Proposal for a COUNCIL DECISION establishing the position to be taken by the European Union within the Ministerial Conference of the World Trade Organization as regards an extension of the moratorium on customs duties on electronic transmissions and the moratorium on non-violation and situation complaints
Date: 2015-10-06
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: World Trade Organisation, abolition of customs duties, common commercial policy, electronic commerce, ministerial meeting

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   EUROPEAN COMMISSION  Brussels, 6.10.2015  COM(2015) 483 final 2015/0234 (NLE)   Proposal for a COUNCIL DECISION establishing the position to be taken by the European Union within the Ministerial Conference of the World Trade Organization as regards an extension of the moratorium on customs duties on electronic transmissions and the moratorium on non-violation and situation complaints  
 
EXPLANATORY MEMORANDUM 

1. 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The objective of this proposal is to allow the Union to join a consensus in the World Trade 
Organisation  (WTO)  on  the  adoption  by  the  WTO  Ministerial  Conference  of  two  decisions 
relating  to  (1)  a  moratorium  on  customs  duties  on  electronic  transmissions  ("e-commerce 
moratorium")  and  (2)  the  application  of  subparagraphs  1(b)  and  1(c)  of  Article  XXIII  of 
GATT 1994 on "non-violation and situation complaints"  to the settlement of disputes under 
the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS”).  

The Union has always supported the extension of the "e-commerce  moratorium" because e-
commerce  is a  service and therefore it should not  be subject to  customs duties.  Further, the 
moratorium provides significant economic benefits to the Union companies.  

The TRIPS Agreement laid down a moratorium of five years from its entry into force in 1995 
on  the  application  of  subparagraphs  1(b)  and  1(c)  of  Article  XXIII  on  non-violation  and 
situation complaints to consultations and the settlement of disputes under TRIPS (Article 64 
(2)  TRIPS).  During  that  period,  no  consensus  was  reached  on  the  scope  and  modalities  for 
non-violation and situation complaints pursuant to Article 64 (3) TRIPS. 

After  the  initial  five  year  period  expired  the  WTO  Ministerial  Conference  has  continuously 
extended the suspension by consensus decision, pursuant to Article 64 (3) TRIPS, and it did 
so  until  its next  session.  The  last  extension  of  11  December  2013  lasts  until  the Ministerial 
Conference  in  2015.  The  WTO  Ministerial  Conference  Decisions  directed  the  Council  for 
TRIPS  to  continue  its  examination  of  the  scope  and  modalities  for  complaints  of  the  types 
provided  for  under  subparagraphs  1(b)  and  1(c)  of  Article  XXIII  of  GATT  1994  and  make 
recommendations to its next Session. The Decisions also stated that it was agreed that, in the 
meantime, Members will not initiate such complaints under the TRIPS Agreement. 

So far no consensus was reached on scope and modalities. 

The proposal provides that the Council authorises the Commission to take a position on behalf 
of the European Union within the WTO to join a consensus as regards the extension of the "e-
commerce moratorium" on an indefinite basis (or at every Ministerial Confernce where the e-
commerce  moratorium  is  proposed  for  adoption  ),  and  the  extension  of  the  moratorium  on 
non-violation  and  situation  complaints  under  TRIPS  Agreement  until  the  WTO  Ministerial 
Conference takes a decision on the scope and modalities of the non-violation complaints.  

• 

Consistency  with  existing  policy  provisions  in  the  policy  area  and  with  other 
Union policies 

The initiative is fully consistent with existing policy provisions. Similar decisions have been 
prepared  for  previous  WTO  Ministerial  Conferences,  including  most  recently  for  the  9th 
WTO Ministerial Conference in 2013.  

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) provides that 
when a Decision having legal effects needs to be taken in a body set up by an international 
agreement, the Council, on a proposal from the Commission or the High Representative of the 
Union for Foreign Affairs and Security Policy, shall adopt a Decision establishing the position 
to be adopted on the Union’s behalf. The extension of the moratoria falls under this provision 

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as the Decision is taken in a body set up by an international agreement (the WTO Ministerial 
Conference) affecting the rights and obligations of the Union. 

The  envisaged  e-commerce  moratorium  relates  to  matters  falling  within  the  scope  of  the 
common  commercial  policy  (Article  207  TFEU)  and  in  particular,  to  obligations  under  the 
General  Agreement  on  Trade  in  Services.  Similarly,  the  envisaged  moratorium  on  non-
violation and situation complaints relates to matters falling within the scope of the common 
commercial policy, in particular to obligations under the TRIPS Agreement.  

3. 

SCOPE OF THE PROPOSAL 

Consistent  with  Article  218(10)  TFEU,  the  European  Parliament  will  be  immediately  and 
fully informed. 

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2015/0234 (NLE) 

Proposal for a 

COUNCIL DECISION 

establishing the position to be taken by the European Union within the Ministerial 
Conference of the World Trade Organization as regards an extension of the moratorium 
on customs duties on electronic transmissions and the moratorium on non-violation and 
situation complaints 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(4), in conjunction with Article 218(9), thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

A  moratorium  on  customs  duties  on  electronic 
transmissions  (‘e-commerce 
moratorium’) to the effect that WTO members are to continue their current practice of 
not imposing customs duties on electronic transmissions was adopted in the form of a 
declaration  at  the  1998  Ministerial  conference  of  the  World  Trade  Organization 
(WTO).  Currently  the  moratorium  takes  the  form  of  a  WTO  Ministerial  Conference 
decision, which has been renewed every two years since 1998.  

A  moratorium  on  non-violation  and  situation  complaints  has  continuously  been 
extended  at  the  WTO  Ministerial  Conference  after  the  expiration  of  the  five  year 
period for taking the decision on the scope and modalities of such complaints pursuant 
to Article 64(3) of the TRIPS Agreement.  

These moratoria were last extended at the WTO Ministerial Conference in December 
2013  till  2015.  They  should  be  further  extended  at  any  next  WTO  Ministerial 
Conference or made permanent should a consensus to that effect arise in the on-going 
or future discussions.  

It is in the interest of the Union to give its support to the extension of the e-commerce 
moratorium  on  an  indefinite  basis  and  to  the  extension  of  the  moratorium  on  non-
violation  and  situation  complaints  until  such  moment  the  Ministerial  Conferences 
approves the recommendations of the Council for TRIPS with regard to the scope and 
modalities  of  non-violation  and  situation  complaints  pursuant  to  Article  64(3)  of  the 
TRIPS, 

HAS ADOPTED THIS DECISION:  

Article 1 

The position of the Union within the Ministerial Conference of the World Trade Organisation 
shall  be  to  support  an  extension  of  the  moratorium  on  customs  duties  on  electronic 
transmissions (‘e- commerce moratorium’) and of the moratorium on complaints of the types 
provided  for  under  subparagraphs  1(b)  and  1(c)  of  Article  XXIII  of  GATT  1994  ("non-

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violation and situation complaints"), until the Ministerial Conference takes a decision on the 
scope and modalities of the non-violation and situation complaints.  

This Decision shall enter into force on the day of its adoption. 

Done at Brussels, 

Article 2 

For the Council 
The President 

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