CELEX: 51994PC0143
Language: el
Date: 1994-04-15
Title: Πρόταση ΑΠΟΦΑΣΗΣ ΤΟΥ ΣΥΜΒΟΥΛΙΟΥ σχετικά με τη σύναψη των αποτελεσμάτων των πολυμερών εμπορικών διαπραγματεύσεων του Γύρου της Ουρουγουάης (1986-1994)

ΕΠΙΤΡΟΠΗ ΤΩΝ ΕΥΡΩΠΑΪΚΩΝ ΚΟΙΝΟΤΗΤΩΝ
                                      K0MC94) 143 τελικό
                                      Βρυξέλλες, 15.04.1994
                                      94/ 0114CAVC)
                          Πρόταση
                 ΑΠΟΦΑΣΗΣ ΤΟΥ ΣΥΜΒΟΥΛΙΟΥ
         σχετικά με τη σύναψη των αποτελεσμάτων
        των πολυμερών εμπορικών διαπραγματεύσεων
         του Γύρου της Ουρουγουάης (1986 - 19θΜ)
              (υποβληθείσα από την Επιτροπή)
 ---pagebreak---                            ΑΙΤΙΟΛΟΓΙΚΗ ΕΚΘΕΣΗ
Κατά τη 1.726Π συνοδό του στις 13-15 Δεκεμβρίου 1993, το Συμβούλιο
ενέκρινε τη συνολική δέσμη ρυθμίσεων την οποία συμφώνησε η Επιτροπή
Εμπορικών Διαπραγματεύσεων στη Γενεύη, και στην οποία περιλαμβάνονται
τα αποτελέσματα του Γύρου της Ουρουγουάης (Σχετ.: PV/C0NS89). Η απόφαση
του Συμβουλίου ελήφθη βάσει σειράς γραπτών εκθέσεων, τις οποίες υπέβαλε
ο Sir Leon Br ittan εξ ονόματος της Επιτροπής, οι οποίες περιέχουν μία
γενική και θετική αξιολόγηση των αποτελεσμάτων κατά την άποψη της
Κοινότητας, καθώς και βάσει προφορικών εκθέσεων κατά τη συνεδρίαση.
Μετά την υπογραφή στο Μαρακές των οριστικών κειμένων των συμφωνιών που
ενσωματώνονται στην τελική πράξη, πρέπει το Συμβούλιο να εγκρίνει τα
αποτελέσματα του Γύρου επισήμως. Έτσι, με την επιφύλαξη της σύμφωνης
γνώμης του Ευρωπαϊκού Κοινοβουλίου, η Κοινότητα μπορεί να δηλώσει στη
Γενεύη ότι είναι έτοιμη να αποδεχθεί τις συμφωνίες αυτές.
Τον περασμένο Δεκέμβριο οι διαπραγματεύσεις είχαν στην ουσία ήδη
περατωθεί και η έκθεση της Επιτροπής η οποία υπεβλήθη τότε εκάλυπτε το
μεγαλύτερο μέρος των αποτελεσμάτων των διαπραγματεύσεων. Όσον αφορά
θέματα τα οποία εκκρεμούσαν τότε, ορισμένα εξ αυτών (π.χ. ορισμένοι
τομείς παροχής υπηρεσιών, συναλλαγές στον τομέα των πολιτικών
αεροσκαφών και προμήθειες) αφέθηκαν ρητά κατά μέρος για περαιτέρω
διαπραγμάτευση το 1994 και 1995, και θα συνεχισθεί η εξέταση τους, κατά
το δέον· άλλα ζητήματα (π.χ. τα χρονοδιαγράμματα όσον αφορά τις
αναλήψεις υποχρεώσεων για τους δασμούς - την πρόσβαση στην αγορά - και
τις αρχικές ειδικές αναλήψεις υποχρεώσεων στον τομέα των υπηρεσιών)
επρόκειτο να αποτελέσουν αντικείμενο περαιτέρω περιορισμένης συζήτησης
και να υποβληθούν σε διαδικασία εξακρίβωσης κατά την περίοδο που
μεσολαβούσε πριν από τη σύνοδο του Μαρακές.
Κατά τη 1.735Π σύνοδο του Συμβουλίου της 7/8 Μαρτίου υποβλήθηκε στα
κράτη μέλη έκθεση σχετικά με τα αποτελέσματα της διαδικασίας αυτής όσον
αφορά την πρόσβαση στην αγορά και τις αναλήψεις υποχρεώσεων για την
παροχή υπηρεσιών, πρόκειται δε να περιληφθεί μια περαιτέρω ανάλυση στη
συμπληρωματική έκθεση, η οποία θα υποβληθεί στο Συμβούλιο. Σε γενικές
γραμμές, η πρόσβαση στην αγορά δεν έχει αλλοιωθεί σημαντικά, παρά το
γεγονός ότι σε ορισμένους τομείς έχουν γίνει μικρές τροποποιήσεις (οι
προσφορές έχουν κατά κανόνα προσαρμοσθεί ώστε να είναι κάπως λιγότερο
φιλόδοξες). Ως προς τις μπανάνες το χρονοδιάγραμμα συμφωνήθηκε με τους
περισσότερους προμηθευτές GATT στο πλαίσιο του Γύρου της Ουρουγουάης.
Αποτελεί επίσης το αποτέλεσμα των διαπραγματεύσεων και διαβουλεύσεων με
τις χώρες αυτές για τις μπανάνες στο πλαίσιο του άρθρου XXVIII. Όσον
αφορά   τις   υπηρεσίες,   έχουν   επαληθευθεί  και   έχουν   σημαντικά
διευκρινισθεί τα εθνικά χρονοδιαγράμματα για τις ειδικές αναλήψεις
υποχρεώσεων και οι κατάλογοι των εξαιρέσεων όσον αφορά την ρήτρα ΜΕΚ,
κατά συνέπεια βελτιώθηκε η ποιότητα των δεσμεύσεων. Το ουσιαστικό
αποτέλεσμα παραμένει το αυτό, αν και οι συμμετέχοντες πρότειναν
περαιτέρω ελευθέρωση με την κατάργηση των περιοριστικών μέτρων και την
προσθήκη νέων τομεακών δραστηριοτήτων.
Εν τω μεταξύ απεστάλη στο Ευρωπαϊκό Κοινοβούλιο η έκθεση της Επιτροπής
του περασμένου Δεκεμβρίου και άρχισαν οι προκαταρκτικές συζητήσεις με
τις αρμόδιες κοινοβουλευτικές επιτροπές για να προετοιμασθεί η επίσημη
διαδικασία σύμφωνης γνώμης, όταν θα είναι διαθέσιμα τα τελικά κείμενα.
Τώρα είναι επείγον να αποσταλεί στο Συμβούλιο πρόταση της Επιτροπής για
τη σύναψη των αποτελεσμάτων των διαπραγματεύσεων, για να διαβιβασθεί
στο Κοινοβούλιο, ώστε η διαδικασία να περατωθεί κατά τη σύνοδο του
Μαΐου.
 ---pagebreak--- Παραμένει ένα θέμα το οποίο θα πρέπει επίσης να συζητηθεί στο
Συμβούλιο. Ανωτέρω ανεφέρθη το γεγονός ότι πρόκειται να συνεχισθούν οι
διαπραγματεύσεις όσον αφορά τις συναλλαγές πολιτικών αεροσκαφών και ότι
πρόκειται να γίνουν ειδικές συμφωνίες για τη βελτίωση του επιπέδου των
αναλήψεων υποχρεώσεων ελευθέρωσης σε ορισμένους         τομείς παροχής
υπηρεσιών. Η Επιτροπή είναι της γνώμης ότι τα θέματα αυτά, τα οποία
καλύπτονται είτε από την εντολή όσον αφορά τις διαπραγματεύσεις για
αεροσκάφη με τις ΗΠΑ ή από την αρχική δήλωση που εγκρίθηκε στην Punt a
del Este το 1986, θεωρούνται ακόμη ως αναπόσπαστο μέρος του Γύρου της
Ουρουγουάης, παρόλο που δεν έχει ακόμη επιτευχθεί συμφωνία ως προς τις
τελικές λύσεις. Συνεπώς, η Επιτροπή πρόκειται να συμμετάσχει σ'αυτές
τις τομεακές διαπραγματεύσεις βάσει των προσανατολισμών που ισχύουν και
σχετικά με τους οποίους έχει συμφωνήσει το Συμβούλιο, και πρόκειται να
υποβάλει περαιτέρω εκθέσεις όσον αφορά την πρόοδο και να ζητήσει
πρόσθετες οδηγίες, εφόσον χρειάζεται.
Επισυνάπτεται σύντομη πρόταση που αφορά τους λόγους επιλογής της
νομικής βάσης για την έγκριση των αποτελεσμάτων του Γύρου της
Ουρουγουάης, καθώς και το κείμενο του σχεδίου αποφάσεως του Συμβουλίου.
Το κείμενο αυτό έχει την τυπική μορφή για τη σύναψη εμπορικών συμφωνιών
και ορίζει το πρόσωπο/τα πρόσωπα τα οποία θα υπογράψουν ή θα καταθέσουν
τα έγγραφα αποδοχής της συμφωνίας.
Η παρούσα απόφαση είναι, κατ'ουσίαν, σύμφωνη με τη θέση που έλαβε η
Επιτροπή στην αίτηση γνωμοδότησης κατά το άρθρο 228 παράγραφος 6 της
συνθήκης ΕΚ προς το Δικαστήριο. Συνεπώς, η Επιτροπή επιφυλάσσεται του
δικαιώματος της να τροποποιήσει την πρόταση της υπό το φως της γνώμης
του Δικαστηρίου, με σκοπό να εξασφαλίσει σε κάθε περίπτωση τη συνοχή
της δράσης της Κοινότητας στο πλαίσιο του ΠΟΕ.
                                 - 2 <Χ  -
 ---pagebreak---               ΣΥΝΑΨΗ ΚΑΙ ΟΡΟΙ ΣΥΜΜΕΤΟΧΗΣ ΓΤΙΓ ΣΥΜΦΩΝΙΕΣ
Α. ΝουικΛ Βάση των αποφάσεων που καλείται να  λάΒει το ΣυυΒούλιο
   Σύμφωνα με την Επιτροπή, η Κοινότητα διαθέτει, συνολικά, τις
   αναγκαίες και επαρκείς εξουσίες για να αναλάβει τις διεθνείς
   υποχρεώσεις που προβλέπουν οι νομικές πράξεις τις οποίες προτείνει
   στο Συμβούλιο προς έγκριση.
   Οι αρμοδιότητες αυτές απορρέουν από το άρθρο 113 της Συνθήκης ΕΚ,
   σε συνδυασμό, για την περίπτωση των προϊόντων ΕΚΑΧ, με το άρθρο 95
   της συνθήκης ΕΚΑΧ.
   Πράγματι, έστω κι αν ορισμένες από τις πράξεις αυτές μπορεί να
   έχουν επιπτώσεις σε άλλους τομείς, ο καθαυτό στόχος τους καθώς και
   το περιεχόμενο τους είναι να καθορίσουν κανόνες, σε διάφορους
   τομείς, που θα διέπουν τις διεθνείς συναλλαγές· ο στόχος αυτός
   εμπίπτει αναμφισβήτητα στο πεδίο της αποκλειστικής αρμοδιότητας της
   Κοινότητας, στο πλαίσιο της κοινοτικής εμπορικής πολιτικής.
   Στην περίπτωση προϊόντων που εμπίπτουν στο πεδίο εφαρμογής της
   συνθήκης ΕΚΑΧ, η Επιτροπή εκτιμά ότι το άρθρο 95 της συνθήκης αυτής
   αποτελεί   την   κατάλληλη  νομική   βάση  για   την  έγκριση   των
   αποτελεσμάτων των διαπραγματεύσεων που αφορούν την Κοινότητα αυτή.
   Το (6ιο σκεπτικό ισχύει για τη σύναψη της διμερούς συμφωνίας με την
   Αυστραλία σχετικά με τον άνθρακα.
   Πράγματι, το άρθρο 95 της συνθήκης ΕΚΑΧ έχει χρησιμοποιηθεί κατά
   τη σύναψη των διακανονισμών για τον χάλυβα με τις Ηνωμένες
   Πολιτείες το 1982 και 1989, καθώς και για την προκαταβολική
   εφαρμογή των εμπορικών διατάξεων για τα προϊόντα ΕΚΑΧ, όπως ορίζουν
   οι ενδιάμεσες συμφωνίες που έχουν συναφθεί με τις χώρες της
   Κεντρικής και Ανατολικής Ευρώπης.
   Η σύναψη πραγματοποιείται με απόφαση της Επιτροπής, η οποία ενεργεί
   ως Ανωτάτη Αρχή, βάσει σύμφωνης γνώμης του Συμβουλίου και ύστερα
   από γνωμοδότηση της Συμβουλευτικής Επιτροπής. Η διαδικασία αυτή
   αποτελεί αντικείμενο πρότασης μνείας στα πρακτικά του Συμβουλίου, η
   οποία επισυνάπτεται.
Β. Απόωαοη που προτείνει η Επιτροπή στο Συμβούλιο ποοο ένκοιοη
   Η Επιτροπή προτείνει στο Συμβούλιο να εγκρίνει την:
       Απόφαση σχετικά με τη σύναψη των αποτελεσμάτων των πολυμερών
       εμπορικών διαπραγματεύσεων του Γύρου της Ουρουγουάης·
   η οποία επισυνάπτεται.
                                     3<α_
 ---pagebreak---    Η έγκριση αυτή αφορά:
    1*  τις πολυμερείς πράξεις που περιλαμβάνονται στην Τελική Πράξη,
        δηλαδή:
             τη συμφωνία για την ίδρυση του Παγκόσμιου Οργανισμού
             Εμπορίου (συμφωνία για τον ΠΟΕ),
            τα παραρτήματα 1, 2 και 3 της συμφωνίας αυτής,
            τις υπουργικές δηλώσεις και αποφάσεις καθώς και το μνημόνιο
            συμφωνίας για τις αναλήψεις υποχρεώσεων σχετικά με τις
            χρηματοπιστωτικές υπηρεσίες·
   2°   τις πλειομερείς συμφωνίες που περιλαμβάνονται στο παράρτημα 4
        της συμφωνίας για τον ΠΟΕ,
   3*   τις διμερείς συμφωνίες και διακανονισμούς που αποτέλεσαν το
        αντικείμενο διαπραγματεύσεων στο περιθώριο του Γύρου της
        Ουρουγουάης, όπως η συμφωνία για το βόειο κρέας με την
        Ουρουγουάη.
   Είναι σκόπιμη η επίσημη έγκριση του συνόλου των υπουργικών
   αποφάσεων και δηλώσεων που περιλαμβάνονται στην Τελική Πράξη καθώς
   και του Μνημονίου για τις χρηματοπιστωτικές υπηρεσίες. Παρά την
   πανομοιότυπη μορφή τους, τα κείμενα αυτά διαφέρουν ως προς τα
   νομικά τους αποτελέσματα. Ορισμένα έχουν υποχρεωτική νομική ισχύ,
   ενώ άλλα αποτελούν απλώς πολιτικές δεσμεύσεις. Εκτιμώντας ότι, σε
   νομικό επίπεδο, οι μη υποχρεωτικές αποφάσεις δεν αποκτούν νομική
   ισχύ με την επίσημη έγκριση τους, είναι προτιμότερο το Κοινοβούλιο
   και το Συμβούλιο να εγκρίνουν ως όλον το σύνολο των κειμένων αυτών
   για να διατηρήσουν, έναντι των τρίτων χωρών, τον τύπο της "ενιαίας
   υποχρέωσης" που κυριάρχησε κατά τις διαπραγματεύσεις.
Γ. ζ>ρθ| ςυμμετοχής OTIC συμφωνίες
   Η σύσταση ενός Παγκόσμιου Οργανισμού Εμπορίου (ΠΟΕ), θα έχει ως
   αποτέλεσμα την επακόλουθη δημιουργία μιας θεσμικής δομής που θα
   περιλαμβάνει τρία συμβούλια, διάφορες επιτροπές και άλλα όργανα.
   Εξάλλου, συγκεκριμένες επιτροπές θα διαχειρίζονται, στο πλαίσιο του
   ΠΟΕ, τις πλειομερείς συμφωνίες που αναφέρονται στο παράρτημα 4 της
   συμφωνίας για τον ΠΟΕ.
   Η Επιτροπή προτείνει να καταστούν, τόσο η Κοινότητα όσο και τα
   κράτη μέλη της, μέλη του ΠΟΕ καθώς και των οργάνων του.
   Ωστόσο, η Επιτροπή θεωρεί ότι η συμμετοχή της Κοινότητας και των
   κρατών μελών της στον ΠΟΕ και στα àp^awa του εν λόγω Οργανισμού
   πρέπει να είναι σύμφωνη με την πρακτική που έχει μέχρι στιγμής
   τηρηθεί στο πλαίσιο της GATT, και ειδικότερα:
        ότι τα κράτη μέλη συμμετέχουν στις εργασίες των οργάνων του ΠΟΕ
        σύμφωνα με όρους που παρέχουν τη δυνατότητα αναγνώρισης της
        ταυτότητας τους εντός της αντιπροσωπίας της Κοινότητας·
                                  -?α_
 ---pagebreak---        ότι οι θέσεις που λαμβάνει η Κοινότητα στα όργανα του ΠΟΕ
       καθορίζονται σύμφωνα με τις συνήθεις διαδικασίες κατά τη
       διάρκεια προηγούμενων συνεδριάσεων συντονισμού· στην περίπτωση
       που, κατά τη διάρκεια των συνεδριάσεων συντονισμού, σημειωθούν
       ανυπέρβλητες αποκλίσεις, οι αντιπρόσωποι της Κοινότητας τηρούν
       στάση αναμονής στο πλαίσιο των οργάνων, μέχρις ότου εξευρεθεί
       λύση από την ειδική επιτροπή που προβλέπει το άρθρο 113, από
       την Επιτροπή των Μόνιμων Αντιπροσώπων, ή, ενδεχομένως, από το
       Συμβούλιο·
       ότι η θέση της Κοινότητας εκφράζεται στα όργανα από την
       Επιτροπή· τα κράτη μέλη που ενδιαφέρονται άμεσα και ιδιαίτερα
       για το εξεταζόμενο θέμα, έχουν τη δυνατότητα να παρεμβαίνουν
       στις κατάλληλες περιπτώσεις και κατόπιν κοινοτικής έγκρισης·
       ότι οι παρεμβάσεις αυτές πρέπει να εντάσσονται στο πλαίσιο της
       κοινής θέσης που έχει προηγουμένως οριστεί για την υποστήριξη
       και την ανάπτυξη της θέσης αυτής.
   Σε περίπτωση ψηφοφορίας, η Επιτροπή ψηφίζει με το σύνολο των δώδεκα
   ψήφων της Κοινότητας, την πρόταση που αντιστοιχεί στην θέση της
   Κοινότητας.
   Εννοείται ότι η συμμετοχή των κρατών μελών στον ΠΟΕ, εκ παραλλήλου
   με τη συμμετοχή της Κοινότητας, δεν δημιουργεί μεταξύ αυτών
   υποχρεώσεις δυνάμει της συμφωνίας για τον ΠΟΕ και των παραρτημάτων
   της. θα ήταν εξάλλου ιδιαιτέρως σκόπιμο να κοινοποιηθεί η ερμηνεία
   αυτή στους εμπορικούς εταίρους μας μέσω επίσημης δήλωσης.
   Εξάλλου, είναι ανάγκη να υπογραμμιστεί ότι οι διατάξεις της
   συμφωνίας για τον ΠΟΕ και τα παραρτήματα της αποκλείεται να έχουν
   άμεσα αποτελέσματα, ώστε να είναι δυνατή η επίκληση αυτών εκ μέρους
   ιδιωτών,   φυσικών   ή νομικών     προσώπων, ενώπιον   των  εθνικών
   δικαιοδοτικών οργάνων. Είναι βέβαιο ότι οι Ηνωμένες Πολιτείες,
   καθώς άλλωστε και ένας μεγάλος αριθμός εμπορικών εταίρων μας, θα
   αποκλείσουν ρητά μια τέτοια άμεση παραγωγή αποτελεσμάτων. Αν η
   περίπτωση αυτή άμεσου αποτελέσματος δεν αποκλειστεί ρητά στην
   κοινοτική πράξη έγκρισης θα μπορούσε να δημιουργηθεί σοβαρή
   ανισορροπία στην πρακτική διαχείριση των υποχρεώσεων της Κοινότητας
   αφενός και των υποχρεώσεων των τρίτων χωρών αφετέρου.
Δ. Συνένιση των διαπρανυατεύσεων
   Ένα από τα σημαντικά αποτελέσματα που πέτυχε η Κοινότητα το
   Δεκέμβριο 1993 στη Γενεύη είναι η επίσημη ανάληψη υποχρέωσης εκ
   μέρους των εμπορικών μας εταίρων, η οποία συμπεριλήφθηκε στην
   Τελική Πράξη, να συνεχίσουν, σύμφωνα με εγκεκριμένο χρονοδιάγραμμα
   και πρόγραμμα εργασίας, τις διαπραγματεύσεις για:
       συγκεκριμένες    αναλήψεις   υποχρεώσεων με   αντικείμενο   την
       ελευθέρωση πολλών σημαντικών τομέων όσον αφορά τις υπηρεσίες,
       όπως   τις   βασικές   τηλεπικοινωνίες,  τις χρηματοπιστωτικές
       υπηρεσίες, τις θαλάσσιες μεταφορές καθώς και την κυκλοφορία των
       προσώπων,
       την πολιτική αεροπορία.
                                  -5^_
 ---pagebreak--- Η συγκεκριμένη ανάληψη υποχρέωσης ήταν αναγκαία, δεδομένου ότι τα
αποτελέσματα που ήταν δυνατό να επιτευχθούν στις 15 Δεκεμβρίου
στους σχετικούς τομείς είχαν κριθεί ως απαράδεκτα εκ μέρους της
Κοινότητας.
Η ανταπόκριση στην υποχρέωση αυτή προϋποθέτει ωστόσο ότι η
Κοινότητα θα τηρήσει τις συμφωνηθείσες βασικές αρχές. Συνεπώς,
είναι σκόπιμο να γίνει μνεία της συνέχισης αυτής, ιδίως όσον αφορά
τους στόχους και τις λεπτομέρειες των σχετικών διαπραγματεύσεων,
στα πρακτικά του Συμβουλίου σύμφωνα με τις κατευθυντήριες γραμμές
που προτείνονται στο παράρτημα.
                             - / « -
 ---pagebreak---                          ΑΠΟΦΑΣΗ ΤΟΥ ΣΥΜΒΟΥΛΙΟΥ
                              της
                 σχετικά με τη σύναψη των αποτελεσμάτων
                των πολυμερών εμπορικών διαπραγματεύσεων
                του Γύρου της Ουρουγουάης (1986 - 199*))
ΤΟ ΣΥΜΒΟΥΛΙΟ ΤΗΣ ΕΥΡΩΠΑΪΚΗΣ ΕΝΩΣΗΣ,
Έχοντας υπόψη:
τη συνθήκη περί ιδρύσεως της Ευρωπαϊκής Κοινότητας, και ιδίως τα άρθρα
113 και 228 παράγραφος τρίτη, εδάφιο δεύτερο,
τη σύσταση της Επιτροπής,
τη σύμφωνη γνώμη του Κοινοβουλίου,
Εκτιμώντας:
ότι οι πολυμερείς εμπορικές διαπραγματεύσεις, οι οποίες εγκαινιάσθηκαν
στο πλαίσιο της Γενικής Συμφωνίας Δασμών και Εμπορίου κατ' εφαρμογήν
της Διακήρυξης των Υπουργών που υιοθετήθηκε στην Πούντα Ντελ Έστε στις
20 Σεπτεμβρίου 1986, κατέληξαν στην κατάρτιση της Τελικής Πράξης, που
περιλαμβάνει τα αποτελέσματα των πολυμερών εμπορικών διαπραγματεύσεων
του Γύρου της Ουρουγουάης·
ότι το σύνολο των αμοιβαίων παραχωρήσεων και αναλήψεων υποχρεώσεων, οι
οποίες προέκυψαν από τις διαπραγματεύσεις που διεξήγαγαν η Κοινότητα
και οι χώρες που συμμετείχαν σε αυτές και οι οποίες περιλαμβάνονται
στις πολυμερείς συμφωνίες που έχουν ενταχθεί στην Τελική Πράξη,
αποτελεί έκβαση, η οποία κρίνεται συνολικά ικανοποιητική και ισόρροπη·
ότι επιπλέον ένα μέρος των εν λόγω παραχωρήσεων και αναλήψεων
υποχρεώσεων, οι οποίες προέκυψαν από τις διαπραγματεύσεις που
διεξήγαγαν η Κοινότητα και ορισμένες από τις χώρες που συμμετείχαν σε
αυτές, έχουν ενσωματωθεί στις πλειομερείς συμφωνίες, οι οποίες
μνημονεύονται στο παράρτημα 4 της συμφωνίας για τη σύσταση του
Παγκόσμιου Οργανισμού Εμπορίου·
ότι ορισμένες από τις προαναφερθείσες παραχωρήσεις και αναλήψεις
υποχρεώσεων έχουν αποτελέσει αντικείμενο διμερών διαπραγματεύσεων στο
περιθώριο του Γύρου της Ουρουγουάης·
ότι, τέλος, πρόκειται για συμφωνίες μεταξύ κυβερνήσεων και, ως εκ
τούτου, είναι σκόπιμο να αποφευχθεί η δυνατότητα για τους ιδιώτες, τα
φυσικά πρόσωπα και τα νομικά πρόσωπα να επικαλούνται άμεσα τις
διατάξεις των συμφωνιών και των διακανονισμών που αναφέρονται παραπάνω
ενώπιον των δικαιοδοτικών οργάνων των κρατών μελών και της Κοινότητας,
ΑΠΟΦΑΣΙΖΕΙ:
                                Άοθοο 1
1.  Εγκρίνονται εξ ονόματος της Ευρωπαϊκής      Κοινότητας οι ακόλουθες
    πολυμερείς συμφωνίες και πράξεις:
        Η συμφωνία για τη σύσταση του Παγκόσμιου Οργανισμού Εμπορίου.
                                     ? Οι -
 ---pagebreak---        Οι συμφωνίες που μνημονεύονται στα παραρτήματα 1, 2 και 3 της
       συμφωνίας για τη σύσταση του Παγκόσμιου Οργανισμού Εμπορίου.
       Οι αποφάσεις και δηλώσεις των υπουργών καθώς και το μνημόνιο
       συμφωνίας για τις απολήψεις υποχρεώσεων σχετικά με τις
       χρηματοπιστωτικές υπηρεσίες, που διαλαμβάνονται στην Τελική
       Πράξη του Γύρου της Ουρουγουάης.
2. Τα κείμενα των συμφωνιών και των πράξεων που μνημονεύονται       στο
   παρόν άρθρο επισυνάπτονται στην παρούσα απόφαση.
3. 0 Πρόεδρος του Συμβουλίου εξουσιοδοτείται να ορίσει το πρόσωπο που
   είναι αρμόδιο να προβεί στην πράξη η οποία προβλέπεται από το άρθρο
   XIV της συμφωνίας για τη σύσταση του Παγκόσμιου Οργανισμού
   Εμπορίου, δεσμεύοντας την Κοινότητα.
                               Άοβοο 2
1. Εγκρίνονται εξ ονόματος της Ευρωπαϊκής Κοινότητας οι πλειομερείς
   συμφωνίες και διακανονισμοί οι οποίοι μνημονεύονται στο παράρτημα 4
   της συμφωνίας για τη σύσταση του Παγκόσμιου Οργανισμού Εμπορίου.
2. Τα κείμενα των συμφωνιών που μνημονεύονται        στο  παρόν  άρθρο
   επισυνάπτονται στην παρούσα απόφαση.
3. 0 Πρόεδρος του Συμβουλίου εξουσιοδοτείται να ορίσει το πρόσωπο που
   είναι αρμόδιο να προβεί στις πράξεις οι οποίες προβλέπονται από τις
   συμφωνίες στις οποίες αναφέρεται το παρόν άρθρο, δεσμεύοντας την
   Κοινότητα.
                               'Αοθοο 3
1. Εγκρίνεται εξ ονόματος της Κοινότητας η συμφωνία με την Ουρουγουάη
   σχετικά με το βόειο κρέας.
2. Το κείμενο της προαναφερθείσας συμφωνίας επισυνάπτεται στην παρούσα
   απόφαση.
3. 0 Πρόεδρος του Συμβουλίου εξουσιοδοτείται να ορίσει το πρόσωπο που
   είναι αρμόδιο να υπογράψει τη συμφωνία, δεσμεύοντας την Κοινότητα.
                                      Βρυξέλλες,
                                      Για το Συμβούλιο
                                      0 Πρόεδρος
                                - * * -
 ---pagebreak---                 Σχέδιο μνειών στα πρακτικά του Συμβουλίου
Προϊόντα ΕΚΑΧ
"Το Συμβούλιο δίδει τη σύμφωνη γνώμη του για τη σύναψη των δασμολογικών
πτυχών των αποτελεσμάτων του Γύρου της Ουρουγουάης που άπτονται του
πεδίου εφαρμογής της Συνθήκης ΕΚΑΧ, στο πλαίσιο της διαδικασίας που
προβλέπει το άρθρο 95 της Συνθήκης ΕΚΑΧ.
"Το Συμβούλιο δίδει επίσης τη σύμφωνη γνώμη του, στο πλαίσιο της ίδιας
διαδικασίας, για τη σύναψη του διμερούς διακανονισμού με την Αυστραλία
για τον άνθρακα."
Συνέχιση των διαποανυατεύσεων
"Το Συμβούλιο λαμβάνει υπόψη ότι η Επιτροπή συνεχίζει εξ ονόματος της
Κοινότητας   τις διαπραγματεύσεις τις σχετικές με τις αναλήψεις
υποχρεώσεων για την ελευθέρωση των συναλλαγών όσον αφορά ορισμένους
επιμέρους τομείς στον χώρο των υπηρεσιών, καθώς επίσης τον κλάδο
κατασκευής αεροσκαφών πολιτικής αεροπορίας, με γνώμονα τους ίδιους με
προηγουμένως στόχους και όρους."
                                 24*-
 ---pagebreak--- MULTILATERAL TRADE
NEGOTIATIONS
THE URUGUAY ROUND
Trede Negotiations Committee
                       FINAL ACT EMBODYING THE RESULTS OF THE
              URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS
                               MARRAKESH, 15 APRIL 1994
 ---pagebreak--- Page 2 ---pagebreak---                                                                                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 Anicle D:i(b) of the General Agreement on
              Tariffs and Trade 1994                                                          25
           Understanding on the Interpretation of Article xvu of the General Agreement on
              Tariffs and Trade 1994                                                          27
           Understanding on Balance-of-Payments 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
        Agreemeni 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 Preshipment Inspection                                                  199
        Agreement on Rules of Origin                                                         209
        Agreement on Impon Licensing Procedures                                              221
        Agreement on Subsidies and Countervailing Measures                                   229
        Agreement on Safeguards                                                              273
      ANNEX IB General Agreemeni 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
        Agreemeni on Trade in Civil Aircraft                                                 383
        Agreement on Government Procurement                                                  383
        International Dairy Agreement                                                        383
        International Bovine Meat Agreement                                                  383
 ---pagebreak--- 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-Importing Developing Countries                               395
      Decision on Notification of First Integration under Article 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 WTO-ISO Standards Information System : . .             399
        Decision on Review of the 1SO/IEC Information Centre Publication                             400
      Decisions and Declaration Relating to the Agreement on'Implementation of Article vi of
        the General Agreement on Tariffs and Trade 1994
        Decision on Anti-Circumvention                                                               401
        Decision on Review of Article 17.6 of the Agreement on Implementation of Article vi
            of the General Agreement on Tariffs and Trade 1994                                       402
        Declaration on Dispute Settlement Pursuant to the Agreement on Implementation of
            Article VI of the General Agreement on Tariffs and Trade 1994 or Part ν of the
            Agreement on Subsidies and Countervailing Measures                                       403
      Decisions Relating to the Agreement on Implementation of Article 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 Certain 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
 ---pagebreak---                                                  r-
     FINAL ACT EMBODYING THE RESULTS OF THE
URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS
                Marrakesh, 15 April 1994
 ---pagebreak--- Page 6 ---pagebreak---                                                                                     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 part 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 panicipants pursuant to Article 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 Agreemeni 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]
 ---pagebreak--- Page 8 ---pagebreak---                                                                                      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:
                                                  Anicle I
                                   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 matters 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 part of this Agreement for those Members that have
 ---pagebreak--- 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 International 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 all 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 maiters under any of ihe 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.
 ---pagebreak---                                                                                    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
Senices (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 part 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.
                                                 Anicle V
                                  Relations with 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.
 ---pagebreak--- 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.
                                                 Anicle 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.
 ---pagebreak---                                                                                               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.
                                                      Anicle 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 States2 which
are Members of the WTO. Decisions of the Ministerial Conference and the General Council shall
be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant
Multilateral Trade Agreement.3
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 interpretation 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 its 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 States shall in no case exceed the number of the
member States of the European Communities.
    decisions by the General Council when convened as the Dispute Settlement Body shall be taken only in accordance
with the provisions of paragraph 4 of Article 2 of the Dispute Settlement Understanding.
 ---pagebreak--- Page 14
any such decision shall be taken by three fourths4 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 fourths4 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. vAny 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. In each 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.         Decisions under a Plurilateral Trade Agreement, including any decisions on interpretations
and waivers, shall be governed by the provisions of that Agreement.
                                                            Anicle 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 I 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 any decision by the Ministerial Conference to submit the proposed amendment to the
 Members for acceptance shall be taken by consensus. Unless the provisions of paragraphs 2, 5 or
 6 appl>. 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.
      Ά decision to grant a waiver in respect of any obligation subject to a transition period or a period for staged implementation
 thai the requesting Member has not performed by the end of the relevant period shall be taken only by consensus.
 ---pagebreak---                                                                                     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 II. 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,
Y 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.
 ---pagebreak--- Page 16
10.      Amendments to a Plurilateral Trade Agreement shall be governed by the provisions of that
Agreement.
                                                 Anicle 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.
                                                Anicle 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 Multilateral Trade
Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. 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.       Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agree­
ment. ·
                                                Article XIII
                          Non-Application of Multilateral Trade Agreements
                                      berween 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 ΧΠ 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.
 ---pagebreak---                                                                                    Page 17
4.       The Ministerial Conference may review the operation of this Article in particular cases at the
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.
                                               Anicle 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.
                                               Anicle 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
 ---pagebreak--- 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 theframeworkof 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 conilict.
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 registered in accordance with the provisions of 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 "count r\ " or "countries" as used in this Agreement and the Multilateral Trade Agreements are to be understood
to include any separate customs lerruory Member of the WTO.
           In the case ol 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
termors. unless »>thcruise specified
 ---pagebreak---                                                                                  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 Article 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
         Agreemeni 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
Understanding 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
International Dairy Agreement
International Bovine Meat Agreement
 ---pagebreak--- Page 20 ---pagebreak---                                                                                    Page 21
                                                ANNEX 1
                                               ANNEX 1A
                   MULTILATERAL AGREEMENTS ON TRADE IN GOODS
General interpretative note to Annex I A:
         In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994
and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade
Organization (referred to in the agreements in Annex 1A as the "WTO Agreement"), the provision
of the other agreement shall prevail to the extent of the conflict.
 ---pagebreak--- Page 22 ---pagebreak---                                                                                                    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 Ï947.
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 Agreement1;
                     (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 Interpretation of Anicle XVII of the General Agreement
                              on Tariffs and Trade 1994;
                     (iii ι    Understanding on Balance-of-Payments Provisions of the General Agreement
                               on Tariffs and Trade 1994;
                     (iv)      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
                               Agreemeni on Tariffs and Trade 1994;
                     (νi)       Understanding on the Interpretation of Article XXVIII 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 Part II of document MTN/FA of
 15 December 1993 and in MTN/FA/COIT.6 of 21 March 1994. The Ministerial Conference shall esublish at its first session
a revised list of waivers covered by this provision that adds any waivers granted under GATT 1947 after 15 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
 ---pagebreak--- 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 party" 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 Β 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 Part 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.
 ---pagebreak---                                                                                      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 Article 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 Article II of GATT 1994 supersedes the decision regarding the applicable date
taken on 26 March 1980 (BISD 27S/24).
 ---pagebreak--- Page 26 ---pagebreak---                                                                                        Page 27
              UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII
              OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Members,
          Noting that Anicle 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 that 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 Members shall notify the enterprises referred,
to in paragraph 1 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 maner 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 Article XVn, 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
 ---pagebreak--- 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 XVTJ.. 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
                                             1
to the Council for Trade in Goods.
      •The activities of this working party shall be coordinated with those of the working group provided for in Section ΠΙ
 of the Ministerial Decision on Notification Procedures adopted on 15 April 1994.
 ---pagebreak---                                                                                                     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") and in order to clarify
such provisions';
          Hereby agree as follows:
Application of Measures
 1.       Members confirm their commitment to announce publicly, as soon as possible, time-schedules
for the removal of restrictive import measures taken for balance-of-payments purposes. It is understood
that such time-schedules may be modified as appropriate to take into account changes in the balance-of-
payments situation. Whenever a time-schedule is not publicly announced by a Member, that Member
shall provide justification as to the reasons therefor.
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-of-
payments purposes unless, because of a critical balance-of-payments situation, price-based measures
cannot arrest a sharp deterioration in the external payments position. In those cases in which a Member
applies quantitative restrictions, it shall provide justification as to the reasons why price-based measures
are not an adequate instrument to deal with the balance-of-payments situation. A Member maintaining
quantitative restrictions shall indicate in successive consultations the progress made in significantly
reducing the incidence and restrictive effect of such measures. It is understood that not more than
one type of restrictive import measure taken for balance-of-payments purposes may be applied on the
same product.
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 Article 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 Understanding is intended to modify the rights and obligations of Members under Articles ΧΠ or XVm:B
of GATT 1994. The provisions of Articles XXII and XXIIl of GATT 1994 as elaborated and applied by the Dispute Senlemeni
Undersunding may be invoked with respect to any matters arising from the application of restrictive impon measures uken
for balance-of-payments purposes.
 ---pagebreak--- 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 used to 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 substantia] 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 Article XII or paragraph 12(a) of Article 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, product
coverage and trade flows affected.
 ---pagebreak---                                                                                        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; id) 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 report 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 XVliI: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 bé 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.
 ---pagebreak--- Page 32 ---pagebreak---                                                                                       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 Article XXIV;
           Hereby agree as follows:
                                                                                     • I
 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 Article XXIV, must satisfy, inter alia, the provisions
of paragraphs 5, 6, 7 and 8 of that Article.
Anicle 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
 tariff rates and customs duties collected in accordance with the methodology used in the assessment
 of tariff offers in the Uruguay Round of Multilateral Trade Negotiations. For this purpose, the duties
 and charges to be taken 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 are difficult, the examination of individual measures, regulations, products
 covered and trade flows affected may be required'.'
 ---pagebreak--- Page 34
3.       The "reasonable length of time" referred to in paragraph 5(c) of Article XXIV 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.
Anicle XXIV.-6
4.        Paragraph 6 of Article XXIV establishes 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 Article XXVIII, as elaborated in the guidelines adopted on 10 November 1980
(BISD 27S/26-28) and in the Understanding on the Interpretation of Article 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 compensator)' adjustment. In such negotiations, as required by paragraph 6 of Article XXTV,
due account shall be taken of reductions of duties on the same tariff line made by other constituents
of the customs union upon its formation. Should such reductions not be sufficient to provide the
necessary compensatory 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 taken 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 compensator)' adjustment to its constituents.
Review of Customs Unions and Free-Trade Areas
 7.       All notifications made under paragraph 7(a) of Article XXIV shall be examined by a working
party in the light of the relevant provisions of GATT 1994 and of paragraph 1 of this Understanding..
 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 appropriate
 recommendations On the proposed time-frame and on measures required to complete the formation
 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 Article XXIV not include a plan
 and schedule, contrary to paragraph 5(c) of Article XXIV. the working party shall in its report
 recommend such a plan and schedule. The parties shall not maintain 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.
 ---pagebreak---                                                                                    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 Understanding may be invoked with respect to any matters 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 Articles XXII and XXIII of GATT 1994 as elaborated and applied by the
Dispute Settlement Understanding 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
Settlement 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 taken within the territory of the former.
 ---pagebreak--- Page 36 ---pagebreak---                                                                                     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 Article 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 the provisions of Article XXIIl of GATT 1994 as elaborated and applied by the Dispute
Settlement Understanding.
 ---pagebreak--- Page 38 ---pagebreak---                                                                                          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 Secretariat. Paragraph 4 of the
"Procedures for Negotiations under Article XXVIII" 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 taken 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 in 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 tariff 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 Secretariat. Paragraph 4
of the above-mentioned "Procedures for Negotiations under Article XXVIII" shall apply in these cases.
6.        When an unlimited tariff concession is replaced by a tariff 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
 ---pagebreak--- Page 40
exceed the level of the quota. 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 entailed by complete
withdrawal of the concession.
7.      Any Member having a principal supplying interest, whether as provided for in paragraph 1
above ôr in paragraph 1 of Article XXVIII, 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.
 ---pagebreak---                                                                                      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 taken 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 consultations 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 l:(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.
 ---pagebreak--- 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 Part III of the schedules, the provisions of Article XXVIII of GATT 1994 and the "Procedures for
Negotiations under Article 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
uken appropriate action as would have been otherwise necessary under the relevant provisions of
Article XXVIII 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]
 ---pagebreak---                                                                                      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 Puma del Este Declaration;
         Recalling that their long-term objective as agreed at the Mid-Term Review of the Uruguay
Round "is to establish a fair and market-oriented agriculturaltrading 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 substantial
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
phytosanitary 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:
                                                  Pan I
                                                 Anicle 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 monetary 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:
 ---pagebreak--- Page 44
            (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 implemenution period
                     and thereafter, calculated in accordance with the provisions of Annex 3 of this
                     Agreement and taking into account the constituent dau and methodology used
                      in the ubles of supporting material incorporated by reference in Part 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 offirstsale 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 annual level of support, expressed
            in 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
                     ubles of supporting material incorporated by reference in Part IV of a Member's
                     Schedule; and
            (ii)     with respect to support provided during any year ofthe 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 tables 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 this Agreement;
        (f) "implemenution period" means the six-year period commencing in the year 1995. except
            that, for the purposes of Article 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) "Total Aggregate Measurement of Support" and "Total AMS" mean the sum of all
            domestic support provided in favour of agricultural producers, calculated as the sum
            of all aggregate measurements of support for basic agricultural products, all non-product-
            specific aggregate measurements of support and all equivalent measurements of support
            for agricultural products, and which is:
            (i)       with respect to support provided during the base period (i.e. the "Base Total
                      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 Part IV of a Member's Schedule; and
 ---pagebreak---                                                                                      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 Total AMS"), calculated
                          in accordance with the provisions of this Agreement, including Article 6, and
                          with thé constituent data and methodology used in the tables of supporting
                          material incorporated by reference in Part IV ofthe 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.
                                                  Anicle 2
                                             Product Coverage
         This Agreement applies to the products listed in Annex 1 to this Agreement, hereinafter referred
to as agricultural products.
                                                   Part II
                                                  Anicle 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 Part 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.
                                                   Pan III
                                                  Anicle 4
                                              Market Access
 1.      Market access concessions contained in Schedules relate to bindings and reductions of tariffs,
and to other market access commitments as specified therein.
 ---pagebreak--- Page 46
2.        Members shall not maintain, resort 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.
                                                              Anicle 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 Article 4 of this
Agreement have been converted 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 ofthe Member
                     granting the concession, as determined on the basis of the c.i.f. import price of the
                     shipment concerned expressed in terms of its domestic currency, falls below a trigger
                     price equal to the average 1986 to 1988 reference price2 for the product concerned.
2.         Imports under current and minimum access commitments established 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 ofthe 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 impon restrictions, variable import levies, minimum import prices, discretionary
import licensing, non-tariff measures maintained through state-trading enterprises, voluntary export restraints, and similar
border measures other than ordinary customs duties, whether 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-agnculture-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.
 ---pagebreak---                                                                                               Page 47
defined as imports as a percenuge ofthe corresponding domestic consumption3 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
ofthe product concerned entering the customs territory ofthe Member granting the concession exceeds
the sum of (.t) 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 ofthe 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
                  ofthe 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;
         (o       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 ofthe 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 take 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 taken into account, the base trigger level under subparagraph 4(a) shall apply.
 ---pagebreak--- 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 data, to
the Committee on Agriculture as far in advance as may be practicable and in any event within 10 days
ofthe implemenution of such action. In cases where changes in consumption volumes must be allocated
to individual tariff lines subject to action under paragraph 4, relevant data 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 ofthe conditions of application
of such action. Any Member taking action under subparagraph 1(b) above shall give notice in writing,
including relevant dau, to the Committee on Agriculture within 10 days ofthe implementation ofthe
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 ofthe conditions
of application of such action.
8.       Where measures are uken 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 of this Article shall remain in force for the duration ofthe reform process as
determined under Article 20.
                                                   Pan IV
                                                  Anicle 6
                                       Domestic Suppon Commitments
 1.      The domestic support reduction commitments of each Member contained in Pan 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 subject to reduction in terms ofthe criteria set out
in this Article and in Annex 2 to this Agreement. The commitments are expressed in terms of Total
Aggregate Measurement of Support and "Annual and 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 bu
included in a Member's calculation of its Current Total 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 Total 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 the calculation of its Current Total AMS
                  and shall not be required to reduce:
 ---pagebreak---                                                                                     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 total 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 total agricultural
                          production.
        (b)     For developing country Members, the de minimis percenuge under this paragraph shall
                be 10 per cent.
5.      (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 ofthe 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 Total AMS.
                                                Anicle 7
                                General Disciplines on Domestic Support
1.       Each Member shall ensure thai any domestic support measures in favour of agricultural producers
which are not subject to reduction commitments because they qualify' under the criteria set out in Annex 2
to this Agreement are maintained in conformity therewith.
2.       (a)     Any domestic support measure in favour of agricultural producers, including any
                modification to such measure, and any measure that is subsequently introduced that
                cannot be shown to satisfy the criteria in Annex 2 to this Agreement or to be exempt
                 from reduction by reason of any other provision of this Agreement shall.be included
                in the Member's calculation of its Current Total AMS.
         (b)     Where no Total 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.
 ---pagebreak--- Page 50
                                                 Pan V
                                                Anicle 8
                                   Expon 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.
                                                Anicle 9
                                     Expon Subsidy· Commitments
        The following export subsidies are subject to reduction commitments under this Agreement:
        (a)     the provision by governments or their agencies of direct subsidies, including payments-
                in-kind, to a firm, to an industry, to producers of an agricultural product, to a
                cooperative or other 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 product 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 export shipments, provided or mandated by
                governments, on terms more favourable than for domestic shipments;
        (Π      subsidies on agricultural products contingent on their incorporation in exported product*
        (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 respect 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 reduction commitments, the maximum quantity
                         of an agricultural product, or group of products, in respect of which such export
                         subsidies may be granted in that year.
 ---pagebreak---                                                                                      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 œrnmitmeht levels in respect ofthe 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 ofthe 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 budgeury
                           outlays;
                 (ii)     the cumulative quantities exported with the benefit of such export subsidies,
                           from the beginning ofthe 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 total cumulative amounts of budgeury 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 ofthe implementation period,
                          are no greater than 64 per cent and 79 percent ofthe 1986-1990 base period
                           levels, respectively. For developing country Members these percentages shall
                          be 76 and 86 per cent, respectively.
3        Commitments relating to limiutions on the extension of the scope of export subsidization are
as specified in Schedules.
4.       During the implementation period, developing country Members shall not be required to
undertake commitments in respect ofthe 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.
                                                 Anicle 10
                      Prevention of Circumvention of Expon 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.
 ---pagebreak--- Page 52
3.       Any Member which claims that any quantity exported in excess of a reduction commitment
level is not subsidized must esublish that no export subsidy, whether listed in Article 9 or not, has
been granted in respect of the quantity of exports in question.
4.       Members donors of international food aid shall ensure:
         (a)     that the provision of international food aid is not tied directly or indirectly to commercial
                 exports of agricultural products to recipient countries;
         (b)     that international food aid transactions, including bilateral food aid which is monetized,
                 shall be carried out in accordance with the FAO "Principles of Surplus Disposal and
                 Consulutive 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 product exceed
the per-unit export subsidy that would be payable on exports ofthe primary product as such.
                                                  Part VI
                                                 Article 12
                           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 Article 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 matter 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 Article shall not apply to any developing country Member, unless the
measure is taken by a developing country Member which is a net-food exporter ofthe specific foodstuff
concerned.
 ---pagebreak---                                                                                                 Page 53
                                                       Pan VII
                                                      Anicle 13
                                                   Due Restraint
          During the implementation period, notwithsunding 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 duties4;
          (ii)    exempt from actions based on Article XVI of GATT 1994 and Part III of the Subsidies
                  Agreement; and
         (iii)    exempt from actions based on non-violation nullification or impairment ofthe benefits
                  of tariff 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 ofthe 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 ofthe 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)      subject 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 ofthe Subsidies Agreement, and due restraint shall be shown
                  in initiating any countervailing duty investigations; and
    "Countervailing duties" where referred to in this Article are those covered by Article VI of GATT 1994 and Part V
of the Agreement on Subsidies and Countervailing Measures.
 ---pagebreak--- Page 54
        (ii)    exempt from actions based on Article XVI of GATT 1994 or Articles 3, 5 and 6 of
                the Subsidies Agreement.
                                               Pan VIII
                                              Article 14
                                Sanitary and Phytosanitary Measures
        Members agree to give effect to the Agreement on the Application of Sanitary and Phytosanitary
Measures.
                                                Pan DC
                                              Anicle 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 reduction commitments
over a period of up to 10 years. Least-developed country Members shall not be required to undertake
reduction commitments.
                                                 PanX
                                              Anicle 16
                  Least-Developed and Net Food-Importing Developing Countries
 1.     Developed country Members shall take such action as is provided for within the framework
ofthe Decision on Measures Concerning the Possible Negative Effects ofthe 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.
                                                 Pan XI
                                               Anicle 17
                                      Committee on Agriculture
        A Committee on Agriculture is hereby esublished.
 ---pagebreak---                                                                                      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 matters and at such intervals as shall be determined, as well as on the basis of such
 documentation as the Secretariat 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 conuin deuils ofthe 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 Committee 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 ofthe Committee 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 Understanding, shall apply to consultations and the settlement of disputes under
this Agreement.
                                                    Pan XII
                                                   Anicle 20
                                     Continuation of the Reform Process
          Recognizing that the long-term objective of substantial progressive reductions in support and
protection resulting in fundamental reform is an ongoing process. Members agree that negotiations
for continuing the process will be initiated one year before the end ofthe implementation period, taking
into account:
          (a)      the experience to that date from implementing the reduction commitments;
          (b)      the effects of the reduction commitments on world trade in agriculture;
 ---pagebreak--- Page 56
        (c)    non-trade concerns, special and differential treatment to developing country Members,
               and the objective to esublish 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 commitments are necessary to achieve the above mentioned long-term
               objectives.
                                             Pan XIII
                                             Anicle 21
                                         Final Provisions
1.      The provisions of GATT 1994 and of other Multilateral Trade Agreements in Annex 1A to
the WTO Agreement shall apply subject to the provisions of this Agreement.
2.      The Annexes to this Agreement are hereby made an integral part of this Agreement.
 ---pagebreak---                                                                                    Page 57
                                              ANNEX 1
                                      PRODUCT COVERAGE
1.        This Agreement shall cover the following products:
     (i)       HS Chapters 1 to 24 less fish and fish products, plus*
     (ii)      HSCode                     2905.43                 (mannitol)
               HS Code                    2905.44                 (sorbitol)
               HS Heading                 33.01                   (essential oils)
               HS Headings               35.01 to 35.05           (albuminoidal substances, modified
                                                                  starches, glues)
               HSCode                    3809.10                  (finishing agents)
               HSCode                    3823.60                  (sorbitol n.e.p.)
               HS Headings               41.01 to 41.03           (hides and skins)
               HS Heading                43.01                    (raw furskins)
               HS Headings               50.01 to 50.03           (raw silk and silk waste)
               HS Headings               51.01 to 51.03           (wool and animal hair)
               H S Headings              52.01 to 52.03           (raw cotton, waste and cotton carded
                                                                  or combed)
               HS Heading                53.01                    (raw flax)
               HS Heading                53.02                    (raw hemp)
2.       The foregoing shall not limit the product coverage of the Agreement on the Application of
Sanitary and Phytosanitary Measures.
•The product descriptions in round brackets are not necessarily exhaustive.
 ---pagebreak--- 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 fundamental 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 effectof providing price support to producers;
plus policy-specific criteria and conditions as set out below.
Government Service Programmes
2.       General services
         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;
         (c)      training services, including both general and specialist training facilities;
         (d)      extension and advisory services, including the provision of means to facilitate 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 services, including market information, advice and promotion
                  relating to particular products but 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
 ---pagebreak---                                                                                                      Page 59
                      reticulation of generally available public utilities. It shall not include subsidies to inputs
                      or operating costs, or preferential user charges.
 3.          Public stockholding for food security purposes5
             Expenditures (or revenue foregone) in relation to the accumulation and holding of stocks of
 products which form an integral part of a food security programme identified in national legislation.
 This may include government aid to private storage of products as part of such a programme.
                      The volume and accumulation of such stocks shall correspond to predetermined targets
                      related solely to food security. The process of stock accumulation and disposal shall
                      befinanciallytransparent. Food purchases by the government shall be made at current
                      market prices and sales from food security stocks shall be made at no less than the
                      current domestic market price for the product and quality in question.
4.          Domestic food aid6
            Expenditures (or revenue foregone) in relation to the provision of domestic food aid to sections
of the population in need.
                     Eligibility to receive the food aid shall be subject 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, factor use or production level in a defined
                     and fixed base period.
      'For the purposes pf 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 the acquisition price and the external reference price is accounted for in the AMS.
' " F o r 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.
 ---pagebreak--- 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 arty 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 to, 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 paymentsthall 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-year 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
              assistance.
       (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 total of such payments shall be less than
               100 per cent of the producer's total loss.
8.     Payments (made either directly 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 occurring; and shall be determined by a production loss which
              exceeds 30 per cent of the average of production in the preceding 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 factors due to the natural disaster in question.
       (c)    Payments shall compensate for not more than the total cost of replacing such losses
              and shall not require or specify the type or quantity of future production.
 ---pagebreak---                                                                                 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 total 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 total and permanent retirement of the recipients
            from markeuble 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
            production 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 production (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.
 ---pagebreak--- 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 disadvantaged regions.
               Each such region must be a clearly designated contiguous geographical area with a
              definable economic and administrative identity, considered as disadvantaged 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 production.
        (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 )    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.
        (ft    The payments shall be limited to the extra costs or loss of income involved in
               undertaking agricultural production in the prescribed area.
 ---pagebreak---                                                                                      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 established, expressed in total
monetary value terms.
7        The AMS shall be calculated 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.
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 maintain 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 thefixedreference 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 factors other than price shall be measured
using budgetary outlays.
 13.     Other non-exempt measures, including input subsidies and other measures such as marketing-cost
reduction measures: the value of such measures shall be measured using government budgetary outlays
or, where the use of budgeury outlays does not reflect the full extent of the subsidy concerned, the
basis for calculating the subsidy shall be the gap between the price ofthe subsidized good or service
 ---pagebreak--- Page 64
and a represenutive market price for a similar good or service multiplied by the quantity of the good
or service.
 ---pagebreak---                                                                                       Page 65
                                                  ANNEX 4
                                         POMESTIC SUPPORT;                                ,,;.
              CALCULATION OF ÉQUIVALENT 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 implemenutron ofthe 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 ofthe market price support component
ofthe AMS is not practicable. For those basic agricultural products, equivalent measurements of market
price support shall be made using the applied administered price and the quantity of production eligible
to receive that price or, where this is not practicable, on budgeury outlays used to maintain the producer
price.
3.       Where basic agricultural products fall ing under paragraph 1 are the subject of non-exempt direct
payments or any other product-specific subsidy not exempted from the reduction 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.
 ---pagebreak--- 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 effect 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 product;
         (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 ofthe Schedule ofthe Member concerned, to 4 per cent
                   of base period domestic consumption of the designated products from the beginning
                   of the first year of the implementation 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 implementation 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 ofthe implementation 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 ofthe special treatment
as set out in paragraph 1 after the end ofthe 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, taking into account the factors of non-trade concerns.
4.       If it is agreed as a result of the 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 is not to be continued at the end of the implementation period,
the Member concerned shall implement the provisions of paragraph 6. In such a case, after the end
of the implementation period the minimum access opportunities for the designated products shall be
 ---pagebreak---                                                                                       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 mainuined in respect of the designated
products shall become subject to the provisions of paragraph 2 of Article 4 with effect from the beginning
ofthe 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 ofthe 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 tariff equivalents to be
calculated in accordance with the guidelines prescribed in the atuchment hereto.
Section Β
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 suple in the
traditional diet of 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 ofthe products concerned, as specified in
                   Section I-B of Part.I of the Schedule of the developing country Member concerned,
                   correspond to 1 per cent of base period domestic consumption ofthe 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 implementation 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 mainuined in the
                   Schedule of the developing country Member concerned;
         (b )      appropriate market access opportunities have been provided for in other products under
                   this Agreement.
8      β Any negotiation on the question of whether there can be a continuation of the special treatment
as set out in paragraph 7 after the end ofthe 10th year following the beginning ofthe 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 implementation period, the products concerned shall be subject
to ordinary customs duties, established 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.
 ---pagebreak--- 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 and 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 deuiled level of the HS wherever
                 appropriate;
         (c)     shall generally be established for worked and/or prepared products by multiplying the
                 specific tariff equivalent(s) for the primary agricultural product(s) by the proportion(s)
                  in value terms or in physical terms as appropriate ofthe 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 representative wholesale price ruling in the domestic
market or an estimate of that price where adequate data is not available.
5.       The initial tariff 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 tariff equivalent may be established at the current bound rate or on the basis
of national offers for that product.
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.
 ---pagebreak---                                                                                               Page 69
                              AGREEMENT ON THE APPLICATION OF
                          ÇANITARY 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 al I Members ;
          Noting that sanitary 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 sanitary 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, sanitary and phytosaniury 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
ofthe International Plant Protection 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 sanitary or phytosanitary measures of importing Members, and as a consequence in access
to markets, and also in the formulation and application of sanitary 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 ofthe provisions of GATT 1994 which
relate to the use of saniury or phytosanitary 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 Article.
 ---pagebreak--- Page 70
                                                 Anicle 1
                                            General Provisions
 1.      This Agreement applies to all sanitary and phytosaniury measures which may, directly or
indirectly, affect international trade. Such measures shall be developed 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 affect the rights of Members under the Agreement on Technical
 Barriers to Trade with respect to measures not within the scope of this Agreement.
                                                  Anicle 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 phytosaniury 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 phytosanitary 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 phytosanitary measures shall
not be applied in a manner which would constitute a disguised restriction 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 sanitary or phytosanitary measures, in particular the provisions
 of Article XX(b)
                                                  Anicle 3
                                              Harmonization
  1.      To harmonize sanitary 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.
 ---pagebreak---                                                                                                         Page 71
2.         Sanitary or phytosanitary 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 sanitary or phytosanitary measures which result in a higher
 level of sanitary or phytosaniury protection 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 ofthe level of sanitary or phytosaniury protection 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 phytosanitary protection 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 ofthe 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 Phytosanitary 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.
                                                            Anicle 4
                                                          Equivalence
 1.       Members shall accept the sanitary 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 sanitary 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 consultations with the aim of achieving bilateral and
multilateral agreements on recognition of the equivalence of specified sanitary or phytosaniury measures.
     'For the purposes of paragraph 3 of Anicle 3. there is a scientific justification if, on the basis of an examination and
evaluation of available scientific information in conformity with the relevant provisions of this Agreement, a Member determines
that the relevant international standards, guidelines or recommendations are not sufficient to achieve its appropriate level
of sanitary or phytosanitary protection.
 ---pagebreak--- Page 72
                                                         Anicle 5
                      Assessment of Risk and Determination of the Appropriate Level
                                     of Sanitary or Phytosanitary Protection
1.        Members shall ensure that their sanitary 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 take 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
environmenul conditions; and quarantine or 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 sanitary or phytosanitary protection 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, establishment or spread of a pest or disease; the costs of control
or eradication in the territory ofthe importing Member; and the relative cost-effectiveness of alternative
approaches to limiting risks.
4.        Members should, when determining the appropriate level of sanitary or phytosanitary 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 establishing or maintaining sanitary or
phytosanitary measures to achieve the appropriate level of sanitary or phytosaniury protection. Members
shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate
level of sanitary or phytosaniury protection, taking 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 froni
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 sanitary or phytosanitary measure
accordingly within a reasonable period of time.
     'For purposes of paragraph 6 of Anicle 5. 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
sanitary or phytosanitary protection and is significantly less restrictive to trade.
 ---pagebreak---                                                                                      Page 73
8.       When a Member has reason to believe that a specific sanitary or phytosaniury measure introduced
or mainuined 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 product originated and to which the product is destined. In
assessing the sanitary or phytosanitary 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.
                                                 Anicle 7
                                               Transparency
         Members shall notify· changes in their sanitary or phytosanitary measures and shall provide
information on their sanitary or phytosanitary measures in accordance with the provisions of Annex B.
                                                 Anicle 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 establishing
tolerances for contaminants in foods, beverages or feedstuffs, and otherwise ensure that their procedures
are not inconsistent with the provisions of this Agreement.
 ---pagebreak--- 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 phytosanitary measures necessary
 to achieve the appropriate level of saniury 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 phytosanitary requirements of an importing Member, the latter shall consider
 providing such technical assistance as will permit the developing country Member to maintain and expand
 its market access opportunities for the product involved.
                                                  Article 10
                                     Special and Differential Treatment
  1.       In the preparation and application of sanitary or phytosanitary measures. Members shall take
 account ofthe special needs of developing country Members, and in particular ofthe least-developed
 country Members.
 2         Where the appropriate level of sanitary or phytosanitary protection allows scope for the phased
 introduction of new sanitary or phytosanitary 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 facilitate the active participation of developing country Members
 in the relevant international organizations.
                                                  Article II
                                   Consultations and Dispute Settlement
  I.       The provisions of Articles XXII and XXIIl of GATT 1994 as elaborated and applied by the
 Dispute Settlement Understanding shall apply to consultations.and the settlement of disputes under
 this Agreement, except as otherwise specifically provided herein.
 ---pagebreak---                                                                                        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 consulution 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.
                                                . Anicle 12
                                               Administration
 1        A Committee on Sanitary and Phytosanitary Measures is hereby established 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 consultations or negotiations among
Members on specific sanitary or phytosaniury 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 feedstuffs.
3.        The Committee shall maintain 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 Secretariat ofthe International Plant Protection 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 Committee
should, in conjunction with the relevant international organizations, establish 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 sanitary or phytosanitary protection. If a Member revises its position, following
its indication ofthe use of a standard, guideline or recommendation as a condition for import, it should
provide an explanation for its change and so inform the Secretariat as well as the relevant international
organizations, unless such notification and explanation is given according to the procedures of Annex B.
 ---pagebreak--- 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 ofthe Members, through appropriate
channels invite the relevant international organizations or their subsidiary bodies to examine specific
maners with respect 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 implementation of this Agreement three years
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
take 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 phytosanitary 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 affecting importation or imported products. Other developing
country Members may delay application ofthe provisions of this Agreement, other than paragraph 8
of Article 5 and Article 7. for two years following the date of entry into force ofthe WTO Agreemeni
with respect to their existing sanitary or phytosanitary measures affecting importation or imported
products, where such application is prevented by a lack of technical expertise, technical infrastructure
or resources.
 ---pagebreak---                                                                                                  Page 77
                                                       ANNEX A
                                                   DEFINITIONS4
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,
                   esublishment or spread of pests; or
           (d)     to prevent or limit other damage within the territory of the Member from the entry,
                   establishment or spread of pests.
Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and
procedures including, inter alia, end product 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 established 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 Secretariat of the International Plant Protection Convention
                    in cooperation with regional organizations operating within the framework of the
                    International Plant Protection Convention; and
     4
      For the purpose of these definitions, "animal" 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.
 ---pagebreak--- Page 78
         (d)      for matters not covered by the above organizations, 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, esublishment or spread of a pest
or disease within the territory of an importing Member according to the sanitary or phytosanitary
measures which might be applied, and ofthe associated potential biological and economic consequences;
or the evaluation ofthe 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 feedstuffs.
5.       Appropriate level of sanitary or phytosanitary protection - The level of protection deemed
appropriate by the Member establishing a saniury or phytosanitary 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, or be 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 protection, 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.
 ---pagebreak---                                                                                                      Page 79
                                                      ANNEX Β
           TRANSPARENCY OF SANITARY AND PHYTOSANITARY REGULATIONS
Publication of regulations
 1.       Members shall ensure that all sanitary and phytosanitary regulations5 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 phytosanitary 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 sanitary or phytosanitary protection;
          (di      the membership and participation of the Member, or of relevant bodies within its
                   territory, in international and regional sanitary and phytosanitary organizations and
                   systems, as well as in bilateral and multilateral agreements and arrangements within
                   the scope of this Agreement, and the texts of such agreements and arrangements.
4         Members shall ensure that where copies of documents are requested by interested Members,
they are supplied at the same price (if any), apart from the cost of delivery, as to the nationals6 ofthe
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, natural or legal, who are domiciled or who have a real and effective industrial or
commercial establishment in that customs territory.
 ---pagebreak--- 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 ofthe objective and rationale ofthe proposed
                 regulation. Such notifications shall take place at an early stage, when amendments
                 can still be introduced 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 protection arise or threaten to arise for a Member.
that Member may omit such ofthe 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 Secretariat 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 ofthe documents covered by a specific
notification in English, French or Spanish.
9.       The Secreuriat shall promptly circulate copies ofthe 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, ofthe provisions concerning notification procedures according
to paragraphs 5, 6, 7 and 8 of this Annex.
 ---pagebreak---                                                                                  Page 81
General reservations
11.    Nothing in this Agreement shall be construed as requiring:
       (a)     thé 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.
 ---pagebreak--- Page 82
                                                    ANNEX C
                    CONTROL, INSPECTION AND APPROVAL PROCEDURES7
1.      Members shall ensure, with respect to any procedure to check and ensure the fulfilment of
sanitary or phytosanitary 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
                   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
                   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 suge 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 establishment 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;
         (f)       any fees 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 actual cost of the service;
         (g)       the same criteria should be used in the siting of 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, exporters or their agents;
         (h)       whenever specifications of a product are changed subsequent to its control and inspection
                   in light ofthe applicable regulations, the procedure for the modified product 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.
 ---pagebreak---                                                                                     Page 83
         (i)      a procedure exists to review complaints concerning the operation of such procedures
                  and to take corrective action when a complaint is justified.
Where an importing Member operates à 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 markets 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 sanitary or phytosanitary measure specifies control at the level of production, the
Member in whose territory the production takes place shall provide the necessary assistance to facilitate
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.
 ---pagebreak--- Page 84 ---pagebreak---                                                                                             Page 85
                            AGREEMENT ON TEXTILES AND CLOTHING
Members,
         Recalling that Ministers agreed at Punta del Este that "negotiations in the area of textiles and
clothing shall aim to formulate modalities that 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 ofthe Uruguay 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 18of 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 ofthe cotton-producing exporting Members should,
in consultation with them, be reflected in the implementation of the provisions of this Agreement.
5.       In order to faciliutc the integration ofthe 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 clothing products to which this Agreement applies are set out in the Annex.
    'To the extent possible, exports from a least-developed country Member may also benefit from this provision.
 ---pagebreak--- Page 86
                                                       Article 2
1.       All quantitative restrictions within bilateral agreements/maintained under Article 4 or notified
under Article 7 or 8 ofthe MFA in force on the day before the entry into force ofthe WTO Agreement
shall, within 60 days following such entry into force, be notified in detail, including the restraint levels,
growth rates and flexibility provisions, by the Members mainuining 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 restrictions maintained
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 ofthe TMB, within 60 days ofthe circulation ofthe 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 ofthe WTO Agreement,
the Members concerned should mutually agree on arrangements to bring the period of restrictions 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 consultations
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 ofthe WTO
Agreemeni. No new restrictions in terms of products or Members shall be introduced except under
the provisions of this 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 ofthe MFA prior to the date of entry into force
ofthe 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 Anicle 3 measures under the MFA. Any measure applied under an MFA Article 4agreement
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 ofthe WTO Agreement, each Member shall integrate into GATT
 1994 products which accounted for not less than 16 per cent ofthe total volume ofthe Member's 1990
imports ofthe products in the Annex, in terms of H S 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 ofthe WTO
Agreement and at the subsequent 12-month intervals.
    The relevant GATT 1994 provisions shall not include Anicle XIX in respect of products not yet integrated into GATT 1994.
except as specifically provided in paragraph 3 of the Annex.
 ---pagebreak---                                                                                      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 mainuining restrictions falling under paragraph 1 undertake, notwithstanding
                  the date of entry into force ofthe WTO Agreement, to notify such deuils to the GATT
                  Secretariat 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, reuined the right to use
                  the provisions of Article 6, shall notify such details 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 total 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 that the WTO Agreement is in effect, products which
                  accounted for not less than 18 per cent of the total 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 effect, 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 1 of Article 6, their intention not to retain
the right to use the provisions of Article 6 shall, for the purposes of this Agreement, be deemed to
have integrated their textiles and clothing products into GATT 1994. Such Members shall, therefore,
be exempted from complying with the provisions of paragraphs 6 to 8 and 11.
 10.     Nothing in this Agreement shall prevent a Member which has submitted an integration 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
detail to the TMB at least 12 months before their coming into effect, and circulated by the TMB to
all Members.
 ---pagebreak--- 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 Stage 1 of this Agreement (from the date of entry into force ofthe 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 ofthe WTO Agreement
shall be increased annually by not less than the growth rate established for the respective restrictions,
increased by 16 per cent.
 14.     Except where thé Council for Trade in Goods or the Dispute Settlement Body decides otherwise
under paragraph 12 of Article 8, the level of each remaining restriction shall be increased annually
during subsequent stages 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 Stage 1, increased by
                  25 per cent;
         (b)      for Stage 3 (from the 85th to the 120th month that the WTO Agreement is in effect,
                  inclusive), the growth rate for the respective restrictions during Stage 2, increased by
                  27 per cent.
 15.     Nothing in this Agreement shall prevent a Member from eliminating any restriction maintained
pursuant to this Article, effective 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 take 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 restrictions represent 1.2 per cent or less of the total
volume ofthe 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 provisions.
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 product during a period of
one year immediately following the integration of that product 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 set out in paragraph 20.
 ---pagebreak---                                                                                                       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 implementation of this Article. It shall, at the request
of any Member, review any particular matter with reference to the implementation 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.
                                                            Anicle 3
1.        Within 60 days following the date of entry into force of the WTO Agreement, Members
maintaining restrictions4 on textile and clothing products (other than restrictions maintained under the
MFA and covered by the provisions of Article 2), whether consistent with GATT 1994 or not, shall
(a) notify them in detail 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 maimaining restrictions 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 restrictions that may not have been notified
     'Restrictions denote all unilateral quantitative restrictions, bilateral arrangements and other measures having a similar
effect.
 ---pagebreak--- 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.
                                                 Anicle 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 consultations with
the affected Member or Members prior to the implementation 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.
                                                 Anicle 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 action against such
circumvention, that Member should consult with the Member or Members concerned with a view to
seeking a mutually satisfactory solution. Such consulutions should be held promptly, and within 30 days
 ---pagebreak---                                                                                         Page 91
when possible. If a mutually satisfactory solution is not reached, the matter may be referred by any
Member involved to the TMB for recommendations.
 3.       Members agree to take necessary action, consistent with their domestic laws and procedures,
to prevent, to investigate and, where appropriate, to take legal and/or administrative action 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 mainuining
 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 ofthe involvement ofthe territories ofthe Members through which the
goods have been transshipped, such action 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 if 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 conuined 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.
 ---pagebreak--- Page 92
                                                           Anicle 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 mainuining 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 reuin 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 ofthe WTO Agreement. The transitional
safeguard should be applied as sparingly as possible, consistently with the provisions of this Article
and the effective implemenution of the integration process under this Agreement.
 2.        Safeguard action may be uken under this Article when, on the basis of a determination by
 a Member5, 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 ofthe 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 substantial
 increase in imports, actual or imminent6, 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 ofthe 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 action shall not exceed 90 days from the date of initial notification as
set forth in paragraph 7.
6.         In the application ofthe transitional safeguard, particular account shall be taken ofthe interests
of exporting Members as set out below:
     \ \ customs union may apply a safeguard measure as a single unit or on behalf of a member State. 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 State, all the requirements for the determination of serious damage, or actual threat
thereof, shall be based on the conditions existing in that member State and the measure shall be limited to that member State.
     *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.
 ---pagebreak---                                                                                        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 toul volume of exports of other Members and who account for only a small
                   percenuge of toul imports of that product into the importing Member shall be accorded
                   differential and more favourable treatment in the fixing ofthe economic terms provided
                   in paragraphs 8, 13 and 14. For those suppliers, due account will be taken, pursuant
                   to paragraphs 2 and 3 of Article 1, ofthe future possibilities for the development of
                   their trade and the need to allow commercial quantities of imports from them;
          (c)      with respect 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 quota 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
ofthe 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
ofthe product 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 product 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 consultations, there is mutual understanding that the situation calls for restraint on
the exports ofthe 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 foi
consultation was made.
9.         Deuils ofthe 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
 ---pagebreak--- Page 94
have available to it the factual dau provided to the Chairman ofthe TMB, referred to in paragraph 7,
as well as any other relevant information provided by the Members concerned. The TMJB 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 matter to the TMB. It shall be open to either Member
to refer the matter to the TMB before the expiry of the period of 60 days. In either case, the TMB
shall promptly conduct an examination ofthe matter, 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 taken 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 case no later than 60 days from the date of
the implementation of the action. The TMB shall promptly conduct an examination of the matter,
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 ofthe implementation ofthe action. The TMB may make such
recommendations as it deems appropriate to the Members concerned.
 12.      A Member may maintain 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 quantitative 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 total exports subject to restraint do not exceed
 the total of the levels for all products so restrained under this Article, on the basis of agreed 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 ζ pro rata basis.
  15.      If a safeguard action is applied under this Article to a product for which a restraint was previously
 in place under the MFA during the 12-month period prior to the entry into force ofthe WTO Agreement,
 or pursuant to the provisions of Article 2 or 6. the level ofthe 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
 ---pagebreak---                                                                                          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 (ii) the level of restraint provided for in
paragraph 8.
 16.     When a Member which is not mainuining 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 established tariff classification and quantiutive 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 φ) avoid over-categorization. The
request for consultations referred to in paragraphs 7 or 11 shall include full information on such
arrangements.
                                                 Article 7
1        As part 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 protection 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 ofthe TMB's comprehensive
report.
 ---pagebreak--- 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 actions 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
ofthe 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. It 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 consultations provided for in
this Agreement, the TMB shall, at the request of either Member, and following a thorough and prompt
consideration ofthe 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 matter 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 ofthe TMB, which shall
exercise proper surveillance of the implementation of such recommendations.
 10.     If a Member considers itself unable to conform with the recommendations ofthe TMB, it shall
provide the TMB with the reasons therefor not later than one month after receipt of such
recommendations. Following thorough consideration ofthe reasons given, the TMB shall issue any
further recommendations it considers appropriate forthwith. If, after such further recommendations,
the matter remains unresolved, either Member may bring the matter before the Dispute Settlement
Body and invoke paragraph 2 of Article XXIII of GATT 1994 and the relevant provisions of the Dispute
Settlement Understanding.
 ---pagebreak---                                                                                       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 stage 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 matters with regard to the integration process, the application ofthe 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 take 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 Settlement Body may authorize, without prejudice to the final date set out
under Article 9, an adjustment to paragraph 14 of Article 2, for the stage subsequent to the review,
with respect to any Member found not to be complying with its obligations under this Agreement.
                                                  Anicle 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.
 ---pagebreak--- 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 sixndigit 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 Article XIX of GATT 1994, as interpreted by the Agreement
on Safeguards, shall be applicable.
 ---pagebreak---                                                                               Page 99
               Products within Section XI (Textiles and Textile Articles) of the
        Harmonized Commodity Description and Coding System (HS) Nomenclature
HS No.  Product Description
Ch. 50  Silk
5004.00 Silk yarn (other than yarn spun from silk waste) not put up for reuil 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 reuil 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 reuil sale
5106.20 Yarn of carded, wool, < 85% by weight of wool, not put up for reuil 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 reuil sale
5108.20 Yarn of combed fine animal hair, not put up for reuil 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/fine animal hair, > / = 85% by wt, mixd w m-m fi
5111.30 Woven fabric of carded wool/fine animal hair, > / = 85% by wt, mixd w m-m fib
5111.90 Woven fabrics of carded wool/fine animal hair, > / = 85% by weight, nes
5112.11 Woven fabric of combed wool/fine animal hair, > /=85 % by weight, < /=200 g/m2
5112.19 Woven fabrics of combed wool/fine animal hair, > /=85 % by weight, > 200 g/m2
5112.20 Woven fabrics of combed wool/fine animal hair, < 85% by wt, mixd w m-m fil
5112.30 Woven fabrics of combed wool/fine 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 reuil 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 retail 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 yarn, > /=85 % .single, uncombed, < 125 dtex, nt put up f retail 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 > d t e x > / = 192.31, not put up
5205.24 Cotton yarn,>/=85%, single, combed, 192.31 > d t e x > / = 125, not put up
 ---pagebreak---  Page 100
HS No.    Product Description
5205.25   Cotton yarn, > / = 85%,single, combed, < 125 dtex, not put up for reuil sale
5205.31   Cotton yarn,>/=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 yarn,>/ = 85%,multi, uncombed, 232.56 > d t e x > / = 192.31, not put up, nes
5205.34   Cotton yarn,>/ = 85%,multi, uncombed, 192.31 >dtex>/=*125, nt put up, nes
5205.35   Cotton yarn,>/ = 85%,multi, uncombed, < 125 dtex, not put up, nes
5205.41   Cotton yarn,>/=85%, multiple, combed,>/=714.29 dtex, not put up, nes
5205.42   Cotton yarn;>/ = 85%,multi, combed, 714.29 >dtex>/=232.56, nt put up, nes
5205.43   Cotton yarn, > / = 85%,multi, combed, 232.56 > d t e x > / = 192.31, nt put up, nes
5205.44   Cotton yarn, > / = 85%,multiple, combed, 192.31 >dtex>/-125, not put up, nes
5205.45   Cotton yarn, > / = 85%, multiple, combed, < 125 dtex, not put up, nes
5206.11   Cotton yarn, <85%, single, uncombed, >/=714.29, not put up
5206.12   Cotton yarn, <85%, single, uncombed, 714.29 >dtex>/ = 232.56, nt put up
5206.13   Cotton yarn, <85%, single, uncombed, 232.56 > d t e x > / = 192.31, not put up
5206.14   Cotton yarn, <85%, single, uncombed, 192.31 > d t e x > / = 125, nt put up
5206.15   Cotton yarn, < 85% .single, uncombed, < 125 dtex, not put up for retail sale
5206.21   Cotton yarn, <85%, single, combed,>/ = 714.29 dtex, nt put up
5206.22   Cotton yarn, <85%, single, combed, 714.29 >dtex>/ = 232.56, not put up
5206.23   Cotton yarn, <85%, single, combed, 232.56 > d t e x > / = 192.31, not put up
5206.24   Cotton yarn/< 85%, single, combed, 192.31 >dtex>/=125, not put up
5206.25   Cotton yarn,<85%,single, combed,< 125 dtex, not put up for retail sale
5206.31   Cotton yarn, <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 yarn,<85%,multiple, uncombed, 232.56 > d e x > / = 192.31, nt put up, nes
5206.34   Cotton yarn, <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 yarn, <85%, multiple, combed,>/ = 714.29, nt put up, nes
5206.42   Cotton yarn.<85%.multiple, combed, 714.29 >dtex>/ = 232.56, nt put up, nes
5206.43   Cotton yarn.<85%,multiple, combed, 232.56 > d t e x > / = 192.31, nt put up, nes
5206.44   Cotton yarn,<85%,multiple, combed, 192.31 >dtex>/=125, nt put up, nes
5206 45   Cotton yarn. <85%, multiple, combed, < 125 dtex, not put up, nes
5207.10   Cotton yarn (other than sewing thread)>/ = 85% by weight of cotton, put up
5207.90   Cotton yarn (other than sewg thread) <85% by wt 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. > / = 85%. > 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%.> 100g/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, yarn dyed
5208 42   Plain weave conon fabrics, > / = 85%. > 100 g/m2 to 200 g/m2, yarn dyed
5208.43   Twill weave cotton fabric,>/-85%, not more than 200 g/m2, yarn dyed
5208.49   Woven fabrics of cotton. > / = 85%,nt more than 200 g/m2, yarn 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
 ---pagebreak---                                                                             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, >I-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 frb, 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,*yam 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, yarn dyd
5211.49 Woven fabrics of cotton, < 85% mixd with m-m fib, > 200 g/m2, yarn 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
 ---pagebreak--- 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 yarn, single
5306.20  Flax yarn, multile (folded) or cabled
5307.10  Yarn 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 yarn
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 yarn (other than sewg thread),of polyester filaments, not put up
5402.31  Texturd yarn 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 retail sale
5402.39  Textured yarn 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  Yarn of polyester filaments, single, untwisted, nes, not put up
5402.49  Yarn of synthetic filaments, single, untwisted, nes, not put up
5402.51  Yarn of nylon or other polyamides fi, single, >50 turns/m, not put up
5402.52  Yarn of polyester filaments, single, >50 turns per metre, not put up
5402.59  Yarn of synthetic filaments, single, > 50 turns per metre, nes, not put up
5402 61  Yarn of nylon or other polyamides fi, multiple, nes. not put up
5402.62  Yarn of polyester filaments, multiple, nes, not put up
5402.69  Yarn of synthetic filaments, multiple, nes, not put up
5403.10  High tenacity yarn (other than sewg thread),of viscose rayon filamt, nt put up
5403.20  Textured yarn nes, of artificial filaments, not put up for retail sale
5403.31  Yarn of viscose rayon filaments, single, untwisted, nes, not put up
5403.32  Yarn of viscose rayon filaments, single, > 120 turns per m, nes, nt put up
5403.33  Yarn of cellulose acetate filaments, single, nes, not put up
5403.39  Yarn of artificial filaments, single, nes, not put up
5403.41  Yarn of viscose rayon filaments, multiple, nes, not put up
5403.42  Yarn of cellulose acetate filaments, multiple, nes, not put up
 ---pagebreak---                                                                                  Page 1Û3
HS No.  Product Description
5403.49 Yarn 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 Yarn of synthetic filament (other than sewing thread), put up for reuil sale
5406.20 Yarn 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 yarn)
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, yarn 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, yarn 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, yarn dyed, nes
5407 74 Woven fabrics, > / = 85% of synthetic filaments, printed, nes
5407.81 Woven fabrics of synthetic filaments, < 85% mixd w cotton, unbl ο bl, nes
5407.82 Woven fabrics of synthetic filaments, < 85% mixed with cotton, dyed, nes
5407.83 Woven fabrics of syntheticfilaments,< 85% mixd w cotton, yarn dyd, nes
5407.84 Woven fabrics of syntheticfilaments,< 85% mixd with cotton, printed, nes
5407.91 Woven fabrics of syntheticfilaments,unbleached or bleached, nes
5407.92 Woven fabrics of syntheticfilaments,dyed, nes
5407 93 Woven fabrics of syntheticfilaments,yarn dyed, nes
5407.94 Woven fabrics of syntheticfilaments,printed, nes
54Q8 10 Woven fabrics of high tenacity filament yarns of viscose rayon
5408.21 Woven fab. > / = 85% of artificial fi ο 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, yarn 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 Staple fibres of polyesters, not carded or combed
5503.30 Staple fibres of acrylic or modacrylic, not carded or combed
5503.40 Staple fibres of polypropylene, not carded or combed
5503.90 Synthetic staple fibres, not carded or combed, nes
 ---pagebreak---  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 staple fibres, carded or combed
5508.10   Sewing thread of synthetic staple fibres
5508.20   Sewing thread of artificial staple fibres
£509.11   Yarn, >/ = 85% nylon or other polyamides suple fibres, single, not put up
5509.12   Yarn,>/ = 85% nylon ο oth polyamides suple fibres, multi, not put up, nes
5509.21   Yarn, >/ = 85% of polyester staple fibres, single, not put up
5509.22   Yarn, >/ = 85% of polyester suple fibres, multiple, not put up, nes
5509.31   Yarn, >/ = 85% of acrylic or modacrylic staple fibres, single, not put up
5509.32   Yarn,>/ = 85% aerylic/modacrylie staple fibres, multiple, not put up, nes
5509.41   Yarn,>/ = 85% of other synthetic staple fibres, single, not put up .
5509.42   Yarn, > / = 8 5 % of other synthetic suple fibres, multiple, not put up, nes
5509.51   Yarn of polyester staple fibres mixd w/ arti staple fib, not put up, nes
5509.52   Yarn of polyester staple fib mixd w wool/fine animal hair, nt put up. nes
5509.53   Yarn of polyester staple fibres mixed with cotton, not put up, nes
5509.59   Yarn of polyester staple fibres, not put up, nes
5509.61   Yarn of acrylic staple fib mixd w wool/fine animal hair, not put up, nes
5509.62   Yarn of acrylic staple fibres mixed with cotton, not put up, nes
5509.69   Yarn of acrylic staple fibres, not put up, nes
5509.91   Yarn of oth synthetic staple fibres mixed w/wool/fine animal hair, nes
5509.92   Yarn of other synthetic staple fibres mixed with cotton, not put up, nes
5509.99   Yarn of other synthetic staple fibres, not put up. nes
5510.11   Yarn.>/ = 85% of artificial staple fibres, single, not put up
5510.12   Yarn,>/ = 85% of artificial staple fibres, multiple, not put up. nes
5510.20   Yarn of artificl staple fib mixd w wool/fine animal hair, not put up, nes
5510.30   Yarn of artificial staple fibres mixed with cotton, not put up, nes
5510.90   Yarn of artificial staple fibres, not put up, nes
5511.10   Yarn, > / = 85% of synthetic staple fibres, other than sewing thread, put up
5511.20   Yarn. < 8 5 % of synthetic staple fibres, put up for retail sale, nes
5511.30   Yarn of artificial fibres (other than sewing thread), put up for retail sale
5512.11   Woven fabrics, containing >/ = 85% of polyester staple fibres, unbl or bl
5512.19   Woven fabrics, containg >/ = 85% of polyester staple fibres, other than unbl or bl
5512.21   Woven fabrics, containg >/ = 85% of acrylic staple fibres, unbleached or bl
5512.29   Woven fabrics, containing >/ = 85% of acrylic suple fibres, other than unbl or bl
5512.91   Woven fabrics, containing >/ = 85% of oth synthetic staple fibres, unbl/bl
5512.99   Woven fabrics, containg >/ = 85% of other synthetic staple fib, other than unbl/bl
5513.11   Plain weave polyest stapl fib fab,<85%,mixd w/cottn, </=170g/m2, unbl/bl
5513.12   Twill weave polyest stapl fib fab,<85%,mixd w/cottn,</=170g/m2, unbl/bl
5513.13   Woven fab of polyest staple fib. < 85% mixd w/cot,</=170g/m2, unbl/bl. nes
5513.19   Woven fabrics of oth syn staple fib,<85%,mixd w/cot,</=170g/m2, unbl/bl
5513.21   Plain weave polyester staple fib fab,<85%,mixd w/cotton, </=170g/m2. dyd
5513.22   Twill weave polyest staple 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
 ---pagebreak---                                                                                 Page 105
HS No.  Product Description
5513.31 Plain weave polyest stapl fib fab,< 85% mixd w/cot, </ = 170g/m2, yarn dyd
5513.32 Twill weave polyest stapl fib fab,<85% mixd w/cot,</= 170g/m2, yarn dyd
5513.33 Woven fab of polyest suple fib, <85% mixd w/cot, < / = 170 g/ml', dyd nes
5513.39 Woven fab of oth syn staple fib, < 85% mixd w/cot, < / = 170g/m2. yarn 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 stapl fib fab,<85%.mixd w/cotton,> 170g/m2, unbl/bl
5514.13 Woven fab of polyester staple 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 staple 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 stapl fib, < 85% mixd w/cot, > 170g/m2, yarn dyd nes
5514.39 Woveji fabrics of oth syn staple fib, < 85% mixd w/cot, > 170 g/m2, yarn dyd
5514.41 Plain weave polyester staple fibre fab,<85%,mixd w/cot,> 170g/m2, printd
5514 42 Twill weave polyester staple fibre fab.<85%.mixd w/cot, > 170g/m2, printd
5514.43 Woven fab of polyester staple 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 staple fibres mixd w/wool/fine animal hair, nes
5515.19 Woven fabrics of polyester staple fibres, nes
5515.21 Woven fabrics of acrylic staple 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 ο 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, containing >/ = 85% of artificial staple fibres, dyed
5516.13 Woven fabrics, containing > / = 85% of artificial staple fib, yarn dyed
5516.14 Woven fabrics, containing >/ = 85% of artificial staple fibres, printed
5516.21 Woven fabrics of artificial staple 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, yarn dyd
5516.24 Woven fabrics of artificial staple 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 staple fib, < 85% mixd w/wool/fine animal hair, dyd
5516.33 Woven fab of arti suple fib, < 85% mixd w/wool/fine animal hair, yarn dyd
5516.34 Woven fab of arti staple fib. < 85% mixd w/wool/fine animal hair, printd
5516.41 Woven fabrics of artificial staple fib,<85% mixd with cotton, unbl ο bl
5516.42 Woven fabrics of artificial suple fib, < 8 5 % mixed with cotton, dyed
5516.43 Woven fabrics of artificial staple fib, < 85% mixd with cotton, yarn 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
 ---pagebreak---  Page 106
HS No.    Product Description
5516*92 Woven fabrics of artificial staple fibres, dyed, nes
5516.93 Woven fabrics of artificial suple fibres, £arn dyed, nes
5516.94 Woven fabrics of artificial staple fibres, printed, nes
Ch. 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 sanitary articles
5601.22   Wadding of man-made fibres and articles thereof, other than sanitary 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   Felt 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 yarn of polyest, nylon oth polyamid, viscose rayon, ctd etc
5604.90   Textile yarn, strips&the like, impreg ctd/cov with rubber ο plastics, nes
5605.00   Metallisd yarn, beg textile yarn combind w metal thread, strip/powder
5606.00   Gimped yarn nes; chenille yarn; loop wale-yarn
5607.10   Twine, cordage, ropes and cables, of jute or other textile bast fibres
5607.21   Binder ο baler twine, of sisal ο 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 woven 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
 ---pagebreak---                                                                                   Page 107
 HS No.  Product Description
 5703.20 Carpets of nylon or other polyamides, tufted
 5703.30 Carpets of other man-made textile materials, tufted
 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 terry&narrow fab.
 5801.32 Cut corduroy fabrics of man-made fibres, other than narrow fabrics
 5801.33 Woven weft pile fabrics of man-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 Tern1 towellg & similar woven terry fab of cotton, other than narrow fab, unbl
 5802.19 Terry towellg&similar woven terry fab of cotton, other than unbl&other than nar fab
 5802.20 Terry 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 articles of textile materials
 5807 90 Labels, badges and similar articles, not woven, of textile materials, nes
 5808.10 Braids in the piece
 5808 90 Ornamental trimmings in the piece, other than knit; tassels, pompons&similar art
 5809.00 Woven fabrics of metal thread/of meullisd yarn, 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
 ---pagebreak---   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-making 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 ο the like, incl 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 cotton, 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 apparel & clothing access, knitted or crocheted
 6101.10   Mens/boys overcoats, anoraks etc, of wool or fine animal hair, knitted
 6101.20   Mens/boys overcoats, anoraks etc, of cotton, knitted
6101.30    Mens/boys overcoats, anoraks etc, of man-made fibres, knitted
 ---pagebreak---                                                                                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 fibres, knitted
6104.19 Womens/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 ensembles, 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 skirts, of cotton, knitted
6104.53 Womens/girls skirts, of synthetic fibres, knitted
6104.59 Womens/girls skirts, 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
 ---pagebreak--- 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
611110   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 yarn knittd
6115.12  Panty hose&tights. of synthetic fib yarns > / = 6 7 dtex/single yarn knittd
6115 19  Panty hose and tights, of other textile materials, knitted
6115.20  Women full-l/knee-l hosiery, of textile yarn < 67 dtex/single yarn knittd
6115 91  Hosiery nes, of wool or fine animal hair, knitted
6115.92  Hosiery nes, of cotton, knitted
6115.93  Hosiery nes. of synthetic fibres, knitted
6115.99  Hosiery nes. of other textile materials, knitted
 ---pagebreak---                                                                                Page 111
HS No. Product Description
6116.10 Gloves impregnated, coated or covered with plastics or rubber, knitted
6116.91 Gloves, mittens and mitts, nes, of wool or fine animal hair, knitted
6116.92 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/gjrls overcoats&sim articles of wool/fine animal hair nt knit
6202.12 Womens/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 article 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
 ---pagebreak---  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 knitted
6205.10   Mens/boys shirts, of wool or fine animal hair, not knitted
6205.20   Mens/boys shirts, of cotton, not knitted
6205.30   Mens/boys shirts, 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 ο 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, ctd, cov, etc, textile woven fab
6210.50   Womens/girls garments nes, of impregnatd, ctd, cov, etc, textile woven fab
6211.11   Mens/boys swimwear. of textile materials not knitted
 ---pagebreak---                                                                                  Page 113
HS No.  Product 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 rugs, of wool or fine animal hair
6301.30 Blankets (other than electric) and travelling rugs, of cotton
6301.40 Blankets (other than electric) and travelling rugs, of synthetic fibres
6301.90 Blankets (other than electric) and travelling rugs, 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
 ---pagebreak--- Page 114
HS No. Product Description
6302.99  Toilet and kitchen linen, of other textile materials
6303.11  Curtains, drapes, interior blinds&curtairi or bed valances, of cotton, knit
6303.12  Curtains, drapes, interior blinds&curtain/bd valances, of syn fib, knittd
6303.19  Curtains, drapes, interior blinds&curtain/bd valances, oth tex mat, knit
6303.91  Curtains/drapes/interior blinds&curtain/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 articles 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 ο 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
6306.1 i Tarpaulins, awnings and sunblinds, of cotton
6306. J2 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 (X) Sets consistg of woven fab & yarn, for makg up into rugs, tapestries etc
6309.(XI Worn clothing and other worn articles
                     Textile and clothing products in Chapters 30-49, 64-96
HS No.        Product Description
3005.90       Wadding, gauze, bandages and the .like
ex 3921.12} {
ex 3921.13} { Woven, knitted or non-woven fabrics coated, covered or laminated with plastics
ex 3921.90} {
 ---pagebreak---                                                                              Page 115
HS No.      Product Description
ex 4202.12} {
ex 4202.22} {Luggage, handbags and flatgoods with an outer surface predominantly of textile
ex 4202.32} {materials
ex 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
ex 7019.20  Woven fabrics of fibre glass
8708.21     Safety seat belts for motor vehicles
8804.00     Parachutes; their parts and accessories
9113.90     Watch straps, bands and bracelets of textile materials
ex 9404.90  Pillow and cushions of cotton: quilts; eiderdownss comforters and similar articles
            of textile materials
9502.91     Garments for dolls
ex 9612.10  Woven ribbons, of man-made fibres, other than those measuring less than 30 mm
            in width and permanently put up in cartridges
 ---pagebreak--- Page 116 ---pagebreak---                                                                                       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 ofthe terms given in Annex 1 applies.
 1.3      All products, including industrial and agricultural products, shall be subject to the provisions
of this Agreement.
 ---pagebreak--- Page 118
1.4      Purchasing specifications prepared by governmental bodies for production or consumption
requirements of governmental bodies are not subject 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 sanitary and phytosaniury measures as defined
in Annex A of the Agreement on the Application of Saniury and Phytosanitary 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 respect 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
safety, 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 mainuined 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 objectives explicitly mentioned
 in paragraph 2, and is in accordance with relevant international standards, it shall be rebuttably presumed
not to create an unnecessary obstacle to international trade.
 ---pagebreak---                                                                                        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 product 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 stage, 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 Secretariat 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 stage, when
                   amendments can still be introduced and comments taken 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 subsunce 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 ofthe 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 Secretariat 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 ofthe urgent problems;
         2.10.2 upon request, provide other Members with copies ofthe technical regulation;
         2.10.3 without discrimination, allow other Members to present their comments in writing,
                   discuss these comments upon request, and uke 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.
 ---pagebreak--- 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-governmenul 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 ofthe 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
Article 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.
                                                 Anicle 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,
directly 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 respect to compliance of standardizing
bodies with the provisions of the Code of Good Practice shall apply irrespective of whether or not
a standardizing body has accepted the Code of Good Practice.
 ---pagebreak---                                                                                        Page 121
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
                 entails suppliers' right to an assessment of conformity under the rules ofthe 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 effect 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 taken 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 stage of the
                 procedure, with any delay being explained;
         5.2.3    information 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
 ---pagebreak--- Page 122
                 procedures is respected in the same way as for domestic 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.
54       In cases where a positive assurance is required that products conform with technical regulations
or standards, and relevant guides or recommendations issued by international standardizing 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 plant life or health, or the
environment; fundamental climatic or other geographical factors; fundamental 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.
56       Whenever a relevant guide or recommendation issued by an international standardizing body
does not exist or the technical content of a proposed conformity assessment procedure is not in accordance
with relevant guides and recommendations issued by international standardizing 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 they
                   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 stage,
                   when amendments can still be introduced and comments taken into account;
 ---pagebreak---                                                                                       Page 123
         5.6.3    upon request, provide to other Members particulars or copies ofthe proposed procedure
                  and, whenever possible, identify the parts which in substance deviate from relevant
                  guides or recommendations issued by international standardizing 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     Subject 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 ofthe 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
ofthe importing Member.
                                                 Anicle 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
satisfactory 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;
 ---pagebreak--- Page 124
         6.1.2    limitation 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 implementation 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.
                                                  Anicle 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 substantially the same as that of
previously notified conformity assessment procedures of central government bodies of the Members
concerned.
7.3      Members may require contact 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 take measures which require or encourage local government bodies within
their territories to act in a manner inconsistent with the provisions of Articles 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.
                                                 Anicle 8
                Procedures for Assessment of Conformity by Non-Governmental Bodies
8.1      Members shall take 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 ofthe obligation to notify proposed conformity
 ---pagebreak---                                                                                   Page 125
assessment procedures. In addition, Members shall not take 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-governmenul 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.
                                               Anicle'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 ofthe 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
                                               Anicle 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-governmenul bodies which have legal power to enforce
                 a technical regulation, or by regional standardizing 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, or proposed conformity assessment procedures,
                 which are operated within its territory by central or local government bodies, or by
 ---pagebreak--- 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 established
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-governmenul standardizing
                     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 are operated within its territory by non-governmental bodies, or by regional
                     bodies of which such bodies are members or participants;
            10.33 the membership and participation of relevant non-governmenul 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;
                     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 equitable price (if any) which
 shall, apart from the real cost of delivery, be the same for the nationals1 of the Member concerned
 or of any other Member.
  10 5      Developed country Members shall, if requested by other Members, provide, in English, French
 or Spanish, translations of the documents covered by a specific notification or, in case of voluminous
 documents, of summaries of such documents.
      "Nationals" here shall be deemed, in the case of a separate customs territory Member ofthe WTO, to mean persons.
 natural or legal, who are domiciled or who have a real and effective industrial or commercial establishment in that customs
 territory
 ---pagebreak---                                                                                        Page 127
 10.6 The Secreuriat shall, when it receives notifications in accordance with the provisions of this
Agreement, circulate copies ofthe notifications to all Members and interested international standardizing
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 effect on trade, at least one Member party to the agreement shall notify other Members
through the Secretariat ofthe products to be covered by the agreement and include a brief description
of the agreement. Members concerned are encouraged to enter, upon request, into consultations 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 ofthe Member
                 except as stated 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 Secretariat 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.
                                                Anicle 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 assistance on mutually agreed terms and conditions regarding the
establishment of national standardizing bodies, and participation in the international standardizing bodies,
and shall encourage their national standardizing bodies to do likewise.
11.3 Members shall, if requested, take 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 assistance on mutually agreed terms and
conditions regarding:
 ---pagebreak--- 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 met.
 11.4 Members shall, if requested, take 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 assistance on mutually agreed terms and conditions regarding the esublishment
of bodies for the assessment of conformity with standards adopted within the territory ofthe requesting
Member.
 11.5     Members 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 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
establishment ofthe 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 ofthe 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 ofthe least-developed country Members.
                                                 Anicle 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 attention to the provisions of this 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 ofthe 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 obstacles to exports from developing
country Members.
 ---pagebreak---                                                                                      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 take such reasonable measures as may be available to them to ensure that
international standardizing 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 standardizing 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 ofthe technical assistance, account shall be taken ofthe stage of development ofthe 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 part 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 ofthe developing country Member,
as well as its stage 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 ofthe 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 ofthe special
needs ofthe former in regard to financing, trade and development.
 12.10 The Committee shall examine periodically the special and differential treatment, as laid down
in this Agreement, granted to developing country Members on national and international levels.
 ---pagebreak--- 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 established, and shall be composed
of representatives from each ofthe 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 Committee 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 governments in other technical bodies. The Committee shall examine this problem
with a view to minimizing such duplication.
                                                  Anicle 14
                                    Consultation and Dispute Settlement
14.1     Consultations and the settlement of disputes with respect to any matter affecting the operation
of this Agreement shall take place under the auspices ofthe Dispute Settlement Body and shall follow,
mutatis mutandis, the provisions of Articles 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 establish 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.
 ---pagebreak---                                                                                        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.
Review
 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 taken to ensure the implementation and
administration of this Agreement. Any changes of such measures thereafter shall also be notified to
the Committee.
 15.3 The Committee shall review annually the implemenution and operation of this Agreement taking
into account the objectives 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 ofthe 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 Committee 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.
 ---pagebreak--- 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 this 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 standards 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.
 ---pagebreak---                                                                                         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 ofthe 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 ofthe European Communities the provisions governing central government bodies
        apply. However, regional bodies or conformity assessment systems may be established 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. states, 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.
 ---pagebreak--- Page 134
                                                  ANNEX 2
                                     TECHNICAL EXPERT GROUPS
         The following procedures shall apply to technical expert groups established in accordance with
the provisions of Article 14.
1.       Technical expert 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 technical expert 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 a technical expert group without the joint
agreement ofthe 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 representatives
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 the 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
e.vpert 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 bui 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 information
6.       The technical expert group shall submit a draft report to the Members concerned with a view
to obtaining their comments, and taking 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.
 ---pagebreak---                                                                                      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 standardizing 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 standardizing body one or more members of which are Members
ofthe WTO; and to any non-governmental regional standardizing 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
 "standardizing bodies" and individually as "the standardizing 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 standardizing body shall accord treatment to products originating
in the territory of any other Member ofthe 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 obstacles to international trade.
F.       Where international standards exist or their completion is imminent, the standardizing 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 fundamental climatic or geographical factors or fundamental
technological problems.
G.       With a view to harmonizing standards on as wide a basis as possible, the standardizing body
shall, in an appropriate way, play a full part, within the limits of its resources, in the preparation by
relevant international standardizing bodies of international standards regarding subject matter for which
it either has adopted, or expects to adopt, standards. For standardizing bodies within the territory
of a Member, participation in a particular international standardization activity shall, whenever possible,
take place through one delegation representing all standardizing bodies in the territory that have adopted,
or expect to adopt, standards for the subject matter to which the international standardization activity
relates.
H.       The standardizing body within the territory of a Member shall make every effort to avoid
duplication of, or overlap with, the work of other standardizing bodies in the national territory or with
the work of relevant international or regional standardizing bodies. They shall also make every effort
to achieve a national consensus on the standards they develop. Likewise the regional standardizing
 ---pagebreak--- Page 136
body shall make every effort to avoid duplication of, or overlap with, the work of relevant international
standardizing bodies.
I.       Wherever appropriate, the standardizing 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 standardizing body shall publish a work programme
containing its name and address, the standards it is currently preparing and the standards which it has
adopted in the preceding period. A standard is under preparation from the moment a decision has
been taken 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
ofthe 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 taken as a basis. No later than at the time of publication
of its work programme, the standardizing body shall notify' the existence thereof to the ISO/IEC
Information Centre in Geneva.
         The notification shall contain the name and address ofthe standardizing 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 standardizing 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 ofthe comment period.
the standardizing 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
standardizing body shall promptly provide, or arrange to provide, a copy of a draft standard which
it has submitted 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 standardizing 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 published.
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
 ---pagebreak---                                                                                 Page 137
programme or of a standard which it 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 standardizing body shall afford sympathetic consideration to, and adequate opportunity
for, consulution regarding representations with respect to the operation of this Code presented by
standardizing bodies that have accepted this Code of Good Practice. It shall make an objective effort
to solve any complaints.
 ---pagebreak--- Page 138 ---pagebreak---                                                                                    Page 139
              AGREEMENT ON TRADE-RELATED INVESTMENT MEASURES
Members,
         Considering that Ministers agreed in the Puma del Este Declaration that "Following an
examination of the operation of GATT Articles related to the trade restrictive 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 facilitate
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 certain 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").
                                                Anicle 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 Article 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 Article III of GATT 1994 and the obligation of general elimination
of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 js 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.
 ---pagebreak--- 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 Understanding 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 take into account
the individual development, financial and trade needs ofthe 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 Anicle 2. TRIMs introduced less than
 180 days before the date of entry into force ofthe WTO Agreement shall not benefit from the transitional
arrangements provided in paragraph 2.
5.         Notwithstanding the provisions of Article 2, a Member, in order not to disadvantage established
enterprises which are subject to a TRIM notified under paragraph 1, may apply during the transition
period the same TRIM to a new investment (/) where the products of such investment are like products
to those of the esublished enterprises, and (ii) where necessary to avoid distorting the conditions of
competition between the new investment and the established 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 established 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. Information
that would prejudice the legitimate commercial interests of particular enterprises need not be disclosed.
 ---pagebreak---                                                                                    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
Understanding 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 ofthe 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 consultation, 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.
                                                  Anicle 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 esublished, 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.
                                                  Anicle 8
                                  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.
                                                  Anicle 9
                               Review by the Council for Trade in Goods
         Not later than f\vt years after the date of entry into force ofthe 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
 ---pagebreak--- Page 142
in Goods shall consider whether the Agreement should be complemented with provisions on investment
policy and competition policy.
 ---pagebreak---                                                                                       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 rulings, or compliance with which is necessary to obtain 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 rulings, 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
        (O       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.
 ---pagebreak--- Page 144 ---pagebreak---                                                                                                     Page 145
                       AGREEMENT ON IMPLEMENTATION OF ARTICLE VI
               OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
Members hereby agree as follows:
                                                         PART I
                                                         Article]
                                                        Principles
          An anti-dumping measure shall be applied only under the circumstances provided for in Article VI
of GATT 1994 and pursuant to investigations initiated1 and conducted in accordance with the provisions
of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in
so far as action is taken under anti-dumping legislation or regulations.
                                                         Article 2
                                               Determination of Dumping
2.1        For the purpose of this Agreement, a· product is to be considered as being dumped, i.e
introduced into the commerce of another country at less than its normal value, if the export price of
the product exported from one country to another is less than the. comparable price, in the ordinary
course of trade, for the like product when destined for consumption in the exporting country.
2.2        When there are no sales of the like product in the ordinary course of trade in the domestic
market ofthe exporting country or when, because ofthe particular market situation or the low volume
of the sales in the domestic market of the exporting country'2, 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 importing Member, provided that a lower ratio should be acceptable where
the evidence demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a
proper comparison.
 ---pagebreak--- Page 146
                     only if the authorities3 determine that such sales are made within an extended period
                     of time4 in substantial quantities5 and are at prices which do not provide for the recovery
                     of all costs within a reasonable 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 ofthe 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 this 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 product 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 ofthe country of
                               origin of the same general category of products;
     'When in this Agreement the term "authorities" is used, u shall be interpreted as meaning authorities at an appropriate
senior level.
     4
      The extended period of time should normal!) be one year but shall in no case be less than six months.
     *Sales below per unit costs are made in substantial quantities when the authorities establish that me 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 ofthe volume sold in
transactions under consideration for the determination of the normal value.
     The adjustment made for start-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 taken into account by the authorities
during the investigation.
 ---pagebreak---                                                                                                 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 product 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 ofthe 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 ofthe constructed export
price, or shall make due allowance as warranted under this paragraph. The authorities shall indicate
to the parties in question what information is necessary to ensure a fair comparison and shall not impose
an unreasonable burden of proof on those parties.
           2.4.1    When the comparison under paragraph 4 requires a conversion of currencies, such
                    conversion should be made using the rate of exchange on the date of sale8, provided
                    that when a sale of foreign currency on forward markets is directly linked to the export
                    sale involved, the rate of exchange in the forward sale shall be used. Fluctuations
                    in exchange rates shall be ignored and in an investigation the authorities shall allow
                    exporters at least 60 days to have adjusted their export prices to reflect sustained
                    movements in exchange rates during the period of investigation.
           2 4.2    Subject to the provisions governing fair comparison in paragraph 4, the existence of
                    margins of dumping during the investigation phase shall normally be established 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 transaction-to-transaction basis. A normal value established
                    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 date of contract, purchase order, order confirmation, or invoice, whichever
establishes the material terms of sale.
 ---pagebreak--- Page 148
                    purchasers, regions or time periods, and if an explanation is provided as to why such
                    differences cannot be taken 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 Injury9
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 ofthe dumped imports and the
effect ofthe dumped imports 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 ofthe 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
imports only if they determine that (a) the margin of dumping established 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
imports from each country is not negligible and (b) a cumulative assessment ofthe effects ofthe imports
is appropriate in light ofthe 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 a domestic industry or material retardation of the establishment of such an industry
and shall be interpreted in accordance with the provisions of this Article.
 ---pagebreak---                                                                                                   Page 149
3.4       The examination ofthe impact ofthe dumped imports on the domestic industry concerned shall
include an evaluation of all relevant economic factors and indices having a bearing on the state 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
ofthe 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 ofthe 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 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 ofthe 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, taking 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 product being investigated.
No one of these factors by itself can necessarily give decisive guidance but the totality ofthe factors
    l0
      One example, though not an exclusive one. is that there is convincing reason to believe that there will be, in the near
future, substantially increased importation of the product at dumped prices.
 ---pagebreak--- Page 150
considered must lead to the conclusion that further dumped exports are imminent and that, unless
protective action is taken, 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.
                                                             Anicle 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
ofthe products constitutes a major proportion ofthe total domestic production of those products, except
that
           (i)       when producers are related" to the exporters or importers or are themselves importers
                     ofthe 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 production 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 ofthe 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 ofthe 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 production within such market.
4 2        When the domestic industry has been interpreted as referring to the producers in a certain area,
i.e a market as defined in paragraph l(ii). anti-dumping duties shall be levied12 only on the products
in question consigned for final consumption to that area. When the constitutional law ofthe 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
Article 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 taken to be the domestic industry
     "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 (h) 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 effect ofthe 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.
 ---pagebreak---                                                                                        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 production 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 product is sold from
                  the country or countries of origin or export to a third country or countries, or on the
                  constructed value of the product) 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 ofthe volume ofthe allegedly dumped imports, the effect
                  of these imports on prices ofthe 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 state ofthe 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
determined, on the basis of an examination ofthe degree of support for, or opposition to, the application
 ---pagebreak--- Page 152
expressed13 .by domestic producers ofthe 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 suppprted 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.
5.5        The authorities shall avoid, unless a decision has been made to initiate an investigation, any
publicizing ofthe 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, 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 φ) 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 an 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 imports
ofthe 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.
    ,J
      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 that 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.
 ---pagebreak---                                                                                                          Page 153
                                                          Anicle 6
                                                          Evidence
6.1 - All interested parties in an anti-dumping investigation shall be given notice ofthe 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.15 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 ofthe written application received under paragraph 1 of Article 5 to the known
                     exporters16 and to the authorities ofthe 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 advantage 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 representative ofthe exporting Member or, in the case of a separate customs territory
Member of the WTO, an official represenutive of the exporting territory.
    '*lt being understood that, where the number of exporters involved is 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.
 ---pagebreak--- 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 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.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
                   detail to permit a reasonable understanding 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
                   statement of the reasons why summarization is not possible must be provided.
         6.5.2     If the authorities find that a request for confidentiality is not warranted and if the
                   supplier of the information is either unwilling to make the information public or to
                   authorize its disclosure in generalized or summary form, the authorities may disregard
                  • such information unless it can.be demonstrated to their satisfaction from appropriate
                   sources that the information is correct.18
6.6      Except iii circumstances provided for in paragraph 8, the authorities shall during the course
of an investigation satisfy themselves as to the accuracy ofthe information supplied by interested parties
upon which their findings are based.
6.7      In order to verify information provided or to obtain further details, the authorities may carry
out investigations in the territory of other Members as required, provided they obtain the agreement
of the firms concerned and notify the representatives of the government ofthe 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 ofthe 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 ofthe
 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 product under investigation. In cases where the number of
 exporters, producers, importers or types of products involved is so large as to make such a determination
 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.
 ---pagebreak---                                                                                       Page 155
to the authorities at the time of the selection, or to the largest percentage 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 consultation 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 ofthe 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 product subject to investigation,
                 or a trade or business association a majority ofthe members of which are producers,
                 exporters or importers of such product;
         (ii)  . the government of the exporting Member; and
         (iii)   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.
6.12 The authorities shall provide opportunities for industrial users of the product under investigation,
and for representative consumer organizations in cases where the product is commonly sold at the retail
level, to provide information which is relevant to the investigation regarding dumping, injury and
causality.
6.13 The authorities shall take 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
determinations, whether affirmative or negative, or from applying provisional or final measures, in
accordance with relevant provisions of this Agreement.
 ---pagebreak--- 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 take the form of a provisional duty or, preferably, a security - by
cash deposit or bond - equal to the amount ofthe 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 other 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 percentage ofthe 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.
                                                         Anicle 8
                                                  Price Undertakings
8.1       Proceedings may" be suspended or terminated without the imposition of provisional measures
or anti-dumping duties upon receipt of satisfactory voluntary 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.
     "The word "may* shall not be interpreted to allow the simultaneous continuation of proceedings with the implemenution
of price undertakings except as provided in paragraph 4.
 ---pagebreak---                                                                                        Page 157
8.2      Price undertakings shall not be sought or accepted from exporters unless the authorities of the
importing Member have made a preliminary affirmative determination of dumping and injury caused
by such dumping.
8.3      Undertakings offered need not be accepted if the authorities consider their acceptance impractical,
for example, if the number of actual or potential exporters is too great, or for other reasons, including
reasons of general policy. Should the case arise and where practicable, the authorities shall provide
to the exporter the reasons which have led them to consider acceptance of an undertaking as
inappropriate, and shall, to the extent possible, give the exporter an opportunity,to make comments
thereon.
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 ofthe 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 invitation to do so, shall in no way prejudice the consideration ofthe case. However,
the authorities are free to determine that a threat of injur}' 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 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 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.
                                                   Anicle 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 ofthe 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 irijury, except as to imports from those sources
 ---pagebreak--- Page 158
from which price undertakings under the terms of this Agreement have been 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 established
under Article 2.
           9.3.1    When the amount of the anti-dumping duty is assessed on a retrospective basis, the
                    determination ofthe final liability for payment of anti-dumping duties shall take 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 take 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 take 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 established 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.
 ---pagebreak---                                                                                      Page 159
provided that the authorities shall disregard for the purpose of this paragraph any zero and de minimis
margins and margins established 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
ofthe 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 taken under paragraph 1 of Article 7 and paragraph 1
of Article 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
ofthe establishment of an industry) is made or, in the case of afinaldetermination of a threat of injury,
where the effect of the dumped imports would, in the absence ofthe provisional measures, have led
to a determination of injury, anti-dumping duties may be levied retroactively 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 ofthe 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
 ---pagebreak--- Page 160
determine for the dumped product in question that:
          (i)        there is a history of dumping which 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 ofthe 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, take 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 Review 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.
11.2 The authorities shall review the need for the continued imposition ofthe duty, where warranted.
on their 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 ofthe 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 ofthe 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 ofthe 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 ofthe domestic industry within a reasonable period
of time prior to that date, that the expiry ofthe 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 Article 9, does
not by itself constitute a review within the meaning of this Article.
 ---pagebreak---                                                                                                        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 shall apply mutatis mutandis to price undertakings accepted under
Article 8.
                                                         Article 12
                               Public Notice and Explanation of Determinations
12.1      When the authorities are satisfied that there is sufficient evidence to justify the initiation of
an anti-dumping investigation pursuant to Article 5, the Member or Members the products of which
are subject to such investigation and other interested parties known to the investigating authorities to
have an interest therein shall be notified and a public notice shall be given.
           12.1.1 A public notice of the initiation of an investigation shall contain, or otherwise make
          available through a separate report23, adequate information on the following:
                     (i)     the nameof the exporting country' or countries and the product involved;
                     (ii)    the date of initiation of the investigation;
                     (iii)   the basis on which dumping is alleged in the application;
                     (iv)    a summary of the factors on which the allegation of injury is based;
                     (v)     the address to which representations by interested parties should be directed;
                     (vi)    the time-limits allowed to interested parties for making their views known.
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.
     a
       When the amount ofthe anti-dumping duty is assessed on a retrospective basis, a finding in the most recent assessment
proceeding under subparagraph 3.1 of Anicle 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 report, they
shall ensure that such report is readily available toi the public.
 ---pagebreak--- 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 matters 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, 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 establishment and comparison ofthe 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 matters 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 Article 11. Such tribunals or procedures shall be independent ofthe authorities
 responsible for the determination or review in question.
 ---pagebreak---                                                                                        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 information to show that the alleged dumping is causing injury to the domestic
 industry concerned in the third country. The government ofthe third country shall afford all assistance
to the authorities ofthe importing country to obtain any further information which the latter may require.
 14.3 In considering such an application, the authorities ofthe 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 ofthe alleged dumping on the industry's
exports to the importing country or even on the industry's total 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 take action, the initiation of the approach to the
Council for Trade in Goods seeking its approval for such action shall rest with the importing country'
                                                  Anicle 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
                                                  Anicle 16
                                  Committee on Anti-Dumping Practices
 16.1    There is hereby established a Committee on Anti-Dumping Practices (referred to in this
Agreement as the "Committee") composed of representatives from each ofthe Members. The Committee
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 matters relating to the operation ofthe Agreement or the furtherance
of its objectives. The WTO Secretariat shall act as the secretariat to the Committee.
16.2     The Committee may set up subsidiary bodies as appropriate.
 ---pagebreak--- 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 Committee or
a subsidiary body seeks such information from a source within the jurisdiction of a Member, it shall
inform the Member involved. It shall obtain the consent ofthe Member and any firm to be consulted.
16.4     Members shall report without delay to the Committee all preliminary or final anti-dumping
actions taken. Such reports shall be available in the Secretariat for inspection by other Members.
Members shall also submit, on a semi-annual basis, reports of any anti-dumping actions taken within
the preceding six months. The semi-annual reports shall be submitted on an agreed standard form.
16.5     Each Member shall notify the Committee, (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 Understanding is applicable to
consultations 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
ofthe matter, 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 consultations considers that the consultations pursuant to paragraph 3
have failed to achieve a mutually agreed solution, and iffinalaction has been taken 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 taken 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 ofthe complaining party, establish a panel to examine the matter
based upon:
         (i)     a written statement ofthe Member making the request indicating how a benefit accruing
                  to it. directly or indirectly, under this Agreement has been nullified or impaired, or
                 that the achieving of the objectives 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.
 ---pagebreak---                                                                                              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' establishment ofthe facts was proper and whether their evaluation of those
                    facts was unbiased and objective. If the establishment ofthe 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
                    interpretation, 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 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 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 ofthe 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.
    24
      This is not intended to preclude action under other relevant provisions of GATT 1994, as appropriate.
 ---pagebreak--- Page 166
18.4     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
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 implementation and operation of this Agreement taking
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.
 ---pagebreak---                                                                                         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 ofthe exporting Member and thefirmsknown
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 ofthe 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 practice to obtain explicit agreement of the firms concemed in the exporting
Member before the visit is finally scheduled.
4.       As soon as the agreement of thefirmsconcerned 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 ofthe importing Member notify the representatives
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 exporting Member is informed by
the investigating authorities ofthe anticipated visit and does not object to it; further, it should be standard
practice prior to the visit to advise the firms concerned ofthe general nature ofthe 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 ofthe exporting Members and essential
to a successful on-the-spot investigation should, whenever possible, be answered before the visit is
made
 ---pagebreak---  Page 168
                                                   ANNEX Π
       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 detail the information required from any interested party, and the manner in which that
 information 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 to make determinations on the basis of the facts available, including those contained 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
.rrfedium (e.g. computer tape) 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 maintain a request for a computerized response
 if the interested party does not maintain 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.        All 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 taken 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 tape), the information should be supplied in the form of written material or
 any other form acceptable 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 information 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
 ---pagebreak---                                                                                     Page 169
disposal, such as published price lists, official import statistics and customs returns, and from the
information obtained from other interested parties during the investigation. It is clear, however, that
if an interested party does not cooperate and thus relevant information 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.
 ---pagebreak--- Page 170 ---pagebreak---                                                                                     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 certain 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 determined under the provisions of Article 1 there should
normally be a process of consultation 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 consultation 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.       Articles 5 and 6 provide two bases for determining the customs value where it cannot be
determined on the basis ofthe transaction value ofthe imported goods or of identical or similar imported
goods. Under paragraph 1 of Article 5 the customs value is determined 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 certain 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.
 ---pagebreak--- 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 Anicle VII of GATT 1994 and desiring to
elaborate rules for their application in order to provide greater uniformity and certainty in their
implementation;
         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 equitable 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:
                                                   PARTI
                                 RULES ON CUSTOMS VALUATION
                                                   Anicle J
 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 Article 8, provided:
         (a)     that there are no restrictions as to the disposition or use ofthe goods by the buyer other
                 than restrictions which:
                 (ij      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 subject to some condition or consideration for which a value
                 cannot be determined 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 directly or indirectly to the seller, unless an appropriate adjustment
                 can be made in accordance with the provisions of Article 8; and
 ---pagebreak---                                                                              Page 173
   (d) that the buyer and seller are not related, or where the buyer and seller are related,
       that the transaction value is acceptable for customs purposes under the provisions of
       paragraph 2.
2. (a) In determining whether the transaction value is acceptable 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 taken 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 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
 ---pagebreak--- 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 take 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 transaction
value, an adjustment shall be made to take 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 ofthe imported goods.
                                                   Article 4
          If the customs value ofthe 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 determined under that Anicle. 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
          (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 ofthe 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 ofthe importation ofthe goods being valued, to persons
 ---pagebreak---                                                                                         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 ofthe 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 ofthe sum of:
        (a)        the cost or value of materials and fabrication or other processing employed in producing
                  the imported goods;
         ib)      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 paragraphe 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 ofthe 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 ofthe country in question and the latter does not object
to the investigation.
 ---pagebreak--- Page 176
                                                 Article 7
1.      If the customs value of the imported goods cannot be determined under the provisions of
Articles 1 through 6, inclusive, the customs value shall be determined 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 data 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 of two
                 alternative values;
        (c)      the price of goods 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;
        (f)      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 production 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;
 ---pagebreak---                                                                                        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 to 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 ofthe country
of importation concerned and shall reflect as effectively as possible, in respect ofthe 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.
 ---pagebreak--- 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 initialrightof appeal without penalty may be to an authority within the customs administration
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 ofthe 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 rulings 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 respective 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.
 ---pagebreak---                                                                                      Page 179
 2.        In this Agreement:
           (a)       "identical goods" means goods which are the same in all respects, including physical
                     characteristics, quality and reputation. Minor differences in appearance would not
                     preclude goods otherwise conforming to the definitionfrombeing 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 taken 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 sector, and includes identical or similar
goods.
4.        For the purposes of this Agreement, persons shall bé deemed to be related only if:
          (a)       they are 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 directly or indirectly 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;
          (fi       both of them are directly or indirectly controlled by a third person;
          (g)       together they directly or indirectly 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.
 ---pagebreak--- 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 the importer's
goods was determined.
                                                 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.
                                                  PART II
              ADMINISTRATION, CONSULTATIONS AND DISPUTE SETTLEMENT
                                                 Article 18
                                                 Institutions
1.        There is hereby established a Committee on Customs Valuation (referred to in this Agreement
as "the Committee") composed of representatives from each ofthe 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 this Agreement, for the purpose of affording Members the opportunity 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 Secretariat shall act as the secretariat
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 ofthe 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
 1.       Except as otherwise provided herein, the Dispute Settlement Understanding is applicable to
consultations and the settlement of disputes under this Agreement.
2.        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 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 consultations with the Member
or Members in question. Each Member shall afford sympathetic consideration to any request from
another Member for consultations.
 ---pagebreak---                                                                                        Page 181
3.       The Technical Committee shall provide, upon request, advice and assistance to Members engaged
in consultations.
                                   * .  . . > . · •
4.       At the request of a party to the dispute, or on its own initiative, a panel established 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 ofthe Technical Committee for the particular dispute and set a time period for receipt
of the report of the Technical Committee. The panel shall take 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 Members not party to the Agreement on Implementation of Article VII
of 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 ofthe WTO accordingly.
2.       In addition to paragraph 1. developing country Members not party to the Agreement on
Implementation of Anicle VII ofthe 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 ofthe 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 implementation measures, access to sources of information regarding customs valuation
methodology, and advice on the application of the provisions of this Agreement.
 ---pagebreak--- Page 182
                                                PART IV
                                         FINAL PROVISIONS
                                                Article 21
                                               Reservations
        Reservations may not be entered in respect of any ofthe 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.
                                                Article 23
                                                 Review
        The Committee shall review annually the implementation and operation of this Agreement taking
into account the objectives 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 Secretariat except in regard to those
responsibilities specifically assigned to the Technical Committee, which will be serviced by the CCC
Secretariat.
 ---pagebreak---                                                                                        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 ofthe 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 statements 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 ofthe 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.
 ---pagebreak--- Page 184
                                               Note to Article 1
Price Actually Paid or Payable
1.        The price actually paid or payable is the total payment made or to be made by the buyer to
or for the benefit ofthe seller for the imported goods. The payment need not necessarily take 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 in 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 restrictions
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 subject to some condition or consideration for which a value cannot be
determined 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 establishes the price of the imported goods on condition 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 established 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.
 ---pagebreak---                                                                                       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 establishing 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 there are doubts about the acceptability of the price. Where
the customs administration have no doubts about the acceptability ofthe 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 detailed 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 ofthe firm's overall profit realized
over a representative 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 acceptable 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 detailed 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 met. 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 taken into consideration in determining whether one value "closely
approximates" to another value. These factors include the nature of the imported goods, the nature
 ---pagebreak--- Page 186
ofthe 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 percentage, 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 acceptable 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 ofthe 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 established 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.
 ---pagebreak---                                                                                         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
in any one of the three conditions described above.
4          For the purpose of Anicle 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
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 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 established 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 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
take place.
 ---pagebreak--- Page 188
2.       As an example of this, goods are sold from a price list which 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.
 ---pagebreak---                                                                                      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 taken into account in establishing 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 taken 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 obtained 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 ofthe sale ofthe 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 of 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 ofthe 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 Article 5. the "earliest date" shall be the date by which
sales ofthe 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 ofthe 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 ofthe further processing, the imported goods lose their
identity. However, there can be instances where, although the identity ofthe 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 maintain 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 ofthe above, each situation of this type must be considered on a case-by-
case basis.
                                            Note to Article 6
 1.      As a general rule, 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, ir most cases the
 ---pagebreak--- 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 ofthe 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 ofthe
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 ofthè. 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 ofthe 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 ofthe same class or kind. 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 ofthe imported goods because of particular
commercial circumstances, the producer's actual profit figures should be taken 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 maintain competitivity. Where the producer's own figures for
profit and general expenses are not consistent with those usually reflected in sales of goods ofthe 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 ofthe importing country shall inform the
 importer, if the latter so requests, ofthe source of such information, the data used and the calculations
 based upon such data, 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.
 ---pagebreak---                                                                                         Page 191
8.       Whether certain 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 be-the 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 J(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 factors 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 ofthe element is that cost. If the element was produced
 ---pagebreak--- 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 production 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 ofthe 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, data 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 obtaining 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 afirmwhich 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 attributable to a given product. In such cases, a direct adjustment may appropriately
be made under the provisions of Anicle 8.
5.        In another case, afirmmay carry the cost ofthe 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 production 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 a period of time, the adjustment should be limited to the value actually added to that element outside
the country of importation.
 ---pagebreak---                                                                                      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 factors 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 II
 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 subject 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.
 ---pagebreak--- 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.
 ---pagebreak---                                                                                       Page 195
                                               ANNEX II
                     TECHNICAL COMMITTEE ON CUSTOMS VALUATION
 1.     In accordance with Article 18 of this Agreement, the Technical Committee shall be established
under the auspices ofthe CCC with a view to ensuring, at the technical level, uniformity in interpretation
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 ofthe
                 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
                status 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 take the form of advisory opinions,
                commentaries or explanatory notes;
        (e)     to facilitate, 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
ofthe Technical Committee and the Technical Committee shall provide its report within that period.
4.      The Technical Committee shall be assisted as appropriate in its activities by the CCC Secretariat.
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 representatives on the Technical
Committee. Such a Member so represented on the Technical Committee is referred to in this Annex
as a "member ofthe Technical Committee". Representatives of members ofthe Technical Committee
may be assisted by advisers. The WTO Secretariat may also attend such meetings with observer status.
 ---pagebreak--- 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 ofthe 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 representatives
of international governmental and trade organizations to attend meetings of the Technical Committee
as observers.
 8.      Nominations of delegates, alternates and advisers to meetings ofthe Technical Committee shall
be made to the Secretary-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 ofthe meeting
may be varied either at the request of any member ofthe 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 Article 19 of this Agreement.
 10.     The meetings ofthe Technical Committee shall be held at the headquarters ofthe CCC unless
otherwise decided.
 11.     The Secretary-General shall inform all members ofthe Technical Committee and those included
under paragraphs 6 and 7 at least 30 days in advance, except in urgent cases, ofthe opening date of
each session of the Technical Committee.
Agenda
 12.     A provisional agenda for each session shall be drawn up by the Secretary-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 ofthe 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 Secretary-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 retiring Chairman and Vice-Chairmen are eligible for re-election. The mandate of
a Chairman or Vice-Chairman who no longer represents a member ofthe 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.
 ---pagebreak---                                                                                       Page 197
 16.     The Chairman ofthe meeting shall participate in the proceedings ofthe Technical Committee
as such and not as the representative 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 state 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 ofthe CCC Secretariat designated by the Secretary-General,
shall perform the secretarial work of meetings of the Technical Committee.
Quorum and Voting
20.      Representatives of a simple majority ofthe members ofthe 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 trie 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 decisions 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 ofthe Technical
Committee. Memoranda and correspondence for the consideration ofthe 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 ofthe Chairman
shall report on the work of the Technical Committee at each meeting of the Committee and at each
meeting ofthe CCC.
 ---pagebreak--- 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 certain
developing country Members. In such cases a developing country Member may request before the
end ofthe 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 established 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 ofthe 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 ofthe 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 implementation 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 statement, document or declaration presented
to them for customs valuation purposes. The Anicle 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.
 ---pagebreak---                                                                                        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 ofthe 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 those activities 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 equitable resolution of disputes between
exporters and preshipment inspection entities arising under this Agreement;
         Hereby agree as follows:
                                                  Anicle 1
                                           Coverage - Definitions
1.       This Agreement shall apply to all preshipment inspection activities 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 activities.
3.       Preshipment inspection activities are all activities relating to the verification ofthe 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.
 ---pagebreak--- 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 ofthe 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 standards, relevant international standards2 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 shall include a reference to the laws
and regulations of user Members relating to preshipment inspection activities, and shall also include
the procedures and criteria used for inspection and for price and currency exchange-rate verification
     'It is understood that this provision docsriotobligate 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-governmenul body whose membership is
open to all Members, one of whose recognized activities is in the field of standardization.
 ---pagebreak---                                                                                        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 assistance shall not, however, relieve exportersfromtheir 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 maintain 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 ofthe 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 data related to patented, licensed or undisclosed processes, or to processes
                   for which a patent is pending;
          (b)      unpublished technical data other than data necessary to demonstrate compliance with
                   technical regulations or standards,
          (c)      internal pricing, including manufacturing costs;
          (d)      profit levels;
 ---pagebreak--- Page 202
            (e).     the terms of contracts between exporters and their suppliers unless it is not otherwise
                     possible for the entity to conduct the inspection 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 inspection 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, maintain
procedures to avoid conflicts of interest:
            (a)      between preshipment inspection 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
                     subject to preshipment inspection, with the exception of the government entities
                     contracting or mandating the inspections;
            (c)      with divisions of preshipment inspection entities engaged in activities 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 inspection 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 ofthe final documents and completion of
the inspection, preshipment inspection entities, within five working days, either issue a Clean Report
of Findings or provide a detailed written explanation specifying the reasons for non-issuance. User
Members shall ensure that, in the latter case, preshipment 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 inspection
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 the 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 inspection
entity on the basis of such preliminary verification is not withdrawn, providing the goods conform
to the import documentation and/or import licence. They shall ensure that, after a preliminary
verification has taken 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'.
 ---pagebreak---                                                                                                      Page 203
either of their acceptance or of their detailed 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 representatives 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 corrected 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 verification4 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, taking into
                              account the relevant economic factors pertaining to the country of importation
                              and a country or countries used for price comparison;
                     (ii)     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 inspection entity shall take into account the specific elements
                              listed in subparagraph (c);
                     (iv)     at any stage in the process described above, the preshipment inspection entity
                              shall provide the exporter with an opportunity to explain the price;
          (c)        when conducting 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 factors shall include but not be
                     limited to the commercial level and quantity ofthe 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 the other Multilateral Trade Agreements
included in Annex 1A of the WTO Agreement.
 ---pagebreak--- Page 204
                customarily invoiced separately; they shall also include certain 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 nature ofthe 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 inspected, except in exceptional circumstances. This
minimum value shall form part of the information furnished to exporters under the provisions of
paragraph 6.
 ---pagebreak---                                                                                                    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 ofthe 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 ofthe grievance in accordance with the
provisions of paragraph 21 of Article 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 established 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
                              inspection 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 ofthe 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
    5
     lt is understood that such technical assistance may be given on a bilateral, plurilateral or multilateral basis
 ---pagebreak--- Page 206
                shall be updated annually. The list shall be publicly available. It shall be notified
                to the Secretariat 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 establishing 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) ofthe 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) ofthe 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 above
                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 take the necessary
                decisions to ensure an expeditious settlement ofthe dispute by the panel, for instance,
                whether the facts of the case require the panelists to meet andt if so, where such a
                meeting shall take place, taking into account the site ofthe 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 take the necessary
                decisions to ensure an expeditious settlement of the dispute, for instance taking into
                account the site of the inspection in question;
        (f)     the object of the review shall be to establish 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 ofthe 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 Secretariat shall inform the Members ofthe availability of this information.
 ---pagebreak---                                                                                  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, taking 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 respect to any matter affecting
the operation of this Agreement. In such cases, 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
        Any disputes among Members regarding the operation of this Agreement shall be subject to
the provisions of Article XXIII of GATT 1994, as elaborated and applied by the Dispute Settlement
Understanding.
                                               Article 9
                                           Final Provisions
 1.     Members shall take the necessary measures for the implementation of the present Agreement.
2.      Members shall ensure that their laws and regulations shall not be contrary to the provisions
of this Agreement.
 ---pagebreak--- Page 208 ---pagebreak---                                                                                        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 rules of origin themselves do not create unnecessary obstacles to trade;
         Desiring to ensure that rules 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 rules of origin;
         Desiring to ensure that rules of origin are prepared and applied in an impartial, transparent,
predictable, consistent and neutral manner;
         Recognizing the availability of a consultation mechanism and procedures for the speedy, effective
and equitable resolution of disputes arising under this Agreement;
         Desiring to harmonize and clarify rules of origin;
         Hereby agree as follows:
                                                  PART I
                                    DEFINITIONS AND COVERAGE
                                                 Article 1
                                              Rules of Origin
 1.      For the purposes of Parts I to IV of this Agreement, rules 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 tariff 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 rules of origin used in non-preferential
commercial policy instruments, such as in the application of: most-favoured-nation treatment under
Articles I, II, III, XI and XIII of GATT 1994; anti-dumping and countervailing duties under Article VI
of GATT 1994; safeguard measures under Article XIX of G ATT 1994; origin marking requirements
 ---pagebreak--- Page 210
under Article IX of GATT 1994; and any discriminatory quantitative restrictions or tariff quotas.
They shall also include rules of origin used for government procurement and trade statistics.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 rules of origin set out in Part I V 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 tariff classification is applied, such
                                 a rule of origin, and any exceptions to the rule, must clearly specify' the
                                 subheadings or headings within the tariff nomenclature that are addressed by
                                 the rule;
                      (ii)       in cases where the ad valorem percentage criterion is applied, the method for
                                 calculating this percentage shall also be indicated in the rules 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 rules of origin are not used as instruments to pursue trade objectives
                      directly or indirectly:
             (c)      rules 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 ofthe 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)      the rules of origin that they apply to imports and exports are not more stringent than
                      the rules of origin they apply to determine whether or not a good is domestic and shall
                      not discriminate between other Members, irrespective of the affiliation of the
                      manufacturers of the good concerned2;
     '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.
    2
      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.
 ---pagebreak---                                                                                                    Page 211
           (e)       their rules of origin are administered in a consistent, uniform, impartial and reasonable
                     manner;
           (0        their rules of origin are based on a positive standard. Rules of origin that state 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 rulings of general
                     application relating to rules 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 rules 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)      w h e n introducing changes to their rules of origin or new rules 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 ofthe 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 rules 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
                     ma\ 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 ofthe harmonization work
programme set out in Part IV, the establishment of harmonized rules of origin, Members shall ensure,
upon the implementation of the results of the harmonization work programme, that:
           (a)       they apply rules of origin equally for all purposes as set out in Article 1 ;
     'In respect 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.
 ---pagebreak--- Page 212
       (b)   under their rules of origin, the country to be determined as the origin of a particular
             good is either the country where the good has been wholly obtained or, when more
             than one country is concerned in the production of the good, the country where the
             last substantial transformation )ias been carried out;
       (c)   the rules of origin that they apply to imports and exports are not more stringent than
             the rules 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;
       (d)   the rules of origin are administered in a consistent, uniform, impartial and reasonable
             manner; .
       (e)   their laws, regulations, judicial decisions and administrative rulings of general
             application relating to rules 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;
       (0    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 rules 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 rules of origin or new rules 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 ofthe 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 ofthe application of rules 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.
 ---pagebreak---                                                                                      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 ofthe representatives from each ofthe 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 matters 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 established 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 out the technical work called for
 in Part IV and prescribed in Annex I. Where appropriate, the Technical Committee shall request
 information and advice from the Committee on matters related to this Agreement. The Technical
Committee may also request such other work from the Committee as it considers appropriate for the
furtherance ofthe above-mentioned objectives ofthe 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 Secretariat, within 90 days after the date of entry into force
ofthe WTO Agreement for it, its rules of origin, judicial decisions, and administrative rulings of general
application relating to rules of origin in effect on that date If by inadvertence a rule 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 Secretariat.
 2.       During the period referred to in Article 2, Members introducing modifications, other than
de minimis modifications, to their rules of origin or introducing new rules of origin, which, for the
 purpose of this Article, shall include any rule of origin referred to in paragraph 1 and not provided
 to the Secretariat, shall publish a notice to that effect at least 60 days before the entry into force of
the modified or new rule in such a manner as to enable interested parties to become acquainted with
 the intention to modify a rule of origin or to introduce a new rule 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 rule as soon as possible.
 ---pagebreak---  Page 214
                                                 Article 6
                                                  Review
 1.       The Committee shall review annually the implementation and operation of Parts II and III of
 this Agreement having regard to its objeaives. The Committee 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 reflect the results of the harmonization work programme.
 3.       The Committee, in cooperation with the Technical Committee, shall set up a mechanism to
 consider and propose amendments to the results of the harmonization work programme, taking into
.account the objectives and principles set out in Article 9. This may include instances where the rules
 need to be made more operational or need to be updated to take into account new production processes
 as affected by any technological change.
                                                 Article 7
                                               Consultation
          The provisions of Article XX11 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 rules 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)     rules of origin should be applied equally for all purposes as set out in Article 1 ;
          (b)     rules of origin should provide for the country to be determined as the origin of a
                  particular good to be either the country where the good has been wholly obtained 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;
 ---pagebreak---                                                                                   Page 215
       (c)   rules of origin should be objective, understandable and predictable;
       (d)   notwithstanding the measure or instrument to which they may be linked, rules 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 not pose unduly strict requirements or require the
             fulfilment of a certain condition not relating to manufacturing or processing as a
             prerequisite for the determination ofthe country of origin. However, costs not directly
             related to manufacturing or processing may be included for purposes ofthe application
             of an ad valorem percentage criterion;
       (e)   rules of origin should be administrable in a consistent, uniform, impartial and reasonable
             manner;
       (f)   rules of origin should be coherent;
       (g)   rules 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 Committee and the Technical Committee provided for in Article 4 shall be the
             appropriate bodies to conduct this work.
       (c)   To provide for detailed input by the CCC, the Committee shall request the Technical
             Committee to provide its interpretations and opinions resulting from the work described
             below on the basis ofthe 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 ofthe Harmonized System
             (HS) nomenclature.
             (i)      Wholly Obtained and Minimal Operations or Processes
             The Technical Committee shall develop harmonized definitions of:
                      the goods that are to be considered as being wholly obtained 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 submitted to the Committee within three months of
             receipt of the request from the Committee.
             (ii)     Substantial Transformation - Change in Tariff Classification
                      The Technical Committee shall consider and elaborate upon, on the basis of
                      the criterion of substantial transformation, the use of change in tariff subheading
                      or heading when developing rules of origin for particular products or a product
 ---pagebreak--- Page 216
                               sector and, if appropriate, the minimum change within the nomenclature that
                              meets this criterion.
                              The Technical Committee 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 one year and three months
                               from receipt of the request of the Committee.
                      (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 ofthe HS nomenclature does not
                      allow for the expression of substantial transformation, the Technical Committee:
                               shall consider and elaborate upon, on the basis ofthe criterion of substantial
                               transformation, the use, in a supplementary or exclusive manner, of other
                               requirements, including ad valorem percentages4 and/or manufacturing or
                               processing operations5, when developing rules 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 receipt of the
                               request from the Committee.
Role of the Committee
3.         On the basis of the principles listed in paragraph 1:
           (a)       the Committee shall consider the interpretations and opinions of the Technical Committee
                      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 Committee 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 completion 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
     If the ad valorem criterion is prescribed, the method for calculating this percenuge shall also be indicated in the rules
of origin.
    *If the criterion of manufacturing or processing operation is prescribed, the operation that confers origin on the product
concerned shall be precisely specified.
 ---pagebreak---                                                                                                    Page 217
Results of the Harmonization Work Programme and Subsequent Work
4.         The Ministerial Conference shall establish the results of the harmonization work programme
in an annex as an integral part of this Agreement.6 The Ministerial Conference shall establish 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 ofthe Technical Committee, to examine specific technical
                   problems arising in the day-to-day administration ofthe rules 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 matters 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 ofthe implementation and operation of Parts II
                   and III.
2.         The Technical Committee 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 the Technical Committee. Representatives of members of the Technical Committee
may be assisted by advisers at meetings of the Technical Committee. The WTO Secretariat may also
attend such meetings with observer sums.
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 representatives shall
attend meetings of the Technical Committee as observers.
    6
     At the same time, consideration shall be given to arrangements concerning the settlement of disputes relating to customs
classification.
 ---pagebreak--- Page 218
6.       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 representatives
of international governmental and trade organizations to attend meetings of the Technical Committee
as observers.
7.       Nominations of delegates, alternates and advisers to meetings ofthe Technical Committee shall
be made to the Secretary-General.
Meetings .
8.       The Technical Committee shall meet as necessary, but not less than once a year.
Procedures
9.       The Technical Committee shall elect its own Chairman and shall establish its own procedures.
                                                 ANNEX II
    COMMON DECLARATION WITH REGARD TO PREFERENTIAL RULES OF ORIGIN
1.       Recognizing that some Members apply preferential rules.of origin, distinct from non-preferential
rules of origin, the Members hereby agree as follows.
2.       For the purposes of this Common Declaration, preferential rules 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 1 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 tariff classification is applied, such
                          a preferential rule of origin, and any exceptions to the rule, must clearly specify
                          the subheadings or headings within the tariff nomenclature that are addressed
                          by the rule;
                  (ii)     in cases where the ad valorem percentage criterion is applied, the method for
                          calculating this percentage shall also be indicated in the preferential rules 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 rules of origin are based on a positive standard. Preferential rules
                  of origin that state what does not confer preferential origin (negative standard) are
 ---pagebreak---                                                                                               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 rulings of general
                    application relating to preferential rules 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
                    ofthe preferential origin they would accord to a good are issued as soon as possible
                    but no later than 150 days7 after a request for such an assessment provided that all
                    necessary elements have been submitted. Requests for such assessments shall be
                    accepted before trade in the good concerned begins and may be accepted at any later
                    point in time. Such assessments shall remain valid for three years provided that the
                    facts and conditions, including the preferential rules 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 (0- Such assessments
                    shall be made publicly available subject to the provisions of subparagraph (g);
          (e)       when introducing changes to their preferential rules of origin or new preferential rules
                    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 take in relation to the determination of preferential
                    origin is reviewable promptly by judicial, arbitral or administrative tribunals or
                    procedures, independent ofthe 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 rules 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 Secretariat promptly their preferential rules of origin, including
a listing of the preferential arrangements to which they apply, judicial decisions, and administrative
rulings of general application relating to their preferential rules 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 rules of origin or new preferential rules of origin as soon as
possible to the Secretariat. Lists of information received and available with the Secretariat shall be
circulated to the Members by the Secretariat.
    '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.
 ---pagebreak--- Page 220 ---pagebreak---                                                                                                 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 that 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 in international trade, and to ensure the fair and equitable application and administration of such
procedures and practices;
         Desiring to provide for a consultative mechanism and the speedy, effective and equitable
resolution of disputes arising under this 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.
 ---pagebreak--- Page 222
2.         Members shall ensure that the administrative procedures used to inclement import licensing
regimes 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, taking into account the economic development purposes
and financial and trade needs of developing country Members.2
3.         The rules for import licensing procedures shall be neutral in .application and administered in
a fair and equitable manner.
4.         (a)       The rules and all information concerning procedures for the submission of applications,
including the eligibility of persons, firms and institutions to make such applications, the administrative
body(ies) to be approached, and the lists of products subject to the licensing requirement shall be
published, in the sources notified to the Committee on Import Licensing provided for in Article 4
(referred to in this Agreement as "the Committee"), in such a manner as to enable governments3 and
traders to become acquainted with them. Such publication shall take 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 rules 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 ofthe 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
ihere 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 not 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 inteni 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 bulk loading and other minor differences consistent with normal commercial practice..
     •Nothing in this Agreement shall he taken as implying that the basis, scope or duration of a measure being implemented
h> 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 ofthe European
Communities
 ---pagebreak---                                                                                                      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 Licensing4
 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', in addition to those in paragraphs 1 through 11 of Article 1 and
paragraph 1 of this Anicle, 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 subject
                               to automatic licensing is equally eligible to apply for and to obtain 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 submitted 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 that 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 impon 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.
     Ά developing country Member, other than a developing country Member which was a Party to the Agreement on Impon
Licensing Procedures done on 12 April 1979. which has specific difficulties with the requirements of subparagraphs (a)(ii)
and (a)(iii) 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.
 ---pagebreak--- Page 224
                                                   Article 3
                                      Non-Automatic Import Licensing
!..      The following provisions, in addition to those in paragraphs 1 through 11 of Anicle 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-restrictive or -distortive effects on imports 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, information for other Members and traders to know the
basis for granting and/or allocating licences.
4.       Where a Member provides the possibility for persons,firmsor 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, upon the request of any Member having an interest in the trade
                  in the product concerned, all relevant information concerning:
                  (i)      the administration ofthe restrictions;
                  (ii)     the import licences granted over a recent period;
                  (iii)    the distribution of such licences among supplying countries;
                  (iv)     where practicable, import statistics (i.e. value and/or volume) with respect
                           to the products subject 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
 ---pagebreak---                                                                                   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 them;
    (e)       any person, firm or institution which fulfils the legal and administrative requirements
              of 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 take these reasons into consideration when allocating new licences.
              Consideration shall also be given to ensuring a reasonable distribution of licences to
              new importers, taking 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 "quota holders".
 ---pagebreak--- Page 226
                                                 Article 4
                                                institutions
         There is hereby established a Committee on Import Licensing composed of representatives
from each ofthe 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 published;
         (e)     indication of whether the licensing procedure is automatic or non-automatic according
                 to definitions contained in Articles 2 and 3;
         if)     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 information required
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.
 ---pagebreak---                                                                                       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 implementation
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 Secretariat shall prepare a factual report based on
information provided under Article 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 ofthe 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.
 ---pagebreak--- Page 228 ---pagebreak---                                                                                                 Page 229
               AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES
Members hereby agree as follows:
                                       PART I: 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)   thereisany form ofincome or price support in the sense of Article XVIofGATT 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 ΓΠ of this Agreement, the exemption of an exponed product from duties or taxes borne by the like product when
destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have
accrued, shall not be deemed to be a subsidy.
 ---pagebreak--- 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 ofthe 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 j      Where the granting authority, or the legislation pursuant to which the granting authority
                     operates, establishes objective criteria or conditions2 governing the eligibility for, and
                     the amount of, a subsidy, specificity shall not exist, provided that the eligibility is
                     automatic and that such criteria and conditions are strictly adhered to. The criteria
                     or conditions must be clearly spelled out in law, regulation, or other official document,
                     so as to be capable of verification.
           (c)       If, notwithstanding any appearance of non-specificity resulting from the application
                     of the principles laid down in subparagraphs (a) and (b), there are reasons to believe
                     that the subsidy may in fact be specific, other factors may be considered. Such factors
                     are. use of a subsidy programme by a limited number of certain enterprises,
                     predominant use by certain enterprises, the granting of disproportionately large amounts
                     of subsidy to certain enterprises, and the manner in which discretion has been exercised
                     by the granting authority in the decision to grant a subsidy.3 In applying this
                      subparagraph, account shall be taken of the extent of diversification of economic
                     activities within the jurisdiction ofthe granting authority, as well as ofthe 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 nature and horizonui 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.
 ---pagebreak---                                                                                                          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 fact4, whether solely or as one of several other
                     conditions, upon export performance, including those illustrated in Annex I5;
            (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 days6 ofthe 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 establishment, the panel may request the assistance ofthe Permanent Group of Experts7
(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 that the granting of a subsidy, without having been made legally contingent
upon expon performance, is in fact tied to actual or anticipated exportation or export earnings. The mere fact that a subsidy
is granted to enterprises which expon shall not for that reason alone be considered to be an expon subsidy within the meaning
of this provision.
     'Measures referred to in Annex I as not constituting expon subsidies shall not be prohibited under this or any other provision
of this Agreemeni.
     'Any time-periods mentioned in this Article may be extended by mutual agreement.
      'As established in Anicle 24.
 ---pagebreak--- 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 itsfinalreport to the parties to the dispute. The report shall be circulated
to all Members within 90 days ofthe date ofthe composition and the establishment ofthe 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 ofthe issuance ofthe 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 ofthe 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 ofthe DSB is not followed within the time-period specified
by the panel, which shall commence from the date of adoption ofthe 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.
4.11       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.
     ,0
       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.
 ---pagebreak---                                                                                                           Page 233
                                       PART ΠΙ: 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 Member11;
          (b)        nullification or impairment of benefits accruing directly or indirectly to other Members
                     under GATT 1994 in particular the benefits of concessions bound under Article II of
                     GATT 1994'2;
          (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 subsidization14 of a product exceeding 5 per cent15;
          (b)        subsidies to cover operating losses sustained by an industry;
          (c)        subsidies to cover operating losses sustained by an enterprise, other than one-time
                     measures which are non-recurrent and cannot be repeated for that enterprise and which
                     are given merely to provide time for the development of long-term solutions and to
                     avoid acute social problems;
    "The term 'injury to the domestic industry* is used here in the same sense as it is used in Pan V.
    ,2
       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 established in accordance with the practice
of application of these provisions.
    l,
       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.
 ---pagebreak--- 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 ofthe subsidy is to displace 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 commodity17 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 ofthe
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 ofthe following situations: (a) there is an increase
in the market share of the subsidized product; φ) 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
     l6
        Members recognize that where royalty-based financing for a civil aircraft programme is not being fully repaid due
to the level of actual sales falling below the level of forecast sales, this does not in itself constitute serious prejudice for the
purposes of this subparagraph.
     "Unless other multilaterally agreed specific rules apply to the trade in the product or commodity in question.
 ---pagebreak---                                                                                                     Page 235
that can be obtained as to the changes in market shares ofthe 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 exist18 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 ofthe 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
Anicle 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 nature of the subsidy in question, and φ) the injury caused to the
     '•The fact that certain circumstances are referred to in this paragraph does not, in itself, confer upon them any legal
sutus in terms of either GATT 1994 or this Agreement. These circumstances must not be isolated, sporadic or otherwise
insignificant.
 ---pagebreak--- Page 236
domestic industry, or the nullification or impairment, or serious prejudice19 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 consultations as quickly as possible.
The purpose of the consultations shall be to clarify the facts ofthe situation and to arrive at a mutually
agreed solution.
7.4         If consultations .do not result in a mutually agreed solution within 60 days20, any Member party
to such consultations may refer the matter to the DSB for the establishment of a panel, unless the DSB
decides by consensus not to establish a panel. The composition ofthe panel and its terms of reference
shall be established within 15 days from the date when it is established.
7.5         The panel shall review the matter 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
establishment of the panel's terms of reference.
7.6         Within 30 days ofthe issuance ofthe panel's report to all Members, the report shall be adopted
by the DSB21 unless one ofthe 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 ofthe 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.22
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
Anicle 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
nature ofthe adverse effects determined to exist, unless the DSB decides by consensus to reject the
request.
     l9
       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.
    •aIf a meeting of the DSB is not scheduled during this period, such a meeting shall be held for this purpose.
 ---pagebreak---                                                                                                              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-actionable23:
             (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
                       establishments" on a contract basis with firms if:24 Μ• 2b
                       the assistance covers27 not more than 75 per cent of the costs of industrial research2"
                       or 50 per cent of the costs of pre-competitive development activity2"-30;
     :,
        It is recognized that government assistance 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 use 11
restrict the ability of Members to provide such assistance.
     :
      *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 ofthe 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(z) with a view to making all necessary modifications to improve the operation
of these provisions. In its consideration of possible modifications, the Committee 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
     *The provisions of this Agreement do not apply to fundamental research activities independently conducted by higher
education or research establishments. The term "fundamental research" means an enlargement of general scientific and technical
knowledge not linked to industrial or commercial objectives.
     r
        The allowable levels of non-actionable assistance referred to in this subparagraph shall be established by reference to
the toul eligible costs incurred over the duration of an individual project.
     M
         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-competkive 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
 ---pagebreak--- Page 238
                     and provided that such assistance is limited exclusively to:
                     (i)        costs of personnel (researchers, technicians and other supporting staff employed
                                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 ofthe 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)       assistance to disadvantaged regions within the territory of a Member given pursuant
                     to a general framework of regional development31 and non-specific (within the meaning
                     of Article 2) within eligible regions provided that:
                     (i)        each disadvantaged region must be a clearly designated contiguous geographical
                                area with a definable economic and administrative identity;
                     (ii)       the region is considered as disadvantaged on the basis of neutral and objective
                                criteria32, indicating that the region's difficulties arise out of more than
                                temporary circumstances; such criteria must be clearly spelled out in law,
                                regulation, or other official document, so as to be capable of verification;
                     (iii)      the criteria shall include a measurement of economic development which shall
                                be based on at least one of the following factors:
                                          one of either income per capita or household income per capita, or
                                          GDP per capita, which must not be above 85 per cent ofthe average
                                          for the territory concerned;
projects cannot he converted 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-competitive development activity, the allowable level
of non-actionable assistance shall not exceed the simple average ofthe allowable levels of non-actionable assistance applicable
to the above two categories, calculated on the basis of all eligible costs as set forth in items (i) to (v) of mis subparagraph.
     "A "general framework of regional development* means that regional subsidy programmes are part 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 certain regions beyond what is appropriate for the
elimination or reduction of regional disparities within the framework of the regional development policy. In mis regard,
regional subsidy programmes shall include ceilings on the amount of assistance which can be granted to each subsidized
project. Such ceilings must be differentiated according 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 assisunce shall
be sufficiently broad and even to avoid the predominant use of a subsidy by, or the granting of disproportionately large amounts
of subsidy to. certain enterprises as provided for in Article 2.
 ---pagebreak---                                                                                                        Page 239
                                          unemployment rate, which must be at least 110 per cent ofthe 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 adaptation of existing facilities33 to new environmental
                     requirements imposed by law and/or regulations which result in greater constraints
                     and financial burden on firms, provided that the assistance:
                     (i)       is a one-time non-recurring measure; and
                     (ii)      is limited to 20 per cent of the cost of adaptation; 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 afirm'splanned 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 implementation to the Committee in accordance with the provisions of Part 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
84          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 ofthe Secretariat (or,
if a review by the Secretariat 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 Committee
following the notification of a subsidy programme, provided that at least two months" have elapsed
between such notification and the regular meeting of the Committee. 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 Committee 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
environmental requirements are imposed.
     M
      It is recognized that nothing in this notification provision requires the provision of confidential information, including
confidential business information.
 ---pagebreak--- Page 240
cases, of the conditions set out in a notified programme, shall be submined 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 implementation of a programme referred to in paragraph 2 of Article 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 ro the
domestic industry of that Member, such as to cause damage which would be difficult to repair, such
Member may request consultations with the Member granting or maintaining the subsidy.
9.2      Upon request for consultations under paragraph 1, the Member granting or maintaining the
subsidy programme 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 acceptable
solution.
9.3     If no mutually acceptable solution has been reached in consultations under paragraph 2 within
60 days of the request for such consultations, 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 ofthe 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 take appropriate
countermeasures commensurate with the nature and degree ofthe effects determined to exist.
 ---pagebreak---                                                                                                      Page 241
                                    PART V: COUNTERVAILING MEASURES
                                                           Article 10
                                        Application of Article VI of GATT 1994*
            Members shall take all necessary steps to ensure that the imposition of a countervailing duty36
on any product of the territory of any Member imported into the territory of another Member is in
accordance with the .provisions of Article VI of GATT 1994 and the terms of this Agreement.
Countervailing duties may only be imposed pursuant to investigations initiated37 and conducted in
accordance with the provisions of this Agreement and the Agreement on Agriculture.
                                                           Article 11
                                          Initiation and Subsequent Investigation
 11.1       Except as provided in paragraph 6, an investigation to determine the existence, degree and
effect of any alleged subsidy shall be initiated upon a written application by or on behalf of the domestic
industry.
11.2        An application under paragraph 1 shall include sufficient evidence of the existence of (a) a
subsidy and, if possible, its amount, φ) injury within the meaning of Article 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 ofthe applicant and a description ofthe volume and value ofthe 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 ΙΠ 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 the 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 Anicle 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 standards 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
bestoweddirectlyor indirectly upon the manufacnjre. production or expon of any merchandise, as provided for in paragraph 3
of Anicle VI of GATT 1994.
     J>
        rhe term "initiated" as used hereinafter means procedural action by which a Member formally commences an investigation
as provided in Anicle 11.
 ---pagebreak--- 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 ofthe subsidies; this evidence includes information on the evolution
                     ofthe volume ofthe 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 state 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 ofthe degree of support for, or opposition to, the application
expressed38 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 on
behalf of the domestic industry•" if it is supported by those domestic producers whose collective output
constitutes more than 50 per cent ofthe total production ofthe 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 ofthe 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 φ) 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.
 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
      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 that 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.
 ---pagebreak---                                                                                                       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 ofthe 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
                      exporters4' and to the authorities ofthe 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 information that is relevant to the presentation of their cases, that is
     40
        A s 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
transmined to the appropriate diplomatic representatives of the exponing Member or, in the case of a separate customs territory
Member of the WTO, an official representative of the exponing territory.
     4l
       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.
 ---pagebreak--- Page 244
not confidential as defined in paragraph 4, and that is used by the authorities in a countervailing duty
investigation, and to prepare presentations 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 advantage 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 information), 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
                                                                                               42
shall not be disclosed without specific permission of the party submitting it.
           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 detail to permit a reasonable understanding of the substance of
                    the information submitted in confidence. In exceptional circumstances, such Members
                    or parties may indicate that such information is not susceptible of summary. In such
                    exceptional circumstances, a statement ofthe 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 φ) 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 pertain 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
ofthe facts available.
 12.8      The authorities shall, before a final determination is made, inform all interested Members and
interested parties ofthe 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.
    4i
       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. Members further agree that the
investigating authority may request the waiving of confidentiality only regarding information relevant to the proceedings.
 ---pagebreak---                                                                                                          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 ofthe 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 representative 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 take due account of any difficulties experienced by interested parties, in
particular small companies, in supplying information requested, and shall provide any assistance
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 consultations 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 ofthe 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 consultation, these
provisions regarding consultations 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 the provisions of Part Π. ΠΙ or X.
 ---pagebreak--- Page 246
investigation access to non-confidential evidence, including the non-confidential summary of confidential
data being used for initiating or conducting the investigation.
                                                         Article 14
                                 Calculation ofthe 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 ofthe 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,
                     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 thefirmwould pay on a comparable commercial loan
                     which the firm could actually obtain 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 Injury45
  15.1     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 subsidized imports and
     45
       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 in accordance with the provisions of this Article.
 ---pagebreak---                                                                                                          Page 247
the effect of the subsidized imports on prices in the domestic market for like products46 and φ) the
consequent impact of these imports on the domestic producers of such products.
 15.2      With regard to the volume ofthe 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 ofthe 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 established 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 φ) a cumulative assessment ofthe effects
ofthe imports is appropriate in light ofthe 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 state ofthe 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 effects47 of subsidies,
causing injury within the meaning of this 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 ofthe 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 the product under consideration.
     47
        As set forth in paragraphs 2 and 4.
 ---pagebreak--- 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)        nature 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, taking 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 related48 to the exporters or
 importers or are themselves importers ofthe 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 production 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
ofthe product in question in that market, and φ) the demand in that market is not to any substantial
     ''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 effect ofthe 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.
 ---pagebreak---                                                                                        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 total 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 φ) 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 the 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 take 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.
 ---pagebreak--- Page 250
                                                         Article 18
                                                       Undertakings
18.1 Proceedings may49 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 ofthe subsidy is eliminated. Price increases
                   under such undertakings shall not be higher than necessary to eliminate the
                   amount ofthe subsidy.             It is desirable that the price increases be less than
                   the amount 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 ofthe importing Member
have made a preliminary affirmative determination of subsidization and injury caused by such
subsidization and, in case of undertakings from exporters, have obtained the consent of the exporting
Member.
 18.3    Undertakings offered need not be accepted if the authorities ofthe 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 Agreemeni.
 18.5 Price undertakings may be suggested by the authorities ofthe 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 data. In 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
     *The word "may" shall noi be interpreted to allow the simultaneous continuation of proceedings with the implemenution
of undertakings, except as provided in paragraph 4.
 ---pagebreak---                                                                                                  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.
                                                    Anicle 19
                             Imposition and Collection of Countervailing Duties
 19.1     If. after reasonable efforts have been made to complete consultations, 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 ofthe subsidy or less, are decisions to be made by the authorities
of the importing 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 representations made,
by domestic interested parties50 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 establish
an individual countervailing duty rate for that exporter.
 19.4    No countervailing duty shall be levied51 on any imported product in excess of the amount of
the subsidy found to exist, calculated m terms of subsidization per unit ofthe subsidized and exported
product.
                                                    Anicle 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
ofthe establishment of an industry) is made or, in the case of afinaldetermination of a threat of injury,
    "For the purpose of mis 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 ttx.
 ---pagebreak--- Page 252
where the effect of the subsidized imports would, in the absence oi the provisional measures, have
led to a determination of injury, countervailing duties may be levied retroactively 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
retardation is made (but no injury has yet occurred) a definitive countervailing duty may be imposed
only from the date ofthe 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 ofthe 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 substantiating the need for a review. Interested parties shall have the right to request the
authorities to examine whether the continued imposition ofthe 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 ofthe 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 not later than five years from its imposition (or from the date ofthe most recent
review under paragraph 2 if that review has covered both subsidization 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
 ---pagebreak---                                                                                                     Page 253
or recurrence of subsidization and injury.52 The duty may remain in force pending.the outcome of
such a review.
21.4 The provisions of Article 12 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.
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 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.
22.2      A public notice of the initiation of an investigation shall contain, or otherwise make available
through a separate report53, 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, ofthe 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.
     "When the amount ofthe 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 Article in a separate report, they
shall ensure that such report is readily available to the public.
 ---pagebreak--- 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, 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 amount of subsidy established 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
détermina:ion 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 contain 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 Article 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 to 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
 bv the administrative actions with access to review.
 ---pagebreak---                                                                                   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 ofthe Members. The Committee 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 orby 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 secretariat to the Committee.
2.4.2    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 nature
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 Committee 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 submitted 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 maintained 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,
 ---pagebreak--- Page 256
and without prejudice to the contents and form ofthe questionnaire on subsidies54, Members shall ensure
that their notifications contain 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 total 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)      statistical data 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 ho measures in their territories requiring notification
under paragraph 1 of Article 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 ofthe 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 maintained by another Member (including any subsidy referred to in Part IV j.
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 Anicle 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 Committee 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 taken within the preceding six months. The semi-annual reports shall be submitted on
an agreed standard form.
    ^Thc Committee shall esublish a Working Party to review the contents and form ofthe questionnaire as contained in
BISD 9S/193-194
 ---pagebreak---                                                                                                      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 φ) 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 Committee shall examine reports submitted 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.
          .(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 Kb) 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
                                                                       55
Member shall not increase the level of its export subsidies , 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
consultation with the Committee, which will determine whether an extension of this period is justified,
after examining all the relevant economic, financial and development needs ofthe developing country
Member in question. If the Committee determines that the extension is justified, the developing country
Member concerned shall hold annual consultations with the Committee to determine the necessity of
     55
       For a developing country Member not granting export subsidies as ofthe date of entry into force ofthe WTO Agreement,
this paragraph shall apply on the basis of the level of export subsidies granted in 1986.
 ---pagebreak--- Page 258
maintaining 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 φ) 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 ofthe Harmonized System Nomenclature. The Committee 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 taken 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 ofthe subsidized imports represents less than 4 per cent ofthe total
                  imports of the like product in the importing Member, unless imports from
                  developing country Members whose individual shares of total imports represent
                  less than 4 per cent collectively account for more than 9 per cent ofthe 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.
 ---pagebreak---                                                                                     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 Part 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 Committee 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 established within the territory of any Member before
 ---pagebreak--- 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 Committee if such departures
are deemed necessary for the process of transformation.
                                     PART X: DISPUTE SETTLEMENT
                                                       Article 30
         The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the
Dispute Settlement Understanding shall apply to consultations and the settlement of disputes under
this Agreement, except as otherwise specifically provided herein.
                                        PART XI: FINAL PROVISIONS
                                                       Article 31
                                              Proxisional 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 Committee 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 taken except in accordance
with the provisions of GATT 1994. as interpreted by this Agreement.56
32.2     Reservations may not be entered in respect of any ofthe 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.
 ---pagebreak---                                                                                       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 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 implementation and operation of this Agreement,
taking 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.
 ---pagebreak--- 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 available57 on world markets to their exporters.
 (e)       The full or partial exemption remission, or deferral specifically related to exports, of direct
           taxes5* or social welfare charges paid or payable by industrial or commercial enterprises.59
(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 the base on which direct taxes are charged.
      '"The term "commercially available" means that the choice between domestic and imported products is unrestricted and
 depend-* nuls on commercial considerations.
      **Ior the purpose ol this Agreement:
            The term "direct taxes" shall mean taxes on wages, profits, interests, renfs, 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 thai arc levied on imports:
            The term "indirect taxes" shall mean sales, excise, turnover, value added, franchise, stamp, transfer, inventory
 and equipment taxes, border taxes and all taxes other than direct taxes and import charges;
            "Prior-stage" indirect taxes are those levied on goods or services used directly or indirectly in making the product:
            "Cumulative* indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent crediting
 of the tax if the goods or services subject to tax ai one suge of production are used in a succeeding stage of production;
            "Remission" of taxes includes the refund or rebate of taxes;
            "Remission or drawback" includes the full or partial exemption or deferral of import charges.
      *Thc 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 in transactions between exporting enterprises
 and foreign buyers under their or under the same control should for tax 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 taxes in export
 transactions. In such circumstances the Members shall normally anempt to resolve their differences using the facilities of
 existing bilateral tax treaties or other specific international mechanisms, without prejudice to the rights and obligations of
 Members under GATT 1994. including the right of consultation created in the preceding sentence.
            Paragraph (e) is not intended to limit a Member from taking measures to avoid the double taxation of foreign-source
  income earned by its enterprises or the enterprises of another Member.
 ---pagebreak---                                                                                                Page 263
 (g)      The exemption or remission, in respect ofthe production and distribution of exported products,
          of indirect taxes58 in excess of those levied in respect ofthe production and distribution of like
          products when sold for domestic consumption.
 (h)      The exemption, remission or deferral of prior-stage cumulative indirect taxes58 on goods or
          services used in the production of exported products in excess of the exemption, remission
          or deferral of like prior-stage cumulative indirect taxes on goods or services used in the
          production 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 ofthe 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 charges58 in excess of those levied on imported inputs
          that are consumed in the production of the exported product (making normal allowance for
          waste); provided, however, that in particular cases afirmmay use a quantity of home market
          inputs equal to, and having the same quality and characteristics 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 ofthe 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.
(I)       Any other charge on the public account constituting an export subsidy in the sense of Article XVI
          of G ATT 1994.
     "Paragraph (h) does not apply to value-added tax systems and border-ux adjustment in lieu thereof; the problem of
the excessive remission of value-added uxes is exclusively covered by paragraph (g).
 ---pagebreak--- Page 264
                                                       ANNEX II
       GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS61
                                                              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 ofthe 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 ofthe 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
ofthe amount of such taxes actually levied on inputs that are consumed in the production ofthe 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 ofthe 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 production of the exported product and in what amounts. Where
such a system or procedure is determined 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 product.
 ---pagebreak---                                                                                       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 determining the amount of a particular input that is consumed in the production 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 production 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.
 ---pagebreak--- Page 266
                                                ANNEX III
                  GUIDELINES IN THE DETERMINATION OF SUBSTITUTION
                          DRAWBACK SYSTEMS AS EXPORT SUBSIDIES
                                                       I
         Drawback systems can allow for the refund or drawback of import charges on inputs 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
ofthe import charges levied initially on the imported inputs for which drawback is being claimed.
                                                      II
         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 may be substituted for
imported inputs in the production of a product for export provided such inputs are 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 it enables the government ofthe 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 applied, the investigating 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 earn 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.
 ---pagebreak---                                                                                 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 actually paid or payable.
 ---pagebreak---  Page 268
                                                         ANNEX IV
                   CALCULATION OF THE TOTAL AD VALOREM SUBSIDIZATION
                                       (PARAGRAPH 1(A) OF ARTICLE 6)"
  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 ofthe value ofthe product, the value ofthe product shall be calculated
 as the total value ofthe recipient firm's63 sales in the most recent 12-month period, for which sales
.data is available, preceding the period in which the subsidy is granted.64
 3.         Where the subsidy is tied to the production or sale of a given product, 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 15 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 located in an inflationary economy country, the value ofthe product
 shall be calculated as the recipient firm's total sales (or sales ofthe 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 ofthe amount of a subsidy for the purpose of paragraph 1(a) of Article 6.
     ^'An understanding among Members should he 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 Anicle 6.
     ^The 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 firms
 sales in the fiscal year in which the tax-related measure was earned.
     ^Start-up situations include instances where financial commitments for product development or construction of facilities
 to manufacture products benefiting from thé subsidy have been made, even though production has not begun.
 ---pagebreak---                                                                                                    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 ofthe subsidizing
Member as necessary to establish the existence and amount of subsidization, the value of total sales
ofthe 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 ofthe subsidizing Member and ofthe 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 effects 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 or 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 gathered by relevant statistical sen-ices but which have not yet been published, customs
data concerning imports and declared values ofthe 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 ofthe subsidy in question (and. where appropriate, the value of total sales ofthe subsidized
firms), prices ofthe subsidized product, prices ofthe non-subsidized product, prices of other suppliers
to the market, changes in the supply ofthe 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 take into account the need to protect information which is by nature
confidential or which is provided on a confidential basis by any Member involved in this process.
 ---pagebreak--- 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 erf the non-cooperation ofthe 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 ofthe 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.
 ---pagebreak---                                                                                           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 ofthe 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 ofthe 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 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 ofthe 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 ofthe firm;
such a visit may only be made if (a) the authorities ofthe importing Member notify the representatives
of the government of the Member in question and φ) the latter do not object to the visit.
          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 ofthe anticipated visit and does not object to it; further, it should be standard
practice prior to the visit to advise the firms concerned ofthe general nature ofthe 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 ofthe exporting Members and essential
to a successful on-the-spot investigation should, whenever possible, be answered before the visit is
made
 ---pagebreak--- 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 annum68: Bolivia,
         Cameroon, Congo, Côte d'Ivoire, Dominican Republic, Egypt, Ghana, Guatemala, Guyana,
         India, Indonesia, Kenya, Morocco, Nicaragua, Nigeria, Pakistan, Philippines, Senegal, Sri Lanka
         and Zimbabwe.
      **The inclusion of developing country Members in the list in paragraph (b) is based on the most recent data from the
  World Bank on GNP per capita.
 ---pagebreak---                                                                                                        Page 273
                                       AGREEMENT ON SAFEGUARDS
Members,
          Having in mind the overall objective ofthe 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 Action 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 rules for the application of safeguard measures which shall be
understood to mean those measures provided for in Article XlX^of GATT 1994.
                                                            Article 2
                                                           Conditions
 1.        A Member1 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.
     Ά customs union may apply a safeguard measure as a single unit or on behalf of a member State. When a customs
union applies a safeguard 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 Article XXIV
of GATT 1994.
 ---pagebreak--- 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 setting 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 ofthe 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 ofthe 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 injury to a domestic industry under the terms of this Agreement, the
 competent authorities shall evaluate all relevant factors of an objective and quantifiable nature having
 a bearing on the situation of that industry, in particular, the rate and amount ofthe 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.
 ---pagebreak---                                                                                        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 ofthe 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 representative 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 concerned. In cases in which this method
is not reasonably practicable, the Member concerned shall allot to Members having a substantial interest
in supplying the product shares based upon the proportions, supplied by such Members during a previous
representative period, of'the total quantity or value of imports ofthe product, due account being taken
of any special factors which may have affected or may be affecting the trade in the product.
           (b)      A Member may depart from the provisions in subparagraph (a) provided that consultations
under paragraph 3 of Article 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 (/') imports from certain Members have increased in disproportionate percentage in relation to the
total increase of imports of the product concerned in the representative 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 take 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 take 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
 ---pagebreak--- 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 facilitate 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 total 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 facilitate 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 ofthe 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
 ---pagebreak---                                                                                              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 consultations 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 substantially equivalent concessions
or other obligations under GATT 1994, to the trade ofthe 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 taken 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 product 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 total imports of the product concerned.2
2.        A developing country Member shall have the right to extend the 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, taken 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 taken pursuant to Article XIX of GATT 1947
that were in existence on the date of entry into force ofthe 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 Article 9 to the Committee on Safeguards.
 ---pagebreak--- Page 278
                                                    Anicle 11
                             Prohibition and Elimination of Certain Measures
1.       (a)      A Member shal 1 not take 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 maintain any voluntary export restraints,
orderly marketing arrangements or any other similar measures on the export or the import side.3·4
These include actions taken by a single Member as well as actions under agreements, arrangements
and understandings entered into by two or more Members. Any such measure in effect 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, taken or maintained 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 not more than one specific measure per importing Member5, the duration
of which shall not extend beyond 31 December 1999. Any such exception must be mutually agreed
between the Members directly 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 investigatory process relating to serious injury or threat thereof and the
                   reasons for it;
    'An impon quou applied as a safeguard measure in conformity with the relevant provisions of GATT 1994 and this
 Agreement may. by mutual agreement, be administered by the exponing Member.
    'Examples of similar measures include expon moderation, expon-price or import-price monitoring systems, expon or
impon surveillance, compulsory impon cartels and discretionary export or impon licensing schemes, any of which afford
protection.
    The only such exception to which the European Communities is entitled is indicated in the Annex to this Agreement.
 ---pagebreak---                                                                                      Page 279
         (b)      making a finding of serious injury or threat thereof caused by increased imports; and
         (c)      taking 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 Committee on Safeguards with all pertinent
information, which shall include evidence of serious injury or threat thereof caused by increased imports,
precise description ofthe product involved and the proposed measure, proposed date of introduction,
expected duration and timetable for progressive liberalization. In the case of an extension of a measure,
evidence that the industry concerned is adjusting shall also be provided. The Council for Trade in
Goods or the Committee on Safeguards may request such additional information as they may consider
necessary from the Member proposing to apply or extend the measure.
3        A Member proposing to apply or extend a safeguard measure shall provide adequate opportunity
for prior consultations with those Members having a substantial interest as exporters of the product
concerned, with a view to, inter alia, reviewing the information provided under paragraph 2, exchanging
views on the measure and reaching an understanding on ways to achieve the objective set out in
paragraph 1 of Article 8.
4.       A Member shall make a notification to the Committee on Safeguards before taking a provisional
safeguard measure referred to in Article 6. Consultations shall be initiated immediately after the measure
is taken.
5        The results of the consultations 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 Article 8. and proposed suspensions of concessions and other obligations referred to in paragraph 2
of Anicle 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 maintaining measures described in Article 10 and paragraph 1 of Article 11 which
exist on the date of entry into force ofthe 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 Agreemeni to make such notifications.
9        Any Member may notify the Committee on Safeguards of any non-governmental measures
referred to in paragraph 3 of Article 11.
10.      All 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.
 ---pagebreak--- Page 280
                                                 Article 13
                                                Surveillance
1.      A Committee on Safeguards is hereby established, under the authority ofthe 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
                 implementation 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 consultations 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 ofthe Member taking 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;
        (0      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 Secretariat shall 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 Understanding shall apply to consultations and the settlement of disputes arising
under this Agreement.
 ---pagebreak---                                                                                                      Page 281
                                                                          ANNEX
                        EXCEPTION REFERRED TO IN PARAGRAPH 2 OF ARTICLE 11
            ^     ^                 ^ ^ ^   ^ W M ^   ^ B           B
• ^ - • ^ •   ^ ^   ^ ^ ^ ^ ^ ^ ^ ^       ^         ^     F = = = =   ™ ^ • ^ - - ' ' •  — — — — " '     '' ' ———•~—*———-
   Members concerned                                       Product                      Termination
   EC/Japan                                                Passenger cars, off road     31 December 1999
                                                           vehicles, light commercial
                                                           vehicles, light trucks (up
                                                           to 5 tonnes), and the same
                                                           vehicles in wholly
                                                           knocked-down form (CKD
                                                           sets).
 ---pagebreak--- Page 282 ---pagebreak---                                                                             Page 283
                                           ANNEX IB
                     GENERAL AGREEMENT ON TRADE IN SERVICES
PART 1          SCOPE AND DEFINITION
       Article I .      Scope and Definition
PART II        GENERAL OBLIGATIONS AND DISCIPLINES
      Article  II       Most-Favoured-Nation Treatment
      Article  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
      Anicle   VI       Domestic Regulation
      Article  VII      Recognition
      Article  VIII "   Monopolies and Exclusive Service Suppliers
      Article  IX       Business Practices
      Article  X        Emergency Safeguard Measures
      Anicle   XI       Payments and Transfers
      Article  XII      Restrictions to Safeguard the Balance of Payments
      Article  XIII     Government Procurement
      Article  XIV      General Exceptions
      Article  XIV bis  Security Exceptions
      Article  XV       Subsidies
PART III       SPECIFIC COMMITMENTS
       Anicle XVI       Market Access
       Anicle XVII      National Treatment
       Article XVIII    Additional Commitments
PART IV         PROGRESSIVE LIBERALIZATION
       Article XIX      Negotiation of Specific Commitments
       Article XX       Schedules of Specific Commitments
       Article XXI      Modification of Schedules
PART V          INSTITUTIONAL PROVISIONS
       Article XXII     Consultation
       Article XXIII    Dispute Settlement and Enforcement
       Article XXIV     Council for Trade in Services
       Article XXV      Technical Cooperation
       Article XXVI     Relationship with Other International Organizations
 ---pagebreak--- Page 284
PART VI        FINAL PROVISIONS
       Article XXVII    Denial of Benefits
       Article XXVIII   Definitions
       Article XXIX     Annexes
Annex on Article Π 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
 ---pagebreak---                                                                                       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 establish a multilateral framework of principles and rules for trade in services with
a view to the expansion of 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 advantageous 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 of their service exports including, inter alia, through the strengthening of their
domestic services capacity and its efficiency and competitiveness;
         Taking particular account ofthe serious difficulty ofthe least-developed countries in view of
their special economic situation and their development, trade and financial needs;
         Hereby agree as follows:
                                                  PART I
                                       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;
 ---pagebreak--- Page 286
         (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" means measures taken 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 take
         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 supplied neither on a commercial basis, nor in competition with one or more service suppliers.
                                                   PART II
                             GENERAL OBLIGATIONS AND DISCIPLINES
                                                  Article II
                                      Most-Favoured-Nation Treatment
 1.       With respect to any measure covered by this Agreement, each Member shall accordimmediately
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 facilitate 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 pertain to or affect
the operation of this Agreement. International agreements pertaining to or affecting trade in services
to which a Member is a signatory shall also be published.
 ---pagebreak---                                                                                    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
ofthe 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 establish 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 established within two years
from the date of entry into force ofthe Agreement Establishing 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 any measure, taken 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 facilitated
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 establish contact
points within two years from the date of entry into force ofthe WTO Agreement to facilitate 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;
 ---pagebreak--- Page 288
          (b)       registration, recognition and obtaining of professional qualifications; and
          (c)       the availability of services technology.
3.        Special priority shall be given to the least-developed country Members in the implementation
of paragraphs 1 and 2. Particular account shall be taken ofthe serious difficulty ofthe 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 or 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 coverage1, and
          (b)       provides for the absence or elimination of substantially all discrimination, in the sense
          of Article XVII. between or among the parties, in the sectors covered under subparagraph (a),
          through:
                    (i)        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 ofthe 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 natural persons of the parties to such an agreement.
4.        Any agreement referred to in paragraph 1 shall be designed to facilitate 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 sectors 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.
 ---pagebreak---                                                                                                      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 establish 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 implementation. The Council may establish 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 referrecl to in paragraph 1 may not seek
compensation for trade benefits that may accrue 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
establishing full integration2 ofthe 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 sectors 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.
     2
       Typically, such integration provides citizens ofthe parties concerne J - -: '.t of free entry to the employment markets
of the parties and includes measures concerning conditions of pay, other conuiuons of employment and social benefits.
 ---pagebreak--- Page 290
2.        (a) " Each Member shall maintain 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 this 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
thesubmission of an application considered complete under domestic laws and regulations, inform
the applicant ofthe decision concerning the application. At the request ofthe applicant, the competent
authorities of the Member shall provide, without undue delay, information concerning the status 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 establish, 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 organizations3
 applied by that Member.
 6.         In sectors where specific commitments regarding professional services are undertaken, each
 Member shall provide for adequate procedures to verify the competence of professionals of any other
 Member.
     The term "relevant international organizations" refers to international bodies whose membership is open to the relevant
  bodies of at least all Members of the WTO.
 ---pagebreak---                                                                                       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 obtained, 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
concemed 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 obtained 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 state 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 state 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 establishment 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, act 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
 ---pagebreak---  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 establishing, maintaining or authorizing such supplier to
 provide specific information concerning the relevant operations.
4.        If, after the date of entry into force ofthe WTO Agreement, a Member grants monopoly rights
 regarding the supply of a 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 ofthe 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.
 ---pagebreak---                                                                                       Page 293
                                                 Article XI
                                          Payments and Transfers
 1. , Except under the circumstances envisaged in Article XII, a Member shall not apply restrictions
on international transfers and payments for current transactions relating to its specific commitments.
2.       Nothing in this Agreement shall affect the rights and obligations of the members of the
International Monetary Fund under the Articles of Agreement ofthe 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 XII
                            Restrictions 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 restrictions 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 ofthe 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 restrictions, 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 restrictions adopted or maintained 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 restrictions adopted under this Article.
 ---pagebreak--- Page 294
           (b)       The Ministerial Conference shall establish procedure4 for periodic consultations with
the objective of enabling such recommendations to be made to the Member concerned as it may deem
appropriate.
           (c)       Such consultations shall assess the balance-of-payment situation of the Member concerned
and the restrictions adopted or maintained under this Article, taking into account, inter alia, 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 consultations 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 statistical 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 ofthe consulting Member.
 6.         If a Member which is not a member of the International Monetary Fund wishes to apply the
 provisions of this Article, the Ministerial Conference shall establish 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 governmental 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 ofthe 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
     4
      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 the
 fundamental interests of society.
 ---pagebreak---                                                                                                       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)          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 data 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 equitable or effective6 imposition or collection of direct taxes 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 equitable or effective imposition or collection of direct taxes include measures
uken by a Member under iu> taxation system which:
         (n        apply , 0 non-resident service suppliers in recognition of the fact that the tax obligation of non-residents
                   is determined with respect to taxable items sourced or located in the Member's territory; or
         (II ·     apply to non-residents in order to ensure the imposition or collection of taxes in the Member's territory;
                   or
         (un       apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including
                   compliance measures; or
         (iv)      apply to consumers of services supplied in or from the territory of another Member in order to ensure
                   the imposition or collection of taxes on such consumers derived from sources in the Member's territory;
                   or
         (v;       distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in
                   recognition of the difference in the nature of the tax 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 ofthe same person, in order to safeguard the Member's
                   ux base.
         Tax terms or concepts in paragraph (d) of Article XIV and in this footnote are determined according to ux definitions
and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Member uking the measure.
 ---pagebreak--- 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 taking any action 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 establishment;
                   (ii)       relating to fissionable and fusionable materials or the materials from which
                              they are derived;
                    (iii)    taken in time of war or other emergency in international relations; or
          (c)      to prevent any Member from taking 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
taken under paragraphs 1(b) and (c) and of their termination.
                                                   Article XV
                                                    Subsidies
1.        Members recognize that, in certain circumstances, subsidies may have distortive 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 take 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 consultations with that Member on such matters. Such requests shall be accorded
sympathetic consideration.
     Ά future work programme shall determine how. and in what time-frame, negotiations on such multilateral disciplines
will be conducted.
 ---pagebreak---                                                                                                   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.8
 2.         In sectors where market-access commitments are undertaken, the measures which a Member
 shall not maintain 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 sector 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 capital in terms of maximum percentage limit
                    on foreign shareholding or the total value of individual or aggregate foreign investment.
     •if a Member undertakes a market-access commitment in relation to the supply of a service through the mode of supply
referred to in subparagraph 2(a) of Article 1 and if the cross-border movement of capital is an essential pan of the service
itself, that Member is thereby commined to allow such movement of capiul. If a Member undertakes a market-access
commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(c) of Article 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 fcr the suppiy of services.
 ---pagebreak---  Page 298
                                                     Article XVII
                                                National Treatment
 1.        In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set
 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
 subject 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.
                                                       PART IV
                                     PROGRESSIVE LIBERALIZATION
                                                     Article XIX
                                     Negotiation of Specific Commitments
  1.        In pursuance ofthe 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 advantageous basis
 and to securing an overall balance of rights and obligations.
 2.         The process of liberalization shall take place with due respect for national policy objectives
 and the level of development of individual Members, both overall and in individual sectors. There
 shall be appropriate flexibility for individual developing country.Members for opening fewer sectors,
  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 objectives referred to in Article IV.
      "Specific commitments assumed under this Article shall not be cony!· · -   . .«ire any Member to compensate for any
  inherent competitive disadvanuges which result from the foreign character ot uic relevant services or service suppliers.
 ---pagebreak---                                                                                      Page 299
3.       For each round, negotiating guidelines and procedures shall be established. For the purposes
of establishing such guidelines, the Council 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 establish 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 undertakes 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 implementation 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 Anicle XVI. In this case the inscription will be considered to provide a condition or qualification
to Article XVII as well.
3.       Schedules of specific commitments shall be annexed to this Agreement and shall form an integral
pan thereof.
                                                Article XXI
                                         Modification of Schedules
 1.      (a)      A Member (referred to in this Article 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 modify or withdraw a commitment pursuant
to this Article to the Council for Trade in Services no later than three months before the intended date
of implementation of the modification or withdrawal.
2.       (a)      At the request of any Member the benefits of which under this Agreement may be affected
(referred to in this Article as an "affected 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
 ---pagebreak--- Page 300
concerned shall endeavour to maintain a general level of mutually advantageous 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 with the findings ofthe arbitration, any affected Member that participated in the arbitration
may modify or withdraw substantially equivalent benefits in conformity with those findings..
Notwithstanding Article II, such a modification or withdrawal may be implemented solely with respect
to the modifying Member.
5.       The Council for Trade in Services shall establish 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.
                                                       PART V
                                         INSTITUTIONAL PROVISIONS
                                                     Article XXII
                                                     Consultation
 1.       Each Member shall accord sympathetic consideration to, and shall afford adequate opportunity
for. consultation regarding such representations as may be made by any other Member with respect
to any matter affecting the operation of this Agreement. The Dispute Settlement Understanding (DSU)
shall apply to such consultations.
2.        The Council for Trade in Services or the Dispute Settlement Body (DSB) may. at the request
of a Member, consult with any Member or Members in respect of any matter for which it has not been
possible to find a satisfactory solution through consultation under paragraph 1.
3.        A Member may not invoke Article XVII, either under this Article or Article XXIIl. 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." 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 uxation which exist on the date of entry into force ofthe WTO
Agreement, such a maner may be brought before the Council for Trade in Services only with the consent of both parties
to such an agreement.
 ---pagebreak---                                                                                       Page 301
                                              Article XXIII
                                  Dispute Settlement and Enforcement
1.        If any Member should consider that 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 matter 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 ofthe
measure. In the event an agreement cannot be reached between the Members concerned. Article 22
ofthe DSU shall apply
                                              Article XXIV
                                      Council for Trade in Senices
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 representatives of all Members.
3.        The Chairman of the Council shall be elected bv 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 assistance 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 consultation and cooperation
with the United Nations and its specialized agencies as well as with other intergovernmental organizations
concerned with services.
 ---pagebreak--- 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 establishes 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,
               rule, 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 respect 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 establishment,
                including through
 ---pagebreak---                                                                                                        Page 303
                    (i)         the constitution, acquisition or maintenance of a juridical person, or
                     (ii)       the creation or maintenance of a branch or a representative 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;
          (0         "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
                    (ii)          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 established 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 respect 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 parts ofthe supplier located outside the termor)
where the service is supplied.
 ---pagebreak--- 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
             governmentally-owned, including any corporation, trust, 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 substantive 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.        natural 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 taxes 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.
 ---pagebreak---                                                                                    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 take 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 Anicle II ofthe 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 I of Article II
of the Agreement.
Lists of Article II Exemptions
IThe agreed lists of exemptions under paragraph 2 of Article II will be annexed here in the treaty copy
ofthe WTO Agreement!
 ---pagebreak--- Page 306
                             ANNEX ON 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 natural 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, or their temporary stay in, its territory, including those measures necessary to
 protect the integrity of. and to ensure the orderly movement of natural persons across, its borders,
 provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing
 to any Member under the terms of a specific commitment.1
    'The sole fact of requiring a visa for natural persons of certain Members and not for those of others shall not be regarded
as nullifying or impairing benefits under a specific commitment.
 ---pagebreak---                                                                                       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 settlement
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 rules, 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.
 ---pagebreak--- Page 308
                                   ANNEX ON FINANCIAL SERVICES
1.       Scope and Definition
         (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 ofthe 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 Article I of the Agreement, if a Member
allows any ofthe 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 Article 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 stability 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 prudential 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
 ---pagebreak---                                                                                      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 services, 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 otherfinancialservices (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, bilis, certificates of
                                    deposits);
                           (B)      foreign exchange;
                           (C)      derivative products including, but ncihmited v;. v.: :».·.·•>. Ô ..·: :^:.;:,iis;
 ---pagebreak--- 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 publicly or 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 trust services;
               . (xiv)     Settlement and clearing services for financial assets, including securities,
                           derivative products, and other negotiable instruments;
                 (xv)      Provision and transfer of financial information, andfinancialdata 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 activities 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.
 ---pagebreak---                                                                                  Page 311
                         SECOND ANNEX ON FINANCIAL SERVICES
1.      Notwithstanding Article IT ofthe Agreement and paragraphs 1 and 2 ofthe 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 establish any procedures necessary for the application
of paragraphs 1 and 2.
 ---pagebreak--- Page 312
             ANNEX ON NEGOTIATIONS ON MARITIME TRANSPORT SERVICES
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 maintain, shall enter
into force for international shipping, auxiliary services and access to and use of port facilities only
on:
         (a)      the implementation date to be determined under paragraph 4 ofthe Ministerial Decision
                  on Negotiations on Maritime Transport Services; or,
       ' (b)      should the negotiations not succeed, the date ofthefinalreport ofthe 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 implementation
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.
 ---pagebreak---                                                                                                       Page 313
                                    ANNEX ON TELECOMMUNICATIONS
1.        Objectives
          Recognizing the specificities ofthe 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 activities, 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 establish, 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 data transmission typically involving the real-time
transmission of customer-supplied information between 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
infrastructure 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 ensur·.* «J···: •• >. ^ligations of this Annex are applied with
respect to suppliers of public telecommunications transport networks anu serwcs by whatever measures are necessary:
 ---pagebreak---  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
            Ih 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: tariffs 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 toand 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 (0. 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;
                     (ii)         to interconnect private leased or owned circuits with public 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 consultation, in accordance with relevant provisions ofthe Agreement.
            (d)      Notwithstanding the preceding paragraph, a Member may take such measures as are
  necessary to ensure the security and confidentiality of messages, subject to the requirement that such
       2
        The term "non-discriminatory " is understood to refer to most-favoured-nation and national treatment as defined in 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 télécommunications transport networks or services under like circumsunces".
 ---pagebreak---                                                                                       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, for the 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;
                 (ν)         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 Reconstruction and Development.
         (b)     Members shall encourage and support telecommunications cooperation among developing
countries at the international, regional and sub-regional levels.
 ---pagebreak--- Page 316
        (c)      In co-operation with relevant international organizations*. Members shall make available,
where practicable, to developing countries information with respect to telecommunications services
and developments in telecommunications and information technology to assist in strengthening their
domestic telecommunications services sector.
         (d)     Members shall give special consideration to oprx)rtunities for the least-developed countries
to encourage foreign suppliers of telecommunications services to assist in the transfer of technology,
training and other activities that support the development of their telecommunications infrastructure
and expansion of their telecommunications services trade.
7.       Relation to International Organizations and Agreements
         (a)     Members recognize the importance of international standards for 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 particular 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.
 ---pagebreak---                                                                                       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 maintain, shall enter
into force for basic telecommunications only on:
         (a)     the implementation date to be determined under paragraph 5 ofthe Ministerial Decision
                 on Negotiations on Basic Telecommunications; or,
         (b)     should the negotiations not succeed, the date ofthe final report ofthe 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.
 ---pagebreak--- Page 318 ---pagebreak---                                                                         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.  Protection 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
 ---pagebreak--- Page 320
                        AGREEMENT ON TRADE-RELATED ASPECTS OF
                               INTELLECTUAL PROPERTY RIGHTS
Members,
          Desiring to reduce distortions and impediments to international trade, and taking 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 rules 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, taking into account differences in national legal systems;
          (d)     the provision of effective and expeditious procedures for the multilateral prevention
                  and settlement of disputes between governments; and
          (e)     transitional arrangements aiming at the fullest participation in the results of the
                  negotiations;
          Recognizing the need for a multilateral framework of principles, rules 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 respect 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 establish 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:
 ---pagebreak---                                                                                                      Page 321
                                                         PARTI
                            GENERAL PROVISIONS AND BASIC PRINCIPLES
                                                        Article 1
                                          Nature and Scope of Obligations
 1.       Members shallgive 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 intellectual 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 ofthe 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 Berne 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 Aspects of Intellectual Property Rights (the "Council
forTRIPS").
                                                         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 this Agreement shall derogate from existing obligations that Members
may have to each other under the Paris Convention, the Berne Convention, the Rome Convention and
the Treaty on Intellectual Property in Respect 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, natural or legal, who are domiciled or who have a real and effective industrial or
commercial establishment in that customs territory.
    Mn 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 the Berne
Convention for the Protection 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
Properry in Respect of Integrated Circuits" (IPIC Treaty) refers to the Treaty on Intellecnial Property in Respect of Integrated
Circuits, adopted at Washington on 26 May 1989. "WTO Agreement" refers to the Agreement Establishing the WTO.
 ---pagebreak--- Page 322
                                                        Article 3
                                                  National Treatment
 1.        Each Member shall accord to the nationals of other Members treatment no less favourable than
that it accords to its'own nationals with regard to the protection3 of intellectual property, subject to
the exceptions already provided in, respectively, the Paris Convention (1967), the Berne
Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated
Circuits. In respect of performers, producers of phonograms and broadcasting organizations, this
obligation only applies in respect ofthe 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 protection of intellectual property;
           (b)        granted in accordance with the provisions ofthe Berne 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 protection of intellectual property
                      which entered into force prior to the entry into force ofthe 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 the purposes of Articles 3 and 4. "protection" shall include maners affecting the availability, acquisition, scope,
 maintenance and enforcement of intellecnial property rights as well as those maners affecting the use of intellectual property
 rights specifically addressed in this Agreement.
 ---pagebreak---                                                                                      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.
                                                Anicle 6
                                               Exhaustion
         For the purposes of dispute settlement 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 propertyrightsshould 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.
 ---pagebreak--- Page 324
                                                  PART Π
                   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 Berne Convention (1971) and the
Appendix thereto. However, Members shall not have rights or obligations under this Agreement in
respect ofthe rights conferred under Article 6bis of that Convention or ofthe 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 Berne Convention (1971).
2.       Compilations of data or other material, whether in machine readable or other form, which by
reason ofthe 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 respect of computer programs, this obligation does not apply to rentals
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
 ---pagebreak---                                                                                        Page 325
years from the end ofthe 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 exclusiverightsto certain special cases which
do not conflict with a normal exploitation ofthe work and do not unreasonably prejudice the legitimate
interests of the right holder.
                                                 Anicle 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 the 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 reproduction 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 matter of broadcasts with the possibility of preventing the above acts, subject
to the provisions of the Berne 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 determined in a Member's
law. If on 15 April 1994 a Member has in force a system of equitable remuneration of right holders
in respect ofthe 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 reproduction
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 ofthe 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 ofthe 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 ofthe Beme Convention (1971) shall also apply, mutatis mutandis,
to the rights of performers and producers of phonograms in phonograms.
 ---pagebreak--- Page 326
                                    SECTION 2: TRADEMARKS
                                                Anicle 15
                                       Protectable Subject 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 particular 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 distinctiveness 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
determining whether a trademark is well-known. Members shall take account ofthe knowledge ofthe
trademark in the relevant sector of the public, including knowledge in the Member concerned which
has been obtained as a result of the promotion of the trademark.
3.       Article 6bis ofthe Paris Convention (1967) shall apply, mutatis mutandis, to goods or services
which are not similar to those in respect 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
 ---pagebreak---                                                                                      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 take account ofthe legitimate interests ofthe
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 maintaining 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 ofthe 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.
 ---pagebreak--- 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 territory, where a.
given quality, reputation or other characteristic ofthe good is essentially attributable to its geographical
origin.
2.       In respect of geographical indications. Members shall provide the legal means for interested
parties to prevent:
         (a)     the use of any means in the designation or presentation 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
                 ofthe good;
         (b)     any use which constitutes an act of unfair competition within the meaning of
                  Article \0bis ofthe Paris Convention (1967).
3.       A Member shall, ex officio if its legislation so permits or at the request of an interested party.
refuse or invalidate the registration of a trademark which contains or consists of a geographical indication
with respect to goods not originating in the territory indicated, if use ofthe indication in the trademark
for such goods in that Member is of such a nature as to mislead the public as to the true place of origin.
4.       The protection under paragraphs 1,2 and 3 shall be applicable against a geographical indication
which, although literally true as to the territory'· region or locality in which the goods originate, falsely
represents to the public that the goods originate in another territory.
 ---pagebreak---                                                                                                 Page 329
                                                       Article 23
                              Additional Protection 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 true origin ofthe 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, protection 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, taking into account the need to ensure equitable treatment ofthe 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 protection 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 ofthe provisions of this Section;
the first such review shall take place within two years ofthe 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 take
such action as may be agreed to facilitate 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 Article 42. Members may, with respect to these obligations, instead provide for
enforcement by administrative action.
 ---pagebreak--- 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 tû, a geographical indication.
6.        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 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
territory 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 ofthe protected
 indication has become generally known in that Member or after the date of registration ofthe 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.        The provisions 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
count rv.
                                 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
 ---pagebreak---                                                                                                     Page 331
differ from known designs or combinations of known design features. Members may provide that
such protection 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
particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity
to seek and obtain such protection. Members shall be free to meet this obligation through industrial
design law or through copyright law.
                                                        Article 26
                                                        Protection
 1j        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, ofthe 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 ofthe owner ofthe protected design, taking
account of .the legitimate interests of third parties.
3.        The duration of protection available shall amount to at least 10 years.
                                               SECTION 5: PATENTS
                                                       Article 27
                                              Patentable Subject 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 Article 70 and paragraph 3 of this Article, patents shall be available and patent rights
enjoyable without discrimination as to the place of invention, thefieldof 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 the treatment of humans or animals;
    5
     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.
 ---pagebreak--- Page 332
         (b)         plants and animals other than micro-organisms, and essentially biological processes
                     for the production of plants or animals other than non-biological and microbiological
                    processes. However, Members shall provide for the protection of plant varieties either
                     by patents or by an effective sui 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 subject matter of a patent is a product, to prevent third parties not having
                     the owner's consent from the acts of: making, using, offering for sale, selling, or
                  . importing6 for these purposes that product;
          (b)        where the subject matter 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 importing for these purposes at least the product obtained
                     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 art 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 ofthe patent and do not
unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate
interests of third parties.
    This right, like all other rights conferred under this Agreement in respect ofthe use, sale, importation or other distribution
of goods, is subject to the provisions of Article 6.
 ---pagebreak---                                                                                          Page 333
                                                      Article 31
                            Other Use Without Authorization of the Right Holder
         Where the law of a Member allows for other use7 of the subject matter of a patent without
the authorization of the right holder, including use by the government or third parties authorized by
the government, the following provisions shall be respected:
         (a)       authorization of such use shall be considered on its individual merits:
         (b)       such use may only be permitted if, prior to such use, the proposed user has made efforts
                   to obtain 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 anti-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 adequate protection ofthe legitimate
                   interests ofthe persons so authorized, to be terminated if and when the circumstances
                   which led 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,
                   taking 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;
    7
     "Other use" refers to use other than that allowed under Anicle 30.
 ---pagebreak--- Page 334
            (j)      any decision relating to the remuneration provided in respect 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 set 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 taken into account in determining 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 respect ofthe 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 forfeit a 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.
 ---pagebreak---                                                                                                      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 Article 28,* if the subject matter 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 obtain 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
obtained by the patented process:
           (a)      if the product obtained 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 actually 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 taken 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 3of Article 6), Article 12 and paragraph 3of Article 16 of the Treaty on Intellectual Property
in Respect 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 therightholder:9 importing, selling, or otherwise
distributing for commercial purposes a protected layout-design, an integrated circuit in which a protected
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.
 ---pagebreak--- Page 336
                                                      Article 37
                           Acts Not Requiring the Authorization ofthe Right Holder
1.         Notwithstanding Article 36, no Member shall consider unlawful the performance of any of
the acts referred to in that Article in respect of ah integrated circuit incorporating an unlawfully
reproduced layout-design or any article 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 article incorporating such an integrated circuit, that it incorporated an unlawfully
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 (a) 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 exploitation 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 ofthe first commercial exploitation wherever
in the world it occurs.
3.         Notwithstanding paragraphs 1 and 2, a Member may provide that protection shall lapse 15
years after the creation of the layout-design.
                  SECTION 7: PROTECTION OF UNDISCLOSED INFORMATION
                                                      Anicle 39
 1.        In the course of ensuring effective protection against unfair competition as provided in
Article I0fc/J of the Paris Convention (1967), Members shall protect undisclosed information in
accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance
with paragraph 3.
2.         Natural and legal persons shall have the possibility of preventing information lawfully within
their control from being disclosed to, acquired by, or used by others without their consent in a manner
contrary to honest commercial practices10 so long as such information:
     ,0
       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 parties who knew, or were grossly negligent in failing to know, that such practices were involved in
 ---pagebreak---                                                                                            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 of 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 taken 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 pertaining 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 ofthe relevant laws and
regulations of that Member.
3.        Each Member shall enter, upon request, into consultations with any other Member which has
cause to believe that an intellectual property right owner that is a national or domiciliary ofthe Member
to which the request for consultations 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.
 ---pagebreak--- Page 338
Section shall, upon request, be granted an opportunity for consultations 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 equitable.
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 propertyrightsdistinct from that 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.
 ---pagebreak---                                                                                                      Page 339
        SECTION 2: CIVIL AND ADMINISTRATIVE PROCEDURES AND REMEDIES
                                                         Article 42
                                            Fair and.Equitable Procedures
          Members shall make available to right holders" 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 detail, 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 support its claims and has specified evidence relevant to substantiation of its claims
which lies in the control ofthe opposing party, to order that this evidence be produced by the opposing
party, subject in appropriate cases to conditions which ensure the protection of confidential information.
2        In cases in which a party to a proceeding voluntarily and-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 arc not obliged to accord such authority in respect of protected subject matter
acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing
in such subject matter would entail 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 the purpose of this Part, the term "right holder" includes federations and associations having legal standing to assert
such rights.
 ---pagebreak--- Page 340
other cases, the remedies under this Part shall apply or, where th'^se 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 activity.
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 recovery 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 ofthe 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 ofthe 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 ofthe 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 ofthe infringement, to order the infringer to inform the right
holder ofthe identity of third persons involved in the production and distribution ofthe infringing goods
or services and of their channels of distribution.
                                                                                                               (2:
 ---pagebreak---                                                                                          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
oh the merits of a case, such procedures shall conform to principles equivalent in substance to those
set forth in this Section.
                               SECTION 3: PROVISIONAL MEASURES
                                                   Article 50
          The judicial authorities shall have the authority to order prompt and effective provisional
measures:
          (a)     to prevent an infringement of any intellectual property right from occurring, and in
                  particular 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 certainty 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 defendant
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
 ---pagebreak--- Page 342
reasonable period after the notification of the measures, whether these measures shall be modified,
revoked or confirmed.
5.         The applicant may be required to supply other information necessary for the identification oif
the goods concerned by the authority that will execute the provisional measures.
6.         Without préjudice to paragraph 4, provisional measures uken on the basis of paragraphs 1
and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings
leading to a decision on the merits of the case are not initiated within a reasonable period, to be
determined by the judicial authority ordering the measures where a Member's law so permits or, in
the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever
is the longer.
7.         Where the provisional measures are revoked or where they lapse due to any act or omission
by the applicant, or where it is subsequently found that there has been no infringement or threat of
infringement of an intellectual property right, the judicial authorities shall have the authority to order
the applicant, upon request of the defendant, to provide the defendant appropriate compensation for
any injury caused by these measures.
8.         To the extent that any provisional measure can be ordered as a result of administrative
procedures, such procedures shall conform to principles equivalent in substance to those set forth in
this Section.
         SECTION 4. SPECIAL REQUIREMENTS RELATED TO BORDER MEASURES12
                                                            Article 51
                                    Suspension of Release by Customs Authorities
           Members shall, in conformity with the provisions set out below, adopt procedures13 to enable
a right 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 jud icial. for the suspension by the customs authorities ofthe release into free circulation
of such goods. Members may enable such an application to be made in respect 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 part of a customs union, it shall not be required to apply the provisions of this Section at that border.
     "It is 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.
     "PFor  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 the making of that copy would have constituted an infringement
                     of a copyright or a related right under the law of the country of importation.
 ---pagebreak---                                                                                       Page 343
met. Members may also provide for corresponding procedures œnœrning 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 Article 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 ofthe 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 take 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 that 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 action 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.
 ---pagebreak--- Page 344
                                               Article 55
                                        Duration of Suspension
         If, within a period not exceeding 10 working days after the applicant has been served notice
ofthe 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 taken 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 take place upon request ofthe 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 ofthe 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 ofthe Owner ofthe Goods
        Relevant authorities shall have the authority to order the applicant to pay the importer, the
consignee and the owner ofthe 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 Inspection and Information
        Without prejudice to the protection 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 Action
        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;
 ---pagebreak---                                                                                      Page 345
         (b)      the importer and the right 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 subject to the conditions, mutatis mutandis, set out at Anicle 55 ;
         (c)      Members shall only exempt both public authorities and officials from liability, to
                  appropriate remedial measures where actions are taken or intended in good faith.
                                                 Article 59
                                                  Remedies
         Without prejudice to other rights of action open to the right holder and subject to the right
ofthe defendant to seek review by a judicial authority, competent authorities shall have the authority
to order the destruction or disposal of infringing goods in accordance with the principles set out in
Article 46. In regard to counterfeit trademark goods, the authorities shall not allow the re-exportation
of the infringing goods in an unaltered state or subject them to a different customs procedure, other
than in exceptional circumstances.
                                                 Article 60
                                            De Minimis Imports
         Members may exclude from the application ofthe 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 destruction 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.
 ---pagebreak--- 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 subject to thé right being granted or
registered, Members shall ensure that the procedures for grant or registration, subject 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
protection.
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 set 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 subject of invalidation
procedures.
                                                 PART V
                           DISPUTE PREVENTION AND SETTLEMENT
                                                Article 63
                                               Transparency
 1.      Laws and regulations, and final judicial decisions and administrative rulings of general
application, made effective by a Member pertaining to the subject matter of this Agreement (the
availability, scope, acquisition, enforcement and prevention ofthe 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 governmental 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 ofthe 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 consultations with
 ---pagebreak---                                                                                        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 action required regarding notifications pursuant
to the obligations under this Agreement stemming from the provisions of Article 6ter of the Paris
Convention (1967).
3.       Each Member shall be prepared to supply, in response to a written requestfromanother Member,
information of the sort 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 rulings 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 consultations 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
Anicle XXIII of GATT 1994 made pursuant to this Agreement, and submit its recommendations to
the Ministerial Conference for approval. Any decision ofthe 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 effective 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.
 ---pagebreak--- 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 structural 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 protection 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
ofthe provisions on product patents of Section 5 of Part II to such areas of technology for an additional
period of five years.
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 of 10 years from the date of application as defined under
paragraph 1 of Article 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 facilitate the implementation 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 protection and enforcement of intellectual property
rights as well as on the prevention of their abuse, and shall include support regarding the establishment
or reinforcement of domestic offices and agencies relevant to these matters, including the training of
personnel.
 ---pagebreak---                                                                                      Page 349
                                                PART VII
                   INSTITUTIONAL ARRANGEMENTS; FINAL PROVISIONS
                                                Article 68
                                  Council for Trade-Related Aspects of
                                       Intellectual 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 assistance 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 consultation with WIPO, the Council shall seek to establish, 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 establish 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 respect 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 Article 18 of the Berne Convention (1971), and obligations with respect to the rights
of producers of phonograms and performers in existing phonograms shall be determined solely under
Article 18 ofthe Berne Convention (1971) as made applicable under paragraph 6 of Article 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 matter which
become infringing under the terms of legislation in conformity with this Agreement, and which were
 ---pagebreak--- 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 limiution 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 equitable remuneration.,
5.       A Member is not obliged to apply the provisions of Article 11 and of paragraph 4 of Article 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 Article 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 protection 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 protection 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 patentability 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 protection referred to in subparagraph (b).
9.        Where a product is the subject of a patent application in a Member in accordance with
paragraph 8(a). exclusive marketing rights shall be granted, notwithstanding the provisions of Part VI,
for a period of five years after obtaining marketing approval in that Member or until a product 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 obtained in such other Member.
                                                  Article 71
                                           Revie*' and Amendment
 1        The Council for TRIPS shall review the implementation of this Agreement after the expiration
of the transitional period referred to in paragraph 2 of Article 65. The Council shall, having regard
to the experience gained in its implementation, review it two years after that date, and at identical
 ---pagebreak---                                                                                     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 intellectual
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 ofthe 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
                contrary 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 ι     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)    taken 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.
 ---pagebreak--- Page 352 ---pagebreak---                                                                                     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 rules and procedures of this Understanding shall apply to disputes brought pursuant to
the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this
Understanding (referred to in this Undersunding as the "covered agreements"). The rules and procedures
of this Understanding shall also apply to consultations 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 Understanding as the "WTO Agreement") and of this
Understanding uken-in isolation or in combination with any other covered agreement.
2.       The rules and procedures of this Understanding shall apply subject to such special or additional
rules and procedures on dispute settlement contained in the covered agreements as are.identified in
Appendix 2 to this Understanding. To the extent that there is a difference between the rules and
procedures of this Understanding and the special or additional rules and procedures set forth in
Appendix 2, the special or additional rules and procedures in Appendix 2 shall prevail. In disputes
involving rules and procedures under more than one covered agreement, if there is a conflict between
special or additional rules and procedures of such agreements under review, and where the parties to
the dispute cannot agree on rules and procedures within 20 days ofthe establishment of the panel, the
Chairman ofthe Dispute Settlement Body provided for in paragraph 1 of Article 2 (referred to in this
Understanding as the "DSB"), in consultation 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 rules and procedures should be used where possible,
and the rules and procedures set out in this Understanding should be used to the extent necessary to
avoid conflict.
                                                 Anicle 2
                                             Administration
 1.      The Dispute Settlement Body is hereby established to administer these rules and procedures
and, except as otherwise provided in a covered agreement, the consultation and dispute settlement
provisions ofthe covered agreements. Accordingly, the DSB shall have the authority to establish panels,
adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings 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 te'rm "Member" as used herein shall refer only to those Members that are parties 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 taken by the DSB with respect to that dispute.
 ---pagebreak--- 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 Understanding.
4.        Where the rules and procedures of this Understanding provide for the DSB to take 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 1947, and .the rules 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 rules of interpretation of public international law.
Recommendations and rulings ofthe DSB cannot add to or diminish the rights and obligations provided
iu 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 taken 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 rulings made by the DSB shall be aimed at achieving a satisfactory
settlement of the matter in accordance with the rights and obligations under this Understanding and
under the covered agreements.
5         All solutions to matters formally raised under the consultation 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 action under these
procedures would be fruitful. The aim ofthe dispute settlement mechanism is to secure a positive
solution to a dispute. A solution mutually acceptable 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 ofthe dispute settlement mechanism is usually to secure the withdrawal ofthe 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 ofthe 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 taken, formally objects to the proposed decision.
 ---pagebreak---                                                                                                  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
 the 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 ofthe 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 ofthe rules has an adverse impact on other Members
 parties 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 Understanding 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 consultations 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 settlement rules and procedures
 in effect immediately prior to the date of entry into force of the "WTO Agreement shall continue to
 apply.:
 12.       Notwithstanding paragraph 11. if a complaint based on any ofthe 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 Understanding, the corresponding provisions ofthe 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 ofthe complaining party, that time-frame may
 be extended. To the extent that there is a difference between the rules and procedures of Articles 4,
 5. 6 and 12 and the corresponding rules and procedures ofthe Decision, the latter shall prevail.
                                                         Article 4
                                                      Consultations
  1.       Members affirm their resolve to strengthen and improve the effectiveness of the consultation
 procedures employed by Members.
      This paragraph shall also be applied to disputes on which panel reports have not been adopted or fully implemented.
 ---pagebreak--- Page 356
2.         Each Member undertakes to accord sympathetic consideration to and afford adequate opportunity
for consulution regarding any representations 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 consultations 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 consultations 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 consultations
may proceed directly to request the establishment 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 ofthe measures
at issue and an indication of the legal basis for the complaint.
5.         In the course of consultations 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.        Consultations shall be confidential, and without prejudice to the rights of any Member in any
further proceedings.
7.        If the consultations fail to settle a dispute within 60 days after the date of receipt of the request
for consultations, the complaining party may request the establishment of a panel. The complaining
party may request a panel during the 60-day period if the consulting parties jointly consider that
consultations 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
ofthe 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 consultations being held pursuant to paragraph 1 of Article XXII of GATT 1994, paragraph 1
of Article XXII of GATS, or the corresponding provisions in other covered agreements4, such Member
     J
      Where the provisions of any other covered agreement concerning measures taken by regional or local governments or
authorities within the territory of a Member contain 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.
Article 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 Anicle 14:
 ---pagebreak---                                                                                                 Page 357
may notify the consulting Members and the DSB, within 10 days after the date of the circulation ot
the request for consulutions under said Article, 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 consultations is not accepted, the
applicant Member shall be free to request consulutions under paragraph 1 of Article ΧΧΠ or paragraph 1
of Article XXIII of GATT 1994, paragraph 1 of Article 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
parties to the dispute so agree.
2.        Proceedings involving good offices, conciliation and mediation, and in particular 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 consultations, 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 Article 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, Article 7; Agreement on Import Licensing Procedures,
Article 6; Agreement on Subsidies and Countervailing Measures, Article 30; Agreement on Safeguards, Article 14; Agreement
on Trade-Related Aspects of Intellecnial Property Rights. Article 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.
 ---pagebreak--- 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 esublish a panel.5
2.         The request for the establishment of a panel shall be made in writing. It shall indicate whether
consultations 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 establishment 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 ofthe relevant provisions in (name ofthe 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 rulings 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
ofthe 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 representative of
a Member or of a contracting party to GATT 1947 or as a representative to the Council or Committee
 of any covered agreement or its predecessor agreement, or in the Secretariat, taught 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 spectrum of experience.
     5
      If the complaining party so requests, a meeting of the DSB shall be convened for this purpose within IS days of the
 request, provided that at least 10 days' advance notice of the meeting is given.
 ---pagebreak---                                                                                                   Page 359
 3.         Citizens of Members whose governments6 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
to the dispute agree otherwise.
 4.         To assist in the selection of panelists, the Secreuriat shall maintain an indicative list of
 governmental and non-governmenul 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 established on 30 November 1984 (BISD 31S/9), and other rosters and indicative
 lists established under any ofthe 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 governmental and non-governmental individuals for inclusion on the
 indicative list, providing relevant information on their knowledge of international trade and ofthe sectors
•or subject matter ofthe 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 establishment 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 establishment of
a panel, at the request of either party, the Director-General, in consultation with the Chairman ofthe
 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 rules 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 ofthe DSB shall inform the Members ofthe composition ofthe panel thus formed no later
than 10 days after the date the Chairman receives such a request.
8.          Members shall undertake, as a general rule, to permit their officials to serve as panelists.
9.          Panelists shall serve in their individual capacities and not as government representatives, nor
as representatives of any organization. Members shall therefore not give them instructions 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 parties to a dispute, this provision applies to citizens of all
 member countries of the customs unions or common markets.
 ---pagebreak--- 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 taking 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 therightswhich 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 established 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 ofthe parties 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 ofthe 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 accruing to it under any covered agreement, that Member may have recourse to
normal dispute settlement procedures under this Understanding. Such a dispute shall be referred to
the original panel wherever possible.
                                                Article 11
                                            Function 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
ofthe matter before it, including an objective assessment ofthe facts ofthe 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 rulings provided for in the covered agreements.
Panels should consult regularly with the parties to the dispute and give them adequate opportunity to
develop a mutually satisfactory solution.
 ---pagebreak---                                                                                           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, taking into account the provisions of paragraph 9 of
Article 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 Secretariat 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 ofthe responding party's first submission unless the panel decides,
in fixing the timetable referred to in paragraph 3 and after consultations 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 ofthe matter among the
parties to the dispute has been found, the report ofthe 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 ofthe panel have been agreed
upon until the date the final report is issued to the parties to the dispute, shall, as a general rule, 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 consultations involving a measure taken by a developing country Member,
the parties may agree to extend the periods established in paragraphs 7 and 8 of Article 4. If, after
the relevant period has elapsed, the consulting parties cannot agree that the consultations have concluded,
the Chairman ofthe DSB shall decide, after consultation with the parties, whether to extend the relevant
period and, if so, for how long. In addition, in examining a complaint against a developing country
 ---pagebreak--- 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 Article 20 and paragraph 4 of Article 21 are not
affected by any action pursuant to this paragraph.
11.       Where one or more of the parties 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 ofthe 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 establishment 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 such 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 fully 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 ofthe Member providing
the information.
2.        Panels may seek information from any relevant source and may consult experts to obtain 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 statements made.
3.        Opinions expressed in the panel report by individual panelists shall be anonymous.
 ---pagebreak---                                                                                                      Page 363
                                                         Article 15
                                                 Interim Review Stage
 1.        Following the consideration of rebutul 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 parties 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 stage 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
noi 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 objections
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 ofthe 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 meeting7 unless a party to the dispute formally notifies the DSB of its decision
to appeal or the DSB decides by consensus not to adopt the report. If a party has notified its decision
to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion
of the appeal. This adoption procedure is without prejudice to the right of Members to express their
views on a panel report.
    7
     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 Article 16 to be met, a meeting of the DSB shall be held for this purpose.
 ---pagebreak--- Page 364
                                                Article 17
                                            Appellate Review
Standing Appellate Body
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 rotation. Such rotation shall be
determined in the working procedures ofthe 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 ofthe 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 activities 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 Article 10 may
make written submissions to, and be given an opportunity to be heard by, the Appellate Body.
5.       As a general rule, 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 ofthe Committee on Budget, Finance and Administration.
Procedures for Appellate Review
9.       Working procedures shall be drawn up by the Appellate Body in consultation with the Chairman
of the DSB and the Director-General, and communicated to the Members for their information.
 ---pagebreak---                                                                                                   Page 365
10.        The proceedings of the Appellate Body shall be confidential. The reports of the Appellate
Body shall be drafted without the presence ofthe parties to the dispute and in the light ofthe information
provided and the statements 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 findings·and 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 ofthe 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" 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.
     l(>
        With respect to recommendations in cases not involving a violation of GATT 1994 or any other cohered agreement.
see Article 26.
 ---pagebreak--- Page 366
2.        In accordance with paragraph 2 of Article 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.
                                                         Anicle 20
                                            Time-frame for DSB Decisions
           Unless otherwise agreed to by the parties to the dispute, the periodfromthe 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 rule 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 taken shall be added to the above periods.
                                                         Article 21
                       Surveillance of Implementation of Recommendations and Rulings
 1.        Prompt compliance with recommendations or rulings ofthe 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 respect of implementation
of the recommendations and rulings of the DSB. If it is impracticable to comply immediately with
the recommendations and rulings, the Member concerned 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 rulings; or, in the absence of such
                      agreement,
           (c)        a period of time determined through binding arbitration within 90 days after the date
                      of adoption of the recommendations and rulings.12 In such arbitration, a guideline for
                      the arbitrator0 should be that the reasonable period of time to implement panel or
                      Appellate Body recommendations should not exceed 15 monthsfromthe date of adoption
                      of a panel or Appellate Body report. However, that time may be shorter or longer,
                      depending upon the particular 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 parties cannot agree on an arbitrator within ten days after referring the matter 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.
 ---pagebreak---                                                                                      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 establishment
 ofthe panel by the DSB until the date of determination ofthe 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 taken 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 rulings such dispute shall be decided through
 recourse to these dispute settlement procedures, including wherever possible resort to the original panel.
 The panel shall circulate its report within 90 days after the date of referral ofthe matter to it. When
•the panel considers that it cannot provide its report within this time frame, it shall inform the DSB
 m writing ofthe reasons for the delay together with an estimate ofthe period within which it will submit
 its report.
6.        The DSB shall keep under surveillance the implementation of adopted recommendations or
 rulings. The issue of implementation of the recommendations or rulings 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 rulings shall be placed on the agenda ofthe DSB meeting
after six months following the date of establishment 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 status report in writing
of its progress in the implementation of the recommendations or rulings.
7.        If the matter is one which has been raised by a developing country Member, the DSB shall
consider what further action it might take 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 rulings 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 voluntary 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 rulings within
the reasonable period of time determined pursuant to paragraph 3 of Article 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.
 ---pagebreak--- 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 respect 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 obiigations with respect to the same sector(s), it may seek to suspend concess ions
                  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 respect 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 party 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 party decides to request authorization to suspend concessions or other obligations
                  pursuant to subparagraphs (b) or (c), it shall state 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 sectors: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 Section 7 of Part II. or the
                            obligations under Pan III, or Part IV of the Agreement on TRIPS;.
        (g)       for purposes of this paragraph, "agreement" means:
                  (i)       with respect to goods, the agreements listed in Annex 1A of the WTO
                            Agreement, taken as a whole as well as the Plurilateral Trade Agreements in
                            so far as the relevant parties to the dispute are parties to these agreements;
                  (ii)      with respect to services, the GATS;
   "The lisi in document MTN.GNS/W/I20 identifies eleven sectors.
 ---pagebreak---                                                                                                     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 other 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 party 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 arbitrator15 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 arbitrator16 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 ofthe decision ofthe arbitrator
and shall upon request, grant authorization to suspend concessions or other obligations where the request
is consistent with the decision ofthe 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 rulings provides a solution to the nullification
or impairment of benefits, or a mutually satisfactory solution is reached. In accordance with paragraph 6
of Article 21, the DSB shall continue to keep under surveillance the implementation of adopted
recommendations or rulings, 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 ruled 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
     "The expression "arbitrator" shall be interpreted as referring either to an individual or a group.
     ,6
       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.
 ---pagebreak--- Page 370
compensation and suspension of concessions or other obligations appls "in 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 rules and procedures of this
Understanding.
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 rules and procedures of this Understanding, and shall make any
                     such determination consistent with the findings contained 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 the recommendations and rulings; and
          (c)        follow the procedures set forth in Article 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 rulings within that reasonable period of time.
                                                       Article 24
                       Special Procedures Involving Least-Developed Country Members
 1.       At all stages of the determination ofthe 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 taken 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 satisfactory
solution has not been found in the course of consultations 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 parties to settle the dispute, before a request for a panel
    ,T
      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 this paragraph, the provisions of such
covered agreement shall prevail.
 ---pagebreak---                                                                                        Page 371
is made. The Director-General or the Chairman ofthe 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 facilitate
the solution of certain 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
•resort to arbitration shall be notified to all Members sufficiently in advance ofthe actual commencement
of the arbitration process.
3.        Other Members may become party to an arbitration proceeding only upon the agreement of
the parties 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.        Articles 21 and 22 of this Understanding shall apply mutatis mutandis to arbitration awards.
                                                  Anicle 26
1.        Son-Violation Complaints of the Type Described in Paragraph 1φ) of Article XXIII of
          GATT 1994
          Where the provisions of paragraph 1(b) of Article XXIII of GATT 1994 are applicable to a
covered agreement, a panel or the Appellate Body may only make rulings and recommendations where
a party to the dispute considers that any benefit accruing 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 ofthe 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 Understanding shall apply, subject to the following:
          (a)      the complaining party shall present a detailed 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, ofthe 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;
 ---pagebreak--- Page 372
         (d)     notwithsunding the provisions of paragraph 1 of Article 22, compensation may be
                 part of a mutually satisfactory adjustment as final settlement of the dispute.
2.       Complaints of the Type Described in Paragraph 1 (c) of Article XXIII 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 rulings and recommendations where a party considers that
any benefit accruing 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
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 party considers and
a panel determines that the matter is covered by this paragraph, the procedures of this Understanding
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 rules and procedures conuined in the Decision
of 12 April 1989 (BISD 36S/61-67) shall apply to consideration for adoption, and surveillance and
implementation of recommendations and rulings. The following shall also apply:
         (a)     the complaining party shall present a detailed justification in support of any argument
                 made with respect to issues covered under this paragraph;
         (b)     in cases involving matters covered by this paragraph, if a panel finds that cases also
                 involve dispute settlement 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 Secretariat 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 assistance in respect of dispute settlement
to developing country Members. To this end, the Secretariat 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 Secretariat shall conduct special training courses for interested Members concerning these
dispute settlement procedures and practices so as to enable Members' experts to be better informed
in this regard.
 ---pagebreak---                                                                                    Page 373 ·
                                              APPENDIX 1
                      AGREEMENTS COVERED BY THE UNDERSTANDING
(A)      Agreement Establishing 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:         Understanding on Rules 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
ofthe Understanding to the individual agreement, including any special or additional rules or procedures
for inclusion in Appendix 2, as notified to the DSB.
 ---pagebreak--- Page 374
                                             APPENDIX 2
                    SPECIAL OR ADDITIONAL RULES AND PROCEDURES
                        CONTAINED IN THE COVERED AGREEMENTS
Agreement                                                  Rules and Procedures
Agreement on the Application of Sanitary
        and Phytosaniury Measures                          11.2
Agreement on Textiles and Clothing                         2.14,2.21,4.4,5.2,5.4,5.6,6.9,
                                                           6.10,6.11, 8.1 through 8.12
Agreement on Technical Barriers to Trade
                                                           14.2 through 14.4, Annex 2
Agreement on Implementation of Article VI
        of GATT 1994
                                                           17.4 through 17.7
Agreement on Implementation of Article VII
        of GATT 1994
                                                           19.3 through 19.5, Annex 11.2(f), 3, 9, 21
Agreement on Subsidies and Countervailing Measures 4.2 through4.12, 6.6,7.2 through 7.10, 8.5,
                                                           footnote 35, 24.4, 27.7, Annex V
General Agreement on Trade in Services                     XXII.3, XXIII:3
        Annex on Financial Services                        4
        Annex on Air Transport Services                    4
Decision on Certain Dispute Settlement
  Procedures for the GATS                                   1 through 5
        The list of rules and procedures in this Appendix includes provisions where only a part ofthe
provision may be relevant in this context.
        Any special or additional rules or procedures in the Plurilateral Trade Agreements as determined
by the competent bodies of each agreement and as notified to the DSB.
 ---pagebreak---                                                                                        Page 375
                                               APPENDIX 3
                                       WORKING PROCEDURES
1.     In its proceedings the panel shall follow the relevant provisions of this Undersunding. In addition,
the following working procedures shall apply.
2.     The panel shall meet in closed session. The parties to the dispute, and interested parties, 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 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 which that Member has designated as confidential. Where a party 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 parties, the parties to the dispute shall
transmit to the panel written submissions in which they present the facts ofthe casé 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 parties 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 meeting of the panel set aside
for that purpose. All such third parties may be present during the entirety of this session.
?.     Formal rebuttals shall be made at a second substantive meeting of the panel. The party complained
against shall have the right to take the floor first to be followed by the complaining party. The parties
shall submit, prior to that meeting, written rebuttals to the panel.
8      The panel may at any time put questions to the parties and ask them for explanations either in
the course of a meeting with the parties or in writing.
9      The parties to the dispute and any third party invited to present its views in accordance with
Article 10 shall make available to the panel a written version of their oral statements.
 10    In the interest of full transparency, the presentations, rebuttals and statements referred to in
paragraphs 5 to 9 shall be made in the presence of the parties. Moreover, each party's written
submissions, including any comments on the descriptive part ofthe report and responses to questions
put by the panel, shall be made available to the other party or parties.
 11.   Any additional procedures specific to the panel.
 ---pagebreak--- Page 376
12.    Proposed timeuble for panel work:
       (a)    Receipt of first written submissions of the parties:
              (1)     complaining Party:                                                   3-6 weeks
              (2)    "Party complained against:                                            2-3 weeks
       (b)    Date, time and place of first substantive meeting
              with the parties; third party session:                                       1-2 weeks
       (c)    Receipt of written rebuttals of the parties:                                 2-3 weeks
       (d)    Date, time and place of second substantive
              meeting with the parties:                                                    1-2 weeks
       (e)    Issuance of descriptive part of the report to the parties:                   2-4 weeks
       (f)    Receipt of comments by the parties on the
              descriptive part of the report:                                              2 weeks
       (g)    Issuance ofthe interim report, including the
              findings and conclusions, to the parties:                                    2-4 weeks
       (h)    Deadline for party to request review of part(s) of report:                   1 week
       (i)    Period of review by panel, including possible
              additional meeting with parties:                                             2 weeks
       (j)    Issuance of final report to parties to dispute:                              2 weeks
       (k)    Circulation of the final report to the Members:                              3 weeks
       The above calendar may be changed in the light of unforeseen developments. Additional meetings
with the parties shall be scheduled if required.
 ---pagebreak---                                                                                      Page 377
                                              APPENDIX 4
                                       EXPERT REVIEW GROUPS
       The following rules and procedures shall apply to expert review groups established 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 ofthe 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 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 instructions 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
ofthe information will be provided by the government, organization or person supplying the information.
6.     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.
 ---pagebreak--- Page 378 ---pagebreak---                                                                                       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 torales,disciplines and commitments made under the Multilateral
Trade Agreements and, where applicable, the Plurilateral Trade Agreements, and hence to the smoother
functioning ofthe multilateral trading system, by achieving greater transparency in, and understanding
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 ofthe wider economic and developmental needs, policies and objeaives
of the Member concerned, as well as of its external environment. However, the function ofthe review
mechanism is to examine the impact of a Member's trade policies and practices on the multilateral
trading system!
Β        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
implementation of domestic transparency must be on a voluntary basis and uke account of each Member's
legal and political systems.
C.        Procedures for review
          (i )    The Trade Policy Review Body (referred to herein as the "TPRB") is hereby esublished
to carry out trade policy reviews.
          (ii)    The trade policies and practices of all Members shall be subject 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 representative period, will be the determining factor
 in deciding on the frequency of reviews. The first four trading entities so identified (counting the
European Communities as one) shall be subject 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 ofthe individual Members. Exceptionally, in the event
of changes in a Member's trade policies or practices that may have a significant impact on its trading
partners, the Member concerned may be requested by the TPRB, after consultation, to bring forward
its next review.
 ---pagebreak--- Page 380
          (iii)    Discussions in the meetings ofthe 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 establish a basic plan for the conduct ofthe 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, acting in their personal capacity,
shall introduce the discussions in the TPRB.
          (v)      The TPRB shall base its work on the following documentation:
                   (a)      a full report, referred to in paragraph D, supplied by the Member or Members
                            under review;
                   (b)      a report, 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
                            concerned. The Secretariat should seek clarification from 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
ofthe respective meeting of the TPRB, shall be published promptly after the review.
          (vii)    These documents will be forwarded to the Ministerial Conference, which shall take
note of them.
D.      . Reporting
          In order to achieve the fullest possible degree of transparency, each Member shall report regularly
to the TPRB. Full reports shall describe the trade policies and practices 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 onthe Outline Format for Country Reports established 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 1 and, 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 statistical information will be provided according to the agreed format.
Particular account shall be taken of difficulties presented to least-developed country Members in
compiling their reports. The Secreuriat shall make available technical assisunce on request to developing
country Members, and in particular to the least-developed country Members. Information contained
in reports should to the greatest extent possible be coordinated with notifications made under provisions
ofthe Multilateral Trade Agreements and, where applicable, the Plurilateral Trade Agreements.
E.        Relationship with the balance-of-payments provisions of GATT 1994 and GATS
          Members recognize the need to minimize the burden for governments also subject to full
consultations under the balance-of-payments provisions of GATT 1994 or GATS. To this end, the
Chairman ofthe TPRB shall, in consultation with the Member or Members concerned, and with the
Chairman ofthe Committee on Balance-of-Payments Restrictions, devise administrative arrangements
that harmonize the normal rhythm ofthe trade policy reviews with the timetable for balance-of-payments
consultations but do not postpone the trade policy review by more than 12 months.
 ---pagebreak---                                                                                  Page 381
F.       Appraisal ofthe Mechanism
         The TPRB shall undertake an appraisal ofthe operation ofthe TPRM not more than five years
after the entry into force of the Agreement Establishing 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.
 ---pagebreak--- Page 382 ---pagebreak---                                                                               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.
 ---pagebreak--- Page 384 ---pagebreak---                                                                                         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 contained in paragraphs 2(d), 6 and 8 ofthe Decision of 28 November 1979 on Differential
and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries;
         Having regard to the commitment of the participants as set out in Section Β (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 acceptance of these instruments, the least-developed countries, and for
so long as they remain in that category, while complying with the general rules 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 Establishing the World Trade
Organization.
2.      Agree that:
         (i)     Expeditious implementation of all special and differential measures taken in favour
                 of least-developed countries including those taken within the context of the Uruguay
                 Round shall be ensured through, inter alia, regular reviews.
         (ii)    To the extent possible, MFN concessions on tariff and non-tariff measures agreed in
                 the Uruguay Round on products of export interest to the least-developed countries may
                 be 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 rules 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 assistance
                 in the development, strengthening-and diversification of their production and export
 ---pagebreak--- Page 386
                bases including those of services, as well as in trade promotion, to enable them to
                maximize the 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 facilitate the expansion of trading opportunities in
favour of these countries.
 ---pagebreak---                                                                                       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
interactions between the economic policies pursued by individual countries, including interactions between
the structural, 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
t.o the healthy growth and development of their own economies and ofthe 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 andfinancialconditions,
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 ofthe 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
support to net food-importing developing countries facing short-term costs arising from agricultural
trade reforms.
3         The positive outcome ofthe 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 all 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 ofthe 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 rules and disciplines. These
improvements mean that trade policy can in the future play a more substantial rôle in ensuring the
coherence of global economic policymaking.
4         Ministers recognize, however, that difficulties the origins of which lie outside the trade field
cannot be redressed through measures uken in the tradefieldalone. 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 ineach 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 monetary 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 Director-General of the WTO to review with the Managing Director of
the International Monetary Fund and the President ofthe World Bank, the implications ofthe 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.
 ---pagebreak--- Page 388
         (21
 ---pagebreak---                                                                                         Page 389
                           DECISION ON NOTIFICATION PROCEDURES
         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 Establishing
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 undertaking 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 ofthe Secretariat.
While Members will continue to follow existing notification procedures, the Secretariat shall ensure
that the central registry records such elements ofthe 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 ofthe 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.
 ---pagebreak--- Page 390
ΠΙ.    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.
 ---pagebreak---                                                                                                   Page 391
                                                          ANNEX
                             INDICATIVE LIST1 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, tax 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 ofthe WTO Agreement.
 ---pagebreak--- Page 392 ---pagebreak---                                                                                    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 Monetary 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 ofthe 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
ofthe 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 Monetary Fund, with regard to the areas covered by the Multilateral Trade
Agreements in Annex 1A ofthe 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.
 ---pagebreak--- Page 394 ---pagebreak---                                                                                         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 implementation of the results of the Uruguay Round
as a whole will generate increasing opportunities for trade expansion and economic growth to the benefit
of all participants.
2.        Ministers recognize that during the reform programme leading to greater liberalization of trade
in agriculture least-developed and net food-importing developing countries may experience negative
effects in terms of the availability of adequate supplies of basic foodstuffs from external sources on
reasonable terms and conditions, including short-term difficulties in financing normal levels of commercial
imports 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 assistance 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 established periodically by the Committee 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 assistance 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 take note of paragraph 37 ofthe report
of the Director-General to the CONTRACTING PARTIES to GATT 1947 on his consultations with the
Managing Director of the International Monetary 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.
 ---pagebreak--- Page 396 ---pagebreak---                                                                                       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
ofthe Agreement on Textiles and Clothing shall notify full deuils ofthe actions to be taken pursuant
to paragraph 6 of Article 2 of that Agreement to the GATT Secretariat 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 established, for the
purposes of paragraph 21 of Article 2 of the Agreement on Textiles and Clothing.
 ---pagebreak--- Page 398 ---pagebreak---                                                                                     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 understanding 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;
       ">       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 standardizing bodies to
                         give for each standard mentioned in the work programme an (alpha)numeric
                         indication of the subject matter;
                (b)      a stage code system which would allow standardizing bodies to give for each
                         standard mentioned in the work programme an (alpha)numeric indication of
                         the stage of development ofthe standard; for this purpose, at least five sUges
                         of development should be distinguished: (/) the stage at which the decision
                         to develop a standard has been taken, 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 stage at which the period
                         for the submission of comments has started, but has not yet been completed;
                         (4) the stage at which the period for the submission of comments has been
                         completed, but the standard has not yet been adopted; and (5) the stage at
                         which the standard has been adopted;
                (c )     an identification system covering all international standards which would allow
                         standardizing bodies to give for each sundard mentioned in the work
                         programme an (alpha)numeric indication of the international standard(s) used
                         as a basis;
                the ISO/IEC Information Centre shall promptly convey to the Secretariat copies of
                any notifications referred to in paragraph C of the Code of Good Practice;
                the ISO/IEC Information Centre shall regularly publish the information received in
                the notifications made to it under paragraphs C and J ofthe 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.
 ---pagebreak--- Page 400
                            DECISION ON REVIEW OF THE ISO-IEC
                             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 settlement, at least once a year review the publication provided by the
ISO/IEC Information Centre on information 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 facilitate this discussion, the Secretariat shall provide a list by Member of all
standardizing bodies that have accepted the Code, as well as a list of those standardizing bodies that
have accepted or withdrawn from the Code since the previous review.
         The Secreuriat shall also distribute promptly to the Members copies ofthe notifications it receives
from the ISO/IEC Information Centre.
 ---pagebreak---                                                                                    Page 401
                            DECISION ON ANTI-CIRCUMVENTION
Ministers,
        Noting that while the problem of circumvention of anti-dumping duty measures formed part
ofthe negotiations which preceded the Agreement on Implementation of Article VI of GATT 1994,
negotiators were unable to agree on specific text.
        Mindful ofthe desirability ofthe 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.
 ---pagebreak--- 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 standard of review in paragraph 6 of Article 17 ofthe Agreement on Implementation 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.
 ---pagebreak---                                                                                     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 settlement pursuant to the Agreement on
Implemenution of Anicle 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.
 ---pagebreak--- Page 404 ---pagebreak---                                                                                    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 Implementation 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 the truth or accuracy of the particulars or of documents produced by traders in support of
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 ofthe 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 ofthe 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 ofthe 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 Anicle 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 ofthe 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.
 ---pagebreak--- 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 Committee on Customs Valuation established
under the Agreement on Implementation of Article VII of GATT 1994, for adoption.
         Where a developing country makes a reservation to reuin officially established 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 ofthe development,financialand trade needs ofthe 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 of 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 importations
by sole agents, sole distributors and sole concessionaires.
 ---pagebreak---                                                                                       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 set out below.
The Council for Trade in Services,
         Acting pursuant to Article XXIV with a view to facilitating 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 establish 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 earn1 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 andthe operaiion ofthe 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 conduct 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 assistance to developing country Members and developing countries
                 negotiating accession to the Agreement Establishing the World Trade Organization
                 in respect ofthe application of obligations or other matters affecting trade in services
                 in the sector concerned; 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 established a Committee on Trade in Financial Services which will have the
responsibilities listed in paragraph 2.
 ---pagebreak--- 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.
The 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 XXIIl,
         Decides as follows.
 1.      A roster of panelists shall be established to assist in the selection of panelists.
2.       To this end, Members may suggest names of individuals possessing the qualifications referred
to in paragraph 3 for inclusion on the roster, and shall provide a curriculum vitae of their qualifications
including, if applicable, indication of sector-specific expertise.
3.       Panels shall be composed of well-qualified governmenul and/or non-governmental 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 representatives 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.
5.       The Secretariat shall maintain the roster and shall develop procedures for its administration
in consultation with the Chairman of the Council.
 ---pagebreak---                                                                                     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 take 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 thefirstbiennial meeting ofthe Ministerial
Conference after the entry into force ofthe Agreement Establishing the World Trade Organization.
 ---pagebreak--- Page 410
        DECISION ON NEGOTIATIONS ON MOVEMENT OF 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 ofthe objectives ofthe 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 Natural 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.
 ---pagebreak---                                                                                       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 Agreement, Members shall be free to improve, modify or withdraw all or part of their
commitments in this 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 rer· .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.
 ---pagebreak--- 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 time as the
Agreement Esublishing the World Trade Organization (hereinafter referred to as the "WTO Agreement"),
         Decide as follows:
 1.       Negotiations shall be entered into on a voluntary basis in the sector 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 established 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 Commuruties
which announce their intention to participate. To date, the following have announced their intention
to take part in the negotiations:
         Argentina, Canada, European Communities and their member States. 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 itsfirstnegotiating 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 ofthe 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 implementation 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)
 ---pagebreak---                                                                                  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
relevant to the fulfilment of paragraph 7. Such notifications shall be deemed to have been submitted
to the NGMTS upon their receipt by the Secretariat.
 ---pagebreak---  Page 414
            DECISION ON NEGOTIATIONS ON BASIC TELECOMMUNICATIONS
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 ofthe General Agreement on 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 States.
 Further notifications of intention to participate shall be addressed to the depositary ofthe 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 ofthe 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 to all the provisions of the Agreement.
 7.        Commencing immediately and continuing until the implementation 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 governmental arrangements
  regarding the provision of basic telecommunications services.
  8.       The implemenution of paragraph 7 shall be subject 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 Secretariat.
 ---pagebreak---                                                                                        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.
The Council for Trade in Sennces,
         Recognizing the impact of regulatory measures relating to professional qualifications, technical
standards and licensing on the expansion of trade in professional services;
         Desiring to establish multilateral disciplines with a view to ensuring that, when specific
commitments are undertaken, such regulatory 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 zpd 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 facilitating 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 effect to paragraph 5 of Article VII;
         (c)     facilitating the effective application of paragraph 6 of Article VI ofthe Agreement by
                 establishing guidelines for the recognition of qualifications.
In elaborating these disciplines, the Working Party shall take account of the importance of the
governmental and non-governmental bodies regulating professional services.
 ---pagebreak--- Page 416 ---pagebreak---                                                                                         Page 417
                                  DECISION ON ACCESSION TO THE
                        AGREEMENT ON GO\TRNMENT PROCUREMENT
 1.      Ministers invite the Committee on Government Procurement established under the Agreement
on Government Procurement in Annex 4(b) ofthe 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 ofthe Agreement,
                    in particular Article I and. where appropriate. Article 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 Parties to the Agreement, so requests. The
                   working party should examine: (/) the coverage offer made by the applicant Member;
                   and (//) relevant information pertaining to export opportunities in the markets ofthe
                   Parties, taking into account the existing and potential export capabilities ofthe applicant
                   Member and export opportunities for the Parties in the market ofthe applicant Member;
         (e)       upon a decision by the Committee agreeing to the terms of accession including the
                   coverage lists ofthe 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;
         (0        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 the Director-General ofthe WTO would be carried
                   out by the Director-General to the CONTRACTING PARTIES to the GATT 1947.
2.        It is noted that Committee 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.
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      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 thefieldof dispute settlement shall remain in effect until the date of entry into force ofthe 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 the 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 Establishing the World Trade Organization, and to take a decision on the occasion of its
first meeting after the completion ofthe review, whether to continue, modify or terminate such dispute
settlement rules and procedures.
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              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.      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 ofthe Agreement, the following shall apply:
         Each Member shall list in its schedule pertaining tofinancialservices existing monopoly rights
         and shall endeavour to eliminate them 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) ofthe Annex.
         Financial Services purchased by Public Entities
2.       Notwithstanding Article XIII ofthe 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 offinancialservices to supply, as a principal,
through an intermediary or as an intermediary, and under terms and conditions that accord national
treatment, the following services:
 ---pagebreak--- 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;
         (c)      provision and transfer offinancialinformation and financial data processing as referred
                  to in subparagraph 5(a)(xv) ofthe 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
         (c)      subparagraphs 5(a)(v) to (xvi) of the Annex.
         Commercial Presence
5.        Each Member shall grant financial service suppliers of any other Member the right to establish
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 ofthe establishment
and expansion of a commercial presence in so far as they do not circumvent the Member's obligation
under paragraph 5 and they are consistent with the other obligations ofthe Agreement.
          New Financial Services
7         A Member shall permitfinancialservice suppliers of any other Member esublished in its territory
to offer in its territory any new financial service.
          Transfers of Information and Processing of Information
8         No Member shall take measures that prevent transfers of information or trie processing of
financial information, including transfers of data by electronic means, or that, subject 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 personal data, personal privacy and the confidentiality of individual
 records and accounts so long as such right is not used to circumvent the provisions ofthe Agreement.
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         Temporary Entry of Personnel
9.      (a)       Each Member shall permit temporary entry into its territory of the fol lowing personnel
                  of a financial service supplier of any other Member that is esublishing or has established
                 a commercial presence in the territory of the Member:
                  (i)      senior managerial personnel possessing proprietary information essential to
                           the establishment, control and operation ofthe services ofthe financial service
                           supplier; and
                  (ii)     specialists in the operation of the financial service supplier.
         (b)      Each Member shall permit, subject to the availability of qualified personnel in its
                 territory, temporary entry into its territory ofthe 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-discrimin^iory 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 determined by the Member, all thefinancialservices
                 permitted by the Member;
        (b)       non-discriminatory measures that limit the expansion of the activities offinancialservice
                  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 taken 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
ofthe Member, provided that this commitment does not result in unfair discrimination against financial
service suppliers of the Member applying such measures.
 ---pagebreak--- 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 facilities.
2.       When membership or participation in, or access to, any self-regulatory 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 ofthe 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 service 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 afinancialnature, including services related to existing
and new products or the manner in which a product is delivered, that is not supplied by any financial
service supplier in the territory of a particular Member but which is supplied in the territory of another
Member.
 ---pagebreak---  ---pagebreak---                                                                 ISSN 0254-1483
                                                       COM(94) 143 τελικό
                                                             ΕΓΓΡΑΦΑ
GR                                                                         11
                              Apifl. καταλόγου : CB-CO-94-153-GR-C
                                                        ISBN 92-77-67674-4
Υπηρεσία EJUQ-TIUCOV Εκδόοεων ίων Ευρωπαϊκών Κοινοτήτων
1 -2985 Luxembourg