Source: EURLEX
Language: en
Format: md

```
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.

#### **a. -**
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                                   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.

```

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        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 
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```
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;

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**< / - -**

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- 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- 
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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 l e 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 -**

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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

```

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```
      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** **5**

**AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION** **9**

**ANNEX** **1** **21**

**ANNEX 1A: MULTILATERAL AGREEMENTS ON TRADE** **IN** **GOODS** **21**

***** **General Agreement on Tariffs and Trade 1994** **23**
**Understanding on the Interpretation of Article** **n.-i(b)** **of the General Agreement on**

**Tariffs** **and Trade 1994** **25**

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

**Tariffs and Trade** **1994** **27**

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

**Tariffs and Trade 1994** **29**

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

**Tariffs and Trade 1994** **.** **33**

**Understanding in Respect of Waivers of Obligations** **under** **the General Agreement**

**on Tariffs and Trade 1994** **37**

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

**Tariffs and Trade 1994** **39**

**Marrakesh** **Protocol to the General Agreement on** **Tariffs** **and Trade 1994** **41**
**Agreement on Agriculture** **43**
**Agreement on the Application of Sanitary and Phytosanitary Measures** **69**
**Agreement on Textiles and Clothing** **>** **85**
**Agreement on Technical Barriers to Trade** **117**
**Agreement on Trade-Related Investment Measures** **139**
**Agreement on** **Implementation** **of Anicle** **vi** **of the General Agreement on Tariffs and**

**Trade** **1994** **145**

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

**Trade** **1994** **171**

**Agreement on** **Preshipmem** **Inspection** **199**
**Agreement on Rules of Origin** **209**
**Agreement on** **Import** **Licensing Procedures** **221**
**Agreement on Subsidies and Countervailing Measures** **229**
**Agreement on Safeguards** **273**
**ANNEX** **IB** **General Agreement on Trade in Services** **283**
**ANNEX ic** **Agreement on Trade-Related Aspects of Intellectual Property Rights . . . .** **319**

**ANNEX** **2** **Understanding on Rules and Procedures Governing the Settlement of Disputes** **353**

**ANNEX** **3** **Trade Policy Review Mechanism** **379**

**ANNEX** **4** **Plurilateral Trade Agreements** **383**
**Agreement on Trade in Civil Aircraft** **383**
**Agreement on Government Procurement** **383**
**International Dairy Agreement** **383**
**International Bovine Meat Agreement** **383**

**Page** **4**

**MINISTERIAL DECISIONS AND DECLARATIONS**

**Decision on Measures in Favour of Least-Developed Countries** **385**
**Declaration on the Contribution of the World Trade Organization to Achieving Greater**

**Coherence-** **in Global Economic Policymaking** **387**
**Decision on Notification Procedures** **389**

**Declaration on the Relationship of the World Trade Organization with the International**

**Monetary Fund** **393**
**Decision on Measures Concerning the Possible Negative Effects of** **the** **Reform Programme**

**on Least-Developed and Net** **Food-Imponing** **Developing Countries** **395**
**Decision on Notification of First Integration** **under** **Anicle** **2.6** **of** **the** **Agreement on Textiles**

**and Clothing** **-** **397**
**Decisions Relating to the Agreement on Technical Barriers to Trade**

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

**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** **401**

**Decision on Review of Anicle** **17.6** **of the Agreement on** **Implementation** **of Anicle** **vi**
**of the General Agreement on Tariffs and Trade 1994** **402**
**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** **403**
**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**
**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** **406**

**Decisions Relating to the General Agreement on Trade in Services**

**Decision on** **Institutional** **Arrangements for the General Agreement on Trade in**
**Services** **407**

**Decision** **on** **Cenain Dispute Settlement Procedures for the General** **Agreement** **on Trade**
**in Services** **408**

**Decision on Trade in Services and the Environment** **409**

**Decision on Negotiations on Movement of Natural Persons** **410**
**Decision on Financial Services** **411**

**Decision on Negotiations on Maritime Transport Services** **412**
**Decision on Negotiations on Basic Telecommunications** **414**
**Decision on Professional Services** **415**

**Decision on Accession to the Agreement on Government Procurement** **417**
**Decision on the Application and Review of the Understanding on Rules and Procedures**

**Governing the Settlement of Disputes** **419**

**UNDERSTANDING** **ON** **COMMITMENTS** **IN** **FINANCIAL SERVICES** **421**

## **r-**

**FINAL ACT EMBODYING THE RESULTS OF THE**

**URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS**

**Marrakesh, 15 April 1994**

**Page 6**

**Page 7**

**FINAL ACT EMBODYING THE RESULTS OF THE**

**URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS**

**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.**

**4.** **The representatives** _**agree**_ **that the WTO Agreement shall be open for acceptance as a whole,**
**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.**

**6** **. This Final Act and the texts annexed hereto shall be deposited with the Director-General to**
**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.**

**4.** **The General Agreement on Tariffs and Trade 1994 as specified in Annex** **1A** **(hereinafter referred**
**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**_

**1.** **The WTO shall facilitate the implementation, administration and operation, and further the**
**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.**

**2.** **The WTO shall provide the forum for negotiations among its Members concerning their**
**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.**

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

**5.** **There shall be a Council for Trade in Goods, a Council for Trade in Services and a Council**
**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.**

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

**7.** **The Ministerial Conference shall establish** **a** **Committee on Trade and Development, a Committee**
**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**_

**1.** **The General Council shall make appropriate arrangements for effective cooperation with other**
**intergovernmental organizations that have responsibilities related to those of the WTO.**

**2.** **The General Council may make appropriate arrangements for consultation and cooperation**
**with non-governmental organizations concerned with matters related to those of the WTO.**

**Page 12**

_**Article VI**_

_**The Secretariat**_

**1.** **There shall be a Secretariat of the WTO (hereinafter referred to as "the** **Secretariat")** **headed**
**by** **a** **Director-General.**

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

**4.** **The responsibilities of** **the** **Director-General** **and** **of** **the** **staff of the Secretariat shall** **be** **exclusively**
**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**_

**1.** **The** **Director-General shall present to the Committee on Budget, Finance and Administration**
**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.**

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

**3.** **The General Council shall adopt the financial regulations and the annual budget estimate by**
**a** **two-thirds** **majority comprising more than half of the Members of the WTO.**

**4.** **Each Member shall promptly contribute to the WTO its share in the expenses of the WTO**
**in accordance with the financial regulations adopted by the General Council.**

**Page 13**

_**Article**_ _**VIII**_

_**Status of the WTO**_

**1.** **The WTO shall have legal personality, and shall be accorded by each of its Members such**
**legal capacity as may be necessary for the exercise of its functions.**

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

**4.** **The privileges and immunities to be accorded by a Member to the WTO, its** **officials,** **and the**
**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**_

**1.** **The WTO shall continue the practice of decision-making by consensus followed under**
**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** **States** **[2]** **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 ]**

**2.** **The Ministerial Conference and the General Council shall have the exclusive authority to adopt**
**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 fourths** **[4]** **of the Members unless otherwise provided for in.**
**this paragraph.**

**(a)** **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 fourths** **[4]** **of the Members.**

**(b)** **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.**

**5.** **Decision:,** **under a Plurilateral Trade Agreement, including any decisions on interpretations**
**and** **waivers,** **shail** **be governed by the provisions of that Agreement.**

_**Article X**_

_**Amendments**_

**1** **Any Member of** **the** **WTO may** **initiate** **a proposal to amend the provisions of this Agreement**
**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.**

**Page 15**

**2.** **Amendments to the provisions of this Article** **and** **to the provisions of the following** **Articles.**
**shall take effect only upon acceptance by all** **Members** **:**

**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.**

**5.** **Except as provided in paragraph 2 above, amendments to Parts I, II and III of** **GATS** **and the**
**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**

**10.** **Amendments to a Plurilateral Trade Agreement shall be governed by the provisions of that**
**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**_

**1.** **Any State or separate customs territory possessing full autonomy in the conduct of its external**
**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**

**3.**

**ment.**

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

_**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.**

**3.** **Paragraph 1 shall apply between a Member and another Member which has acceded under**
**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**

**4.** **The Ministerial Conference may review the operation of this Article in particular cases at** **thé**
**request of any Member and make appropriate recommendations.**

**5.** **Non-application of a Plurilateral Trade Agreement between parties to that Agreement shall**
**be governed by the provisions of that Agreement.**

_**Article XIV**_

_**Acceptance, Entry into Force and Deposit**_

**1.** **This Agreement shall be open for** **acceptance,** **by signature or** **otherwise,** **by contracting parties**
**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.**

**3.** **Until the entry into force of this** **Agreement,** **the text of this Agreement and the** **Multilateral**
**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**

**4.** **The acceptance and entry into force of a Plurilateral Trade Agreement shall be governed by**
**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.**

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

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

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

6. This Agreement shall be reg r~d in accordance with the provisions ..-; Article 102 of the
Charter of the United Nations.

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**

**ANNEX 3**

**Trade Polic\ Review Mechanism**

**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** 1 **A** **as the** "WTO Agreement"), the provision
of the other agreement shall prevail to the extent of **the** conflict.

**Page 22**

Page 23

GENERAL AGREEMENT ON TARIFFS **AND** TRADE **1994**

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

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

( vi) 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.**

**3.** **(a)** **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.**

**Page 25**

**UNDERSTANDING ON THE INTERPRETATION OF ARTICLE II:l(b)**

**OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994**

_**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.**

**4.** **Where a tariff item has previously been the subject of a** **concession,** **the level of "other duties**
**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.**

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

**Page 27**

**UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVH**

**OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994**

_**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.**

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

Page 29

UNDERSTANDING ON THE BALANCE-OF-PAYMENTS PROVISIONS

OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE **1994**

_**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 provisions [1] ;

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-ofpayments situation. Whenever a time-schedule is not publicly announced by a Member, that Member
shall provide justification as to the reasons therefor.

2. Members confirm their commitment to give preference to those measures which have the least
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-ofpayments 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.

4. Members confirm that restrictive import measures taken for balance-of-payments purposes may
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.**

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

**12** **The Secretariat** **shall,** **with a view to facilitating the consultations in the Committee, prepare**
**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**

**Page 33**

**UNDERSTANDING ON THE INTERPRETATION OF ARTICLE** **XXTV**

**OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE** **1994**

_**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:**

**1.** **Customs unions, free-trade** **areas,** **and interim agreements leading to the formation of** **a** **customs**
**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**_

**4.** **Paragraph 6 of Article XXIV esublishes the procedure** **to** **be followed when a Member forming**
**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**_

**7.** **All** **notificatioas** **made under paragraph 7(a) of Article** **XXIV** **shall be examined by a** **worVing**
**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.**

**8** **In** **regard to interim** **agreements,** **the working party may in its report make** **app*r;** **^?te**
**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**

**11.** **Customs unions and constituents of free-trade areas shall report periodically to the Council**
**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**_

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

**14.** **The provisions of Anicles XXII and** **XXIII** **of GATT 1994 as elaborated and applied by the**
**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**

Page 37

UNDERSTANDING IN RESPECT OF WAIVERS OF OBLIGATIONS

UNDER THE GENERAL AGREEMENT ON TARIFFS AND **TRADE 1994**

_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.

2. Any waiver in effect on the date of entry into force of the WTO Agreement shall terminate,
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.

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

**Page 39**

**UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXVIII**

**OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994**

_**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.**

_**2**_ **Where a Member considers that it has a principal supplying interest in terms of paragraph** **1,**
**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.**

**5.** **Where a Member considers that it has a principal supplying or a substantial interest** **in.** **terms**
**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.**

**Page** **41**

**MARRAKESH PROTOCOL TO THE**

**GENERAL AGREEMENT ON TARIFFS AND TRADE 1994**

_**Members,**_

_**Having**_ **carried out** **negotiations** **within the framework of GATT 1947, pursuant to the Ministerial**
**Declaration on the Uruguay Round,**

**Hereby** **agree** **as follows:**

**1.** **The schedule annexed to this Protocol relating to a Member shall become a Schedule to**
**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.**

**8.** **The Schedules annexed hereto are authentic in the English, French or Spanish language as**
**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)** **"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)** **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**

**(ii)** **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;**

**(e)** **"export subsidies" refers to subsidies contingent upon export** **performance,** **including**
**the export subsidies listed in Article 9 of** _**tins**_ **Agreement;**

**(f)** **"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** **:**

**<g** **)** **"market access** **concessions"** **includes all market access commitments undertaken pursuant**
**to this** **Agreement;**

**(h)** **Toul 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.

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

1. Market access concessions contained in Schedules relate to bindings and reductions of uriffs.
**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)** **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:**

**(b)** **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 price** **[2]** **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.**

**4** **Any additional duty imposed under subparagraph 1(a) shall only** **be** **maintained until the end**
**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 consumption** **[3]** **during the three preceding**
**years for which data are available:**

**(a)** **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;**

**(b)** **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;**

**(c)** **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.**

**5.** **The additional duty imposed under subparagraph 1(b) shall be set according to the following**
**schedule:**

**(a)** **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;**

**(b)** **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;**

**(ci** **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);**

**(d)** **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);**

**(e)** **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).**

**6.** **For perishable and seasonal products, the conditions set out above shall be applied in such**
**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.**

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

**9.** **The provisions pf this Article shall remain in force for the** **duration** **of the reform process as**
**determined under Article 20.**

**.** _**Part IV**_

_**Article**_ _**6**_

_**Domestic Support Commitments**_

**1.** **The domestic support reduction commitments of each Member contained in Part IV of its**
**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.** **T K** **^:»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.**

**3.** **A Member shall be considered to be in compliance with its domestic support reduction**
**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)** **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**

**(ii)** **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)** **For developing country** **Members,** **the** _**de**_ _**minimis**_ **percenuge under this paragraph shall**
**be 10 per cent.**

**(a)** **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](http://shall.be)**
**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)** **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;**

**(b)** **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;**

**(c)** **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;**

**<d)** **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)** **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**

**(ii)** **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)** **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;**

**(ii)** **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;**

**(iii)** **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**

**(iv)** **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.**

**3.** **Commitments relating to limitations on the extension of the scope of export subsidization are**
**as specified in Schedules.**

**4.** **During the implemenution period,** **developing** **country Members shall not be required to**
**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**_

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

**3.** **Any Member which claims** **mat** **any quantity exported in excess of a reduaion commitment**
**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)** **mat the provision of international food aid is not tied directly or indirealy** **to commercial**
**exports** **of** **agricultural** **products** **to recipient** **countries;**

**(b)** **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**_

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

**(a)** **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;**

**(b)** **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)** **domestic support measures that conform fully to the provisions of Annex 2 to this**

**-**
**Agreement shall be:**

**(i)** **non-actionable subsidies for purposes of countervailing** **duties** **[4]** **:**

**(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)** **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;**

**(ii)** **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**

**(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,** **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**_

**1.** **In** **keeping with the recognition that differential and more favourable treatment for developing**
**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**_

**1.** **Progress in the implemenution of commitments negotiated under the Uruguay Round reform**
**programme shall be reviewed by the Committee on Agriculture.**

**2.** **The review process shall be undertaken on the basis of notifications submitted by Members**
**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.**

**3.** **In addition to the notifications to be submitted under paragraph 2, any new domestic support**
**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.**

**4-** **In** **the review process Members shall give due consideration to the influence of excessive rates**
**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.**

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

**1.** **The provisions of GATT** **1994** **and of other Multilateral Trade Agreements in Annex** **1A** **to**
**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)** **HS Chapters 1 to 24**

**(ii)** **HSCode**

**HSCode**

**HS Heading**

**HS Headings**

**HSCode**

**HSCode**

**HS Headings**

**HS Heading**

**HS Headings**

**HS Headings**

**HS Headings**

**HS Heading**

**HS Heading**

**less** **fish** **and** **fish** **products, plus***

**2905.43** **(mannitol)**

**2905.44** **(sorbitol)**

**33.01** **(essential oils)**

**35.01 to 35.05**

**3809.10**

**3823.60**

**41.01 to 41.03**

**43.01**

**50.01 to 50.03**

**51.01 to 51.03**

**52.01 to 52.03**

**53.01**

**53.02**

**(albuminoidal subsunces. modified**
**starches, glues)**

**(finishing agents)**

**(sorbitol n.e.p.)**

**(hides and skins)**

**(raw furskins)**

**(raw silk and silk waste)**

**(wool and animal hair)**

**(raw cotton, waste and cotton carded**
**or combed)**

**(raw flax)**

**(raw hemp)**

**2.** **The foregoing shall not limit the product coverage of the Agreement on the Application of**
**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)** **research,** **including general** **research,** **research in connection with environmental**
**programmes,** **and research programmes relating to particular products;**

**(b)** **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** **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**

**(g)** **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 purposes** **[5 ]**

**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 aid** **[6 ]**

**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)** **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.**

**(c)** **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 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)** **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.**

**(b)** **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.**

**(c)** **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)** **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.**

**(b)** **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)** **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.**

**(b)** **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. -**

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

**(d)** **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)** **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.**

**(b)** **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.**

**(c)** **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)** **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.**

**(f)** **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)** **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.**

**(b)** **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.**

**(c)** **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.**

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

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

**(0** **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.**

_**2.**_ **Subsidies under paragraph 1 shall include both budgetary** **outlays** **and revenue foregone by**
**governments or their agents.**

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

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

**5.** **The AMS calculated as outlined below for the base period shall constitute the base level for**
**the implementation of the reduction commitment on domestic support.**

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

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

**11.** **The fixed reference price** **shall** **be based on the years 1986 to 1988 and shall generally be the**
**actual price** **used** **for determining payment rates.**

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

**2.** **The-equivalent** **measurements of support provided for in paragraph 1 shall be calculated on**
**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.**

**3.** **Where basic agricultural products falling under paragraph** **1** **are the subject of non-exempt direct**
**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**

**ANNEX 5**

**SPECIAL TREATMENT WITH RESPECT TO PARAGRAPH 2 OF ARTICLE 4**

_**Section A**_

**1.** **The provisions of paragraph 2 of Article 4 shall not apply with effea from the entry into force**
**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)** **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**

**(e)** **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.**

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

**5.** **Where the special** **treatment** **-: not to be continued at the end of the implementation period,**
**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.**

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

**10.** **In the event that special treatment under paragraph 7 is not to be continued beyond the 10th**
**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**

**1.** **The** **calculation** **of** **the uriff equivalents, whether** **expressed** **as** _**ad**_ _**valorem**_ **or** **specific** **rates,**
**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)** **shall** **be** **esublished** **at the** **six-digit** **or a** **more** **details ;evel** **of the HS** **wherever**
**appropriate;**

**(c)** **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.**

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

**3.** **The external prices shall generally** **be** **converted** **to** **domestic currencies using** **the** **annual average**
**market exchange rate** **for the** **same period** **as** **the price data.**

**4.** **The** **internal price shall generally** **be a** **represenutive wholesale price ruling** **in** **the domestic**
**market** **or an** **estimate** **of** **that price where adequate data** **is not** **available.**

**5.** **The initial** **uriff** **equivalents may be adjusted, where necessary, to take account** **of** **differences**
**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**_

**1.** **This Agreement applies to all sanitary and phytosanitary measures which may, directly or**
**indirectly, affect international trade. Such measures shall be** **df** **;oped** **and applied in accordance with**
**the provisions of this Agreement.**

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

**3.** **The annexes are an integral part of this Agreement.**

**4.** **Nothing** **in** **this Agreement shall affea** **the** **rights of Members under** **the** **Agreement** **on** **Technical**
**Barriers to Trade with respect to measures not within the scope of this Agreement.**

_**Article 2**_

_**Basic Rights and Obligations**_

**1.** **Members** **have the** **right to take sanitary** **and** **phytosanitary measures necessary for the protection**
**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.**

**3.** **Members shall ensure that their sanitary and phytosaniury measures do not arbitrarily or**
**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**_

**1.** **Members shall accept the saniury or phytosaniury measures of other Members as equivalent,**
**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.**

**2.** **Members** **shall,** **upon request, enter into consulutions with the aim of achieving bilateral and**
**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.**

**3.** **In assessing the risk to animal or plant life or health and determining the measure to be applied**
**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.**

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

**6.** **Without prejudice to paragraph 2 of Article 3. when esublishing or maintaining sanitary or**
**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.** **.**

**3.** **Exporting Members claiming that areas within their territories are pest- or disease-free areas**
**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**_

**1.** **Members agree to facilitate the provision of technical assistance to other Members, especially**
**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.**

**3.** **With** **a view to ensuring that developing country Members are** **able** **to comply with the provisions**
**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.** **Members should encourage** **and** **faciliute the active participation of developing country Members**
**in** **the relevant international organizations.**

_**Article**_ _**11**_

_**Consultations and Dispute Settlement**_

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

**Page 75**

**2.** **In a dispute under this** **Agreement** **involving scientific or technical** **issues,** **a panel should seek**
**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**

**DEFINITIONS** **[4 ]**

**1.** _**Sanitary or phytosanitary measure**_ **- Any measure applied:**

**(a)** **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;**

**(b)** **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;**

**(c)** **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**

**(d)** **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.**

**2.** _**Harmonization**_ **- The establishment, recognition and application of common sanitary and**
**phytosaniury measures by different Members.**

**3.** _**International standards, guidelines and recommendations**_

**(a)** **. 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;**

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

**(c)** **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.**

**5.** _**Appropriate level of sanitary or phytosanitary protection**_ **- The level of proteaion deemed**
**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**_

**1.** **Members shall ensure that all sanitary** **and** **phytosaniury regulations** **[5]** **which have been adopted**
**are published promptly in such a manner as to enable interested Members to become acquainted with**

**them.**

**2.** **Except in** **urgent** **circumstances, Members shall allow a reasonable interval between the**
**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 nationals** **[6]** **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)** **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;**

**(b)** **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;**

**(c)** **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;**

**(d)** **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)** **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**

**(b)** **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 PROCEDURES** **[7 ]**

**1.** **Members** **shall** **ensure, with respect to any procedure to check and ensure the fulfilment of**
**saniury or** **phytosaniur** **-measures,** **that:**

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

**(b)** **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)** **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;**

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

**(0** **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;**

**(g)** **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;**

**(h)** **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.**

**3.** **Nothing in this Agreement shall prevent Members from carrying out reasonable inspection**
**within their own territories.**

**Page 84**

**Page 85**

**AGREEMENT ON TEXTILES AND CLOTHING**

_**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**_

**1.** **This Agreement sets out provisions to be applied by Members during a transition period for**
**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 ]**

**3.** **Members shall have due regard to the situation of those Members which have not accepted**
**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.**

**4.** **Members agree** **that** **the particular interests of the cotton-producing exporting Members should,**
**in consultation with** **them,** **be reflected in the implemenution of the provisions of this Agreement.**

**5.** **In** **order to faciliute** **the** **integration of** **the** **textiles** **and** **clothing sector** **into GATT** **1994,** **Members**
**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.**

**2.** **The TMB shall** **circulate** **these notifications to all Members for their information. It is open**
**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** **o** **[v]** **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.**

**5.** **Any unilateral measure taken under Article 3 of the MFA prior to the date of entry into force**
**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.**

**7.** **Full deuils of the actions to be uken pursuant to paragraph 6 shall be notified by the Members**
**concerned according to the following:**

**(a)** **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;**

**(b)** **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.**

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

**(c)** **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 lof 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.**

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

**12.** **The base levels of the restrictions on the remaining products, mentioned in paragraph 8,** **shall**
**be the restraint levels referred to in paragraph** **1.**

**13.** **During Suge 1 of this Agreement (from the date of entry into force of the WTO Agreement**
**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)** **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;**

**(b)** **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.**

**15.** **Nothing in this Agreement shall prevent** **a** **Member from eliminating any restriaion maintained**
**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.**

**16.** **Flexibility** **provisions,** **i.e.** **swing,** **carryover and carry forward, applicable to all restrictions**
**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.**

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

**18.** **As regards those Members whose exports are subject to restrictions on the day before the** **entry**
**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** _**p**_ _**[r]**_ **ons.**
**Such improvements shall be notified to the TMB.**

**19.** **In any** **case,** **during the duration of this Agreement, in which a safeguard measure is initiated**
**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 restrictions** **[4]** **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. •**

**2.** **Members maintaining restriaions falling under paragraph** **1,** **except those justified under a GATT**
**1994** **provision,** **shall either:**

**(a)** **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**

**(b)** **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.**

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

**their information.**

_**Article 4**_

**1.** **Restrictions referred to in Article 2, and those applied under Article 6, shall be administered**
**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.**

**3.** **Members agree to take necessary aaion,** **consistent** **with their domestic laws and** **procedures,**
**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** **Member** **[3]** **,** **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.**

**4.** **Any measure invoked pursuant to the provisions of this Article shall** **be** **applied** **on a** **Member-by-**
**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.**

**6.** **In the** **application of the transitional safeguard, particular account shall be uken of the interests**
**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)** **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;**

**(b)** **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;**

**(c)** **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;**

**(d)** **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.**

**7.** **The Member proposing to take** **safeguard** **action shall seek consultations with the Member or**
**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)** **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;** *****

**(b)** **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.**

**2.** **The TMB shall develop its own working** **procedures,** **h** **is understood, however, that consensus**
**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.**

**3.** **The TMB shall be considered as a standing body and shall meet as necessary to carry out the**
**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.**

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

**7.** **Before formulating its recommendations or observations, the TMB shall invite** **participation**
**of such Members as may be directly affected by the maner in question.**

**8!** **Whenever the TMB is called upon to make recommendations or** **findings,** **it shall do so.**
**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.**

**9.** **The Members shall endeavour to accept in full the recommendations of the TMB, which shall**
**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 ]**
**further recommendations it considers appropriate** **fora** **.** **t** **If,** **after such further recommendations,**
**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**

**11.** **In order** **to** **oversee the implemenution of this Agreement, the Council for Trade in Goods**
**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**

**1.** **'*** **This Annex lists textile and clothing products defined by Harmonized Commodity Description**
**and Coding System (HS) codes at the six-digit level.**

**2.** **Actions under the safeguard provisions in Article 6 will be** **uken** **with respect to particular**
**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)** **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;**

**(b)** **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.**

**Page 99**

**Products within Section XI (Textiles and Textile Articles) of the**
**Harmonized Commodity** **Description** **and Coding System (HS) Nomenclature**

**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,** **</=200** **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]** **</=170g** **m2,** **unbi**
**5513.13** **Woven fab of polyest staple fib,** **< 85** _**%**_ **mixd** **w/ccn** **-170g/ml.** **unbl/bl.** **nes**
**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**

**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**

**Ch.** **58** **Special woven fab; tufted tex fab; lace; tapestries etc.**
**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** **wt>/«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

Ch. 59 Impregnated, coated, cover/laminated **textile fabric etc.**
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** -' & **clothing** **access,** **knitted or crocheted**
6101.10 Mens/boy oats, anoraks etc, of wool or fine animal hair, knitted
6101.20 Mens/boys oats, anoraks etc, of cotton, knitted
6101.30 Mens/boys -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](http://fibr.es)**
**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 Footwear with soles and uppers of wool felt
ex 6406.10 Footwear uppers of which 50% or more of the external surface area is textile

       - material .

ex 6406.99 Leg warmers and gaiters of textile material
6501.00 Hat-forms, hat bodies and hoods of felt; plateaux and manchons of felt
6502.00 Hat-shapes, plaited or made by assembling strips of any material
6503.00 Felt hats and other felt headgear
6504.00 Hats & other headgear, plaited or made by assembling strips of any material
6505.90 Hats & other headgear, knitted or made up from lace, or other textile material
6601.10 Umbrellas and sun umbrellas, garden type
6601.91 Other umbrella types, telescopic shaft
660199 Other umbrellas

ex 7019.10 Yarns of fibre glass
e.x 7019.20 Woven fabrics of fibre glass
8708.21 Safety seat belts for motor vehicles
8804.00 .Parachutes; their pans and accessories
9113.90 Watch straps, bands and bracelets of textile materials
ex 9404.90 Pillow and cushions of cotton; quilts; eiderdowns; comforters and similar articles
of textile materials

9502.91 Garments for dolls

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.**

**1.3** **All products, including industrial and agricultural products, shall be subject to the provisions**
**of this Agreement.**

**Page 118**

**1.4** **Purchasing specifications prepared by governmental bodies for production or consumption**
**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.**

**1.5** **The provisions of this Agreement do** **not** **apply** **to** **saniury and phytosaniury measures** **as** **defined**
**in Annex A of the Agreement on the Application of Sanitary and Phytosaniury Measures.**

**1.6** **All references in this Agreement to technical regulations, standards and conformity assessment**
**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:**

**2.1** **Members shall ensure that in respea of technical** **regulations,** **products imported from the territory**
**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.**

**2.2** **Members shall ensure that technical regulations are not prepared, adopted or applied with a**
**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.**

**2.5** **A Member** **preparing,** **adopting or applying a technical regulation which may have** **a** **significant.**
**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**_

**4.1** **Members shall ensure that their central government standardizing bodies accept and comply**
**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.**

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**4.2** **Standardizing"bodies** **that have accepted and are complying with the Code of Good Practice**
**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**_

**5.1** **Members shall ensure that, in cases where a positive assurance of conformity with technical**
**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** **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;**

**5.2.2** **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**

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**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.**

**5.3** **Nothing** **in** **paragraphs** **1** **and 2 shall prevent Members from carrying out reasonable spot checks**
**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; fundamental** **c'imatic** **or other geographical factors; fundamenul technological or**
**infrastructural problems.**

_**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.**

**5 6** **Whenever a relevant guide or recommendation issued by an international sundardizing body**
**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.**

**7.3** **Members may require conuct with other Members, including the notifications, provision of**
**information,** **comments and discussions referred to in paragraphs 6 and 7 of Anicle 5, to take place**
**through the central government.**

**7.4** **Members shall not uke measures which require or encourage local government bodies within**
**their.territories** **to act in a manner inconsistent with the provisions of Anicles 5 and 6.**

**7.5** **Members are fully responsible under this Agreement for the observance of all provisions of**
**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** **lures,**
**which are operated within its territory by central or local government bodies,** **<** **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.**

**10.2** **If, however, for legal or administrative reasons more than one enquiry point is esublished**
**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 nationals** **[1]** **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.**

**11.8** **In providing advice and technical assistance to other Members in terms of paragraphs 1 to 7.**
**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.**

**13.3** **It is understood that unnecessary duplication should be avoided between the work under this**
**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.**

**1.** **Technical expert groups are under the** **panel's** **authority.** **Their terms of reference and deuiled**
**working procedures shall be decided by the panel, and they shall report to the panel.**

**2.** **Participation in technical expert groups shall be restricted to persons of professional standing**
**and** **exr;** **r;i!nce** **in the field in question.**

**3.** **Citizens of parties to the dispute shall not serve on a technical** _**KXOCTI**_ **group without the joint**
**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.**

**4.** **Technical expert groups may consult** **and** **seek information and technical advice** **from** **any source**
**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**

**D.** **In respect of standards, the sundardizing body shall accord treatment to products originating**
**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.**

**E.** **The standardizing body shall ensure that standards are not prepared, adopted or applied with**
**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.**

**I.** **.** **Wherever appropriate, the sundardizing body shall specify standards based on product**
**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.**

**K.** **The national member of ISO/IEC shall make every effort to become a member of ISONET**
**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.**

**Q.** **The sundardizing body shall afford sympathetic consideration to, and adequate opportunity**
**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**

**Page 139**

**AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES**

_**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**_

**1.** **Without prejudice to other rights and obligations under GATT 1994, no Member shall apply**
**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.**

**5.** **Notwithstanding the provisions of Anicle 2, a Member, in order not** **to** **disadvantage established**
**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.**

**2.** **Each Member shall notify the Secretariat of the publications in which TRIMs may be found,**
**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.**

**3.** **The Committee shall monitor the operation and implementation of this Agreement and shall**
**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)** **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;**

**(b)** **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**

**(c)** **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**

Page 145

AGREEMENT ON IMPLEMENTATION OF ARTICLE VI

OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE **1994**

_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 initiated [1] 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 ordinarycourse 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**

**n "» *>**

**only if the** **authorities** **•** **ermine that such sales are** **made** **within an extended period**
**of time** **[4]** **in** **substantial** **c -** **-cities** **[5]** **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 ]**

**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.**

**The 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)** **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;**

**(iii)** **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 sale** **[8]** **, 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.**

**2.7** **This Article** **is** **without prejudice to the second Supplementary Provision to paragraph 1 of**
**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**

**3.4** **The** **examination** **of the impact of** **the** **dumped imports on the domestic industry concerned 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 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.**

**3.6** **The effect of the dumped imports shall be assessed in relation to the domestic production** **of**
**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.**

**3.7** **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 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)** **a significant rate of increase of dumped imports into the domestic market indicating**
**the likelihood of substantially increased importation;**

**(ii)** **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**

**M** **One** **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**_

**4.1** **For the purposes of** **this** **Agreement, the term "domestic** **industry"** **shall** **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 toul domestic production of those products, except**
**that**

**(i)** *** 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;**

**(ii)** **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** **levied** **[12]** **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.**

**Page** **151**

**referred to in paragraph** **1.**

**4.4** **The provisions of paragraph 6 of Article 3 shall be applicable to this Article.**

_**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)** **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;**

**(ii)** **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;**

**(iii)** **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.**

**5.3** **The authorities shall examine the accuracy and adequacy of the evidence provided in the**
**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**

**expressed** **[13]** **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**
**investigation** **r** **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.**

**5.10** **Investigations shall, except in special circumstances, be concluded within one** **year,** **and in no**
**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**
**exporters** **[16]** **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.**

**6.5** **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**

**"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](http://can.be)**
**sources that the information is** **correct.** **[18 ]**

**6.6** **Except in circumstances provided for in paragraph 8, the authorities shall during the course**
**of an investigation satisfy themselves** **as to the** **accuracy of the information supplied by interested parties**
**upon which their findings are based.**

**6.7** **In** **order to verify information provided or to obuin further deuils, the authorities may carry**
**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)** **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;**

**(ii)** **a preliminary affirmative determination has been made of dumping and consequent**
**injury to a domestic industry; and**

**(iii)** **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.**

**7.3** **Provisional measures shall not be applied sooner than 60 days from the date of initiation of**
**the investigation.**

**7.4** **The application of provisional measures shall be limited to as short a period as** **possible,** **not**
**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**_

**8.1** **Proceed ings** **may** **[19]** **be suspended or terminated without the imposition of provisional measures**
**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 h e 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](http://not.be)**
**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.**

**8.4** **If** **an undertaking is accepted, the investigation of dumping and injury shall nevertheless be**
**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.**

**9.3** **The amount of the** **anti-dumping** **duty shall not exceed the margin of dumping as esublished**
**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)** **the weighted average margin of dumping esublished with respect to the selected**
**exporters or producers or.**

**(ii)** **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)** **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**

**(ii)** **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 report** **[23]** **, 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.**

**12.2** **Public notice shall be given of any preliminary or final determination, whether affirmative**
**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.**

**s** **When** **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.**

**14.2** **Such an application shall be** **supported** **by price information to show that the imports are being**
**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**

**16.3** **In carrying out their functions, the Committee and any** **s-.sidiary** **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 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**_

**17.1** **Except as otherwise provided** **herein,** **the Dispute Settlement Undersunding is applicable to**
**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.**

**17.3** **If any Member considers that any benefit accruing to it, directly or indirectly, under this**
**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)** **a written sutement of the Member making the request indicating how a benefit accruing**
**to it, direaly or** **indirectly,** **under this Agreement** **has** **[1]** **been nullified or** **impaired,** **or**
**. that the achieving of the objeaives of the Agreement is being impeded, and**

**(ii)** **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)** **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;**

**(ii)** **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.**

**18.3** **Subject to subparagraphs 3.1 and** **3.2.** **the provisions of this Agreement shall apply to**
**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**

**1.** **Upon initiation of an investigation, the authorities of the exporting Member** **and the** **firms** **known**
**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.**

**3.** **It should be standard praaice to obuin explicit agreement of** **the** **firms concerned in the exporting**
**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**

**ANNEXn**

**BEST** **INFORMATION AVAILABLE IN TERMS OF PARAGRAPH 8 OF ARTICLE 6**

**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**

**Page 171**

**AGREEMENT ON IMPLEMENTATION OF ARTICLE VII**

**OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994**

**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.**

**4.** **Anicle 7 sets out how to determine the customs value in cases where it cannot be determined**

**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**_

**1.** **The customs value of imported goods shall be the transaction value, that is the price actually**
**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)** **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;**

**(c)** **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)** **the transaction value in sales to unrelated buyers of identical or similar goods**
**for export to the same country of importation;**

**(ii)** **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)** **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.**

**(b)** **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.**

**2.** **Where the costs and charges referred to in paragraph 2 of Article 8 are** **included in** **the transaction**
**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.**

**3.** **If, in applying this Article, more than one transaction value of identical goods is found, the**
**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.**

**3.** **If.** **in** **applying this** **Article,** **more** **than** **one transaction value of similar goods is found, the lowest**
**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)** **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;**

**(ii)** **the usual costs of transport and insurance and associated costs incurred within**
**the country of importation;**

**(iii)** **where** **appropriate,** **the costs** **and** **charges referred** **to** **in paragraph** **2** **of Article** **8** **;**
**and**

**(iv)** **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**_

**1.** **The customs value of imported goods under the provisions of this Article shall be based on**
**a computed value. Computed value shall consist of the sum of:**

**(a)** **the** **cost or value** **of** **materials and fabrication or other processing** **employed in producing**
**the imported goods;**

**fb)** **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**_

**1.** **If the customs value of the imported goods cannot be daermined under the provisions of**
**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.**

**3.** **If the importer so requests, the importer shall be informed in writing of the customs value**
**determined under the provisions of this Article and the method used to determine such value.**

_**Article 8**_

**1.** **In determining the customs value under the provisions of Article** **1,** **there shall be added to**
**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)** **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;**

**(d)** **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.**

**2.** **In** **framing** **its legislation, each Member shall provide for the inclusion in or the exclusion from**
**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.**

**3.** **Additions to the price** **actually** **paid or payable shall be made under this Article only on the**
**basis of objective and quantifiable data.**

**4.** **No additions shall be made to the price actually paid or payable in determining the customs**
**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.**

**2.** **The conversion rate to be used shall be** **that** **in effect at the time of exportation or the time**
**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.**

**2.** **An initial** **right** **of appeal** **vWmoutperaltyirwy**
**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.**

_**Article 15**_

**In this Agreement:**

**(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) .** **"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 ;**

**(b)** **"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;**

**(c)** **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;**

**-(d)** **goods shall not be regarded as "identical goods" or "similar goods" unless they were**
**produced in the same country as the goods being valued;**

**(e)** **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)** **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;**

**(e)** **one of them directly or indirectly controls the other;**

**(f>** **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**_

**î.** **Except as otherwise provided herein, the Dispute Settlement Undersunding is applicable to**

**•** **^nsulutions** **and the** **satlement** **of disputes under this Agreement.**

_**2.**_ **If any Member considers that any benefit accruing to it, direaly or indirectly, under this**
**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**

**3.** **The Technical Comminee shall provide, upon request, advice and assisunce to Members engaged**
**in consulutions.**

**\ .** **. • < . .** **»** **• •** **•**

**4:** **At the request** **of a** **party** **to<he** **dispute, or on its own initiative, a panel esublished** **to** **examine**
**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**_

**1.** **Developing** **country** **[1]** **Members not party to the Agreement on Implementation of Article VII**
**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.

2. 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.

_**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.**

**4.** **Where the customs value cannot be determined under the provisions of Articles 1 through 6**
**it is to be determined under the provisions of Article 7.**

_**Use of Generally Accepted**_ _**Accounting**_ _**Principles**_

**1.** **"Generally** **accepted accounting** **principles"** **refers to the recognized consensus or substantial**
**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.**

**2.** **For the purposes of** **this** **Agreement,** **the customs administration of** **each Member** **shall utilize**
**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.**

**3.** **The customs value shall not include the following charges or costs, provided that they are**
**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.**

**4.** **The price actually paid or payable refers to the price for the imported goods. Thus the flow**
**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)** **the seller esublishes the price of the imported goods on** **cc:** **.** **ion** **that the buyer will**
**also buy other goods in specified quantities;**

**(b)** **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;**

**(c)** **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**_

**1.** **Paragraphs** **2(a) and 2(b)** **provide different means of esublishing** **the** **acceptability of a transaction**

**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**
**to enable it to examine the** **circumstances** **surrounding the sale.** **In this context, the customs**
**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**_

**1.** **In** **applying** **Article** **2,** **the customs administration** **shall,** **wherever possible,** **use a sale** **of identical**
**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.**

**2.** **Having found a sale under any one of these three conditions adjustments will then be made,**
**as the case may be. for:**

**(a)** **quantity factors only;**

**(b)** **commercial level factors only; or**

**(c)** **both commercial level and quantity factors.**

**3.** **The expression "and/or" allows the** **flexibility** **to use the sales and make the necessary adjustments**
**in any one of the three conditions described above.**

**4.** **For the purposes of Article** **2,** **the transaction value of identical 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**
**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.**

**2.** **Having found a sale under any one of these three conditions adjustments will then be made,**
**as the case may be, for:**

**(a)** **quantity factors only;**

**(b)** **commercial level factors only; or**

**(c)** **both commercial level and quantity factors.**

**3.** **The expression** **"and/or"** **allows the flexibility to use the sales and make the necessary adjustments**
**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**

**2.** **As an example of this, goods are sold from a price list** **when** **grants favourable unit prices**
**for purchases made in larger quantities.**

_**Total quantity**_
_**Sale**_ _**quantity**_ _**Unit**_ _**price**_ _**Number**_ _**of sales**_ _**sold at**_ _**each**_ _**price**_

**1-10** **units** **100** **10 sales of 5 units** **65**

**5 sales of** **3** **units**

**11-25 units** **95** **5 sales of** **11** **units** **55**

**over 25 units** **90** **1 sale of 30 units** **80**

**1 sale of 50 units**

**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.**

**4.** **A third example would be the following situation where various quantities are sold at various**
**prices.**

_**(a) Sales**_

_**Sale**_ _**quantity**_ _**Unit**_ _**price**_

**40 units** **100**

**30 units** **90**

**15 units** **100**

**50 units** **95**

**25 units** **105**

**35** **units** **90**

**5 units** **100**

_**(b) Totals**_

_**Total quantity**_ _**sold**_ _**Unit**_ _**price**_

**65** **90**

**50** **95**

**60** **100**

**25** **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.**

**12.** **It is recognized that the method of valuation provided** **for** **in paragraph 2 of Article 5 would**
**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**_

**1.** **As** **a** **general** **mle,** **customs value** **is** **determined under this Agreement on** **the** **basis of information**
**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.**

**6.** **Where information other than that supplied by or on behalf of the producer is used for the**
**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**_

**1.** **Customs values determined under the provisions of Article 7 should, to the greatest extent**
**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)** _**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.**

**(b)** _**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.**

_**Note to Article 8**_

_**Paragraph l(a)(i)**_

**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)**_

**1.** **There are two faaors involved in the apportionment of the elements specified in**
**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.**

**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)**_

**1.** **Additions for the elements specified in paragraph l(b)(iv) of Article 8 should be based on**
**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.**

**3.** **The ease with which it may be possible to calculate the values to be added will depend on a**
**particular firm's structure and management practice, as well as its accounting methods.**

**4.** **For** **example,** **it** **is** **possible** **that a** **firm** **which imports** **a** **variety of products** **from** **several countries**
**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.**

**6.** **Variations in the above circumstances will, of course, require different factors to** **be** **considered**
**in determining the proper method of allocation.**

**7.** **In** **cases where the production of the element in question involves a number of countries and**
**over** **-, — w -** **a period of** **w** **time,** **-,** **the adjustment should be limited** **j** **to the** **value actually added to** **that** **element outside**
**the count: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.**

**2.** **Payments made by the buyer for the right to distribute or resell the imported goods shall not**
**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**_

**1.** **Article** **11** **provides the importer with the right to appeal against** **a** **valuation determination made**
**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.**

**3.** **However,** **nothing in Article** **11** **shall prevent** **a** **Member from requiring full payment of assessed**
**customs duties prior to an appeal.**

_**Note to Article 15**_

_**Paragraph 4**_

**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)** **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;**

**(b)** **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;**

**(c)** **to prepare** **and** **circulate annual reports on the technical aspects of the operation and**
**sums** **of this Agreement;**

**(d)** **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;**

**(e)** **to faciliute, as requested, technical assistance** **to .Members** **with a view to furthering**
**the international acceptance of this Agreement;**

_**(f)**_ **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**_

_**5**_ **.** **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 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**

**6.** **Members of the CCC which are not Members of the WTO may be represented at meetings**
**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.**

**8.** **Nominations of delegates, alternates and advisers to meetings of the Technical Committee shall**
**be made to the Secreury-General.**

_**Technical Committee Meetings**_

**9.** **The Technical Committee shall meet as necessary but at least two times a year. The date of**
**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.**

**10.** **The meetings of the Technical Committee shall be held at the headquarters of** **the** **CCC unless**
**otherwise decided.**

**11.** **The Secreury-General shall inform all members of** **the** **Technical Committee** **and** **those included**
**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.**

**13.** **The Technical Committee shall determine its agenda at the opening of each session. During**
**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.**

**15.** **If the Chairman is absent from any meeting or part** **thereof,** **a Vice-Chairman shall preside.**
**In that event, the latter shall have the same powers and duties as the Chairman.**

**(i**

**Page 197**

**16.** **The Chairman of** **the** **meeting shall participate in the proceedings of** **the** **Technical Committee**
**as such and not as the represenutive of a member of the Technical Committee.**

**17.** **In addition to exercising the other powers conferred upon the Chairman by these rules, the**
**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.**

**19.** **The** **Secretary-General,** **or** **officers** **of** **the CCC** **Secreuriat designated by the** **Secretary-General,**
**shall perform the secretarial work of meetings of the Technical Committee.**

_**Quorum and Voting**_

**20.** **Represenutives of** **a** **simple majority of** **the members** **of** **the** **Technical Committee shall constitute**

**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.**

**23.** **The Technical Committee shall draw up a report of** **all** **its sessions and, if** **the** **Chairman considers**
**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**

**1.** **The five-year delay in the application of the provisions of the Agreement by developing country**
**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.**

**3.** **Developing countries which consider that the reversal of the sequential order at the request**
**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:**

**"The Government of** **reserves the right to provide that the relevant provision 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.**

**4.** **Developing countries may wish to make a reservation with respect to paragraph 2 of Article 5**
**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.**

**6.** **Anicle** **17** **recognizes that in applying the Agreement, customs administrations may need to**
**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.**

**7.** **The price actually paid or payable includes** **all** **payments actually made or to be made as a**
**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.**

**Page 199**

**AGREEMENT ON PRESHIPMENT INSPECTION**

_**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.**

**2.** **The term "user Member" means a Member of which the government or any government body**
**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**

**4.** **The term "preshipment inspection entity" is any entity contracted or mandated by a Member**
**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**_

**2.** **User Members shall ensure that in the course of preshipment inspection activities relating to**
**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** **standards** **[2]** **apply.**

_**Transparency**_

_**5.**_ **User Members shall ensure** **that** **preshipment inspection activities are conducted** **in a** **transparent**

**manner.**

**6.** **User Members shall ensure** **that,** **when initially contacted by exporters, preshipment inspection**
**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**
**and regulations of user Members relating to preshipment inspe** **n activities, and shall also include**
**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**_

**9.** **User Members shall ensure that preshipment inspection entities treat all information received**
**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.**

**12.** **User Members shall ensure that preshipment inspection entities do not request exporters to**
**provide information regarding:**

**(a)** **manufacturing dau** **related** **to** **patented,** **licensed or undisclosed processes, or to processes**
**for which a patent is pending;**

**(b)** **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.**

**13.** **The information referred to in paragraph 12, which preshipment inspeaion entities shall not**
**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)** **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;**

**(b)** **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;**

**(c** **)** **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.**

**18.** **User Members shall ensure that, in order to avoid delays in payment, preshipment inspection**
**entities send to exporters or to designated represenutives of** **the** **exporters a Clean Report of Findings**
**as expeditiously as possible.**

**19.** **User Members shall ensure** **that,** **in the** **event of** **a** **clerical error** **in the** **Clean Report of Findings,**
**preshipment inspection entities correct the error** **and** **forward the correaed information** **to** **the appropriate**
**parties as expeditiously as possible.**

_**Price Verification**_

**20.** **User Members shall ensure that, in order to prevent over- and under-invoicing and fraud,**
**preshipment inspection entities conduct price verification** **[4]** **according to the following guidelines:**

**(a)** **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);**

**(b)** **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)** **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;**

**( i i** **)** **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;**

**(iii)** **the preshipment inspeaion entity shall** **uke** **into account the specific elements**
**listed in subparagraph (c);**

**(iv)** **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)** **the selling price in the country of importation of goods produced in such**
**country,**

**(ii)** **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:**

**(a)** **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;**

**(b)** **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:**

**(c)** **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).**

_**Derogation**_

**22.** **By derogation to the provisions of Article 2, user Members shall provide that, with the exception**
**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**_

**1.** **Exporter Members shall ensure** **that their laws** **and** **regulations relating to preshipment inspection**
**activities are applied in a** **non-discriminatory** **manner.**

_**Transparency**_

_**2.**_ **Exporter 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.**

_**Technical Assistance**_

**3.** **Exporter Members shall offer to provide to user Members, if requested, technical assistance**
**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)** **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;**

**(b)** **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**

**shall be updated annually. The list shall be publicly available. It shall be notified**
**to the Secreuriat and circulated to all Members;**

**•** **.** **•** **'** ***** **'** **•** **•** **•** **•** **.**

**(c)** **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;**

**(d)** **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;**

**(e)** **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;**

**(0** **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;**

**(g)** **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.**

**2.** **Members shall ensure that their laws and** **regulations** **shall not be contrary to the provisions**
**of this Agreement.**

**Page 208**

**Page 209**

**AGREEMENT ON RULES OF ORIGIN**

_**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.**

**2.** **Rules of origin referred to in paragraph** **1** **shall include all mles of origin used** **in** **non-preferential**
**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 ]**

**PART II**

**DISCIPLINES TO GOVERN THE APPLICATION** **QF** **RULES OF ORIGIN**

_**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)** **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;**

**(ii)** **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;**

**(iii)** **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:**

**(b)** **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;**

**(c)** **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);**

**(d)** **(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 concerned** **[2]** **;**

**'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)** **their mles of origin** **are** **administered** **in a** **consistent, uniform, impartial and reasonable**

**manner;**

**(f)** **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;**

**(g)** **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;**

**(h)** **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);**

**(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;**

**(j** **)** **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;**

**(k** **)** **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)** **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;**

**(c)** **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;**

**(d)** **the mles of origin** **are** **administered in a consistent, uniform, impartial and reasonable**

**manner; .**

**(e)** **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;**

**(f)** **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);**

**(g)** **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;**

**(h)** **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;**

**(i)** **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.**

**2.** **There shall be esublished a Technical Committee on Rules of Origin (referred to in this**
**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**_

**1.** **Each Member shall provide to the Secreuriat, within 90 days after the date of entry into force**
**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.**

**2.** **The Committee shall review the provisions of Parts I, II and III and propose amendments as**
**necessary to reflea the results of the harmonization work programme.**

**3.** **The Committee, in cooperation with the Technical Comminee, shall set up a mechanism to**
**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**

_**Article 9**_

_**Objectives and Principles**_

**1.** **With the objectives of harmonizing mles of origin and,** _**inter alia,**_ **providing more certainty**
**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)** **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;**

**(e)** **rules of** **origin** **should be adrninistrable in a consistent, uniform, impartial and reasonable**

**manner;**

**(f)** **mles of origin should be coherent;**

**(g)** **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)** **The Comminee and the Technical Comminee provided for in Article 4 shall** **be** **the**
**appropriate bodies to conduct this work.**

**(c)** **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 percentages** **[4]** **and/or manufacturing or**
**processing** **operations** **[5]** **,** **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.**

**4** **lf** **the ad valorem criterion is** **prescribed,** **the method for calculating this** **percenuge** **shall also be indicated in the rules**
**of origin.**

**5** **If** **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)** **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 :**

**(b)** **to furnish information and advice on any maners concerning the origin determination**
**of goods as may be requested by any Member or the Committee;**

**(c)** **to prepare and** **circulate** **periodic reports on the technical aspects of the operation and**
**status of this Agreement; and**

**(d)** **to review annually the technical aspects of the implementation and operation of Parts II**
**and** **III.**

**2.** **The Technical Comminee shall exercise such other responsibilities as the Committee may request**
**of it.**

**3.** **The Technical Committee shall attempt to conclude its work on specific matters, especially**
**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.**

**5.** **Members of the CCC which are not Members of the WTO may be represented at meetings**
**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.**

**7.** **Nominations of delegates, alternates** **and** **advisers to meetings of the Technical Comminee** **shall**
**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.**

**ANNEX II**

**COMMON DECLARATION WITH REGARD TO PREFERENTIAL RULES OF ORIGIN**

**1.** **Recognizing that some Members apply preferential** **mles.of** **origin,** **distinct from** **non-preferential**
**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)** **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;**

**(iii)** **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**

**permissible as part of a clarification of** **a** **positive standard or in individual cases where**
**a positive determination of preferential origin is not necessary;**

**(c)** **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;**

**(d)** **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 days** **[7]** **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);**

**(e)** **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;**

**(f)** **' 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;**

**(g)** **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.**

**4.** **Members** _**agree**_ **to provide to the Secreuriat promptly their preferential mles of** **origin,** **including**
**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**

**Page** **221**

**AGREEMENT ON IMPORT LICENSING PROCEDURES**

_**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 ]**

**3.** **The mles for import licensing procedures shall be neutral in** **.application** **and administered in**
**a fair and equiuble manner.**

**4.** **(a)** **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 governments** **[3]** **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.**

**6** **Application procedures** **and.** **where** **applicable,** **renewal procedures shall be as simple as** **possible.**
**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.**

**7.** **No application shall be refused for minor documentation errors which do ot alter basic data**
**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**

**9.** **The foreign** **exchange** **necessary to pay for licensed imports shall be made available to licence**
**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***_

**1.** **Automatic import licensing is defined as import licensing where approval of the application**
**is granted in all cases, and which is in accordance with the requirements of paragraph 2(a).**

**2.** **The following provisions** **[5]** **, in addition to those in paragraphs 1 through** **11** **of Article 1 and**
**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)** **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;**

**(ii)** **applications for licences may be submitted on any working day prior to the**
**customs clearance of the goods;**

**(iii** **)** **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.**

**5** **A** **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**_

**1..** **The following provisions, in addition to those in paragraphs** **1** **through** **11** **of Article** **1,** **shall**
**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.**

**3.** **In** **the case of licensing requirements for purposes other** **than** **the implementation of quantitative**
**restrictions.** **Members shall publish** **sufficient,** **infonnation for other Members and traders to know the**
**basis for granting and/or allocating licences.**

**4.** **Where** **a** **Member provides** **the** **possibility for** **persons,** **firms** **or** **institutions to request exceptions**
**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)** **the distribution of such licences among supplying countries;**

**(iv)** **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)** **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;**

**(c)** **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**

**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;**

**(e)** **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;**

**(f)** **'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;**

**(g)** **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;**

**(h)** **.** **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;**

**(i)** **when issuing licences. Members shall take into account the desirability of issuing**
**licences for products in economic quantities;**

**(j)** **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**_

**1.** **Members which institute licensing procedures or changes in these procedures shall notify the**
**Committee of such within 60** **days** **of publication.**

**2.** **Notifications of the institution of import licensing procedures shall include the following**
**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)** **in the case of non-automatic import licensing procedures, indication of the measure**
**being implemented through the licensing procedure; and**

**(h)** **expected duration of the licensing procedure if this can be estimated with some**
**probability,** **and if not. reason why this information cannot be provided.**

**3.** **Notifications of changes in import licensing procedures shall indicate the elements mentioned**
**above,** **if changes in such occur.**

**4.** **Members shall notify the Committee of the publication(s) in which the infonnation** **rec<4** **red**
**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.**

**3** **Members undertake** **to** **complete the annual questionnaire on import licensing procedures promptly**
**and in full.**

**4.** **The Committee shall inform the Council for Trade in Goods of developments during the period**
**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**

**Page 229**

**AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES**

_**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)** **a** **government** **provides goods or services other than general infrastructure,**
**or purchases goods;**

**(iv)** **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;**

**and**

**(b)** **a benefit is thereby conferred.**

**1.2** **A subsidy as defined in paragraph 1 shall** **be** **subject to the provisions of Part II or shall be**
**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**_

**2.1** **In order to determine whether a subsidy, as defined in paragraph 1 of Article 1, is specific**
**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 conditions** **[2]** **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.**

**2.2** **A subsidy which is limited** **to certain** **enterprises located within** **a** **designated geographical region**
**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.**

**2.4** **Any determination of specificity under** **the** **provisions of** **this** **Article shall be clearly substantiated**
**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**_

**3.1** **Except as provided in the Agreement on Agriculture, the following subsidies, within** **the** **meaning**
**of Article 1, shall be prohibited:**

**(a)** **subsidies** **contingent, in law or in fact** **[4]** **, whether solely or as one of several other**
**conditions, upon export performance, including those illustrated in Annex I** **[s]** **;**

**»**

**(b)** **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.**

**4.2** **A request for consultations under paragraph** **1** **shall include a statement of available evidence**
**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.**

**4.4** **If** **no mutually** **agreed solution** **has** **been reached within 30** **days** **[6]** **of the request for consultations,**
**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.**

**4.5** **Upon its** **establ** **ishment.** **the** **panel may request the assistance of** **the** **Permanent** **Group** **of Experts** **[7 ]**

**(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 ]**

**4.10** **In the event the recommendation of the DSB is not followed within the time-period specified**
**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)** **injury to the domestic industry of another** **Member** **[11]** **;**

**(b)** **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** **1994** **[12]** **;**

**(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**_

**6.1** **Serious prejudice in the sense of paragraph (c) of Article 5 shall be deemed to exist in the case**
**of:**

**(a)** **the total ad valorem** **subsidization** **[14]** **of a product exceeding 5 per** **cent** **[15]** **;**

**(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 ]**

**6.2** **. Notwithstanding the provisions of paragraph 1, serious prejudice shall not be found if the**
**subsidizing Member demonstrates that the subsidy in question has not resulted in any of the** **effects**
**enumerated in paragraph 3.**

**6.3** **Serious prejudice in the sense of paragraph (c) of Article 5 may arise in any case where one**
**or several of the following apply:**

**(a)** **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;**

**(b)** **the effect of the subsidy is to displace or impede the exports of a like product of another**
**Member from a third country market;**

**(c)** **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:.**

**(d)** **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.**

**6.4** **For the purpose of paragraph 3(b). the displacement or impeding of exports shall include any**
**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.**

**6.7** **Displacement or impediment resulting in serious prejudice shall not arise under paragraph 3**
**where any of the following circumstances exist** **[18]** **during the relevant period:**

**(a)** **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;**

**(b)** **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;**

**(c)** **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)** **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);**

**(f)** **failure to conform to standards and other regulatory requirements in the importing**
**country.**

**6.8** **In the absence of circumstances referred to in paragraph 7, the existence of serious prejudice**
**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.**

**6.9** **This Article does not apply to subsidies maintained on agricultural products as provided in**
**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 h e** **(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** **prejudice** **[19]** **caused to the interests of**
**the Member requesting consultations.**

**7.3** **Upon request for consultations under paragraph 1, the Member believed to be granting or**
**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.**

**7.4** **If consultations** **do** **not result in** **a** **mutually agreed solution within 60 days** **[20]** **, any Member party**
**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.**

**s** **If** **a** **meeting** **of** **the DSB** **is** **not scheduled during this period, such** **a** **meeting shall** **be** **held** **for** **this purpose.**

**Page 237**

**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.**

**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 covers** **[27]** **not more than 75 per cent of the costs of industrial** **research** **[2]** **"**
**"** **[ M]**
**or 50 per cent of the costs of** **pre-competitive** **development** **activity** **[2]** **;**

**!,** **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.**

***** **[4]** **Since** **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 h e 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)** **costs of personnel** **(researchers,** **technicians and other supporting suff** **employ** **ed**
**exclusively in the research activity);**

**(ii)** **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** **development** **[31]** **and non-specific (within** **the** **meaning**
**of Article 2) within eligible regions provided that:**

**(i)** **each disadvanuged region must be a clearly designated contiguous geographical**
**area with a definable economic and administrative identity;**

**(ii)** **the region is considered as disadvanuged on the basis of neutral and objective**
**criteria** **[32]** **, 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 facilities** **[33]** **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)** **does not** **cover,** **the** **cost of replacing and operating the assisted investment, which**
**must be fully borne by firms; and**

**(iv)** **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 ]**

**8.4** **Upon request of a** **Member,** **the Secretariat shall review a notification made pursuant to**
**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.**

**8.5** **Upon the request of a** **Member,** **the determination** **by the** **Committee referred to** **in** **paragraph 4,**
**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**_

**9.1** **If, in the course of implemenution of** **a** **programme referred to in paragraph 2 of Anicle 8.**
**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.**

**9.3** **If** **no** **mutually accepuble solution has been reached in consulutions under paragraph 2 within**
**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 duty** **[36 ]**

**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 initiated** **[37]** **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 h e 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.**

**11.6** **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**
**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**

**M** **ln** **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**_

**12.1** **Interested Members and all interested parties in a countervailing duty 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.**

**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**
**exporters** **[41]** **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.**

**12.2.** **Interested** **Members and interested parties** **also** **shall have** **the** **right,** **upon justification, to present**
**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.**

**12.7** **In** **cases in which any interested Member or 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.**

**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)** **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**

**(ii)** **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)** **[government provision of equity capital shall not.be considered as conferring a benefit,](http://not.be)**
**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;**

**(b)** **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;**

**( c** **)** **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;**

**(d)** **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**_ _**Injury**_ _**[45 ]**_

**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 products** **[46]** **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.**

**15.5** **It must be demonstrated that the subsidized imports are, through the effects** **[47]** **of subsidies,**
**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)** **nanire of the subsidy or subsidies in question and the trade effects likely to arise**
**therefrom;**

**(ii)** **a significant rate of increase of subsidized imports into the domestic market indicating**
**the likelihood of substantially increased importation;**

**(iii)** **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;**

**(iv)** **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 related** **[48]** **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)** **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;**

**(b)** **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**

**(c)** **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.**

**17.3** **Provisional measures shall not be applied sooner than 60 days from the date of initiation of**
**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**_

**18.1** **Proceedings may** **[49]** **be suspended or terminated without the imposition of provisional measures**
**or countervailing duties upon receipt of satisfactory voluntary undertakings under which:**

**(a)** **the government of** **the** **exporting Member agrees to eliminate or limit the subsidy**
**or take other measures concerning its effects; or**

**(b)** **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.**

**18.4** **If an undertaking is** **accepted,** **the investigation of subsidization and injury shall nevertheless**
**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 h e** **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 parties** **[90]** **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** **levied** **[51]** **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.**

**20.6** **In** **critical circumstances where for the subsidized product in question the authorities find** **that**
**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** **report** **[33]** **,** **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)** **the address to which representations by interested Members and interested**
**parties should be directed; and**

**(vi)** **the** **time-limits allowed** **to** **interested Members and interested parties for making**
**their views known.**

**22.3** **Public notice shall be given of any preliminary or final** **determination,** **whether affirmative**
**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.**

**s** **When** **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** **subsidies** **[54]** **,** **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.**

**25.5** **If subsidies are granted to specific products or sectors, the notifications should be organized**
**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 h e Comminee shall esublish a Working Party to review the contents and form of the questionnaire as contained in**
**BISD** **9S/19M94.**

**Page 257**

**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.**

_**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** **subsidies** **[55]** **,** **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)** **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**

**(b)** **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**_

**28.1** **Subsidy programmes which have been esublished** **within the** **territory'** **of any Member before**
**the date on which such a Member signed the** **WTO** **Agreement and which are inconsistent with the**
**provisions of this Agreement shall be:**

**(a)** **notified to the Committee not later than 90 days after the date of entry into force of**
**the WTO Agreement for such Member; and**

**(b)** **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.**

**29.4** **In exceptional circumstances Members referred to in paragraph 1 may be given departures**
**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**

**32.3** **Subject to paragraph 4, the provisions of this Agreement shall apply to** **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.**

**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** **clause** **[4]** **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)** **Internal transport and freight charges on export shipments, provided or mandated by**
**governments, on terms more favourable than for domestic shipments.**

**•(d)** **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 available** **[57]** **on world markets to their exporters.**

**(e)** **The full or partial exemption remission, or deferral specifically related to exports, of direct**
**taxes** **[5]** ***** **or social welfare charges paid or payable by industrial or commercial** **enterprises.** **[59 ]**

**(f)** **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 h e** **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)** **The exemption** **or** **remission,** **in** **respea of** **the** **production** **and** **distribution of exported** **products,**
**of indirect taxes** **[58]** **in excess of those levied in respect of** **the** **production and distribution of like**
**products when sold for domestic consumption.**

**(h)** **The exemption, remission or** **deferral** **of prior-stage cumulative indirect taxes** **[58]** **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.**

**(i)** **The remission or drawback of import charges** **[58]** **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.**

**(j)** **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.**

**(k)** **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**

**ANNEX** **II**

**,** **GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION** **PROCESS** **[61 ]**

**I**

**1.** **Indirect tax rebate schemes can allow for exemption, remission or deferral of prior-stage**
**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** **[ l]** **X)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:**

**1.** **Paragraph (i) of the Illustrative List stipulates that home market inputs** **ma** **[v]** **be substituted for**
**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.**

**2.** **Where it is alleged that a substitution drawback system conveys a subsidy, the investigating**
**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.**

**Page 267**

**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 268**

**ANNEX IV**

**CALCULATION OF THE TOTAL AD VALOREM SUBSIDIZATION**
**(PARAGRAPH 1(A) OF ARTICLE** **Ô)** **[62 ]**

**1.** **Any calculation of the amount of** **a** **subsidy for the purpose of paragraph** **1** **(a) of Article 6 shall**
**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's** **[63]** **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.**

**4.** **Where the recipient firm is in a start-up situation, serious prejudice shall be deemed to exist**
**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 ]**

**5.** **Where the recipient firm is locatec** **•** **r:** **an** **inflationary economy** **country,** **the value of the product**
**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.**

**6.** **In determining the overall rate of subsidization in** **a** **given year, subsidies given under different**
**programmes and by different authorities in the territory of a Member shall be aggregated.**

**7.** **Subsidies granted prior to the date of entry into force of the WTO** **Agreement,** **the benefits**
**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 h e 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.**

**2.** **In cases where matters are referred to the DSB under paragraph 4 of Article** **7,** **the DSB** **shall,**
**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.**

**4.** **The DSB shall designate a representative to serve the function of facilitating the**
**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.**

**6.** **If the subsidizing and/or third-country Member** **fail** **to cooperate in the information-gathering**
**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.**

**7.** **In making its determination, the panel** **should'draw** **adverse inferences from instances of non-**
**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.**

**9.** **Nothing** **in the information-gathering process shall limit the ability of the panel to seek such**
**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**

**1.** **Upon initiation of** **an** **investigation, the authorities of** **the** **exporting Member** **and the** **firms** **known**
**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.**

**3.** **It should** **be** **standard practice to obtain explicit agreement of** **the** **firms** **concerned in the exporting**
**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)** **Least-developed** **countries designated as such by the United Nations which are Members of**
**the** **WTO.**

**(b)** **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 annum** **[68]** **: 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**_

**1.** **A** **Member** **[1]** **may apply a safeguard measure to a product only if** **that** **Member has determined,**
**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)** **"serious** **injury"** **shall be understood to mean a significant overall impairment in the**
**position of a domestic industry;**

**(b)** **"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**

**(c)** **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.**

**2.** **(a)** **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**_

**1.** **A Member shall apply safeguard** **measures** **only to the extent necessary to prevent or remedy**
**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.**

**2.** **(a)** **.** **In** **cases in which** **a** **quota is allocated among supplying countries, the Member applying**
**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.**

**3.** **The toul period of application of** **a** **safeguard measure including the period of application of**
**any provisional measure, the period of initial application and any extension thereof, shall not exceed**
**eight years.**

**4.** **In** **order** **to facil itate** **adjustment** **in** **a situation where the expected duration of a safeguard measure**
**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.**

**5.** **No safeguard measure shall be applied again to the import of** **a** **product which has been subject**
**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.**

**6.** **Notwithstanding the provisions of paragraph 5, a safeguard measure** **with** **a duration of** **180** **days**
**or less may be applied** **again** **to the import of a product if:**

**(a)** **at least one year has elapsed since the date of introduction of** **a** **safeguard measure on**
**the import of that product; and**

**(b)** **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**_

**1.** **A Member proposing to apply a safeguard measure or seeking an extension of a safeguard**
**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.**

**2** **A 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**_

**1.** **(a)** **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** **Member** **[3]** **,** **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.**

**3.** **Members shall not encourage or support the adoption or maintenance by public and private**
**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.**

**a**
**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** **&.**

**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.**

**9.** **Any Member may notify the Committee on Safeguards of any non-governmental measures**
**referred to in paragraph 3 of Anicle** **11.**

**10.** **AH** **notifications to** **the** **Council for Trade** **in** **Goods referred to** **in** **this Agreement shall normally**
**be made through the Committee on Safeguards.**

**11.** **The provisions on notification in this Agreement shall not require any Member to disclose**
**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)** **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;**

**(b)** **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)** **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;**

**(e)** **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;**

**(f)** **to receive and review all notifications provided for in this Agreement and report as**
**appropriate to the Council for Trade in Goods; and**

**(g)** **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**

**EC/Japan**

**Product**

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**

**Article II** **Most-Favoured-Nation Treatment**

**Anicle III** **Transparency**
**Article III** _**bis**_ **Disclosure of Confidential Information**

**Article** **IV** **Increasing Participation of Developing Countries**
**Article V** **Economic Integration**
**Article** **V** _**bis**_ **Labour Markets Integration Agreements**
**Article VI** **Domestic Regulation**
**Article VII** **Recognition**
**Article VIII** *** Monopolies and** **Exclusive** **Service Suppliers**
**Article IX** **Business Practices .**

**Article X** **Emergency Safeguard Measures**
**Article XI** **Payments and Transfers**
**Article XII** **Restrictions to Safeguard the Balance of Payments**
**Anicle XIII** **Government Procurement**

**Anicle XIV** **General Exceptions**
**Anicle XIV** _**bis**_ **Security Exceptions**
**Anicle XV** **Subsidies**

**PART III** **SPECIFIC COMMITMENTS**

**Anicle** **XV]** **Market Access**

**Anicle XVII** **National Treatment**

**Anicle XVIII** **Additional** **Commitments**

**PART IV** **PROGRESSIVE LIBERALIZATION**

**Ànicle** **XIX** **Negotiation of Specific Commitments**
**Anicle XX** **Schedules of Specific Commitments**
**Anicle XXI** **Modification of** **Schedules**

**PART V** **INSTITUTIONAL** **PROVISIONS**

**Anicle XXn** **Consulution**

**Anicle XXIII** **Dispute Settlement and Enforcement**
**Anicle XXTV** **Council for Trade in Services**

**Anicle XXV** **Technical Cooperation**
**Anicle XXVI** **Relationship with Other International Organizations**

**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**

**Page 285**

**GENERAL AGREEMENT ON TRADE IN SERVICES**

_**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.** **This** **Agreement applies to measures by Members affecting trade in services.**

**2.** **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;**

**(c)** **by a service supplier of one Member, through commercial presence in the territory**
**of any other Member;**

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**(d) •** **by** **a** **service supplier of one Member, through presence of natural persons of** **a** **Member**
**in the territory of any other Member.**

**3.** **For the purposes of this Agreement:**

**(a)** **"measures by** **Members'** **[4]** **means measures uken by:**

**(i)** **central, regional or local governments and authorities; and**

**(ii)** **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;**

**(b)** **"services"** **includes any service in any sector except services supplied in the exercise**
**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.**

**2.** **A Member may maintain** **a** **measure inconsistent with paragraph** **1** **provided** **that** **such** **a** **measure**
**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**_

**1.** **Each Member shall publish promptly and, except in emergency situations, at the latest by the**
**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**

**2.** **'** **Where publication as referred** **to** **in paragraph 1 is not practicable, such information shall be**
**made otherwise publicly available.**

**3.** **'** **Each Member shall promptly and at least annually inform the Council for Trade in Services**
**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.**

**4.** **Each** **Member** **shall** **respond** **promptly to all requests by any other Member for specific**
**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.**

**5.** **Any Member may notify to the Council for Trade in Services am/measure,** **uken** **by any other**
**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**_

**1.** **The increasing participation of developing country Members in world trade shall be** **faciliuted**
**through negotiated specific commitments, by different Members pursuant to Parts III and IV of this**
**Agreement,** **relating to:**

**(a)** **the** **strengthening of their domestic services capacity and its efficiency and**
**competitiveness,** _**inter alia**_ **through access to technology on a commercial basis;**

**(b)** **the improvement of their access to distribution channels and information networks;**
**and**

**(c)** **the liberalization of market access in sectors and modes of supply of** **export** **interest**
**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;**

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**(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**_

**1.** **This Agreement shall not prevent any of its Members from being a party to** **of** **entering into**
**an** **agreement** **liberalizing trade** **in** **services between** **or** **among** **the** **parties** **to such** **an** **agreement, provided**
**that such an agreement:**

**(a)** **has substantial sectoral coverage** **[1]** **, 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)** **elimination of existing discriminatory measures, and/or**

**(ii)** **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**

**5.** **If, in the conclusion, enlargement or any significant modification of any agreement under**
**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. •** **.**

**7.** **(a)** **Members which** **are** **parties to any agreement referred to** **in** **paragraph** **1** **shall promptly**
**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.**

**8.** **A Member which is a party to any agreement referred to in paragraph 1 may not seek**
**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 integration** **[2]** **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,!** **•»:•'** **l.'htof** **free entry to the employment** **markets**
**lie** **panies and includes measures** **concerning** **conditions** **of** **pay;** **other** **conoiuons** **of** **employment and social benefits.**

**Page 290**

**2.** **(a)** **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.**

**3.** **Where** **authorization is required** **for** **the supply of a service on** **which** **a specific commitment**
**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.**

**4.** **With a view to ensuring that measures relating to qualification requirements and procedures,**
**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.**

**5.** **(a)** **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)** **does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c);**
**and**

**(ii)** **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 organizations** **[3 ]**

**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.**

**2.** **A Member that is a party** **to an** **agreement** **or** **arrangement of** **the type** **referred to in paragraph** **1,**
**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.**

**3.** **A Member shall not accord recognition in a manner which would constitute a means of**
**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)** **. 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;**

**(b)** **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;**

**(c)** **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.**

**5.** **Wherever appropriate, recognition should be based on** **multilaterally** **agreed criteria. In**
**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**_

**1.** **Each Member shall ensure that any monopoly supplier of a service in its territory does not,**
**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.**

**2.** **Where a Member's monopoly supplier competes,** **either** **directly** **or through an** **affiliated company,**
**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.**

**3.** **.** **The Council for Trade in Services may, at the request of a Member which has a reason to**
**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**_

**1.** **Members recognize that certain business practices of service suppliers, other than those falling**
**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.**

**3.** **The provisions of paragraph 2 shall cease to apply three years after the date of entry into force**
**of the WTO Agreement.**

**(i**

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_**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.**

**2.** **Nothing in this Agreement shall affect the rights and obligations of the members of the**
**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.**

_**Article Xll**_

**. .** _**Restriaions to Safeguard the Balance of Payments**_

**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.**

**4.** **Any restriaions adopted or mainuined under paragraph 1, or any changes therein, shall be**
**promptly notified to the General Council.**

**5.** **(a)** **Members applying the provisions of this Article shall consult promptly with the**
**Committee on** **Balance-of-Payments** **Restrictions on restriaions adopted under this Article.**

**Page** **294**

**(b)** **The Ministerial Conference shall esublish** **procedu.** _**is**_ _**[4]**_ **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.**

**2.** **There shall be multilateral negotiations on government procurement in services under this-**
**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 •** **.-** **,**

**(i)** **the prevention of deceptive** **and** **fraudulent practices or to deal with the effects**
**of a default on services contracts;**

**(ii)** **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)** **inconsistent with Article XVII, provided that the difference in treatment is** **aimed** **at**
**ensuring the equiuble or effective** **[6]** **imposition or collection of direct uxes in respect**
**of services or service suppliers of other Members;**

**(e)** **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 uxes include measures**
**uken** **by a** **Member under** **its uxation** **system which:**

**<i>** ***Ppl> to** **non-resident service suppliers** **in** **recognition** **of** **the fact that the** **u x** **obligation** **of** **non-residents**
**is** **determined with respect** **to** **uxable** **hems** **sourced** **or** **located** **in the** **Member's territory;** **or**

**(II** **>** **apply to non-residents in order to ensure the imposition or collection** **of** **uxes in the Member's territory;**

**or** **.**

**<iiu** **apply** **to** **non-residents** **or** **residents** **in** **order** **to** **prevent** **the** **avoidance** **or** **evasion** **of** **uxes, including**
**compliance measures;** **or**

**(iv)** **tpply** **to** **consumers** **of** **services supplied** **in or** **from the territory** **of** **another Member** **in** **order** **to** **ensure**
**the imposition or collection** **of** **uxes on such consumers derived from sources in the Member's territory;**

**or**

**(v)** **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**

**(vi)** **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)** **to require any Member to furnish any information, the disclosure of which it considers**
**contrary to its essential security interests; or**

**(b)** **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.**

**2.** **The Council for Trade in Services shall be informed to the fullest extent possible of measures**
**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)** **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:**

**(b)** **limitations** **on the total value of service transactions or assets in the form of numerical**
**quotas or the requirement of an economic needs test;**

**(c)** **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 ]**

**(d)** **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;**

**(e)** **measures which restrict or require specific types of legal entity or joint venture through**
**which a service** **supplier** **may supply a service; and**

**(0** **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.**

**3.** **Schedules of specific commitments shall** **be** **annexed** **to** **this Agreement** **and** **shall form** **an** **integral**
**part** **thereof.**

_**Article**_ _**XXI**_

_**Modification of Schedules**_

**1.** **(a)** **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.**

**2.** **(a)** **At the request of any Member the benefits of which urider this** **Agreement may be affeaed**
**(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.**

**3.** **(a)** **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.**

**4.** **(a)** **The modifying Member may not modify or withdraw its commitment until it has made**
**compensatory** **adjustments in conformity with the findings of the arbitration.**

**(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.**

**5.** **The Council for Trade in Services shall esublish procedures for rectification or modification**
**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.**

_**2.**_ **The Council for Trade in Services or the Dispute Senlement Body** **(DSB)** **may. at the request**
**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.**

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

**3.** **A Member may** **not** **invoke Anicle** **XVII.** **either under this Anicle** **or** **Anicle** **XXIII.** **with respect**
**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.**

**2.** **The Council and, unless the Council decides otherwise, its subsidiary bodies shall be open**
**to** **participation by represenutives of all Members.**

**3.** **The Chairman of the Council shall be elected by the Members.**

_**Article XXV**_

_**Technical Cooperation**_

**1.** **Service suppliers of Members which are in need of such assistance shall have access to the**
**services of contact points referred to in paragraph 2 of Article IV.**

**2.** **Technical assisunce to developing countries shall be provided at the multilateral level by the**
**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)** **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;**

**(b)** **in the case of the supply of** **a** **maritime transport service, if it esublishes that the service**
**is supplied:**

**(i)** **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**

**(ii)** **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)** **"measure" means any measure by** **a** **Member, whether in the form of a law, regulation,**
**mle.** **procedure,** **decision,** **administrative** **action,** **or any other form;**

**(b)** **"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)** **the purchase, payment or use of a service;**

**(ii)** **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;**

**(iii)** **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)** **the constitution, acquisition or maintenance of a juridical person, or**

**(ii)** **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,**

**(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;**

**(f)** **"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;**

**(g)** **"service supplier" means any person that supplies a** **service;** **[12 ]**

**(h)** **"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;**

**(i)** **"service consumer" means any person that receives or uses a service;**

**(j)** **"person" means either a natural person or a juridical person;**

**(k)** **"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)** **is a national of that other Member; or**

**(ii)** **has the right of permanent residence in that other Member, in the case of**
**a Member which**

**1.** **does not have nationals; or**

**2.** **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)** **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**

**(ii)** **in the case of the supply of a service through commercial** **presence,** **owned**
**or controlled by:**

**1.** **naniral persons of that Member; or**

**2.** **juridical persons of that other Member** **identified** **under**
**subparagraph** **(i);**

**(n)** **a juridical person is**

**(i)** **"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:**

**(ii)** **"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:**

**(iii)** **"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.**

**Page 305**

**ANNEX ON ARTICLE II EXEMPTIONS**

_**Scope**_

**1.** **This Annex specifies the conditions under which a Member, at the entry into force of this**
**Agreement, is exempted from its obligations under paragraph 1 of Article II.**

**2.** **Any new exemptions applied for after the date of entry into force of the WTO Agreement shall**
**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**_

**5.** **The exemption of a Member from its obligations under paragraph** **1** **of Article** **Il'of** **the Agreement**
**with respect to a particular measure terminates on the date provided for in the exemption.**

**6.** **In** **principle,** **such exemptions should not exceed a period of 10 years. In any** **event,** **they shall**
**be subject to negotiation in subsequent trade liberalizing rounds.**

**7.** **A Member shall** **notify** **the Council for Trade in Services at the termination of the exemption**
**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**
**as nu** **jllifying** **or impairing benefits under a specific commitment.**

**Page** **307**

**ANNEX ON AIR TRANSPORT SERVICES**

**1.** **This Annex applies to measures affecting** **trade** **in air transport services, whether scheduled**
**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)** **activities conducted by a central bank or monetary authority or by any other**
**public entity in pursuit of monetary or exchange rate policies;**

**(ii)** **activities forming part of a statutory system of social security or public**
**retirement plans; and**

**(iii)** **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)** Insurance intermediation, such as brokerage and agency:
(iv) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment
and claim settlement services.

_**Banking**_ _**and**_ _**other**_ _**financial**_ _**services**_ **(excluding insurance)**

(v) Acceptance of deposits and other repayable funds from the public;

(vi) 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);
(B) foreign exchange;
(C) derivative products including, **but** net limited r : :\: ; *.              - f- [2] -*»;

**Page 310**

**(D)** **exchange rate and interest rate** **instruments,** **including products such**
**as swaps, forward rate agreements;**
**(E)** **transferable securities;**
**(F)** **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)** **Asset management, such as cash or portfolio management, all forms of**
**collective investment management, pension fund management, custodial,**
**depository and** **tmst** **services;**

**(xiv)** **Settlement and clearing services for financial assets, including securities,**
**derivative products, and other negotiable instruments;**

**( x v** **)** **Provision** **and** **transfer of financial information, and financial dau processing**
**and** **related software by suppliers of other financial services;**

**(xvi)** **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.**

**Page 311**

**SECOND ANNEX ON FINANCIAL SERVICES**

**1.** **Notwithstanding** **Article** **IT** **of the Agreement** **and** **paragraphs** **1** **and 2 of the Annex on Article II**
**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.**

**3.** **The Council for Trade in Services shall esublish any procedures necessary for the application**
**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.**

**2.** **Paragraph** **1** **shall not apply to any specific commitment on maritime transport services** **which**
**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.**

**Page 313**

**ANNEX ON TELECOMMUNICATIONS**

**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)** **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**

**(ii)** **. 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 -Migrions** **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)** **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;**

**( i i** **)** **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**

**(iii)** **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**

**The 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)** **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;**

**(ii)** **to protect the technical integrity of public telecommunications transport**
**networks or services;** **or**

**(iii)** **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)** **restrictions on resale or shared use of such services;**

**(ii)** **a requirement to use specified technical interfaces, including interface**
**protocols,** **for inter-connection with such networks and services;**

**(iii)** **requirements,** **where necessary,** **forthe inter-operability** **of such services and**
**to encourage the achievement of the goals set out in paragraph 7(a);**

**(iv)** **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;**

**( v )** **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**
**organizations and agreements in ensuring the efficient operation of domestic and** **global**
**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**

**1.** **-** **Article** **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 basic telecommunications only on:**

**(a)** **the implementation** **date to be** **determined** **under** **paragraph** **5** **of the Ministerial** **Decision**
**on Negotiations on Basic Telecommunications; or,**

**(b)** **should** **the** **negotiations** **not** **succeed,** **the date** **of the** **final** **report of the Negotiating Group**
**on Basic** **Telecommunications.provided** **for in that Decision.** **•**

**2.** **Paragraph 1 shall not apply to any specific commitment on basic telecommunications which**
**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. Copyright and Related Rights
2. Trademarks
3. Geographical Indications
4. Industrial Designs
5. Patents
6. Layout-Designs (Topographies) of Integrated Circuits
7. Proteaion of Undisclosed Information
8. Control of Anti-Competitive Practices in Contractual Licences '

PART III ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

1. General Obligations
2. Civil and Administrative Procedures and Remedies

3. Provisional Measures
4. Special Requirements Related to Border Measures
5. 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)** **the provision of effective and appropriate means for the enforcement of trade-related**
**intellectual property rights, uking into account differences in national legal systems;**

**(d)** **the provision of effective and expeditious procedures for the multilateral prevention**
**and senlement of disputes between governments; and**

**(e)** **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.**

**2.** **For the purposes of this Agreement, the term "intellectual property" refers to all categories**
**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**_

**1.** **In respect of Parts II.** **Ill** **and IV of this Agreement, Members shall comply with Articles 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 protection** **[3]** **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.** **.**

**2.** **Members may avail themselves of the exceptions permitted under paragraph 1 in relation to**
**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)** **deriving from international agreements on judicial assistance or law enforcement of**
**a general nature** **and** **not particularly confined to the proteaion of intellectual property;**

**( b** **)** **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;**

**(c)** **in respect of the rights of performers, producers of phonograms and broadcasting**
**organizations not provided under this Agreement;**

**(d** **)** **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.**

**2.** **Appropriate measures, provided that they** **are** **consistent with the provisions of this Agreement,**
**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.**

**2.** **Copyright protection shall extend to expressions and not to ideas, procedures, methods of**
**operation or mathematical concepts as such.**

_**Article 10**_

_**Computer Programs and Compilations of Data**_

**1.** **Computer programs, whether in source or object code, shall be protected as literary works**
**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**

**Page 325**

**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.**

_**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.**

**2.** **Producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect**
**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).**

**4.** **The provisions of Article** **11** **in respect of computer programs shall apply** _**mutatis mutandis**_
**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.**

**5.** **The term of the** **protection** **available under this Agreement** **to** **performers and producers of**
**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**_

**1.** **Any sign, or any combination of signs, capable of distinguishing the goods or services of one**
**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.**

**2.** **Paragraph 1 shall not be understood** **to'prevent** **a Member from denying registration of a**
**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.**

**4.** **The nature of** **the** **goods or services to which a trademark is to be applied shall in no case form**
**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.**

**3.** **Anicle** _**6bis**_ **of the Paris Convention (1967) shall apply,** _**mutatis mutandis,**_ **to goods or services**
**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**

**Page 327**

**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.**

_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_

**1.** **If use is required to maintain a registration, the registration may be cancelled** **only** **after an**
**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.**

**2.** **When subject to the control of its owner, use of a** **trademark** **by another person shall be**
**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**_

**1.** **Geographical indications are, for the purposes of this Agreement, indications which** **identify**
**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.**

**2.** **In respect of geographical** **indications.** **Members shall provide the legal means for interested**
**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).**

**3.** **A Member** **shall,** _**ex officio**_ **if** **its** **legislation so permits or at the request of** **an** **interested** **party,**
**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**_

**1.** **Members agree to enter into negotiations aimed at increasing the protection of individual**
**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.**

**5.** **Where a trademark has been applied for or registered in good faith, or** **where** **rights to a**
**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.**

**2.** **Each Member shall ensure that requirements for securing protection for textile designs, in**
**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.**

**2.** **Members may provide limited exceptions to the protection of industrial designs, provided that**
**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**_

**1.** **Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions,**
**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)** **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**
**. importing** **[6]** **for these purposes that produa;**

**(b)** **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.**

**2.** **Patent** **owners shall also have the right to assign, or transfer by succession, the patent and to**
**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.**

**2.** **Members may require an applicant** **for** **a patent to provide information concerning** **the** **applicant's**
**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 use** **[7]** **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)** **such use shall be non-assignable, except with that part of the enterprise or goodwill**
**which enjoys such use;**

**(f)** **any such use shall** **be** **authorized predominantly for the supply of** **the** **domestic market**
**of the Member authorizing such use;**

**(g)** **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;**

**(h)** **the right holder shall be paid adequate remuneration in the circumstances of** **each** **case,**
**uking into account the economic value of the authorization;**

**(i)** **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)** **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;**

**(k)** **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)** **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;**

**(ii)** **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**

**(iii)** **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.**

**2.** **Any Member shall be free to provide that the burden of proof** **indicated** **in paragraph 1 shall**
**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.**

**3.** **In the adduction of proof to the contrary, the legitimate interests of defendants in protecting**
**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.**

**The 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.**

**2.** **The conditions set out in** **subparagraphs ta)** **through (k) of Article** **31** **shall apply** _**mutatis mutandis**_
**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.**

**3.** **Notwithstanding paragraphs 1 and 2, a Member may provide that proteaion shall lapse 15**
**years after the creation of the** **layout-design.**

**SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION**

_**Article 39**_

**1.** **In the course of ensuring effeaive proteaion against unfair competition as provided in**
**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** **practices** **[10]** **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**_

**1.** **Members agree that some licensing practices or conditions** **peruining** **to intellectual property**
**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**_

**1.** **Members** **shall ensure that enforcement procedures as specified in this Part are available under**
**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.**

**Page 339**

**SECTION 2: CIVIL AND ADMINISTRATIVE PROCEDURES AND REMEDIES**

_**T,**_ _**•**_ _**>**_ _**•**_ _**•**_
_**Article 42**_

_**Fair**_ _**and.Equitable**_ _**Procedures**_

**Members shall make available to right** **holders** **[11]** **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.**

**2** **In** **cases in which a party to a proceeding voluntarily** **ana\without** **good** **reason** **refuses access**
**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**_

**1.** **The judicial authorities shall have the authority to order prompt and effective provisional**

**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.**

**4.** **Where** **provisional measures have been adopted** _**inaudita altera parte,**_ **the parties affected shall**
**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.**

**the goods** **5.** **The applicant may be required to supply other information necessary for the identification of 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** **MEASURES** **[12 ]**

_**Article 51**_

_**Suspension of Release by Customs Authorities**_

**Members** **shall,** **in conformity with the provisions set out below, adopt procedures** **[13]** **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)** **"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;**

**(b)** **' "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.**

**Page 343**

**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.**

_**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)** **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** **;**

**(c)** **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.**

**2.** **Members shall notify the laws and regulations referred to in paragraph 1 to the Council for**
**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.**

**4.** **Nothing in paragraphs** **1,** **2 and 3 shall require Members 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 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**_

**1.** **Subject to the provisions of paragraphs 2, 3 and 4, no Member shall be obliged to apply the**
**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.**

**2.** **A developing country Member is entitled to delay for a further period of four years the date**
**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**_

**1.** **This Agreement does not give** **rise** **to obligations in respea of acts which occurred before the**
**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.**

**3.** **There shall be no obligation to restore protection to subject matter which on the date of**
**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.**

**6.** **Members shall not be required to apply Anicle 31, or the requirement in paragraph 1 of**
**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)** **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;**

**(b)** **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**

**(c)** **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.**

**2.** **Amendments merely serving the purpose** **of** **adjusting to higher levels of protection of** **intelleoual**
**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)** **to require a Member to furnish any information the disclosure of which it considers**
**contran.** **to its** **essential** **security interests; or**

**(b)** **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_

**1.** **The mles and procedures of this Undersunding shall apply to disputes brought pursuant to**
**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**

**2.** **The DSB shall inform the relevant WTO Councils and Committees of any developments in**
**disputes related to provisions of the respective covered agreements.**

**3.** **The DSB shall meet as often as necessary to carry out its functions within the time-frames**
**provided in this Undersunding.**

**4.** **Where the mles and procedures of** **this** **Understanding provide for the DSB to uke a decision,**
**it shall do so by** **consensus.'**

_**Article 3**_

_**General Provisions**_

**1.** **Members affirm their adherence to the principles for the management of disputes heretofore**
**applied under Articles XXII and XXIII of** **GATT** **1-947,** **and .the** **mles and procedures as further elaborated**
**and modified herein.**

**2.** **The dispute settlement system of the WTO is a central element in providing security and**
**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**_

**1.** **Members** **affirm** **their resolve to strengthen and improve the effectiveness of the consulution**
**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**

**2.** **Each Member underukes to accord sympathetic consideration to and afford adequate opportuniry**
**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.**

**5.** **In the** **course of consulutions** **in** **accordance with the provisions of** **a** **covered** **agreement.** **before**
**resorting to further action under this Understanding, Members should attempt to obtain satisfactory**
**adjustment of the matter.**

**6.** **Consulutions shall be confidential, and without prejudice to the rights of any Member in any**
**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.**

**8.** **In cases of urgency, including those which concern perishable** **goods.** **Members shall enter**
**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.**

**10.** **During consultations Members should give special attention to the particular problems and**
**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** **agreements** **[4]** **,** **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.**

**The 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**_

**1.** **Good offices, conciliation and mediation are procedures that are undertaken voluntarily if the**
**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.**

**4.** **When good offices, conciliation or mediation are entered into within 60 days after the date**
**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.**

**5.** **If the parties to a dispute agree, procedures for good** **offices,** **conciliation or mediation may**
**continue while the panel process proceeds.**

**6.** **The Director-General may. acting in an ex** _**officio**_ **capacity, offer good offices, conciliation**
**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**_

**1.** **Panels shall have the following terms of reference unless the parties to the dispute agree otherwise**
**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)."**

**2.** **Panels shall address the relevant provisions in any covered agreement or agreements cited by**
**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**_

**1.** **Panels shall** **be** **composed of** **well-qualified** **governmental** **and/or** **non-governmental individuals,**
**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.**

**2.** **Panel members should be selected with a view to ensuring the independence of the members,**
**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**

**3.** **Citizens of Members whose governments** **[6]** **are parties to the dispute or third parties as defined**
**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.**

**6.** **The Secretariat shall propose nominations for** **the** **panel** **to the** **parties to** **the** **dispute.** **The parties**
**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.**

**2.** **The single panel shall organize its examination and present its findings to the DSB in such**
**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**_

**1.** **The interests of the panies to** **a** **dispute and those of other Members under a covered agreement**
**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.**

**3.** **Third parties shall receive the submissions of** **the** **parties to the dispute to the first meeting of**
**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**_

**1.** **Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise**
**after consulting the parties to the dispute.**

**2.** **Panel procedures should provide sufficient flexibility so** **as to** **ensure high-quality panel reports,**
**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.**

**4.** **In determining the timetable for the panel process, the panel shall provide sufficient time for**
**the parties to the dispute to prepare their submissions.**

**5.** **Panels should set precise deadlines for written submissions by** **the** **parties and** **the** **parties should**
**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.**

**7.** **Where the parties to the dispute have failed to develop a mutually satisfactory solution, the**
**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.**

**8.** **In order to make the procedures more efficient, the period in which the panel shall conduct**
**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.**

**2.** ***** **Panels may seek information from any relevant source and may** **consult** **experts to obuin their**
**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.**

**2.** **The reports of panels shall be drafted without the presence of the parties to the dispute in the**
**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.**

**2.** **Following the expiration of the set period of time for receipt of comments from the parties**
**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**_

**1.** **In order to provide sufficient time for the Members to consider panel reports, the reports shall**
**not be considered for adoption by the DSB until 20 days after the date they have been circulated to**
**the** **Members.**

**2.** **Members having objections to a panel report shall give written reasons to explain their objeaions**
**for** **circulation at least 10 days prior to the DSB meeting at which the panel report** **will** **be considered.**

**3.** **The parties to a dispute shall have the right to participate fully in the consideration of the panel**
**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 meeting** **[7]** **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.**

**5.** **As a general** **mle.** **the proceedings shall not exceed 60 days from the date a party to the dispute**
**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.**

**6.** **An appeal shall be limited to issues of law covered in the panel report and legal** **interpretations-**
**developed by the panel.**

**7.** **The Appellate Body shall be provided with appropriate administrative and legal support as**
**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**_

_**9.**_ **Working procedures shall** **be** **drawn** **up** **by the Appellate Body in consulution** **with the** **Chairman**
**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.**

**11.** **Opinions expressed in the Appellate Body report by individuals serving on the Appellate Body**
**shall be anonymous.**

**12.** **The Appellate Body shall address each of the issues raised in accordance with paragraph 6**
**during the appellate proceeding.**

**13.** **The Appellate Body may uphold, modify or reverse the legal findingsand conclusions of the**
**panel:**

_**Adoption of Appellate Body Reports**_

**14.** **An Appellate Body 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 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**_

**1.** **There** **shall** **be no** _**ex**_ _**parte**_ **communications** **with the panel or** **Appellate Body concerning matters**
**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** **concerned** **[4]** **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**_

**1.** **Prompt compliance with recommendations or mlings of the DSB is essential in order to ensure**
**effective resolution of disputes to the benefit of all Members.**

**2.** **Particular attention should be paid to matters affecting the interests of developing country**
**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)** **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,**

**(b)** **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,**

**(c)** **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.**

**7.** **If the matter is one which has been raised by a developing country' Member, the DSB shall**
**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**_

**1.** **Compensation and the suspension of concessions or other obligations are temporary measures**
**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**

**3.** **In considering what concessions or other obligations to suspend, the complaining party shall**
**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)** **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;**

**(c)** **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)** **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;**

**(ii)** **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)** **with respect** **to** **services,** **a** **principal sector** **as** **identified** **in** **the current** **"Services**
**Sectoral Classification List" which identifies such** **seaors:** **[14 ]**

**(iii)** **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.**

**4.** **The level of the suspension of concessions or other obligations authorized by the DSB shall**
**be equivalent to the level of the nullification or impairment.**

**5.** **-** **The DSB shall not authorize suspension** **of** **concessions** **or otrier obligations if** **a covered agreement**
**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** **arbitrator** **[13]** **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.**

**7.** **The** **arbitrator** **[16]** **acting pursuant to paragraph 6 shall not examine the nature of** **the** **concessions**
**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**

**,s** **The** **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)** **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;**

**(b)** **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**

**(c)** **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**_

**1.** **At all stages of the determination of the causes of** **a** **dispute** **and** **of dispute settlement procedures**
**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.**

**2.** **In** **dispute settlement cases involving a** **least-developed** **country Member, where a satisfaaory**
**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.**

**Page** **371**

**is made. The Director-General** **or-the** **Chairman of the DSB, in providing the above assisunce, may**
**consult any source which either deems appropriate.**

_**Article 25**_

_**Arbitration**_

**1.** **Expeditious arbitration within** **the WTO** **as** **an** **alternative means of dispute settlement can faciliute**
**the solution of ceruin disputes that concern issues that are clearly defined by both parties.**

**2.** **Except** **as otherwise** **provided** **in this Undersunding, resort to arbitration shall be subject to**
**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 the Type Described in Paragraph 1(b) of Article XXIII of**_

_**GATT**_ _**1994**_

**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)** **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;**

**(b)** **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;**

**(c)** **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)** **the complaining party shall present a deuiled justification in support of any argument**
**made with respea to issues covered under this** **paragraph:**

**(b)** **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.**

**2.** **While the Secretariat assists Members in respect of** **dispute settlement** **at their** **request,** **there**
**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**

_**Agreement**_

**APPENDIX 2**

**SPECIAL OR ADDITIONAL RULES AND PROCEDURES**

**CONTAINED IN THE COVERED AGREEMENTS**

_**Rules**_ _**and**_ _**Procedures**_

**Agreement on the Application of Saniury**
**and Phytosaniury Measures**

**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**

**11.2**

**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**

**Decision on Certain Dispute Settlement**
**Procedures for the GATS**

**XXH:3,** **XXni:3**
**4**

**4**

**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**

**1.** **, In** **its proceedings the panel shall follow the relevant provisions of this** **Uriderstartding.** **In** **addition,**
**the following working procedures shall** **apply.**

**2.** **The panel shall meet in closed session. The panies to the dispute, and interested panies, shall**
**be present at the meetings only when invited by the panel to appear before it.**

**3.** **The deliberations of the panel and the documents submitted to it shall be kept confidential.**
**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.**

**4.** **Before the first substantive meeting of** **the** **panel with the panies, the panies to the dispute shall**
**transmit to the panel written submissions** **in** **which they present** **the** **facts of** **the case and** **their arguments.**

**5.** **At its first substantive meeting with the parties, the panel shall ask the party which has brought**
**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.**

**6** **All third** **panies** **which have notified their interest in the dispute to the DSB shall be** **invited** **in**
**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.**

**7.** **Formal rebuttals shall be made** **at** **a second substantive meaing of the panel. The party complained**
**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.**

**8.** **The panel may at any time put questions** **to the** **panies and ask them for explanations either in**
**the course of a meeting with the panies or in writing.**

**9.** **The panies to the dispute and any third pany invited to present its views in accordance with**
**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)** **complaining Party:**

**(2)** **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)** **Receipt of comments** _**by**_ **the** **panies** **on the**
**descriptive'pan** **of the report:**

**(g)** **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.**

**1.** **Expert review groups are under the** **panel's** **authority. Their terms of reference and** **detailed**
**working procedures shall be decided by the panel, and they shall report to the panel.**

**2.** **Participation in** **expert** **review groups shall be restricted to persons of professional standing and**
**experience in the field in question.**

**3.** **Citizens of parties to the dispute shall not serve on an expert review group without the joint**
**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.**

**4.** **Expert review groups may consult** **and** **seek information and technical advice from any source**
**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)** **a** **full repon,** **referred** **to** **in** **paragraph D,** **supplied by the** **Member or Members**
**under review;**

**(b)** **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)** **These documents will be forwarded to the Ministerial Conference, which shall uke**
**note** **of them.**

**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;**

**1.** _**Decide**_ **that,** **if** **not** **already provided for** **in the** **instruments negotiated in the course of** **the** **Uruguay**
**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)** **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.**

**' (ii)** **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**
**i x** **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.**

**(iii)** **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.**

**(iv)** **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.**

**3.** _**Agree**_ **to keep under review the specific needs of the** **least-developed** **countries and to continue**
**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.** **•**

**3.** **The** **positive** **outcome of the Uruguay Round is a major contribution towards more coherent**
**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**

**1.** _**Ministers recognize**_ **that the progressive implemenution of the results of the Uruguay Round**
**asa whole will generate increasing opportunities for** **trade** **expansion** **and** **economic growth** **to the** **benefit**
**of a** **ill** **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)** **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;**

**(ii)** **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).**

**6.** **The provisions of this Decision will be subject to regular review by the Ministerial Conference,**
**and the follow-up to this Decision shall** **be** **monitored, as appropriate, by** **the** **Committee on Agriculture.**

**Page 396**

Page 397

**DECISION ON NOTIFICATION OF FIRST INTEGRATION UNDER**

**ARTICLE 2.6 OF THE AGREEMENT ON TEXTILES AND CLOTHING**

_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.** **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;**

**2.** **the** **following (alpha)numeric** **classification systems shall be used in the work**
**programmes referred to in paragraph J:**

**(a)** _**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;**

**(b)** _**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;**

**3.** **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;** **-**

**4.** **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.**

**Page 401**

**DECISION ON** **ANH-CIRCUMVENTION**

_**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:**

**1.** **When a declaration has been presented and where the customs administration has reason to**
**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.**

**2** **It is entirely appropriate in applying the Agreement for one Member to assist another Member**
**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.**

**Page 407**

**DECISION ON INSTITUTIONAL ARRANGEMENTS**

**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 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)** **to keep under continuous review and surveillance the application of the Agreement**
**with respect to the sector concerned;**

**(b)** **to formulate proposals or recommendations for consideration by the Council in**
**connection with** **am** **matter relating to trade in the sector concerned;**

**(c)** **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;**

**(d »** **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.**

**(e)** **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.**

**3.** **There is hereby** **esublisheo^^ftnmittee** **on Trade in Financial Services which will have the**
**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.

4. Panels for disputes regarding sectoral matters shall have the necessary expertise relevant to
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.

Page 409

**DECISION** ON **TRADE** IN **SERVICES AND THE ENVIRONMENT**

_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:

1. In order to determine whether any modification of Article XIV of the Agreement is required
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.**

**2.** **A Negotiating Group on Movement of Naniral Persons is esublished to carry out the negotiations.**
**The group shall establish its own procedures and shall report periodically to the Council on Trade in**
**Services.** *****

**3.** **The negotiating** **group** **shall hold its first negotiating session no later than** **16** **May 1994. It**
**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.**

**4.** **Commitments resulting from these negotiations shall be inscribed in Members' Schedules of**
**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:**_

**1.** **Negotiations shall be entered into on a volunury basis in the seaor of maritime transport services**
**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.**

**2.** **A Negotiating** **Group** **on Maritime Transport Services (hereinafter referred** **to as** **the** **"NGMTS " )**
**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)**

**Page 413**

**8.** **The implementation of paragraph 7 shall be subject to surveillance in the NGMTS. Any**
**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** **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.**

**2.** **Without prejudice to their** **outcome,** **the negotiations shall be comprehensive in scope, with**
**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.**

**8.** **The implemenution of paragraph 7 shall be subjea to surveillance in the NGBT. Any participant**
**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.**

**Page 415**

**DECISION ON PROFESSIONAL SERVICES**

_**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:**

**1.** **The work programme foreseen in paragraph** **4** **of Article VI on Domestic Regulation should**
**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)** **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;**

**(b)** **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**

**Page 417**

**DECISION ON ACCESSION TO THE**

**AGREEMENT ON GOVERNMENT PROCUREMENT**

**1.** _**Ministers invite**_ **the Committee on Government Procurement esublished under the Agreement**
**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)** **the Member interested in accession would hold consultations with** **the** **Parties on the**
**terms for its accession to the Agreement:**

**(d)** **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:**

**(e)** **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;**

**(f)** **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.**

**2.** **It** **is noted that Comminee decisions are arrived at on the basis of consensus. It is also noted**

**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**

**Page** **421**

**UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES**

**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**_

**2.** **Notwithstanding Article** **XIII** **of the Agreement, each Member shall ensure that** **financial** **service**
**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)** **reinsurance and retrocession and** **the** **services auxiliary to insurance as referred to** **in**
**subparagraph 5(a)(iv) of the Annex;**

**i...** **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.**

**4.** **Each Member shall permit its residents to purchase in the territory of any other Member the**
**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**_

_**1**_ **.** **A Member shall permit financial** **service** **suppliers of any other Member established in its territory**
**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**_

**10.** **Each Member shall endeavour to remove** **or** **to limit any significant adverse effects on financial**
**service suppliers of any other Member of:**

**(a)** **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;**

**(b)** **non-discriminatory** **measures that limit the expansion of** **the** **aaivities of** **financial** **service**
**suppliers into the entire territory of the Member;**

**(c)** **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**

**(d)** **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.**

**2.** **"Commercial presence" means an enterprise within a Member's territory for the supply of**
**financial services and includes wholly- or partly-owned subsidiaries, joint ventures,** **partnerships,** **sole**
**proprietorships, franchising operations,** **branches,** **agencies,** **represenutive offices or other organizations.**

**3.** **A new financial service is a service of** **a** **financial** **nature, including services related to existing**
**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