed and net food-importing  developing  countries.  To 
this end Ministers  agree: 

(i) 

(ii) 

to review the level of food aid esublished periodically by the Comminee on Food Aid 
under  the  Food  Aid  Convention  1986 and to initiate  negotiations  in the appropriate 
forum  to establish  a level  of  food  aid commitments  sufficient  to meet the  legitimate 
needs  of  developing  countries  during the reform programme; 

to adopt guidelines to ensure that an increasing proportion of basic foodstuffs  is provided 
to least-developed and net food-importing developing countries in fully grant form and/or 
on  appropriate  concessional  terms  in  line  with  Article  IV  of  the  Food  Aid 
Convention  1986; 

(iii) 

to  give  full  consideration  in the context of their aid programmes  to  requests for the 
provision of technical and financial assisunce to least-developed and net food-importing 
developing  countries  to improve their agricultural  productivity  and  infrastructure. 

4. 
Ministers further agree to ensure that any agreement relating to agricultural export credits makes 
appropriate  provision  for  differential  treatment  in favour of  least-developed and net  food-importing 
developing  countries. 

5. 
Ministers  recognize  that as a result of the Uruguay Round  certain developing  countries may 
experience  short-term  difficulties  in  financing  normal  levels  of  commercial  imports  and  that  these 
countries may be eligible to draw on the resources of international financial  institutions under existing 
facilities,  or such facilities as may be established,  in the context of adjustment programmes,  in order 
to address such financing difficulties.  In this regard  Ministers uke note of paragraph 37 of the report 
of  the  Direaor-General  to  the  CONTRACTING  PARTIES  to  GATT  1947  on his consulutions with  the 
Managing  Direaor  of  the  International  Moneury  Fund  and  the  President  of  the  World  Bank 
(MTN.GNG/NG14/W/35). 

The provisions of this Decision will be subject to regular review by the Ministerial Conference, 
6. 
and the follow-up to this Decision shall be monitored, as appropriate, by the Committee on Agriculture. 

Page 396 

DECISION  ON NOTIFICATION  OF FIRST INTEGRATION  UNDER 
ARTICLE 2.6  OF THE AGREEMENT  ON TEXTILES  AND CLOTHING 

Page 397 

Ministers agree that the participants mainuining restrictions falling under paragraph 1 of Article 2 

of the Agreement on Textiles and Clothing shall notify  hill deuils of the actions to be uken pursuant 
to paragraph 6 of Anicle 2 of that Agreement to the GATT Secreuriat not later than 1  October  1994. 
The GATT Secreuriat shall promptly circulate these notifications to the other participants for information. 
These notifications will be made available to the Textiles Monitoring Body, when esublished, for the 
purposes of paragraph  21 of Article 2 of the Agreement  on Textiles and Clothing. 

Page 398 

Page  399 

DECISION  ON  PROPOSED  UNDERSTANDING 
ON  WTO-ISO  STANDARDS  INFORMATION  SYSTEM 

Ministers decide  to recommend  that the Secreuriat  of  the World  Trade  Organization  reach 
an  undersunding  with  the  International  Organization  for  Standardization  ("ISO")  to  esublish  an 
information  system under which: 

1. 

2. 

3. 

4. 

ISONET  members  shall  transmit  to the ISO/IEC  Information  Centre  in Geneva the 
notifications  referred to in paragraphs C and J of the Code of Good Practice  for the 
Preparation, Adoption and Application of Standards in Annex 3 to the Agreement  on 
Technical  Barriers to Trade,  in the manner  indicated there; 

the  following  (alpha)numeric  classification  systems  shall  be  used  in  the  work 
programmes  referred  to in paragraph J: 

(a) 

(b) 

a standards  classification system which would .allow sundardizing  bodies to 
give for each standard mentioned  in the work programme  an (alpha)numeric 
indication of  the subject maner; 

a stage  code system which would allow sundardizing bodies to give for each 
standard  mentioned  in the work programme  an (alpha)numeric  indication of 
the stage of development of the standard;  for this purpose, at least five suges 
of development  should be distinguished:  (1) the suge  at which the  decision 
to develop a standard has been uken,  but technical  work has not yet begun; 
(2)  the  stage  at  which  technical  work  has  begun,  but  the  period  for  the 
submission of comments has not yet started;  (3) the suge at which the period 
for the submission of comments has surted, but has not yet been completed; 
(4) the  stage  at which  the period  for  the submission  of  comments  has been 
completed,  but  the sundard  has not  yet  been adopted;  and  (5) the suge  at 
which the standard has been adopted; 

(c ) 

an identification system covering all international standards which would allow 
standardizing  bodies  to  give  for  each  sundard  mentioned  in  the  work 
programme an (alpha)numeric indication of the international standard(s) used 
as a basis; 

the  ISOflEC  Information  Centre  shall  promptly  convey  to the  Secreuriat  copies  of 
any notifications  referred to in paragraph C of the Code of Good  Practice;  -

the  ISO/IEC  Information  Centre shall  regularly publish the information  received  in 
the notifications  made to it under paragraphs C and J of the Code of  Good Practice; 
this  publication,  for  which  a reasonable  fee  may  be  charged,  shall  be  available  to 
ISONET members  and through the Secreuriat  to the Members  of  the WTO. 

Page  400 

DECISION  ON  REVIEW  OF  THE  ISC  mc 
INFORMATION  CENTRE  PUBLICATION 

Ministers decide that in conformity with paragraph 1 of Article  13 of the Agreement on Technical 
Barriers  to  Trade  in- Annex  1A  of  the  Agreement  Esublishing  the  World  Trade  Organization,  the 
Committee on Technical Barriers to Trade esublished thereunder shall, without prejudice to provisions 
on  consulution  and dispute  senlement,  at least  once  a year  review  the publication  provided  by  the 
ISO/IEC Information Centre on infonnation received according to the Code of Good Practice for the 
Preparation,  Adoption  and Application  of  Standards  in Annex  3  of  the Agreement,  for  the  purpose 
of affording  Members  opportunity  of discussing  any matters  relating to the operation of that Code. 

In order  to  faciliute  this  discussion,  the  Secreuriat  shall  provide  a  list  by  Member  of  all 
sundardizing  bodies  that have accepted the Code, as well  as a list of those sundardizing  bodies that 
have accepted  or withdrawn from the Code since the previous  review. 

The Secreuriat shaU also distribute promptly to the Members copies of the notifications it receives 

from  the ISO/IEC Information  Centre. 

DECISION  ON  ANH-CIRCUMVENTION 

Page  401 

Ministers, 

Noting  that while the problem  of  circumvention  of  anti-dumping  duty measures  formed  pan 
of the negotiations  which preceded  the Agreement  on Implementation of  Anicle  VI of  GATT  1994. 
negotiators  were unable to agree on specific  text. 

Mindful of the desirability of the applicability of uniform rules in this area as soon as possible. 

Decide  to refer this matter to the Committee on Anti-Dumping Practices established under that 

Agreement  for  resolution. 

Page 402 

DECISION  ON REVIEW  OF ARTICLE  17.6 OF THE 
AGREEMENT  ON IMPLEMENTATION  OF ARTICLE VI OF THE 
GENERAL  AGREEMENT  ON TARIFFS AND TRADE 1994 

Ministers decide as follows: 

The sundard of review in paragraph 6 of Article  17 of the Agreement on Implemenution of 
Article VI of GATT  1994 shall be reviewed after a period of three years with a view to considering 
the question of whether it is capable of general application. 

Page  403 

DECLARATION  ON  DISPUTE  SETTLEMENT  PURSUANT  TO  THE  AGREEMENT 
ON IMPLEMENTATION  OF  ARTICLE  VI  OF  THE  GENERAL  AGREEMENT  ON 
TARIFFS  AND TRADE  1994 OR  PART  V  OF  THE  AGREEMENT 
ON  SUBSIDIES  AND  COUNTERVAILING  MEASURES 

Ministers  recognize,  with  respect  to  dispute  senlement  pursuant  to  the  Agreement  on 
Implemenution of Article VI of GATT 1994 or Part V of the Agreement on Subsidies and Countervailing 
Measures, the need for the consistent resolution of disputes arising from anti-dumping and countervailing 
dutv  measures. 

Page 404 

(2( 

Page  405 

DECISION  REGARDING  CASES  WHERE  CUSTOMS 
ADMINISTRATIONS  HAVE  REASONS  TO  DOUBT  THE  TRUTH 
OR  ACCURACY  OF THE  DECLARED  VALUE 

Ministers  invite  the  Committee  on  Customs  Valuation  established  under  the  Agreement  on 

Implemenution  of  Article  VII  of  GATT  1994  to take the following  decision: 

The Committee on  Customs Valuation, 

Reaffirming that the transaction value is the primary basis of  valuation  under the  Agreement 

on  Implemenution  of  Article  VII of  GATT  1994  (hereinafter  referred  to as the  "Agreement"); 

Recognizing  that  the  customs  administration  may  have  to address  cases  where  it  has  reason 
to doubt  thé  truth  or accuracy  of  the particulars  or of  documents  produced  by  traders  in support  oi 
a  declared  value; 

Emphasizing  that  in so doing  the customs  administration  should  not  prejudice  the  legitimate 

commercial  interests  of  traders; 

Taking into account Article  17 of the Agreement, paragraph 6 of Annex III to the Agreement, 

and  the  relevant  decisions  of  the Technical  Committee  on Customs  Valuation: 

Decides  as  follows: 

When  a declaration  has been presented  and where  the customs  administration  has  reason  to 
1. 
doubt the truth or accuracy of the particulars or of documents produced in support of this declaration, 
the customs administration  may ask the importer to provide further explanation,  including  documents 
or other evidence,  that the declared  value represents the total  amount actually  paid or payable for the 
imported  goods,  adjusted  in accordance  with  the provisions  of  Article  8.  If.  after  receiving  further 
information,  or  in the  absence  of  a response,  the customs  administration  still  has  reasonable  doubts 
about the truth or accuracy of the declared value, it may. bearing in mind the provisions of Article  11. 
be deemed  that the customs  value  of  the  imported  goods  cannot be determined  under  the  provisions 
of  Article  1.  Before  taking  a final decision,  the  customs  administration  shall  communicate  to  the 
importer,  in writing  if  requested,  its grounds for doubting  the truth or accuracy  of the particulars or 
documents  produced  and the  importer  shall  be given  a reasonable  opportunity  to  respond  When a 
final decision  is  made,  the  customs  administration  shall  communicate  to  the  importer  in  writing  its 
decision  and  the grounds  therefor. 

It is entirely appropriate in applying the Agreement  for one Member to assist another Member 

2 
on  mutually  agreed terms. 

Page  406 

DECISION  ON  TEXTS  RELATING  TO  MINIMUM  VALUES  AND  IMPORTS 
BY  SOLE  AGENTS,  SOLE  DISTRIBUTORS  AND  SOLE  CONCESSIONAIRES 

Ministers decide to refer the following texts to the Comminee on Customs Valuation established 

under the  Agreement  on Implemenution  of  Article  VII of  GATT  1994,  for  adoption. 

Where a developing country makes a reservation to reuin officially esublished minimum values 
within the terms of paragraph 2 of Annex III and shows good cause, the Committee shall give the request 
for  the  reservation  sympathetic  consideration. 

Where, a reservation  is consented  to, the terms  and conditions  referred  to  in paragraph  2  of 
Annex III shall take full account of the development, financial and trade needs of the developing country 
concerned. 

II 

1. 
A  number  of  developing  countries  have  a concern that problems  may  exist  in the  valuation 
of imports by sole agents, sole distributors and sole concessionaires.  Under paragraph  1 of Article  20, 
developing  country  Members have a period of delay of up to five years prior to the application of the 
Agreement.  In this context, developing country Members availing themselves pf this provision could 
use the period to conduct appropriate studies and to take such other actions as are necessary to facilitate 
application. 

2. 
In consideration of this, the Committee  recommends  that the Customs  Co-operation  Council 
assist  developing  country  Members,  in accordance with the provisions of Annex II, to formulate and 
conduct studies in areas identified as being of potential concern, including those relating to imporutions 
by  sole  agents,  sole  distributors  and sole  concessionaires. 

DECISION  ON  INSTITUTIONAL  ARRANGEMENTS 
FOR  THE  GENERAL  AGREEMENT  ON  TRADE  IN  SERVICES 

Page 407 

Ministers decide to recommend that the Council for Trade in Services at its first meeting adopt 

the decision  on subsidiary  bodies  seC out  below. 

The Council for  Trade in  Services, 

Aaing  pursuant to Article  30É1V with a view  to faciliuting  the operation and furthering  the 

objectives  of  the General  Agreement  on Trade  in Services, 

Decides  as  follows: 

1. 
Any  subsidiary  bodies that the Council  may esublish  shall  report to the Council  annually or 
more  often  as necessary.  Each such body  shall  establish its own rules of procedure,  and may  set up 
its own  subsidiary  bodies  as appropriate. 

2 
Any  sectoral  committee  shall  cany- out  responsibilities  as assigned  to it by the Council,  and 
shall afford Members the opportunity to consult on any matters relating to trade in services in the sector 
concerned and the operation of the sectoral annex to which it may pertain.  Such responsibilities shall 
include: 

(a) 

(b) 

(c) 

(d » 

(e) 

to  keep under  continuous  review  and surveillance  the application  of  the  Agreement 
with  respect  to the sector  concerned; 

to  formulate  proposals  or  recommendations  for  consideration  by  the  Council  in 
connection  with am  matter  relating  to trade  in the sector concerned; 

if there  is an annex pertaining  to the sector,  to consider proposals for amendment  of 
that  sectoral  annex,  and to make  appropriate  recommendations  to the Council; 

to provide a forum for technical discussions, to condua studies on measures of Members 
and to conduct examinations of any other technical matters affecting  trade in services 
in the  sector  concerned. 

to provide technical assisunce to developing country Members and developing countries 
negotiating  accession  tfrthe  Agreement  Establishing  the World  Trade  Organization 
in respect of the application of obligations or other matters affecting  trade in services 
in the sector  concemed;  and 

(0 

to cooperate with any other subsidiary bodies established under the General Agreement 
on Trade in Services or any international organizations active in any sector concerned. 

There  is hereby esublisheo^^ftnmittee  on Trade in Financial  Services  which will  have the 

3. 
responsibilities  listed  in paragraph 2. v 

'

*

$

%

;• 

Page 408 

DECISION  ON CERTAIN DISPUTE SETTLEMENT  PROCEDURES 
FOR THE GENERAL  AGREEMENT  ON TRADE IN SERVICES 

Ministers decide to recommend that the Council for Trade in Services at its first meeting adopt 

the decision set out below. 

77ie Council for  Trade in  Services, 

Taking  into account the  specific  nature of  the obligations  and  specific  commitments  of the 
Agreement, and of trade in services, with respect to dispute settlement under Articles XXII and XXIII, 

Decides as  follows: 

1. 

A roster  of panelists shall be esublished  to assist  in the selection of panelists. 

2.  . 
To this end. Members may suggest names of individuals possessing the qualifications  referred 
•  in paragraph 3 for inclusion on the roster, and shall provide a curriculum vitae of their qualifications 

eluding, if applicable,  indication of sector-specific  expertise. 

3. 
Panels shall be composed of well-qualified govemmenul and/or non-governmenul individuals 
who have  experience  in issues  related  to the General  Agreement  on Trade  in Services  and/or  trade 
in services, including associated regulatory matters.  Panelists shall serve in their individual capacities 
and  not as represenutives  of any government  or organisation. 

Panels  for  disputes  regarding  sectoral matters  shall have the necessary  expertise  relevant  to 

4. 
the specific  services  sectors which the dispute concerns. 

The Secrets:-.21 shall  maintain  the roster and shall develop procedures  for  its administration 

consultation  with the Chairman  of the Council. 

DECISION  ON TRADE IN SERVICES AND THE ENVIRONMENT 

Page 409 

Ministers decide to recommend that the Council for Trade in Services at its first meeting adopt 

the decision set out below. 

The  Council for  Trade in  Services, 

Acknowledging  that  measures  necessary  to  protect  the  environment  may  conflict  with  the 

provisions  of the Agreement;  and 

Noting that since measures necessary to protect the environment typically have as their objective 
the protection of human,  animal  or plant  life or health,  it is not clear that there is a need to provide 
for  more than  is contained  in paragraph (b) of Article XIV; 

Decides as follows: 

In order to determine whether any modification  of Article XIV of the Agreement  is required 
1. 
to uke  account  of such measures, to request  the Committee  on Trade and  Environment  to examine 
and report, with recommendations if any, on the relationship between services trade and the environment 
including the issue of sustainable development.  The Committee  shall also examine the relevance of 
inter-governmental  agreements  on the environment  and their  relationship to the Agreement. 

2. 
The Committee shall report the results of its work to the first biennial meeting of the Ministerial 
Conference  after  the entry  into force  of the Agreement  Establishing  the World Trade  Organization. 

Page  410 

DECISION  ON  NEGOTIATIONS  ON  MOVEMENT  Ol  NATURAL  PERSONS 

Ministers, 

Noting the commitments  resulting from the Uruguay Round negotiations on the movement  of 

natural  persons  for  the purpose  of  supplying  services; 

Mindful of the objectives of the General Agreement on Trade in Services, including the increasing 
participation  of  developing  countries  in trade  in services  and the expansion  of  their service  exports; 

Recognizing  the  importance  of achieving  higher  levels  of  commitments  on the movement  of 
natural  persons,  in order to provide  for a balance of benefits  under the General  Agreement  on Trade 
in Services; 

Decide  as  follows: 

1. 
Negotiations on further liberalization of movement of natural persons for the purpose of supplying 
services  shall  continue  beyond  the  conclusion  of  the  Uruguay  Round,  with  a view  to  allowing  the 
achievement  of  higher levels of commitments  by participants under the General Agreement  on Trade 
in  Services. 

A Negotiating Group on Movement of Naniral Persons is esublished to carry out the negotiations. 
2. 
The group shall  establish  its own procedures and shall  report periodically to the Council  on Trade in 
Services. 

* 

The  negotiating  group shall  hold  its first negotiating  session  no  later than  16 May  1994.  It 
3. 
shall  conclude  these  negotiations  and produce  a final report  no  later than six  months  after  the entry 
into  force  of  the  Agreement  Establishing  the World Trade  Organization. 

Commitments  resulting  from these negotiations shall be inscribed  in Members'  Schedules  of 

4. 
specific  commitments. 

Page 411 

DECISION  ON  FINANCIAL  SERVICES 

Ministers, 

Noting that commitments  scheduled  by participants on financial  services  at the conclusion  of 
the  Uruguay  Round  shall  enter  into  force  on  an  MFN  basis  at  the  same  time  as  the  Agreement 
Establishing  the World  Trade Organization  (hereinafter  referred  to as the  "WTO Agreement"), 

Decide  as  follows: 

1. 
At the conclusion of a period ending no later than six months after the" date of entry into force 
of  the WTO  Agreemenr,  Members  shall  be free  to improve,  modify  or withdraw all  or part  of  their 
commitments in mis sector without offering compensation, notwithstanding the provisions of Article XXI 
of the General Agreement on Trade in Services.  At the same time Members shall finalize their positions 
relating  to MFN  exemptions  in this sector, notwithstanding the provisions of the Annex on Article II 
Exemptions.  From the date of entry into force of the WTO Agreement and until the end of the period 
referred to above, exemptions listed in the Annex on Article  II Exemptions which are conditional upon 
the level  of commitments  undertaken by other participants or upon exemptions  by other participants 
will  not  be applied. 

2. 
The Committee  on Trade in Financial  Services shall monitor the progress of any negotiations 
undertaken under the ten  .s of this Decision and shall report thereon to the Council for Trade in Services 
no  later than four  months  after  the date of  entry  into force  of  the WTO Agreement. 

Page 412 

DECISION  ON  NEGOTIATIONS  ON  MARITIME  TRANSPORT  SERVICES 

Ministers, 

Noting  that  commitments  scheduled  by  participants  on  maritime  transport  services  at  the 
conclusion  of  the  Uruguay  Round  shall  enter  into  force  on  an MFN  basis  at  the  same  tune  as  the 
Agreement Esublishing the World Trade Organization (hereinafter refened to as the "WTO Agreement"), 

Decide  as  follows: 

Negotiations shall be entered into on a volunury basis in the seaor of maritime transport services 
1. 
within  the  framework  of  the  General  Agreement  on  Trade  in  Services.  The  negotiations  shall  be 
comprehensive in scope, aiming at commitments in international shipping, auxiliary services and access 
to and use  of port  facilities,  leading  to the elimination  of  restrictions  within a fixed time  scale. 

A Negotiating Group on Maritime Transport Services (hereinafter referred to as the "NGMTS " ) 

2. 
is esublished to carry out this mandate.  The NGMTS shall report periodically on the progress of these 
negotiations. 

3. 
The negotiations in the NGMTS shall be open to all governments and the European Communities 
which announce their intention to participate.  To date, the following  have announced  their intention 
to uke  part in the negotiations: 

Argentina,  Canada,  European Communities  and their member  Sûtes.  Finland.  Hong  Kong. 
Iceland.  Indonesia,  Korea.  Malaysia,  Mexico,  New  Zealand.  Norway,  Philippines.  Poland. 
Romania,  Singapore,  Sweden.  Switzerland,  Thailand,  Turkey,  United  States. 

Further  notifications  of  intention  to  participate  shall  be  addressed  to  the  depositary  of  the  WTO 
Agreement. 

4. 
The NGMTS shall hold its first negoi^ung session no later than 16 May 1994.  It shall conclude 
these negotiations  and make  a final report no later than June  1996.  The final report of the  NGMTS 
shall  include  a date  for  the  implementation  of  results of  these  negotiations. 

5. 
Until  the  conclusion  of  the  negotiations  Article  II and paragraphs  1 and 2  of  the  Annex  on 
Article  II Exemptions  are suspended  in their application to this sector,  and  it  is not necessary  to  list 
MFN  exemptions.  At the conclusion of the negotiations. Members  shall  be free to improve,  modify 
or  withdraw  any  commitments  made  in  this  sector  during  the  Uruguay  Round  without  offering 
compensation,  notwithstanding  the  provisions  of  Article  XXI  of  the  Agreement.  At  the  same  time 
Members shall  finalize  their positions relating to MFN exemptions  in this sector, notwithstanding the 
provisions of the Annex on Anicle  II Exemptions.  Should  negotiations not succeed,  the Council  for 
Trade in Services shall  decide whether to continue the negotiations  in accordance  with this mandate. 

6. 
Any commitments  resulting from the negotiations, including the date of their entry into force, 
shall  be  inscribed  in the  Schedules  annexed to the General  Agreement  on Trade  in Services  and  be 
subject  to all  the provisions  of  the  Agreement. 

7. 
Commencing  immediately and continuing until the implemenution date to be determined under 
paragraph 4,  it is understood  that participants shall not apply any measure affecting  trade in maritime 
transport  services  except  in  response  to  measures  applied  by  other  countries  and  with  a  view  to 
maintaining or improving the freedom of provision of maritime transport services, nor in such a manner 
as  would  improve  their  negotiating  position and leverage. 

(27) 

The  implementation  of  paragraph  7  shall  be  subject  to  surveillance  in  the  NGMTS.  Any 
8. 
participant may bring to the attention of the NGMTS any action or omission  which  it believes  to be 
rélevant to the fulfilment  of paragraph 7.  Such notifications  shall  be deemed  to have been submitted 
to the  NGMTS  upon their  receipt  by the  Secretariat. 

Page  413 

Page  414 

DECISION  ON  NEGOTIATIONS  ON  BASIC  TCL£COMMUNICATIONS 

Ministers  decide  as  follows: 

1. 
'Negotiations  shall  be  entered  into  on  a  voluntary  basis  with  a  view  to  the  progressive 
liberalization of trade in telecommunications  transport networks and services  (hereinafter  referred  to 
as "basic telecommunications")  within the framework of the General Agreement or. Trade in Services. 

Without  prejudice  to  their outcome,  the negotiations  shall  be  comprehensive  in scope,  with 

2. 
no basic  telecommunications  excluded a  priori. 

•3. 
A  Negotiating  Group on Basic Telecommunications  (hereinafter  referred  to as the  "NGBT") 
is established to carry out this mandate.  The NGBT shall report periodically  on the progress of these 
negotiations. 

4. 
The negotiations in the NGBT shall be open to all governments and the European Communities 
which announce their  intention to participate.  To date, the following  have announced their intention 
to take  part  in the  negotiations: 

Australia.  Austria. Canada. Chile, Cyprus, European Communities and their member States. 
Finland. Hong Kong. Hungary. Japan. Korea, Mexico, New Zealand, Norway, Slovak Republic. 
Sweden,  Switzerland.  Turkey,  United  Sûtes. 

Further notifications  of  intention to participate shall be addressed to the depositary  of the Agreement 
Establishing  the World  Trade  Organization. 

5. 
The NGBT shall hold its first negotiating session no later than 16 May  1994.  It shall conclude 
these negotiations and make a final report no later than 30  April  1996.  The final report of the NGBT 
shall  include  a date  for  the  implementation  of  results of  these  negotiations. 

6. 
Any commitments  resulting from the negotiations, including the date of their entry into force, 
shall  be inscribed  in the Schedules annexed to the General  Agreement  on Trade in Services and shall 
be  subject  lo all  the provisions  of  the Agreement. 

7. 
Commencing  immediately and continuing until the implemenution date to be determined under 
paragraph  5.  it  is  understood  that  no  participant  shall  apply  any  measure  affecting  trade  in  basic 
telecommunications  in such a manner as would  improve  its negotiating  position  and leverage.  It  is 
understood that this provision shall not prevent the pursuit of commercial and govemmenul arrangements 
regarding  the provision  of  basic  telecommunications  services. 

The implemenution of paragraph 7 shall be subjea to surveillance in the NGBT.  Any participant 
8. 
may bring to the attention of the NGBT any action or omission which it believes to be relevant to the 
fulfilment  of paragraph  7.  Such notifications  shall  be deemed to have been submitted  to the NGBT 
upon their  receipt  by the  Secreuriat. 

DECISION  ON  PROFESSIONAL  SERVICES 

Page  415 

Ministers decide to recommend that the Council for Trade in Services at its first meeting adopt 

the decision  set  out  below. 

77?* Council for  Trade in  Services, 

Recognizing the impact of regulatory measures relating to professional qualifications, technical 

standards  and licensing  on the expansion  of  trade  in professional  services; 

Desiring  to  esublish  multilateral  disciplines  with  a  view  to  ensuring  that,  when  specific 
commitments  are undertaken, such regulator}- measures do not constitute unnecessary barriers to the 
supply  of  professional  services; 

Decides  as  follows: 

The work programme  foreseen  in paragraph 4  of Article VI on Domestic  Regulation  should 
1. 
be  put  into  effect  immediately.  To  this  end,  a  Working  Party  on  Professional  Services  shall  be 
established  to examine  and report, with recommendations,  on the disciplines necessary to ensure that 
measures  relating  to  qualification  requirements  and  procedures,  technical  standards  and  licensing 
requirements  in the field of  professional  services do not  constitute unnecessary  barriers to trade. 

2. 
As  a matter of  priority,  the Working  Party shall  make  recommendations  for the  elaboration 
of  multilateral  disciplines  in  the  accountancy  sector,  so  as  to  give  operational  effect  to  specific 
commitments.  In making  these  recommendations,  the Working  Party shall  concentrate on: 

(a) 

(b) 

developing multilateral disciplines relating to market access so as to ensure that domestic 
regulatory  requirements  are:  (/) based on objective and transparent  criteria,  such as 
competence  and  the  ability  to  supply  the  service;  (ii)  not  more  burdensome  than 
necessary  to  ensure  the  quality  of  the  service,  thereby  faciliuting  the  effective 
liberalization  of  accountancy  services; 

the use of international  standards and, in doing so,  it shall encourage the cooperation 
with  the  relevant  international  organizations  as  defined  under  paragraph  5(b)  of 
Anicle  VI.  so  as to give  full  effea  to paragraph 5 of  Anicle  VII; 

(c ) 

facilitating  the effective  application of paragraph 6 of Anicle VI of the Agreement by 
establishing  guidelines  for the recognition of  qualifications. 

In  elaborating  these  disciplines,  the  Working  Pany  shall  uke  account  of  the  importance  of  the 
governmental  and non-governmental  bodies  regulating professional  services. 

Page 416 

DECISION  ON  ACCESSION  TO  THE 
AGREEMENT  ON  GOVERNMENT  PROCUREMENT 

Page  417 

Ministers invite the Committee  on Government Procurement  esublished under the Agreement 

1. 
on Government Procurement in Annex 4(b) of- the Agreement Esublishing the World Trade Organization 
to clarify  that: 

(a) 

a Member  interested  in accession  according  to paragraph  2  of  Article  XXIV  of  the 
Agreement on Government Procurement would communicate its interest to the Director-
General of .the WTO, submitting  relevant  information,  including a coverage offer  for 
incorporation in Appendix  I having regard to the relevant provisions of the Agreement, 
in particular  Anicle  I and.  where appropriate,  Anicle  V; 

(b) 

.  the communication  would  be circulated  to  Parties  to the  Agreement: 

(c) 

(d) 

(e) 

(f) 

the Member  interested  in accession  would  hold  consultations  with  the Parties on the 
terms  for  its accession  to the  Agreement: 

with a view  to facilitating  accession,  the Committee  would establish a working party 
if the Member  in question,  or any of the Panies to the Agreement,  so requests.  The 
working pany should examine:  (i)  the coverage offer made by the applicant Member; 
and  (//')  relevant  information peruining to export opportunities  in the markets of the 
Parties, taking into account the existing and potential export capabilities of the applicant 
Member and export opportunities for the Parties in the market of the applicant Member: 

upon  a decision  by  the  Committee  agreeing  to  the  terms  of  accession  including  the 
coverage lists of the acceding  Member, the acceding  Member  would deposit  with the 
Director-General  of  the  WTO an instrument  of  accession  which  states  the  terms  so 
agreed.  The acceding Member's coverage lists in English. French and Spanish would 
be appended  to the Agreement; 

prior  to  the  date  of  entry  into  force  of  the  WTO  Agreement,  the  above  procedures 
would apply mutatis mutandis to contracting parties to the GATT  1947  interested  in 
accession, and the tasks assigned to theDirector-General  of the WTO would be carried 
out  by the  Director-General  to the CONTRACTING  PARTIES  to the GATT  1947. 

It is noted that Comminee  decisions are arrived at on the basis of consensus.  It is also noted 

2. 
that the non-application  clause  of  paragraph  11 of  Article  XXIV  is  available  to any  Party. 

Page 418 

Page  419 

DECISION  ON  THE  APPLICATION  AND  REVIEW  OF  THE  UNDERSTANDING 
ON  RULES  AND  PROCEDURES  GOVERNING  THE  SETTLEMENT  OF  DISPUTES 

Ministers, 

Recalling the Decision of 22 February 1994 that existing rules and procedures of GATT  1947 
in the field of dispute settlement shall remain in effect until the date of entry into force of the Agreement 
Esublishing  the World  Trade Organization, 

Invite the relevant  Councils and Committees  to decide that they shall remain in operation for 
the purpose of dealing  with any dispute for which thé request for consulution  was made  before that 
date: 

Invite the  Ministerial  Conference  to complete  a full  review  of  dispute  settlement  rules  and 
procedures  under  the  World  Trade  Organization  within  four  years  after  the entry  into  force  of  the 
Agreement .Esublishing  the World Trade Organization, and to uke  a decision on the occasion of  its 
first  meeting after the completion of the review, whether to continue, modify or terminate such dispute 
settlement  rules  and procedures. 

Page 420 

UNDERSTANDING  ON  COMMITMENTS  IN  FINANCIAL  SERVICES 

Page 421 

Participants  in the Uruguay  Round  have been enabled  to uke  on specific  commitments  with 
respect to financial  services  under the General  Agreement  on Trade in Services  (hereinafter  referred 
to  as  the  "Agreement")  on the basis of  an alternative  approach to that  covered  by the  provisions  of 
Part III of the Agreement.  It was agreed that this approach could be applied  subject  to the  following 
undersunding: 

(i) 

it does  not  conflict  with the provisions  of  the  Agreement; 

(ii) 

it does  not prejudice  the right of  any  Member  to schedule  its specific  commitments 
in accordance  with the approach under Part III of  the  Agreement: 

(iii) 

resulting  specific  commitments  shall  apply  on a most-favoured-nation  basis: 

(iv) 

no presumption has been created as to the degree of liberalization to which a Member 
is committing  itself under the Agreement. 

Interested Members,  on the basis of negotiations, and subject to conditions and qualifications. 
where  specified,  have  inscribed  in their schedule  specific  commitments  conforming  to the approach 
set  out  below. 

A. 

x  Standstill 

Any conditions, limitations and qualifications to the commitments  noted below shall be limited 

to existing  non-conforming  measures. 

B. 

Market  Access 

Monopoly  Rights 

1. 

In addition to  Article  VIII of the Agreement,  the following  shall  apply: 

Each Member shall list in its schedule pertaining to financial services existing monopoly rights 
and shall endeavour to eliminate mem or reduce their scope.  Notwithstanding subparagraph  1(b) 
of  the  Annex  on  Financial  Services,  this  paragraph  applies  to  the  activities  referred  to  in 
subparagraph  l(b)(iii)  of  the  Annex. 

Financial Services purchased  by  Public Entities 

Notwithstanding Article XIII of the Agreement, each Member shall ensure that financial service 
2. 
suppliers of any other Member established in its territory are accorded most-favoured-nation treatment 
and national  treatment  as  regards the purchase or acquisition of  financial  services  by public  entities 
of  the Member  in its territory. 

Cross-border  Trade 

3. 
Each Member shall permit non-resident suppliers of financial services to supply, as a principal, 
through an intermediary  or as an intermediary,  and under terms and conditions  that accord  national 
treatment,  the following  services: 

Page  422 

(a) 

insurance  of risks relating to: 

(i) 

maritime  shipping  and commercial  aviation and space launching  and  freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods and any liability 
arising  therefrom;  and 

(ii) 

goods  in international  transit; 

(b) 

i... 

reinsurance  and retrocession  and the services  auxiliary to insurance as  referred  to in 
subparagraph  5(a)(iv)  of  the  Annex; 

provision and transfer of financial information and financial data processing as referred 
to  in subparagraph  5(a)(xv)  of the Annex  and advisory  and other auxiliary' services. 
excluding  intermediation,  relating to banking and other financial  services as referred 
to  in subparagraph  5(a)(xvi)  of  the Annex. 

Each Member  shall  permit  its  residents to purchase in the territory of any other Member  the 

4. 
financial  services  indicated  in: 

(a) 

subparagraph  3(a); 

•'b)  "  subparagraph  3(b);  and 

ic) 

subparagraphs  5(a)(v)  to  (xyi) of the  Annex. 

Commercial  Presence 

5. 
Each Member shall grant financial service suppliers of any other Member the right to esublish 
or expand  within its territory.  including  through the acquisition of existing  enterprises, a commercial 
presence. 

6. 
A Member may impose terms. conditions and procedures for authorization of the esublishment 
and •;'•..;  msion of a commercial  presence in so far as they do not circumvent the Member's  obligation 
un. 

paragraph 5  and they  are consistent  with the other obligations  of  the  Agreement. 

New  Financial Services 

A Member shall permit financial service suppliers of any other Member established in its territory 

1. 
to offer  in its territory  any  new  financial  service. 

Transfers of Information and  Processing  of Information 

8. 
No  Member  shall  uke  measures  that prevent  transfers  of  information  or  {he processing  of 
financial  information,  including transfers of data by electronic means, or that, subjea to importation 
rules  consistent  with  international  agreements,  prevent transfers of equipment, where such transfers 
of  information,  processing  of  financial  information  or transfers  of  equipment  are  necessary  for  the 
conduct  of  the ordinary  business  of a financial  service supplier.  Nothing  in this paragraph  restricts 
the right of a Member to protect persona) data, personal privacy and the confidentiality  of  individual 
records and accounts so long as such right is not used to circumvent the provisions of the Agreement. 

Page  423 

Temporary Entry of Personnel 

9. ' 

(a) 

Each Member shall permit temporary entry into its territory of the following personnel 
of a financial service supplier of any other Member that is esublishing or has esublished 
a  commercial  presence  in the territory of  the Member: 

(i) 

senior  managerial  personnel  possessing  proprietary  information  essential  to 
the esublishment, control and operation of the services of the financial  service 
supplier;  and 

(ii) 

specialists  in the operation of  the financial  service  supplier. 

(b) 

Each  Member  shall  permit,  subjea  to  the  availability  of  qualified  personnel  in  its 
territory, temporary entry into its territory of the following personnel associated with 
a  commercial  presence  of a financial  service supplier of any other Member: 

(i) 

specialists  in computer services, telecommunication services and accounts of 
the financial service  supplier;  and 

(ii) 

actuarial  and legal  specialists. 

Non-discriminùory  Measures 

Each Member shall endeavour to remove or to limit any significant adverse effects on financial 

10. 
service  suppliers  of  any other Member  of: 

(a) 

(b) 

(c) 

(d) 

non-discriminatory measures that prevent financial  service suppliers from offering  in 
the Member's territory, in the form daermined by the Member, all the financial services 
permitted  by the Member; 

non-discriminatory measures that limit the expansion of the aaivities of financial service 
suppliers  into the entire  territory of the Member; 

measures of a Member, when such a Member applies the same measures to the supply 
of  both banking and securities  services,  and a financial  service supplier of  any other 
Member  concentrates  its activities  in the provision of  securities  services;  and 

other  measures  that,  although  respecting  the  provisions  of  the  Agreement,  affect 
adversely  the ability  of  financial  service  suppliers  of  any  other  Member  to operate, 
compete  or enter the  Member's  market; 

provided  that any action uken  under this paragraph would  not unfairly  discriminate  against 
financial  service  suppliers of the  Member uking  such action. 

11.  With respect to the non-discriminatory measures  referred to in subparagraphs  10(a) and (b), 
a  Member  shall  endeavour not to limit or restrict the present degree of market opportunities  nor the 
benefits already enjoyed by financial service suppliers of all other  Members as a class in the territory 
of the Member, provided that this commitment does not result in unfair discrimination against financial 
service suppliers  of  the Member  applying such measures. 

Page  424 

C. 

National Treatment 

1. ' 
Under terms and conditions that accord national treatment, each Member shall grant to financial 
service suppliers of any other Member esublished in its territory access to payment and clearing systems 
operated  by public  entities,  and to official  funding  and refinancing  facilities  available  in the  normal 
course of ordinary' business.  This paragraph is not intended to confer access to the Member's  lender 
of  last  resort  facility 

2. 
When membership or participation in, or access to, any self-reguiatory body, securities or futures 
exchange or market, clearing agency, or any other organization or association, is required by a Member 
in order for financial  service suppliers of any other Member to supply  financial  services on an equal 
basis with financial service suppliers of the Member, or when the Member provides directly or indirectly 
such entities,  privileges  or advantages in supplying financial  services,  the Member  shall  ensure that 
such entities accord national treatment to financial service suppliers of any other Member  resident  in 
the territory of  the Member. 

D. 

Definitions 

For the purposes  of this approach: 

1. 
A non-resident supplier of financial services is a financial  service supplier of a Member which 
supplies  a financial service into the territory of another Member from an establishment  located in the 
territory  of  another  Member,  regardless  of  whether  such a financial sen'ice  supplier  has  or has not 
a  commercial  presence  in the territory' of  the Member  in which the financial  service is  supplied. 

"Commercial  presence"  means  an enterprise  within  a  Member's  territory  for  the  supply  of 
2. 
financial services and includes wholly- or partly-owned subsidiaries, joint ventures, partnerships, sole 
proprietorships, franchising operations, branches, agencies, represenutive offices  or other organizations. 

A new financial  service is a service of a financial nature, including services related to existing 
3. 
and new products or the manner in which a produa  is delivered, that is not supplied by any  financial 
service supplier in the territory of a particular Member but which is supplied in the territor.  of another 
Member. 

ISSN 0254-1475 

COM(94) 143 final 

DOCUMENTS 

EN 

11 

Catalogue number : CB-CO-94-153-EN-C 

ISBN 92-77-67675-2 

Office  for  Official  Publications of the European Communities 

L-2985 Luxembourg