World Trade Organization
BASIC INSTRUMENTS AND SELECTED DOCUMENTS
Volume 5
Protocols, Decisions, Reports
1999
GENEVA, AUGUST 2006
in the series of the WTO Basic Instruments and Selected Documents, the following publications are available in English, French and Spanish and can be obtained from Bernan Associates or from the WTO.
BISD 1995, Protocols, Decisions Reports, etc., published in 1995 iSBN 92-870-1226-1 - ISSN 1726-2917 BISD 1996, Protocols, Decisions, Reports, etc., published in 1996 iSBN 92-870-3302-1 - ISSN 1726-2917 BISD 1997, Protocols, Decisions, Reports, etc., published in 1997 iSBN 92-870-3319-6 - ISSN 1726-2917 BISD 1998, Protocols, Decisions, Reports, etc., published in 1998 iSBN 92-870-3334-X - ISSN 1726-2917 BISD 1999, Protocols, Decisions, Reports, etc., published in 1999 iSBN 1-59888-133-7 - ISSN 1726-2917
PREFACE
The 1999 volume of the WTO Basic Instruments and Selected Documents (BISD) contains Protocols, Decisions and Reports adopted in 1999. Certain documents have been numbered or renumbered to simplify indexing. WTO panel and Appellate Body reports, as well as arbitration awards, can be found in the Dispute Settlement Reports (DSR) series co-published by the WTO and Cambridge University Press.
WTO BISD 1999 v
Table of Contents
TABLE OF CONTENTS WTO - BISD 1999 Page
Members; Observer governments ...... xi
OFFICERS Officers of the Ministerial Conference ...... 1 - Third Session, Seattle 1999 Officers of Other WTO Bodies ...... 2 LEGAL INSTRUMENTS Protocol of Accession of Estonia ...... 5 Protocol of Accession of Georgia ...... 7 Procès-Verbal of Rectification relating to the Protocol of Accession of Georgia ...... 9 Protocol of Accession of Jordan ...... 10 Certifications of Modifications and Rectifications of Schedules of Concessions to the General Agreement on Tariffs and Trade 1994 ...... 12 DECISIONS AND REPORTS
Accession estonia - Report of the Working Party ...... 13 - Decision of the General Council on 21 May 1999 ...... 70 georgia - Report of the Working Party ...... 71 - Decision of the General Council on 6 October 1999 ...... 141 Jordan - Report of the Working Party ...... 142 - Decision of the General Council on 17 December 1999 ...... 230
General Council review of the Dispute Settlement Understanding...... 231 appointment of the next Director-General ...... 234
Dispute Settlement Body adoption of the Agenda ...... 235
WTO BISD 1999 vii Table of Contents
Competence to review the legal validity of a request to authorize the suspension of concessions or other obligations ...... 236 relationship between Articles 21.5 and 22 of the DSU ...... 237 extension for the application of the Rules of Conduct ...... 238 Time-periods for appeal expiring in the month of August ...... 239 review of the Dispute Settlement Understanding ...... 240 appointment of Appellate Body Members ...... 242
Trade Policy Review Body appraisal of the Operation of the Trade Policy Review Mechanism - Report to Ministers ...... 243
Council for Trade in Goods illustrative List of Relationships between Governments and State-Trading Enterprises – Adopted on 15 October 1999 ...... 248
Committee on Market Access dissemination of the Integrated Database - Adopted on 31 May 1999 ...... 254 Consolidated Tariff Schedules Database - Agreed on 22 June 1999 ...... 267 - Statement by the Chairman of the Committee on Market Access relating to the Consolidated Tariff Schedules Database ...... 315
Committee on Subsidies and Countervailing Measures Supplemental Report of the Informal Group of Experts on Calculation Issues Related to Annex IV of the Agreement on Subsidies and Countervailing Measures ...... 316
Committee On Budget, Finance and Administration abstract of the Report - Adopted by the General Council on 17 December 1999...... 325
Council For Trade In Services Communication from Members which have accepted the Fifth Protocol to the General Agreement on Trade in Services ...... 330 decision on Acceptance of the Fifth Protocol to the General agreement on Trade in Services - Adopted on 15 February 1999 ...... 330 decision on Domestic Regulation - Adopted on 26 April 1999 ...... 331
viii WTO BISD 1999 Table of Contents
Second Decision on Negotiations on Emergency Safeguard Measures - Adopted on 24 June 1999 ...... 332 decision on the Acceptance of the Fifth Protocol - Adopted on 21 September 1999 ...... 333 decision on Procedures for the Implementation of Article XXI of the General Agreement on Trade in Services (GATS) - Adopted on 19 July 1999 ...... 333 Procedures for the Implementation of Article XXI of the General Agreement on Trade in Services (GATS) - (Modification of Schedules) - Adopted on 19 July 1999...... 334
Waivers implementation of the Harmonized Commodity Description and Coding System ...... 339 renegotiation of Schedules ...... 339 introduction of Harmonized System Changes into WTO Schedules of Tariff Concessions on 1 January 1996 ...... 339 Other waivers: - Developing Countries - Preferential Tariff Treatment for least-Developed Countries ...... 340 Peru - Agreement on Implementation of Article VII of GATT 1994 ...... 340
DECISIONS AND REPORTS NOT INCLUDED ...... 341
INDEX ...... 345
WTO BISD 1999 ix
WTO MEMBERS AND OBSERVERS (as at 31 December 1999)
A. MEMBERS (135)
Angola Dominica Korea, Qatar Antigua and Dominican republic of Romania Barbuda Republic Kuwait Rwanda Argentina Ecuador Kyrgyz Republic Saint Kitts and Australia Egypt Latvia Nevis Austria El Salvador Lesotho Saint Lucia Bahrain Estonia Liechtenstein Saint Vincent and Bangladesh European Luxembourg the Grenadines Barbados Communities Macau, China Senegal Belgium Fiji Madagascar Sierra Leone Belize Finland Malawi Singapore Benin France Malaysia Slovak Republic Bolivia Gabon Maldives Slovenia Botswana The Gambia Mali Solomon Islands Brazil Germany Malta South Africa Brunei Ghana Mauritania Spain Darussalam Greece Mauritius Sri Lanka Bulgaria Grenada Mexico Suriname Burkina Faso Guatemala Mongolia Swaziland Burundi Guinea-Bissau Morocco Sweden Cameroon Guinea, Mozambique Switzerland Canada republic of Myanmar Tanzania Central African Guyana Namibia Thailand Republic Haiti Netherlands Togo Chad Honduras New Zealand Trinidad and Chile Hong Kong, Nicaragua Tobago Colombia China Niger Tunisia Congo Hungary Nigeria Turkey Costa Rica Iceland Norway Uganda Côte d’Ivoire India Pakistan United Arab Cuba Indonesia Panama Emirates Cyprus Ireland Papua New United Kingdom Czech Republic Israel Guinea United States Democratic Italy Paraguay Uruguay Republic of the Jamaica Peru Venezuela Congo Japan Philippines Zambia Denmark Kenya Poland Zimbabwe Djibouti Portugal
WTO BISD 1999 xi B. OBSERVERS (36)
Albania Former Yugoslav Rep. of Samoa Algeria Macedonia Saudi Arabia Andorra Georgia Separate Customs Armenia Holy See Territory of Taiwan, Azerbaijan Jordan Penghu, Kinmen and Belarus Kazakhstan Matsu Bhutan Laos, P.D.R. of Seychelles Bosnia and Herzegovina Lebanon Sudan Cambodia Lithuania Tonga Cape Verde Moldova Ukraine China Nepal Uzbekistan Croatia Oman Vanuatu Ethiopia Russian Federation Viet Nam Yemen
xii WTO BISD 1999 OFFICERS OF THE MINISTERIAL CONFERENCE
Third Session (Seatle, 30 November – 3 December 1999)
Chairperson:
Ms. Charlene Barshefsky (United States)
Vice-Chairpersons:
Mr. Aboulaye Abdoulkader Cisse (Burkina Faso)
Mrs. Marta Lucia Ramirez de Rincón (Colombia)
Mr. Abdul Razak Dawood (Pakistan)
WTO BISD 1999 OFFICERS OF OTHER WTO BODIES (1999)
General Council Mr. Ali Said Mchumo (Tanzania) Dispute Settlement Body Mr. Nobutoshi Akao (Japan) followed by Mr Kåre Bryn (Norway) Trade Policy Review Body Mr. Jean-Marie Noirfalisse (Belgium)
Council for Trade in Goods Mr. Roger Farrell (New Zealand) - Committee on Agriculture Mr. Nestor Osorio Londoño (Colombia) - Committee on Anti-Dumping Practices Mr. Milan Hovorka (Czech Republic) - Committee on Customs Valuation Mr. Edward Brown (United Kingdom) - Committee on Import Licensing Mrs. Marie Gosset (Côte d’Ivoire) - Committee on Market Access Mr. Pedro da Costa e Silva (Brazil) - Committee on Rules of Origin Mr. Sandy Moroz (Canada) - Committee on Safeguards Mr. Hamish McCormick (Australia) - Committee on Sanitary and Phytosanitary Measures Mr. Attie Swart (South Africa) - Committee on Subsidies and Countervailing Measures Mr. Jan Söderberg (Sweden) - Committee on Technical Barriers to Trade Mr. Mohan Kumar (India) - Committee on Trade-Related investment Measures Mr. Leo Palma (Philippines) - Working Party on Preshipment Inspection Mr. Edward Brown (United Kingdom) - Working Party on State Trading Enterprises Mr. Bernard Kutten (Netherlands) - Committee of Participants on the expansion of Trade in Information Technology Products Mr. Yair Shiran (Israel)
Council for Trade in Services Mr. Stuart Harbinson (Hong Kong, China) - Committee on Trade in Financial Services Mr. Juan A. Marchetti (Argentina) - Committee on Specific Commitments Mr. Jean Le Cocguic (France) - Working Party on GATS Rules Mr. Siva Somasundram (Singapore)
WTO BISD 1999 - Working Party on Professional Services replaced by Working Party on Domestic regulation Mr. Paul Robertson (Canada)
Council for Trade-Related Aspects Mr. Carlos Pérez del Castillo of Intellectual Property Rights (Uruguay) Committee on Balance-of-Payments Restrictions Mr. Tomasz Jodko (Poland) Committee on Budget, Finance and Mrs. Laurence Dubois-Destrizais Administration (France) Committee on Regional Trade Agreements Mr. Krirk-Krai Jirapaet (Thailand) Committee on Trade and Development Mrs. Absa Claude Diallo (Senegal) - Sub-Committee on Least-Developed Countries Mr. Benedikt Jónsson (Iceland) Committee on Trade and Environment Mr. István Major (Hungary) Working Group on the Relationship between Trade and Investment Mr. Man Soon Chang (Korea) Working Group on the Interaction between Trade and Competition Policy Mr. Frédéric Jenny (France) Working Group on Transparency in Government Procurement Mr. Ronald Saborío Soto (Costa R rica) Plurilateral Trade Agreements: Committee on Government Procurement Mr. Dick Mak (Hong Kong, China) Committee on Trade in Civil Aircraft Mr. Didier Chambovey (Switzerland) - Sub-Committee of the Committee on Trade in Civil Aircraft Mr. Didier Chambovey (Switzerland) - Technical Sub-Committee of the Committee on Trade in Civil Aircraft Mr. Didier Chambovey (Switzerland)
WTO BISD 1999 Legal Instruments
WTO BISD 1999 Legal Instruments
LEGAL INSTRUMENTS
PROTOCOL OF ACCESSION OF ESTONIA TO THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION (WT/ACC/EST/30)
The World Trade Organization (hereinafter referred to as the “WTO”), pursuant to the approval of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as “WTO Agreement”), and the Republic of Estonia (hereinafter referred to as “Estonia”), Taking note of the Report of the Working Party on the Accession of Estonia to the WTO in document WT/ACC/EST/28 (hereinafter referred to as the “Working Party Report”), Having regard to the results of the negotiations on the accession of Estonia to the WTO, Agree as follows:
Part I - General 1. Upon entry into force of this Protocol, Estonia accedes to the WTO Agreement pursuant to Article XII of that Agreement and thereby becomes a Member of the WTO. 2. The WTO Agreement to which Estonia accedes shall be the WTO Agreement as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol. This Protocol, which shall include the commitments referred to in paragraph 141 of the Working Party Report, shall be an integral part of the WTO Agreement. 3. except as otherwise provided for in the paragraphs referred to in paragraph 141 of the Working Party Report, those obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be implemented over a period of time starting with the entry into force of that Agreement shall be implemented by Estonia as if it had accepted that Agreement on the date of its entry into force. 4. estonia may maintain a measure inconsistent with paragraph 1 of Article II of the GATS provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.
WTO BISD 1999 Legal Instruments
Part II - Schedules 5. The Schedules annexed1 to this Protocol shall become the schedule of Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the “GATT 1994”) and the Schedule of Specific Commitments annexed to the General Agreement on Trade in Services (hereinafter referred to as “GATS”) relating to Estonia. The staging of concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules. 6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions 7. This Protocol shall be open for acceptance, by signature or otherwise, by Estonia until 31 October 1999. 8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance. 9. This Protocol shall be deposited with the Director-General of the WTO. The Director-General of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance thereto pursuant to paragraph 7 to each member of the WTO and Estonia. 10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations. Done at Geneva this twenty first day of May one thousand nine hundred and ninety nine, in a single copy in the English, French and Spanish languages each text being authentic, except that a Schedule annexed hereto may specify that it is authentic in only one or more of these languages.
1 Not reproduced.
WTO BISD 1999 Legal Instruments
PROTOCOL OF ACCESSION OF GEORGIA TO THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION (WT/ACC/GEO/33) The World Trade Organization (hereinafter referred to as the “WTO”), pursuant to the approval of the General Council of the WTO accorded under Article XII of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as “WTO Agreement”), and the Republic of Georgia (hereinafter referred to as “Georgia”), Taking note of the Report of the Working Party on the Accession of Georgia to the WTO in document WT/ACC/GEO/31 (hereinafter referred to as the “Working Party Report”), Having regard to the results of the negotiations on the accession of Georgia to the WTO, Agree as follows:
Part I - General 1. Upon entry into force of this Protocol, Georgia accedes to the WTO Agreement pursuant to Article XII of that Agreement and thereby becomes a Member of the WTO. 2. The WTO Agreement to which Georgia accedes shall be the WTO Agreement as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol. This Protocol, which shall include the commitments referred to in paragraph 180 of the Working Party Report, shall be an integral part of the WTO Agreement. 3. except as otherwise provided for in the paragraphs referred to in paragraph 180 of the Working Party Report, those obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be implemented over a period of time starting with the entry into force of that Agreement shall be implemented by Georgia as if it had accepted that Agreement on the date of its entry into force. 4. georgia may maintain a measure inconsistent with paragraph 1 of Article II of the GATS provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.
WTO BISD 1999 Legal Instruments
Part II - Schedules 5. The Schedules annexed ���������������������������������������������to this Protocol shall become the schedule of Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the “GATT 1994”) and the Schedule of Specific Commitments annexed to the General Agreement on Trade in Services (hereinafter referred to as “GATS”) relating to Georgia. The staging of concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules. 6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions 7. This Protocol shall be open for acceptance, by signature or otherwise, by Georgia until 1 March 2000. 8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance. 9. This Protocol shall be deposited with the Director-General of the WTO. The Director-General of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance thereto pursuant to paragraph 7 to each member of the WTO and Georgia. 10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations. done at Geneva this sixth day of October one thousand nine hundred and ninety nine, in a single copy in the English, French and Spanish languages each text being authentic, except that a Schedule annexed hereto may specify that it is authentic in only one or more of these languages.
Not reproduced.
WTO BISD 1999 Legal Instruments
PROCES-VERBAL OF RECTIFICATION RELATING TO THE PROTOCOL OF ACCESSION OF GEORGIA DONE AT GENEVA ON 6 OCTOBER 1999
i, the undersigned, Mike Moore, Director-General of the World Trade Organization, having examined the authentic text of the Protocol of Accession of Georgia to the Marrakesh Agreement Establishing the World Trade Organization, have found technical errors in the Protocol that should be rectified. The attached pages 8, 22 and 23 of the Spanish version only of the Schedule of Specific Commitments on Services have been omitted and should be included in the Protocol. The pages following these pages in the Protocol should be renumbered accordingly. acting as depositary of the Protocol of Accession of Georgia to the Marrakesh Agreement Establishing the World Trade Organization, having notified the Members of my intention and having received no objection thereto, I have caused the corrections to be made and have initialled these corrections in the margin of the authentic text of the Protocol. in WITNESS WHEREOF I have signed the present Procès-Verbal of Rectification, drawn up in the English, French and Spanish languages, on 21 November 1999.
Mike Moore Director-General
WTO BISD 1999 Legal Instruments
PROTOCOL OF ACCESSION OF THE HASHEMITE KINGDOM OF JORDAN TO THE MARRAKESH AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION (WTT/ACC/JOR/35)
The World Trade Organization (hereinafter referred to as the “WTO”), pursuant to the approval of the General Council accorded under Article XII of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as “WTO Agreement”), and the Hashemite Kingdom of Jordan (hereinafter referred to as “Jordan”), Taking note of the Report of the Working Party on the Accession of Jordan to the WTO in document WT/ACC/JOR/33 (hereinafter referred to as the “Working Party Report”), Having regard to the results of the negotiations on the accession of Jordan to the WTO, Agree as follows:
Part I - General 1. Upon entry into force of this Protocol, Jordan accedes to the WTO Agreement pursuant to Article XII of that Agreement and thereby becomes a Member of the WTO. 2. The WTO Agreement to which Jordan accedes shall be the WTO Agreement as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of entry into force of this Protocol. This Protocol, which shall include the commitments referred to in paragraph 248 of the Working Party Report, shall be an integral part of the WTO Agreement. 3. except as otherwise provided for in the paragraphs referred to in paragraph 248 of the Working Party Report, those obligations in the Multilateral Trade Agreements annexed to the WTO Agreement that are to be implemented over a period of time starting with the entry into force of that Agreement shall be implemented by Jordan as if it had accepted that Agreement on the date of its entry into force. 4. Jordan may maintain a measure inconsistent with paragraph 1 of Article II of the GATS provided that such a measure is recorded in the list of Article II Exemptions annexed to this Protocol and meets the conditions of the Annex to the GATS on Article II Exemptions.
10 WTO BISD 1999 Legal Instruments
Part II – Schedules 5. The Schedules annexed to this Protocol shall become the schedule of Concessions and Commitments annexed to the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the “GATT 1994”) and the Schedule of Specific Commitments annexed to the General Agreement on Trade in Services (hereinafter referred to as “GATS”) relating to Jordan. The staging of concessions and commitments listed in the Schedules shall be implemented as specified in the relevant parts of the respective Schedules. 6. For the purpose of the reference in paragraph 6(a) of Article II of the GATT 1994 to the date of that Agreement, the applicable date in respect of the Schedules of Concessions and Commitments annexed to this Protocol shall be the date of entry into force of this Protocol.
Part III - Final Provisions 7. This Protocol shall be open for acceptance, by signature or otherwise, by Jordan until 31 March 2000. 8. This Protocol shall enter into force on the thirtieth day following the day of its acceptance. 9. This Protocol shall be deposited with the Director-General of the WTO. The Director-General of the WTO shall promptly furnish a certified copy of this Protocol and a notification of acceptance thereto pursuant to paragraph 7 to each member of the WTO and Jordan. 10. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations. 11. done at Geneva this seventeenth day of December one thousand nine hundred and ninety nine, in a single copy in the English, French and Spanish languages each text being authentic, except that a Schedule annexed hereto may specify that it is authentic in only one or more of these languages.
Not reproduced.
WTO BISD 1999 11 Legal Instruments
CERTIFICATIONS OF MODIFICATIONS AND RECTIFICATIONS OF SCHEDULES OF CONCESSIONS AND COMMITMENTS TO GATT 1994
The following table lists all the modifications and rectifications to Schedules of Concessions and Commitments to GATT 1994 certified in 1999. Modifications resulting from the introduction of the Harmonized System (HS), and from commitments undertaken in the context of the Ministerial Declaration on Trade in Information Technology Products (IT) have been indicated in brackets after the date of certification.
Contracting Type Date of Document party/Member certification
Canada Certification of Modifications and 24 March 1999 WT/Let/329 Rectifications to Schedule V (HS) Certification of Modifications to Schedule V 24 June 1999 WT/Let/316 Czech Republic Certification of Modifications and 18 February 1999 WT/Let/372 Rectifications to Schedule XCII (HS) D o m i n i c a n Certification of Modifications to Schedule 3 February 1999 WT/Let/293 Republic XXIII Certification of Modifications and 18 August 1999 WT/Let/317 Rectifications to Schedule XXIII (HS) El Salvador Certification of Modifications and 27 October 1999 WT/Let/320 Rectifications to Schedule LXXXVII Indonesia Certification of Modifications and 18 February 1999 WT/Let/318 Rectifications to Schedule XXI (HS) Japan Certification of Modifications and 20 December 1999 WT/Let/322 Rectifications to Schedule XXXVIII Korea, Republic Certification of Modifications to Schedule 11 March 1999 WT/Let/302 of LX Certification of Modifications and 27 April 1999 (HS) WT/Let/339 Rectifications to Schedule LX Latvia Certification of Modifications and 8 November 1999 WT/Let/321 Rectifications to Schedule CXLIII Malta Certification of Modifications and 13 May 1999 (HS) WT/Let/315 Rectifications to Schedule CXVII Mauritius Certification of Modifications to Schedule 27 October 1999 WT/Let/334 CXVIII (IT) Philippines Certification of Modifications to Schedule 21 April 1999 (IT) WT/Let/303 LXXV Slovak Republic Certification of Modifications and 18 February 1999 WT/Let/373 Rectifications to Schedule XCIII (HS) Tunisia Certification of Modifications and 18 February 1999 WT/Let/338 Rectifications to Schedule LXXXIII (HS)
12 WTO BISD 1999 Accession
Decisions and Reports
ACCESSIONS
ACCESSION OF ESTONIA Report of the Working Party Adopted by the General Council on 21 May 1999 (WT/ACC/EST/28) INTRODUCTION 1. in March 1994, the Government of Estonia requested accession to the General Agreement on Tariffs and Trade (GATT 1947). At its meeting on 23-24 March 1994, the GATT Council of Representatives established a Working Party to examine the application of the Government of Estonia to accede to the General Agreement under Article XXXIII, and to submit to the Council recommendations which may include a draft Protocol of Accession. Membership of the Working Party was open to all contracting parties indicating the wish to serve on it. In pursuance of the Ministerial Decision of 14 April 1994 on Acceptance of and Accession to the Marrakesh Agreement Establishing the World Trade Organization (WTO) and to the decision of 31 May 1994 of the Preparatory Committee for the WTO, the Working Party examined the application of Estonia for membership in the WTO and agreed to pursue the market access negotiations for goods, including an agricultural country schedule, and for services. The WTO Agreement entered into force on 1 January 1995. In pursuance of the decision adopted by the WTO General Council on 31 January 1995, the GATT 1947 Accession Working Party was transformed into a WTO Accession Working Party. The terms of reference and the membership of the Working Party are reproduced in document WT/ACC/EST/7/Rev.1. 2. The Working Party met on 25 November 1994; 6-7 June and 14 November 1995; 28 March and 18 September 1996; 11 February 1997; and 24 March and 7 April 1999 under the Chairmanship of H.E. Mr. D. Kenyon (Australia).
DOCUMENTATION 3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade Regime of Estonia (L/7423) and the questions submitted by Members on the foreign trade regime of Estonia, together with the replies thereto, and other information provided by the Estonian authorities (L/7529 and Addenda 1 and 2, WT/ACC/EST/2, WT/ACC/EST/4, WT/ACC/EST/9 and Corrigendum 1, WT/ACC/EST/11, WT/ACC/EST/12 and WT/ACC/SPEC/EST/3). The Government of Estonia made available to the Working Party the following documentation:
WTO BISD 1999 13 Decisions and Reports
- law of the Central Bank of the Republic of Estonia of 31 May 1993; - law on Amending the Law of the Central Bank of the Republic of estonia of 20 April 1994; - The Law of the Republic of Estonia on Foreign Investments of 11 September 1991; - restrictions on Transfer of Immovable Property Ownership to aliens, Foreign States and Legal Persons Act of 29 May 1996; - law on Bankruptcy of the Republic of Estonia of 10 June 1992; - Statutes of the Estonian Foreign Investment Agency (9 May 1994); - law on Privatization of 7 July 1993; - Privatization in Estonia (summary); - Competition Act of 11 March 1998; - law on Foreign Relations of 16 November 1993; - law on the State Border of 30 June 1994; - Public Service Act of 25 January 1995; - law on State Budget (amended version of 20 April 1994); - law on Municipal and Town Budget of 28 June 1993; - law on Correlation between Municipal and Town Budgets and the State Budget (amended version of 2 February 1994); - Commercial Code, consolidated on 12 June 1996; - The Customs Act of 17 December 1997, consolidated on 13 May 1998; - The Customs Tariff Act of 14 October 1997; - law on Taxation of 29 December 1993; - law on Amending the Law on Taxation of 30 March 1994; - income Tax Law of 21 December 1993; - law on Land Tax of 12 May 1993; - law on Local Taxes of 10 October 1994; - law on Motor Vehicle Excise Tax of 8 February 1995; - law on Alcohol Excise Tax (with 1994 amendments);
14 WTO BISD 1999 Accession
- law on Amending the Law on Alcohol Excise Tax; - alcohol Excise Duty Act of 8 November 1995, consolidated on 15 april 1997; - law on Tobacco Excise Tax (new version of 13 July 1994); - Tobacco Excise Duty Act of 29 June 1994, consolidated on 22 october 1997; - law on Revenue Stamps of 28 March 1994; - Packaging Excise Duty Act of 19 December 1996; - law on Value Added Tax (amended version of 30 June 1994); - The Food Law of 9 February 1995; - resolution No. 249 of 5 November 1998 – Approval of the Order for Issuing State Licence for Importing Foodstuffs into Estonia; - law on Customs Valuation of 8 February 1995; - draft Act Amending the Customs Valuation Act; - rules of Origin in Free-Trade Agreements with the European Communities, the Ukraine and the Trilateral Free-Trade Agreement with Latvia and Lithuania; - rules of Origin in Free-Trade Agreements with EFTA countries (Norway and Switzerland); - law on Export and Transit of Strategic Goods of 21 April 1994; - Memorandum on the Export Control System in Estonia; - information on the Estonian Innovation Foundation; - Medicinal Products Act, consolidated on 15 October 1996; - draft Law on Standardization; - draft Technical Regulations and Standards Act of the Republic of estonia; - information on standardization in Estonia (July 1998); - Harmonization of the TBT Notification Requirements in Estonia; - estonian legislation on sanitary and phytosanitary measures (October 1998); - animal Protection Act of 17 December 1992, consolidated on 22 February 1998;
WTO BISD 1999 15 Decisions and Reports
- Farm Animal Breeding Act of 25 June 1995, consolidated on 9 december 1997; - Plant Protection Act No. 332 of 1 January 1999; - Legislation and draft legislation in the field of veterinary measures (April 1997); - Veterinary conditions for importing goods into Estonia (April 1997); - regulations for the import of plants and part of plants to Estonia (April 1997); - law of the Republic of Estonia on Veterinary Services of 1 January 1993; - draft Veterinary Services Act; - The Order of Registration for Veterinary Medicines of 15 September 1994; - law on Public Procurement of 1 January 1996; - Public Procurement Amendment Act of 1 January 1997; - grains Act of 8 June 1994, as amended; - a comparison of the old and new version of the Food Act, concerning food control in Estonia; - Fertilizers Act of 1 July 1998; - organic Agriculture Act of 17 July 1997; - legislation on the Agreement on Trade-Related Aspects of intellectual Property Rights; - Copyright Law of 23 November 1992; - Trade Marks Act of 27 August 1992, consolidated on 17 December 1997; - Packaging Act of 3 May 1995, consolidated on 30 June 1997; - Patent Law of 30 March 1994; - industrial Design Protection Act of 18 November 1997; - Utility Model Law of 30 March 1994; - Plant Variety Rights Act of 1 July 1998; - Copyright Act, Code of Administrative Offences, Criminal Code, Consumer Protection Act and Customs Act Amendment Act;
16 WTO BISD 1999 Accession
- explanatory Note to the Act Amending the Copyright Act, Code of administrative Offences, Criminal Code, Consumer Protection act and Customs Act; - law on Securities Market of 14 June 1993; - insurance Law of 18 November 1992; - law of Property Act, consolidated on 8 October 1996; - order of Declaring, Determining and Adjusting the Customs Value of Goods, Regulation No. 4 of 11 January 1996; and - economic bulletins.
Introductory Statements 4. The representative of Estonia noted that Estonia had been an observer to the GATT 1947 since June 1992 and had accordingly witnessed the successful conclusion of the Uruguay Round and looked forward to its implementation. Estonia had adopted new laws and regulations forming a solid legislative foundation. Moreover, Estonia’s economy, which encouraged competition and an entrepreneurial spirit through a liberal trade regime for agricultural and industrial products and openness regarding foreign investment and foreign exchange, was expanding steadily. Estonia’s free and open market had been underpinned by bilaterally binding and mutually beneficial market opening commitments in trade agreements covering more than two thirds of Estonia’s trade. Bilateral free trade agreements had been concluded with Latvia, Lithuania, EFTA States, Ukraine, Czech Republic, Slovak Republic, the European Communities, Faroe Islands, Slovenia, Turkey, Poland and Hungary, and Estonia had trade agreements based on the GATT 1947 principles with several other countries. Having followed the code of conduct laid down by GATT 1947 principles, full membership in the GATT 1947 and upon its entry into force in the Marrakesh Agreement Establishing the World Trade Organization - was the one important missing aspect in Estonia’s trade policy. Estonia intended to join the multilateral trading system embodied in the WTO Agreement as a developed country, fully aware of, and ready to assume, all the obligations and responsibilities this entailed. The representative of Estonia looked forward to the beginning of an active negotiating process which should be concluded by Estonia’s accession to the WTO in the very near future. 5. Members of the Working Party welcomed Estonia’s initial application for accession to the General Agreement and, upon conclusion of the Uruguay Round, to the WTO. The rise in exports and foreign direct investment were indicative of the relative success of Estonia’s liberal economic policies. Membership in the WTO would offer Estonia the opportunity to consolidate its small, open economy within a multilateral framework and to develop and increase trade exchanges with
WTO BISD 1999 17 Decisions and Reports
WTO Members worldwide. The liberal, open market principles currently being implemented by Estonia would also facilitate its assumption of obligations and commitments arising from the Uruguay Round. Several members accordingly expressed the expectation that the establishment of market access conditions for goods and services would proceed in an expeditious manner and looked forward to the successful and timely conclusion of the tasks of the Working Party. 6. The Working Party reviewed the economic policies and foreign trade regime of Estonia and the possible terms of a draft Protocol of Accession to the WTO. The views expressed in the course of the deliberations of the Working Party are summarized below in paragraphs 7-140.
ECONOMIC POLICIES
Monetary and Fiscal Policy 7. Questions by some members of the Working Party focused on the tax components of government revenue and the scope for raising revenue from taxes on trade in Estonia in the light of important free trade agreements which covered a large share of Estonia’s foreign trade. 8. in response, the representative of Estonia recalled that as a way to improve the competitiveness of domestic industries at the present time Estonia did not apply import or export duties. The main sources of government revenue in 1997 were the Value Added Tax (47.9 per cent), income taxes (25.4 per cent), and excise taxes (17.2 per cent).
Foreign Exchange and Payments 9. Some members of the Working Party requested up-to-date information on Estonia’s foreign exchange regime, i.e. the determination of the exchange rate, convertibility, availability of foreign exchange for trade and payments purposes, and the retention of foreign currency. 10. The representative of Estonia confirmed that Estonia, as a member of the International Monetary Fund, followed internationally accepted monetary rules. Since June 1992, the Estonian Kroon had been pegged against the Deutsche mark at the official rate of 8 kroon to 1 DM, with a technical fluctuation limit of 3 per cent. The fixed exchange rate was enshrined in the Law on the Security of the Estonian Kroon; a devaluation required approval by Parliament. He also said that the Bank of Estonia guaranteed free exchange within Estonia of the Kroon at the official rate according to current needs of customers for convertible currencies. Non- convertible currencies were obtained at commercial banks. The last restrictions on current account transactions had been lifted in March 1994, when Estonia accepted the obligations under Article VIII of the Articles of Agreement of the International
18 WTO BISD 1999 Accession
Monetary Fund. Capital account transactions were unrestricted, but exports of cash and securities were subject to a customs declaration.
Investment Regime 11. Some members of the Working Party sought information on Estonia’s strategies in attracting foreign investment and in the application of any restrictions or conditions attached to foreign investment and to land ownership. The representative of Estonia replied that no specific promotion programmes were envisaged; foreign investments were encouraged through an open, non-restrictive regime. The Tallinn Stock Exchange had been established on 31 May 1996. The Government had established a Foreign Investment Agency in 1994, providing various services to foreign investors. The Agency had been restructured in 1997, and was now operating under the Estonian Trade and Investment Board. Estonia had concluded bilateral agreements on investment promotion and protection with the following countries: Austria, Belgo Luxembourg Economic Union, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and the United States. He added that the procedures for registration of companies in Estonia distinguished between domestic and foreign investment in only six areas namely, mining; power engineering, gas and water supply; administration of waterways, ports, dams and similar structures; railways and air transport; telecommunication and communication network; and retail trade in medicines; where foreign investors would need a “Foreign Investment Licence” from the Ministry of Finance while a “Licence of Activity” was required for domestic investors. The Foreign Investment Licence and the Licence of Activity carried the same rights, the procedural difference being the issuing authority. The criteria for determining whether or not to grant these two types of licence were identical. He confirmed that the differentiation between foreign and domestic investment in the communications and telecommunications sector was of technical nature and did not affect negatively the market access and national treatment commitments made in Estonia’s GATS schedule. 12. The representative of Estonia added that when State enterprises were sold against privatization vouchers majority stakes were offered to “core” investors, i.e. majority shareholders (domestic or foreign), who were selected by an open bid. In purchasing State-owned enterprises investors (domestic or foreign) might undertake specific commitments with regard to the amount of capital to be invested and minimum workforce (“performance guarantee”). The Estonian Privatization Agency checked the compliance with agreed conditions. The performance guarantee did not extend to local content or export requirements. 13. regarding purchase of land, the representative of Estonia said that foreign commercial undertakings would need permission from local authorities, and permits
WTO BISD 1999 19 Decisions and Reports would only be granted when the branch of a foreign commercial undertaking had been entered in Estonia’s Commercial Register. Non residents were not allowed to purchase land in border areas and on Estonia’s islands, except on the four largest islands (Saaremaa, Hiiumaa, Vormsi and Muhu). In these areas the purchase of land required special permission of the Government. Non residents would be permitted to buy land provided the purchase was not in conflict with the interests of the State, local governments or national security. 14. Concerning taxation of foreign investment the representative of Estonia said that the Income Tax Law allowed losses to be carried forward up to five years. The Income Tax Law applied to income earned in and outside Estonia by residents, and income derived from Estonian sources by non-residents. Revenue could be repatriated freely. 15. The representative of Estonia confirmed that Estonia applied national treatment with respect to direct taxation and Estonia would continue to apply the national treatment principle in the case of amendments to the tax regime in the future. He further confirmed that Estonia did not use national taxation for export promotion or performance. The Working Party took note of this commitment. State Ownership and Privatization 16. Some members of the Working Party requested details concerning progress in Estonia’s privatization programme and plans to retain State ownership in enterprises or sectors. Further questions addressed relations between the State and company management, the application of competition legislation to State-owned enterprises, bankruptcy or enterprise dissolution provisions in Estonian legislation and general or exclusive funds available for State-owned enterprises. A member requested a detailed report on firms remaining in Government hands, the nature of goods they consumed, exported or distributed; and a report on plans, as appropriate, to complete the privatization process. To ensure full transparency, Estonia should keep WTO Members informed about progress in privatization, and provide periodic reports on developments in privatization and economic reform issues as relevant to its obligations under the WTO. 17. The representative of Estonia said that an enterprise was considered privatized when the majority share holding was in private ownership (i.e. not including assets held by the Estonian Privatization Agency). According to this definition all agricultural enterprises had been privatized by January 1995, and more than 90 per cent of all industrial enterprises by August 1996. Companies had been sold in 16 tender rounds with successful bidders offering guarantees with regard to investment and employment. The public offering of shares had begun in mid-1994; in a public offer the majority stake was sold to a local or foreign “core” investor. The Estonian Privatization Agency became the temporary owner of the shares in the interim period needed for selection of “core” investors or sale of minority stakes.
20 WTO BISD 1999 Accession
18. The representative of Estonia provided information on progress in privatization of State enterprises, summarized in Table 1. Privatization was entering its final stage, involving privatization of major infrastructure services such as communications, transportation and energy supply. These enterprises would be privatized in accordance with a program established through Government Order No. 155 k of 20 February 1996. The Government had confirmed a final list of companies to be privatized. In all, 18 enterprises were sold in 1997. However, the main task in 1997 was to prepare the privatization of Eesti Energia, Eesti Põlevkivi, the operational parts of Estonian Railways and the privatization of land. Eesti Energia and Eesti Põlevkivi were complex privatization projects which were unlikely to be completed before 2000. Estonia also intended to privatize the Port of Tallinn and Estonian Telecom. Estonia provided a summary of privatization in Estonia (1993- 1998), circulated in document WT/ACC/EST/25. According to the most recent data available (1998, third Quarter), Estonia had 160 state enterprises employing 37,954 persons. The Estonian Privatization Agency (EPA) became the holder of the shares of a firm upon the inclusion of the firm in the list of companies to be privatized. The EPA did not hold shares in infrastructure companies. The Privatization Agency kept the shares until privatization contracts had been signed; the time period for this varied case-by-case, on average lasting from one to six months. At present, the EPA held shares in 4 companies (31.9 per cent of the shares of Eesti Buss, 35 per cent of Meie Meel, 30.4 per cent of Valga Autoveod, and 100 per cent of Kunda Tehased) to the total value of approximately EEK 1 million. According to the privatization program, the companies to be privatized in 1999 were Liviko, Narva Elektrivõrk, Edelaraudtee, Eesti Raudtee, Moe Piiritustehas, Eesti Gaas (State share 11.38 per cent), Tarmeko (State share 33.4 per cent), and Eesti Merelaevandus (State share 30 per cent). The output (net sales) of State-owned firms in per cent of GDP had declined from nearly 60 per cent of GDP in 1994 to just over 20 per cent in 1997. Further details are provided in Table 1. During 1993-1998, a total of 1,857 enterprises, structural units, and objects had been certified for privatization, and 39 enterprises had been liquidated. As of 1 January 1999, 6 firms remained to be privatized.
WTO BISD 1999 21 Decisions and Reports
Table 1: Information on Progress in Privatization of State Enterprises (a) Data on enterprises sold and revenue raised
Year 1993 1994 1995 1996 1997 1998
State Enterprises
Total no. at year end 1,116 805 496 303 206 160
Privatized during the year 306 342 278 143 88 32
Of which:
Services/Small Business 21 23 75 36 18 6
Manufacturing 59 116 61 51 24 5
Construction 33 15 68 21 14 0
Agricultural/Fisheries 167 96 24 8 11 3
Other 26 92 50 27 21 18
Sold through:
privatization contracts 54 215 142 43 17 13
open bids 252 126 120 84 64 19
public sales of shares 0 1 16 16 6 0
Revenue raised from: (EEK million)
privatization contracts 353.2 1,330.4 919.1 474.5 1,295.4 318.1
liabilities accepted by the 195.6 700.2 617.9 230,3 416.3 8.2 buyers
investment guarantees 236.8 858.5 1,002.9 453.6 1,714.9 281.1
total obligations accepted 922.0 3,272.7 2,799.1 1,177.5 0 0 by new owners
open bids 122.8 68.2 79.8 148,7 160.6 287.4
public sale of shares 0 99.9 604.5 662.1 944.5 0
Privatization contracts: number of jobs under 9,099 25,573 17,279 1,274 2,929 72 employment guarantees
22 WTO BISD 1999 Accession
(b) Economic Indicators of Enterprises in 1997 -- -- 0.1 0.8 0.07 0.05 5.78 1.29 3.35 7.34 1.32 20.73 GDP of State Net sales enterprises in per cent of in per -- -- 0.02 0.97 0.22 0.02 3.74 1.03 6.03 0.003 0.004 0.0003 0.0003 of total exports of State Exports in per cent in per enterprises -- -- 0.118 0.112 7.157 1.752 6.726 11.066 92.476 398.774 423.975 (EEK 1,537.964 2,480.120 of State million) Exports enterprises 54.070 960.200 160.065 419.692 264.773 162.557 145.056 586.366 Total Total (EEK 1,304.891 7,494.341 exports million) 41,114.574 17,256.623 12,305.940 -- -- 0.02 0.02 0.22 2.08 0.04 0.46 1.21 0.29 2.65 0.47 7.46 sales of State Net sales in per cent in per of total net enterprises -- -- 43.547 34.948 69.316 389.630 840.759 525.070 859.573 (EEK 3,764.637 2,181.817 4,780.199 of State million) Net sales 13,489.496 enterprises 783.755 sales 5,021.375 2,957.871 7,765.850 1,616.040 2,091.068 2,521.490 8,622.751 (EEK 12,805.869 40,420.902 20,583.161 75,428.046 million) Total net Total 180,618.178 Economic sector A griculture, hunting and forestry Construction E ducation, health and social work, social and personal other community, service activities steam, gas and water supply E lectricity, Financial intermediates Fishing Hotels and restaurants Manufacturing Mining R eal estate, renting and business activities storage and communication Transport, Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods Total
WTO BISD 1999 23 Decisions and Reports
(c) Economic Indicators of Enterprises 1994-1997
1994 1995 1996 1997
Total number of enterprises 28,113 23,858 24,609 27,627
Number of state enterprises 805 496 303 206
Percentage of State enterprises in 2.86 2.07 1.23 0.74 total number of enterprises
Total output of enterprises 76,443.030 114,124.372 135,932.342 180,618.178 (net sales in EEK million)
Output of state enterprises 17,527.179 16,805.778 14,233.674 13,489.496 (net sales in EEK million)
Output of State enterprises in per 22.92 14.72 10.47 7.46 cent of total output (net sales)
GDP in current prices 29,644.700 40,705.100 52,445.900 65,079.900 (EEK million)
Output (net sales) of State 59.1 41.2 27.1 20.7 enterprises in per cent of GDP
19. The representative of Estonia said that some privatization tenders had only been published in Estonia, but foreign investment had only been restricted in the case of enterprises processing agricultural commodities or offering services to farmers. These companies were now owned by farmers’ co-operative societies. 20. in response to questions concerning the appointment and dismissal of the management of State owned enterprises, the representative of Estonia said that both the Minister of Finance and the Minister in charge of the Ministry managing the State-owned shares of a company had the right to appoint the members (State representatives) of the administrative council or board of a State-owned enterprise or joint stock company. The management was appointed by the board according to the company’s by-law. The administrative council or board could dismiss the general director of the enterprise; council or board members were released by the Government or the appointing Ministry. The provisions of the Law on Competition, including its sanctions, applied equally to private and State-owned enterprises. Since 1 September 1995, the Civil Code and the Commercial Code contained procedures for the liquidation of enterprises. The representative of Estonia confirmed that State-owned enterprises acted on a purely commercial basis and were required to make their purchases and sales solely in accordance with commercial considerations, and the purchases and sales of State firms, either for their own use or for use in the production process, were not considered government procurement. The representative of Estonia further confirmed that their directors
24 WTO BISD 1999 Accession and administrative council or board were not government employees, even though they could be dismissed or released by the Government or the appointing Ministry. The State owned enterprises could not be considered to be in State trading activities because they did not enjoy any exclusive or special privileges and were not subject to any control by the Government, nor to Government directives in relation to their operations in the sense of Article XVII of GATT 1994 (see also paragraph 102 in the section “State trading”). Their operations were not funded by the State budget, and the Government had no right to intervene in the daily operations of these enterprises. State owned and private enterprises had equal access to Government funds, i.e. the Export Credit Fund, the Fund of Credit to Agriculture and Rural Life, the Fund of Credit to Small Enterprises and the Innovation Fund. 21. The representative of Estonia confirmed the readiness of Estonia to ensure the transparency of its ongoing privatization programme and to keep WTO Members informed of its progress in the reform of its transforming economic and trade regime. He stated that his Government would provide annual reports to WTO Members on developments in its programme of privatization as long as the privatization programme would be in existence along the lines of that provided to the Working Party. He also stated that his Government would provide annual reports on other issues related to its economic reforms as relevant to its obligations under the WTO until 31 December 2003. The Working Party took note of these commitments.
Pricing Policies 22. Some members of the Working Party requested information on the process of price liberalization in Estonia and the extent of any remaining controls on prices for goods and services. Estonia was requested to provide a description of existing price controls; list the affected products by HS tariff line with reference to the legal provisions under which controls were applied; provisions, if any, for border charges that would increase import prices; and the conditions under which the authority to control prices was to be exercised. 23. The representative of Estonia confirmed that prices of all goods and services were determined freely by market forces except for oil-shale and electricity. The prices set for these items, valid as of 18 November 1997 for electricity and as of 1 May 1997 for oil shale, are reproduced in the Annex (Tables 2 and 3). He added that price controls on oil-shale and electricity were subject to gradual deregulation programs; prices would approach world market levels with due regard to the balance between the required return on the invested capital and the interests of consumers. He also noted that the present producers of energy, heating and oil shale were not monopolies since there was no prohibition for anybody to start similar operations in Estonia or offer a competitive solution for the entire Estonian energy system including price reform. The legal basis for the price controls were the Price Law
WTO BISD 1999 25 Decisions and Reports of 1989 and the Decree of the Ministry of Economic Affairs No. 7 of 15 May 1996. Heating and local transport charges were regulated to some limited extent at the level of municipalities. The representative of Estonia confirmed that price controls on oil-shale and electricity were applied only to final products, not to the imports of Eesti Energia and Eesti Põlevkivi. 24. The representative of Estonia said that Estonia could not foresee any further conditions for the application of any price controls, including those for imports, except for those in place for electricity and oil-shale. These incumbent price controls covered only domestic transactions via the facilities of Eesti Energia and Eesti Põlevkivi. The representative of Estonia confirmed that prices for goods and services in every sector of Estonia were determined freely by market forces with the exception of those listed in Tables 2 and 3 attached to this report. 25. The representative of Estonia confirmed that prices for goods and services other than for oil-shale and electricity would not be subject to State control. He confirmed that Estonia would apply such controls, from the date of accession without recourse to a transition period, in a WTO consistent fashion, and would take account of the interests of exporting WTO Members as provided for in Article III.9 of the GATT 1994. Estonia would publish any list of goods and services subject to State price controls in the Official Journal “Riigi Teataja” (State Gazette), including any changes regarding existing price controls on oil-shale and electricity. The Working Party took note of these commitments.
Competition Policy 26. Some members of the Working Party requested a detailed description of Estonia’s competition policy, including the provisions in the Law on Competition which prohibits unfair trade practices and the authority of the Competition Board to permit agreements restricting competition. 27. in response, the representative of Estonia said that a new Competition Act had entered into force on 1 October 1998. The purpose of the Act was to safeguard free competition in the extraction of natural resources, manufacture of goods, provision of services, sale and purchase of services products, and to prevent and eliminate the restriction of competition in other economic activities based on the interests of free enterprise. The Act could also be applied against anti-competitive practices taking place outside Estonia insofar as these practices resulted in restrictions on competition within the territory of Estonia. The Act prohibited agreements and concerted practices restricting competition and abuse of dominant position, and contained provisions regarding individual exemptions on restrictive agreements; market domination; undertaking with special or exclusive rights or natural monopoly; State aid; merger control; unfair competition; State supervision; liability; and implementing provisions. Unfair trade practices were dealt with in a separate chapter and referred to the following types of activities:
26 WTO BISD 1999 Accession
(i) publication of misleading information, or presentation or requests for publication of misleading information; (ii) disparaging a competitor or his/her goods; (iii) abuse of confidential information; (iv) abuse of an employee or representative of another enterprise; and (v) unfair restriction or promotion of the sale of goods. The Competition Board had been established in 1993 and currently employed some 38 officials. The Competition Board supervised the implementation of the Competition Act except in respect of credit institutions, securities brokers and insurance companies. State supervision of credit institutions, securities brokers and insurance companies was exercised by the State supervision authorities in the relevant sector. However, the Competition Board maintained the right to present recommendations and exercise control on mergers in all sectors. The rights and obligations of the Competition Board under the Competition Act to supervise competition was also extended to the sectorial State supervision authorities.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 28. The representative of Estonia stated that, in accordance with the Constitution, the activities of the Riigikogu (Parliament), the President of the Republic, the Government of the Republic, and the judiciary courts were based on the principle of separation and balance of powers. Legislative power was vested in the Riigikogu and executive power in the Government of the Republic. Justice was administered solely by the courts which acted independently as provided in the Constitution and the laws. The main government entities responsible for the formulation and implementation of policies affecting foreign trade were the Ministries of Economic Affairs; Foreign Affairs; Finance; Agriculture; and Transport and Communications. All local issues were resolved and managed by local governments - municipalities and townships - operating autonomously. The representative body of local government was the council, elected in free elections for a term of three years. 29. Municipal and town councils had the right to impose local taxes according to the Law on Local Taxes. Considered as local taxes were the poll tax, local income tax, sales tax, boat tax, motor vehicles tax, commercial and advertisement tax, tax on closing roads and streets, taxes for keeping pets and entertainment tax. Sub- central Governments also had the right to provide “green box” and non-actionable subsidies from local budgetary revenues. 30. The representative of Estonia stated that if Estonian laws or other acts should be found to contradict international treaties ratified by the Riigikogu (Parliament), the provisions of the international treaty would apply. The WTO
WTO BISD 1999 27 Decisions and Reports
Agreement would have the status of an international treaty. The representative of Estonia confirmed that sub-central entities had no autonomous authority over issues of subsidies, taxation, trade policy or any other measures covered by WTO provisions. He confirmed that the provisions of the WTO Agreement, including Estonia’s Protocol, shall be applied uniformly throughout its customs territory and other territories under its control, including in regions engaging in border trade or frontier traffic, special economic zones, and other areas where special regimes for tariffs, taxes and regulations are established. He added that when apprised of a situation where WTO provisions were not being applied or were applied in a non- uniform manner, central authorities would act to enforce WTO provisions without requiring affected parties to petition through the courts. The Working Party took note of these commitments.
POLICIES AFFECTING TRADE IN GOODS
Trading Rights 31. The representative of Estonia said that from 1 September 1995, the Commercial Code had replaced the Enterprise Law. The Commercial Code defined five types of business association (general partnership, limited partnership, limited liability company, joint stock company and co-operative association) and the individual private entrepreneur, and stipulated procedures for opening a foreign company’s branch office in Estonia. A firm obtained the relevant rights and obligations, becoming legally a subject of Estonian law, through registration in the Commercial Register. An entry in the Commercial Register was made upon application. Registration was applied uniformly to all firms, including those which had applied for a Foreign Investment Licence, covering all types of business operations. A trader submitted the required documents and the application, with notarized signatures, to the registrar. An enterprise wishing to perform business in an area which required a Licence of Activity would also need to obtain such a licence and submit it to the registrar. The Commercial Register was to be kept by local city courts. The registrar had no right to deny an entry if the applicant had submitted all necessary documentation in compliance with the requirements. 32. enterprises set up under previous legislation, not meeting the requirements of the new Code, had to be restructured or terminated by 1 September 1997. Stricter mandatory capital requirements would apply from 1 September 1999. The Commercial Code did not contain any provision which was inconsistent with the national treatment principle; all its provisions applied equally to domestic and foreign-owned companies. 33. Some members of the Working Party noted that laws and regulations relating to the right to trade in goods (also sometimes referred to as “registration requirements” or “activity licensing”) should not restrict imports of goods in violation of the general
28 WTO BISD 1999 Accession prohibition on quantitative restrictions in GATT Article XI:1, nor should they discriminate against imported goods in violation of the non discrimination provisions of GATT Article III:4. Furthermore, fees and charges levied on the right to import should be limited to the approximate cost of services rendered (Article VIII:1(a)) and taxes and charges on the right to trade in imported goods should not lead to discrimination in favour of like domestic products (Article III:2). 34. The representative of Estonia confirmed that the former State monopoly in foreign trade had been abolished and that no restrictions existed on the right of foreign and domestic individuals and enterprises to import and export goods within Estonia’s customs territory, except as provided in WTO Agreements. He confirmed that individuals and firms were not restricted in their ability to import and export based on their registered scope of business, and the criteria for enrolment in the Commercial Register of companies in Estonia were generally regulated in the Commercial Code which was published in the Official Journal “Riigi Teataja” (State Gazette). There was no special system of registration of persons or firms to engage in importation, except for those businesses covered by activity licences, in which case anybody fulfilling a set of objective criteria (e.g. relevant education, a place to carry out the activity, fulfilling the sanitary requirements, clean tax record, etc.) could have such a licence. There was no differentiation between foreign-owned and domestic firms for either the non-automatic or automatic (obligation to announce the beginning of the business activity) activity licences. 35. The representative of Estonia stressed that general government policy was to maintain a liberal economic policy and to reduce the areas of activity subject to licensing. He noted that Estonia considered the licensing arrangements to be consistent with the WTO Import Licensing Agreement. In its submission, Estonia listed 43 economic activities in which operators needed a “Licence of Activity” for production and/or trade, valid for up to five years, and the corresponding regulatory authority (Table 4 which is reproduced in the Annex). Among the justifications listed were safety (e.g. medicaments); a technological level adequate to comply with compulsory standards (e.g. alcoholic beverages); registration requirements to prevent threats to security and the environment (e.g. firearms and vehicles); and registration and accounting requirements for tax purposes (alcoholic beverages, tobacco, metals, etc.). The criteria for the issuing of licences were published in the Official Journal “Riigi Teataja” (State Gazette). Any person or firm fulfilling a set of objective criteria (e.g. regarding relevant education, proper place of business, sanitary requirements, a clean tax record, etc.) could obtain a “Licence of Activity”. He confirmed that the number of licences was not restricted and that licences were granted to national and foreign operators under equal conditions. In each licensed sector identical criteria, objectively neutral and systematically administered, were applied regarding importation, exportation and domestic trade. An expired licence could be renewed or replaced by a new valid licence. The fees for issuing licences were no higher than necessary to cover the relevant costs. In most cases the fee did
WTO BISD 1999 29 Decisions and Reports not exceed EEK 2,000 while alcohol and tobacco licences cost EEK 15,000. 36. The representative of Estonia confirmed that Estonia undertook to observe the relevant WTO provisions, in particular the Agreement on Import Licensing Procedures, in different acts covering specific fields of activity. Activity licences had so far been established under different regulations dealing separately with specific fields of activity. 37. The representative of Estonia confirmed that procedures to grant licences for importing food had been finalized, and the Government Resolution No. 249 on “the Order for Issuing State Licence for Importing Foodstuffs into Estonia” had entered into force on 1 December 1998. In his view, the procedures were in full conformity with the provisions of the WTO Agreement on Import Licensing Procedures, notably its Articles 2, 3 and 5. 38. a member expressed concerns about the conformity of this Resolution with WTO requirements. The Resolution appeared to institute a system of discretionary, non-automatic licences approved by majority vote by a commission which included representatives of the domestic industry. The Resolution also appeared to omit a mechanism for appeal, required by the Import Licensing Agreement in the case of non-automatic licences. Estonia was encouraged to amend its legislation to establish an automatic licensing system for foodstuff imports in conformity with Articles 1 and 2 of the WTO Agreement on Import Licensing Procedures. 39. in reply, the representative of Estonia said that Resolution No. 249 had been amended on 16 March 1999 to ensure compliance with WTO requirements. Licences would be issued automatically within ten working days to importers submitting correct and complete applications. The representative of Estonia added that licences granted for importing food would not act to restrict the quantity of imports. The requirements applied to foodstuff importers were identical to those applied to domestic foodstuff manufacturers. The composition of the licensing committee would be modified to ensure that the committee was formed exclusively of civil servants. 40. The representative of Estonia stated that the importation of products covered by activity licences were subject only to requirements consistent with the WTO Agreement. He confirmed that no restrictions existed on the right of foreign and domestic individuals and enterprises to import and export goods within Estonia’s customs territory, with the exception of those specifically listed in Table 4. The activity licenses enumerated in Table 4 did not restrict foreign participation as they applied equally to foreign and domestic businesses. Activity licences were administered for the purpose of ensuring product safety. The criteria for granting activity licences differed according to the area of activity and had been published in the Official Journal “Riigi Teataja” (State Gazette). Upon request, the representative of Estonia would provide a more detailed table containing references to relevant
30 WTO BISD 1999 Accession
Government Regulations. The criteria for engaging in import and export trade in the restricted sectors were consistent with generally applicable restrictions placed on trade in similar domestically produced goods and based on criteria published in the Official Journal “Riigi Teataja” (State Gazette). The availability of activity licences was not restricted nor was the licensing applied to restrict imports, the production, wholesale or retail trade in any product. 41. The representative of Estonia confirmed that from the date of accession Estonia would ensure that its laws and regulations relating to the right to trade in goods and all fees, charges or taxes levied on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws and regulations in full conformity with these obligations. The Working Party took note of this commitment.
1. Import Regulations
Customs Tariff 42. The representative of Estonia presented an initial offer for market access negotiations on goods in April 1995 and submitted a Revised General Offer for Market Access Negotiations on Goods in August 1995. A number of members entered into market access negotiations with Estonia. The commitments agreed between Estonia and members of the Working Party are annexed to the Protocol of Accession of Estonia which is reproduced in the Appendix to this Report.
Customs Duties 43. noting that the current absence of a customs tariff demonstrated Estonia’s free trade determination, some members of the Working Party commended the successful and effective outcome of Estonia’s free trade policies and hoped that Estonia would continue to pursue these same sound and progressive policies in the future. Some members also asked Estonia to provide details about the imposition of customs duties and the criteria for application of zero and non-zero rates. A member expressed concern about Estonia’s intentions in this area and requested further clarification, noting that the Estonian authorities had drafted a Law on Customs Tariff although the draft law apparently had remained unadopted at that time. This member requested that the draft law be provided to the Working Party for review and comment, noting that progress on market access negotiations was contingent upon review of this document by members of the Working Party. 44. The representative of Estonia said that Parliament had adopted the Law on Customs Tariff on 14 October 1997, and it had been in force since 22 November 1997. The Law on Customs Tariff, which was a framework law laying down the legal basis for the application of customs tariffs, included tariff ceiling rates for all
WTO BISD 1999 31 Decisions and Reports commodities (at the four-digit level of the Harmonized System), but actual application of customs duties had to be enacted by a separate law. Prior to the adoption of the Law, Estonia had imposed import duties on furs (16 per cent), sea scooters, small vessels and snow scooters (10 per cent), and the exports of vintage cars presenting a cultural value (100 per cent) as provided for in Government Decree No. 200 of 10 July 1993. In accordance with the Law on Customs Tariff, his Government had decided to abolish all customs tariffs in accordance with Government Decree No. 115 of 2 June 1998, effective as of that date, and there are no tariffs currently applied on imports into Estonia. 45. The representative of Estonia reaffirmed the free trade orientation of his country noting, however, that Estonia would reserve the right to impose customs duties in the future, in full consistency with its concessions and commitments as a member of the WTO. A ceiling tariff binding would offer Estonia the same regulatory opportunities in external trade as its main trading partners. When the Estonian Parliament ratifies Estonia’s Protocol of Accession to the WTO, the commitments annexed thereto in its schedule of concessions will prevail over the tariff ceiling rates provided in the Law on Customs Tariff, the text of which has been provided to the Working Party.
Other Duties and Charges 46. The representative of Estonia stated that Estonia levied no duties and charges on imports other than ordinary customs duties and charges for services rendered. Any such charges applied to imports after accession would be in accordance with WTO provisions. He further confirmed that Estonia would not list any other charges in its Goods Market Access Schedule under Article II:1(b) of GATT 1994, binding such charges at “zero”.
Fees and Charges for Services Rendered 47. Some members of the Working Party noted that Estonia had applied an ad valorem tax to customs clearance operations and questioned whether the revised fee was commensurate with the approximate costs of the services rendered as provided for in Article VIII of the GATT 1994. Estonia was also asked to provide details on the exemptions from the fee. 48. The representative of Estonia informed the Working Party that, as of 1 April 1995, a 0.5 per cent customs procedure tax had been replaced by a flat fee per customs declaration. The representative of Estonia confirmed that a fixed fee of EEK 200 per import and export declaration was charged as a State fee for customs declaration and that this was the only fee or charge for services rendered currently in force. The fee was collected by the National Customs Board as a procedure fee covering the cost of customs formalities. He confirmed that the State fee for customs declaration was applied on a non-discriminatory basis to trade with all
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Estonia’s trading partners. 49. The representative of Estonia said that the fee related only to the cost of customs formalities, and represented some 1.14 per cent of all revenue collected by Estonian Customs during 1997; other revenue was derived from excise taxes (19.51 per cent), value added tax (79.22 per cent), customs duties (0.01 per cent) and other fees (0.12 per cent). The fee was levied on imports from all trading partners, but not on transit trade or goods in customs warehouses, re-exports after customs warehousing, goods declared by physical persons, or preliminary declarations. Also exempt were goods for official use by foreign diplomatic representations, consular representations or international organizations; printed matter and information carriers addressed to libraries; irrecoverable economic aid; humanitarian aid received by the Estonian Red Cross; containers, pallets or other kind of transferable containers and medical and laboratory equipment for emergency aid (exported with an obligation to re-import in unchanged state and imported with an obligation to re-export in unchanged state). 50. The representative of Estonia confirmed that, from the date of accession, Estonia would not reintroduce an ad valorem customs fee. The State fee for customs declaration would be applied in conformity with WTO obligations, in particular Articles VIII and X of the GATT 1994. The level of the applied fee would not exceed the approximate cost of processing import and export declarations, revenues from the fee would be used solely for customs processing of imports and exports, and total annual revenue from collection of the fee would not exceed the approximate cost of customs processing operations for the items subject to the fees. He confirmed that revenues from the State fee were not used for customs processing of imports exempted from the fee. Information regarding the application and level of the fee, revenues collected and their use, would be provided to WTO Members upon request. The Working Party took note of these commitments.
Application of internal taxes to imports 51. Some members of the Working Party noted that the excise taxes for certain domestic and imported tobacco products and alcoholic beverages were different. These members requested Estonia to phase out all measures inconsistent with Article III of the GATT 1994. Some members also questioned the conformity of Estonia’s excise tax on automobiles with Articles III, VII and VIII of the GATT 1994 and the WTO Agreement on Customs Valuation and requested details about the new tax regime. Estonia was also asked to provide details on excise tax exemptions. Some members held the view that excise tax exemptions for small domestic producers of beer (annual domestic production not exceeding 5,000 dekalitres) and of wine (annual production not exceeding 100 dekalitres), and the exemption from the excise tax on domestically-owned second-hand motor vehicles, were inconsistent with the national treatment provision of Article III of the GATT 1994. In their view,
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Estonia would need to change its excise tax legislation to bring it into conformity with Article III of the GATT 1994. 52. The representative of Estonia described the rates of excise tax applied on tobacco, petroleum products, alcohol, motor vehicles and packaging materials (Tables 5 and 6). These tax levels were considered optimal and no reductions were foreseen upon accession to the WTO. An excise duty of 16 per cent on furs and fur products, levied only on domestic producers, had been eliminated. 53. The representative of Estonia said that according to amendments to the Law on Alcohol Excise Tax, the excise rates on domestic and imported beer had been equalized on 1 December 1996. However, in support of regional development, small-scale producers of beer and wine had been tax exempt, and the excise tax on beer had been differentiated depending on the annual output of the manufacturer. In addition, the excise tax on wines had distinguished between bulk and bottled imports to encourage bottling and further processing in Estonia. Estonia had no domestic production of wine from fresh grapes. He confirmed that the tax rates for bulk and bottled wine had been equalized at EEK 10.40 per litre (up to 15 per cent alcohol content by volume) and EKK 15.40 per litre (over 15 per cent alcohol content by volume) on 1 December 1998, and that the tax exemption for small-scale producers of wine (annual production not exceeding 100 dekalitres) had been abolished as from the same date. A new taxation system for beer would enter into force on 1 April 1999; the excise tax would amount to EEK 0.55 per litre by volume of pure alcohol. Thus, the excise tax would no longer be differentiated according to the output of the manufacturer, and the tax exemption for small-scale beer producers (annual production not exceeding 5,000 dekalitres) would lapse as from the same date. 54. The excise tax on alcoholic beverages was fixed in Estonian Kroon per litre, by volume of pure alcohol (e.g. the tax on 1 litre of vodka (40 per cent vol.) amounted to EEK 1.45 x 40 = EEK 58), and assessed on the amount of alcohol sold, exchanged, for free transfer or own consumption. Domestic manufacturers paid the tax to the State Budget through the local Tax Board three times per month - on the third day following each ten-day period - on the basis of their actual turnover during that period. Importers were required to pay the excise tax upon importation, before release for free circulation in Estonia. 55. The representative of Estonia added that excise taxes on alcoholic beverages were not collected on domestically produced alcohol exported by the manufacturer directly or through a customs warehouse; supplies to maritime or air transport vessels engaging in foreign travel; temporary importation by foreign juridical persons of limited amounts of alcohol for fairs and exhibitions; alcohol to be included in a data base on alcohol brands; and alcohol imported for official functions under diplomatic status. The Estonian National Tax Board supervised compliance with the rules.
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Table 5: Excise Taxes in Estonia
Tariff Heading, subheading Product description Tax rate (EEK) Alcohol 2203 00 011, 2203 00 091, 2203 00101, 1. Beer 0.55** 2203 00 019, 2203 00 099, 2203 00 109 (from 1 April 1999) 2204 10 110 ‑ 2204 21 101, 2. Sparkling wines and 10.40* 2204 21 110 ‑ 2204 21 840, other wines of fresh grapes 2204 29 101, 2204 29 105, with an alcoholic content 2204 29 121-2204 29 849, 2205 10 101, by volume up to 15% 2205 90 101, 2205 90 103. 2204 21 109, 2204 21 870 ‑ 2204 3. Sparkling wines and 15.60* 21 990, 2204 29 103, 2204 29 109, other wines of fresh grapes 2204 29 871- 2204 29 999, with an alcoholic content 2205 10 109 – 2205 10 900, 2205 90 by volume exceeding 15% 105, 2205 90 109, 2205 90 901, 2205 90 902. 4. Other fermented drinks (e.g. cider, berry, wine etc.) and their blends: 2206 00 810, 2206 00 891 a) with an alcoholic 4.90* content by volume up to 15 %vol. 2206 00 592, 2206 00 892, 2204 30 109, b) with an alcoholic 6.50* 2204 30 969, 2204 30 989 content by volume exceeding 15 %vol. 2207 10 009, 2208 5. Other alcohol 1.45** 2106 90 200, 3302 10 100 ex2207 10 000 6. Rectified spirits used in 0.20** ex2208 90 910 medicine, pharmaceutics, ex2208 90 990 veterinary, scientific research and study purposes, the production of perfumery * per litre ** per one %vol. of absolute alcohol in a litre Motor Fuel (from 1 December 1998) 2710 00 271, 2710 00 272, 2710 00 290, Petrol, per 1,000 litre 3,000 2710 00 320, 2710 00 341, 2710 00 342 2710 00 343, 2710 00 344, 2710 00 360 2710 00 660, 2710 00 671, 2710 00 681 Diesel oil, per kg 2.32 2710 00 260, 2710 00 370 Aviation gasoline, per kg 1.50
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Tariff Heading, subheading Product description Tax rate (EEK) Motor Fuel (from 1 December 1998) 2710 00 510 Aviation petrol, per kg 3.50 2711 12 940, 2711 12 970 Liquid gas used as motor 1.50 2711 13 910, 2711 13 970 fuel, per kg 2711 21 000 Compressed gas used as 1.20 engine fuel, per kg 2710 00 871 Motor oil, per kg 0.38 2710 00 679, 2710 00 689 Light motor oil, per kg 0.24 Tobacco products (from 1 Jan. 99/from 1 July 99) 2402 20 Filtered cigarettes 5.00*/5.50* 2402 20 Unfiltered cigarettes 5.00*/5.50* 2402 20 Russian cigarettes 5.00*/5.50* 2402 10 001 Cigarillos 5.00*/5.50* 2402 10 009 Cigars 5.00**/5.50** 2403 10 Smoking tobacco 6.35***/7.00*** 2403 99 100 Snuff 6.35***/7.00*** 2403 99 100 Chewing tobacco 6.35***/7.00*** ex2403 99 900 Other tobacco products 6.35***/7.00*** *per package containing up to 20 (incl.) cigarettes, Russian cigarettes or cigarillos **per one cigar ***per package containing up to 50 (incl.) grams of a tobacco product Packaging Alcohol and soft drink packaging, Per unit Per litre depending on the material Glass and ceramics 0.50 2.00 Plastics 1.00 2.00 Metal 0.75 2.00 Other 0.25 1.00 Excise is calculated according to both rates and summarized. As from 1 January 1999, excise tax is not imposed on packaging of which at least 60 per cent is recycled.
56. The representative of Estonia said that the Law on Stamp Duty established revenue stamps, issued against payment of taxes by the National Tax Board at no extra charge, for goods subject to excises. At present the Stamp Duty concerned
36 WTO BISD 1999 Accession only imported and domestically produced tobacco products. For example, the excise tax per package of 20 cigarettes amounted to EEK 5.00 (EEK 5.50 from 1 July 1999). Domestic firms paid excise taxes to the local Tax Board three times per month, taxes on imported tobacco products were payable before release for free circulation in Estonia. The representative of Estonia confirmed that excise rates for imported and domestically-produced tobacco products had been equalized on 1 January 1996 by bringing taxes on domestic products up to the level applied to imports. 57. Concerning the taxation of automobiles, a member said that the exemption of used domestically owned automobiles from the excise tax on used automobiles was inconsistent with Article III of the GATT 1994 and should be changed to bring it into conformity with WTO requirements. In response, the representative of Estonia said that used automobiles imported into Estonia had been subject to a 10 per cent import tax levied in accordance with original invoices for legal persons and a valuation list for natural persons in order to avoid fraud. The import tax had been replaced by excise taxes levied in accordance with the Law on Motor Vehicle Excise Tax, in force since 1 April 1995. 58. all new motor vehicles and used motor vehicles imported into Estonia were subject to excise tax. Passenger automobiles were subject to a tax based on age and cylinder capacity either at the time they were imported or at the point of manufacture within Estonia. The tax was therefore applied at the point of first sale, i.e. either at the time of importation or sale by domestic manufacturer. The subsequent sale was not taxed. There were no manufacturers of motor vehicles in Estonia except that buses were assembled in small quantities. At present there were no sales of domestically produced new or used motor vehicles. According to the Law, if there would be manufacturers of motor vehicles, they would pay the excise tax upon sale, exchange, gratuitous transfer or self consumption of motor vehicles. According to the Law on Motor Vehicle Excise Tax buses were not subject to excise tax. Estonia considered the Law on Motor Vehicle Excise Tax to be in conformity with Article III of GATT 1994 because imported motor vehicles were treated as favourably as domestically produced motor vehicles. In order to explain how excise duties on automobiles were calculated an example was included in Table 6. The excise tax was designed to encourage importation of modern vehicles.
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Table 6: Motor Vehicles
Tariff heading, subheading Product description Tax rate applicable from 1 April 1999
1. excise tax based on the cylinder capacity of motor vehicles
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading No. 8702), including station wagons and racing cars: ex8703 10 Motor vehicles specially designed for EEK 15/cc travelling on snow; golf cars and similar vehicles
Other vehicles, with spark‑ignition internal combustion reciprocating piston engine of a cylinder capacity:
8703 21 not exceeding 1,000 cc EEK 1/cc
8703 22 exceeding 1,000 cc but not 1,500 cc EEK 2.5/cc ex8703 23 exceeding 1,500 cc but not 1,600 cc EEK 2.5/cc ex8703 23 exceeding 1,600 cc but not 2,000 cc EEK 4/cc ex8703 23 and Station wagons, land rovers of a cylinder ex8703 24 capacity exceeding 1,600 cc EEK4/cc ex8703 23 exceeding 2,000 cc but not 2,500 cc EEK 8/cc ex8703 23 exceeding 2,500 cc but not 3,000 cc EEK 15/cc
8703 24 exceeding 3,000 cc EEK 30/cc
Other vehicles with compression‑ignition internal combustion piston engine (diesel or semi‑diesel) of a cylinder capacity:
8703 31 not exceeding 1,500 cc EEK 2.5/cc
8703 32 exceeding 1,500 cc but not 2,500 cc EEK 4/cc Station wagons, land rovers of a cylinder ex8703 32 and capacity ex8703 33 exceeding 1,600 cc EEK 4/cc ex8703 33 exceeding 2,500 cc EEK 8/cc ex8703 33 exceeding 3,000 cc EEK 15/cc
8711 Motorcycles (including mopeds) and cycles EEK 2.5/cc (except under sub-heading fitted with an auxiliary motor, with or without 8711 90) side‑cars; side‑cars
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Tariff heading, subheading Product description Tax rate applicable from 1 April 1999
2. excise tax on used motor vehicles
of up to 10 years of age EEK 500/year
from 11 years of age EEK 1,000/year
3. excise tax on new motor vehicles EEK 1,000
Example: A used automobile, cylinder capacity 2 000 cm³, age 10 years and price according to the purchase documents is 35,000 EEK:
35,000 ‑ price according to the purchase documents 8,000 ‑ excise tax on the basis of the cylinder capacity 5,000 ‑ excise tax on the basis of age 48,000 8,640 ‑ VAT (18% of EEK 48,000) 56,640 ‑ price for importer after importation
59. Some members of Working Party requested information on the application of the value-added tax, including product and user-specific exemptions and equal treatment for imported and domestic products. Questions were also raised regarding the calculation of the VAT on motor vehicles. 60. The representative of Estonia confirmed that the value-added tax at an 18 per cent rate was applied equally to domestic goods and to all imports regardless of country of origin. VAT on motor vehicles imported by natural persons had been based on a standard valuation list until the excise tax system was changed on 1 April 1995. He also confirmed that the exemptions for certain goods and services from the VAT were applied equally to domestic and imported goods and services. The following goods and services were exempt from VAT: education and advanced training, postage stamps and public postal services, medical services, banking and insurance, funeral services and requisites, organization of gambling and lottery tickets, residential rent (letting of housing), medicines, medical goods, medical equipment, treatment of dangerous waste (since February 1995), social services and scientific research activities of universities and State research establishments funded from the State budget, and municipal sauna services. Exports, subscriptions to periodicals published and printed in Estonia, theatre tickets, tickets to concerts of State concert organizations and State collectives of performers, textbooks and workbooks for basic schools and gymnasiums, had zero-rate VAT. The Government had the right to grant exemptions from VAT on imports for non-profit purposes. Imports required for official purposes of foreign representations and diplomats
WTO BISD 1999 39 Decisions and Reports were not subject to VAT provided that foreign country granted the same right to Estonia’s representations abroad. Regarding the VAT exemption on subscriptions to periodicals, the representative of Estonia stated that national treatment will be applied to subscriptions to foreign periodicals by the date of accession to the WTO. 61. noting that certain legal entities with a turnover below EEK 250,000 were not registered as obligatory payers of VAT, a member questioned the rationale for this provision and its conformity with Article III of the GATT 1994. In his view, this exemption would appear to constitute a subsidy program for sales of domestic goods by small Estonian businesses since imports were assessed for the VAT in any case upon importation. Estonia should revise its legislation in the near term or propose a method by which the deficiencies identified in its excise tax and VAT application would be addressed. The representative of Estonia replied that legal persons whose taxable base (except imports) exceeded the threshold value of EEK 250,000 in a calendar year were obliged to register with the Tax Board as persons liable to taxation. Legal persons with a taxable base below the threshold value could also seek registration as liable to taxation at the Tax Board. In his view, non registration did not amount to a subsidy program for small Estonian companies for sales of domestic goods and services since only registered tax payers could claim a refund for VAT paid on goods and services used as inputs in their production. Experience suggested that most firms making use of the threshold were small services providers with relatively low input costs. 62. The representative of Estonia confirmed that, from the date of accession, Estonia will apply its domestic taxes, including those on products listed in paragraphs 52 to 61 in strict compliance with Article III of the GATT 1994. The Working Party took note of this commitment.
Quantitative Import Restrictions, including Prohibitions, Quotas and Licensing Systems 63. Some members of the Working Party sought information about the use of quantitative restrictions and import licensing arrangements. Some members expressed the concern that under certain circumstances the conditions of sale of imported products could be affected in a manner not consistent with Article III of the GATT 1994, for instance, trade in alcohol and tobacco required a preliminary declaration. 64. The representative of Estonia said that no product was subject to quantitative import restrictions in Estonia and that licensing was not applied to restrict imports, the production or the wholesale of any product. The “preliminary declaration” requirement simply implied that all customs procedures and formalities needed to be completed before goods could cross the border. The representative of Estonia stated further that licences were required to engage in certain activities, including importation of certain products as described in paragraphs 34 to 40 of this report.
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These requirements, including licensing arrangements for food imports, were of automatic nature and did not have restrictive effect on imports. In Estonia’s view, the procedures for activity licensing were in full conformity with the provisions of the WTO Agreement on Import Licensing Procedures, notably its Articles 2, 3 and 5. 65. The representative of Estonia confirmed that, from the date of accession, Estonia would not introduce, re-introduce or apply quantitative restrictions on imports, or other non-tariff measures such as licensing, quotas, bans and other restrictions having equivalent effect that could not be justified under the provisions of the WTO Agreement. If balance-of-payment measures were ever necessary in the future, Estonia would impose them in a manner consistent with the relevant WTO provisions, including Article XII of the GATT 1994 and the Understanding on Balance-of-Payments Provisions of the GATT 1994. The Working Party took note of these commitments.
Customs Valuation 66. Some members of the Working Party asked about the status of the Customs Valuation Law and its content. Relating the request for information to Estonia’s implementation of the WTO Agreement on the Implementation of Article VII of the GATT 1994, these members enquired whether Estonia’s Customs Valuation Law was fully consistent with the WTO Agreement. A member understood that Estonia was considering legislation which could provide for minimum prices on importation of certain food products and questioned the conformity of such legislation with GATT rules. Estonia also appeared to use price lists of reference prices to verify invoices. This member reminded Estonia that the use of minimum import prices or reference prices was a violation of Article VII. 67. The representative of Estonia explained that the Customs Valuation Law had been adopted on 8 February 1995 and had entered into force on 1 January 1996. The delay had been necessary to undertake preparatory work for its implementation, including practical arrangements such as the printing of documents, the training of customs officers, informing traders, etc. Estonia considered the Law to be in full conformity with WTO rules, including the WTO Agreement on the Implementation of Article VII of the GATT 1994. 68. estonia’s response to the questionnaire on “Information on Implementation and Administration of the Agreement” was submitted in August 1995 (WT/ACC/ EST/4, annexes 1 and 6, listed in document WT/ACC/EST/5). The representative of Estonia was asked to clarify provisions in the Customs Valuation Law relating to the use of transaction value between related parties (Article 4(3)); verification of transaction values between related parties based on test values (Articles 4(5)(4) and (5)); and a reference to minimum customs values in Article 9(2)(4) of the Law. Estonia was also asked about the implementation of Decision 4.1 of the Customs Valuation Committee concerning the valuation of carrier media bearing software for
WTO BISD 1999 41 Decisions and Reports data processing equipment (the Software Decision). 69. The representative of Estonia said that Estonia had introduced the provisions of the Software Decision. A decree, issued by the Ministry of Finance on 11 January 1996, stipulated that only the cost of the carrier medium itself would be accounted for in the customs value. He stated that the value of imported merchandise was determined in conformity with GATT Article VII (2)(a) also in transactions between related parties; test values were used for the verification of the declared value with the actual value only at the request of the importer. Estonia agreed to incorporate a number of specific requests made by a member in connection with its draft Act Amending the Customs Valuation Act and the draft Order amending its 1995 Order relating to Customs Valuation. These changes included: clarity that Article 3 of the draft Act would incorporate the words “related” rather than “dependent on each other”; language to more clearly reflect royalties and licensing fees under the WTO Agreement in Article 14 of the draft Law; changes to paragraph 32 of the draft Order to clarify its application to situations where transaction value does not apply; and, clarifying language in paragraph 49 of the draft Order into conformity with WTO provisions with respect to the use of test values. 70. The representative of Estonia assured members of the Working Party that the Law on Customs Valuation would be applied in full conformity with the WTO Agreement on the Implementation of Article VII of the GATT 1994. In addition, he confirmed that Article 9(2)(4) of the Law would be applied consistent with Article VII (Valuation for Customs Purposes). He stressed that Article 9(2)(4) of the Customs Valuation Law prohibited the setting up of minimum import values. He underlined that these and other issues raised by members of the Working Party were also addressed in the provisions of the “Order of declaring, determining and adjusting the customs value of goods”, enacted in 1995, and in draft legislation. The draft Act Amending the Customs Valuation Act would be presented to Parliament as soon as possible, and no later than June 1999. Following adoption of these amendments, the Government would revise the 1995 Order. This legislation would be enacted prior to Estonia’s accession. With this additional legislation, Estonia would not have any measures in place at the time of accession which would be inconsistent with WTO rules, nor would Estonia introduce such measures in the future. Estonia did not use measures such as minimum prices, reference prices or lists of prices in order to calculate customs value or to verify invoices. 71. The representative of Estonia confirmed that, from the date of accession, Estonia would apply fully the WTO provisions concerning customs valuation, including in addition to the Agreement on the Implementation of Article VII of the GATT 1994, the provisions on the Treatment of Interest Charges in Customs Value of Imported Goods and for the Valuation of Carrier Media Bearing Software for Data Processing Equipment. In accordance with these latter provisions, only the cost of the carrier medium itself would be accounted for in the customs value. He stated
42 WTO BISD 1999 Accession that Estonia would not use any form of reference price or fixed valuation schedule for the valuation of imports or to apply duties and taxes, and that all methods of valuation used were in strict conformity with those provided for in the WTO Agreement on the Implementation of Article VII of the GATT 1994. He further confirmed that, as an international agreement, the provisions of the WTO Agreement on the Implementation of Article VII of the GATT 1994 would supersede domestic law upon accession. The Working Party took note of these commitments.
Other Customs Formalities 72. The representative of Estonia confirmed that other customs formalities were applied in accordance with internationally accepted rules and were based on the Kyoto Convention. He added that Estonia had been a member of the World Customs Organization since June 1992. In reply to a specific question, he confirmed that Estonia did not require authentication of import/export documents by its consulates overseas.
Rules of Origin 73. Some members of the Working Party requested information about the elaboration of rules of origin in Estonia whether in the context of free trade agreements or otherwise. A member requested Estonia to confirm that its rules of origin for both preferential and non preferential trade complied fully with the WTO Agreement on Rules of Origin. Estonia was asked to describe, in particular, measures consistent with the disciplines under Article 2 of the Agreement and the Common Declaration in Annex II of the Agreement. 74. The representative of Estonia said that the drafting of rules of origin was a continuous process evolving in accordance with developments in the Technical Committee on Rules of Origin of the WTO. Due to the liberal foreign trade regime the elaboration of national rules of origin had not been considered essential in Estonia, but agreed rules of origin were used in the framework of free trade agreements. Estonia applied unified rules of origin within the system of diagonal cumulative origin among the countries of the European Economic Area, Switzerland and ten associated countries in central and eastern Europe. Members of the Working Party were supplied copies of the rules of origin of Estonia’s free trade agreements with EFTA countries; the European Communities, the Ukraine and the trilateral free- trade agreement with Latvia and Lithuania. He said that the preferential rules of origin complied fully with the disciplines under the Common Declaration in Annex II of the WTO Agreement on Rules of Origin. The Estonian authorities envisaged the elaboration of legislation on rules of origin along the lines of existing rules of origin in preferential trade agreements and the suggestions and decisions of the Committee on Rules of Origin of the World Customs Organization and the WTO Agreement on Rules of Origin. Estonia had not developed its own non-preferential
WTO BISD 1999 43 Decisions and Reports rules of origin and was waiting for the new set of rules of origin to be elaborated by the WTO. The new Customs Act that entered into force on 19 January 1998 provided the basis for enactment of those rules. Regarding both non-preferential and preferential rules of origin, when legislation was enacted, it would address the requirements of Article 2(h) and Annex II, paragraph 3(d), which require provision upon request of an assessment of the origin of the import and outline the terms under which it will be provided. 75. The representative of Estonia stated that the Government Regulation establishing Estonia’s non-preferential rules of origin would be adopted by 30 June 1999, or in any case no later than by the date of accession. He confirmed that from the date of accession the non-preferential rules of origin would comply fully with the WTO Agreement on Rules of Origin. The Working Party took note of this commitment.
Anti-Dumping, Countervailing Duties, and Safeguard Regimes 76. Some members of the Working Party noted that Estonia appeared not to have any specific anti-dumping legislation, but that an Anti-dumping Law, including countervailing duties procedures, was in preparation. In view of the uncertainty regarding the date of entry into force of such a law and its content, Estonia was asked to submit draft legislation for comment to members of the Working Party. 77. The representative of Estonia confirmed that, at this point, Estonia did not have legal authority to apply anti-dumping duties, countervailing duties, and safeguards, and therefore did not use these measures to regulate trade. Chapter 4, Article 14 of the Law on Competition mentioned among abuses of dominant position the imposition of unfair pricing conditions or other unfair trading conditions. However, the listed unfair trade practices in the Act did not overlap with any pending anti dumping statute. He added that no text of any Anti-dumping Law existed yet. Provisions on anti-dumping and countervailing measures were not included in the Law on Customs Tariff. 78. The representative of Estonia confirmed that Estonia would not apply any anti-dumping, countervailing or safeguard measure until it had implemented and notified appropriate laws in conformity with the provisions of the WTO Agreements on the Implementation of Article VI, on Subsidies and Countervailing Measures, and on Safeguards. In the elaboration of any legislation concerning such anti-dumping, countervailing and safeguard measures Estonia would ensure their full conformity with the relevant WTO provisions, including Article VI and XIX of the GATT 1994 and the Agreements on the Implementation of Article VI, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards. After such legislation was implemented, Estonia would also apply any anti-dumping duties, countervailing duties and safeguard measures in full conformity with the relevant WTO provisions. The Working Party took note of these commitments.
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2. EXPORT REGULATIONS
Customs Tariffs, Fees and Charges for Services Rendered, Application of Internal Taxes to Exports 79. Some members of the Working Party noted that Estonia had applied export taxes on metals and objects of cultural value. In response, the representative of Estonia said that a 100 per cent export tax had been levied on objects of cultural value, i.e. dating from before 1950, but this tax had been abolished by Government Decree No. 115, which entered into force on 2 June 1998. Export taxes on metals had also been abolished, thus Estonia did not impose export taxes on any product at present. 80. The representative of Estonia confirmed that after accession to the WTO, Estonia would minimize the use of export taxes and any such taxes applied would be in accordance with the provisions of the WTO Agreement and published in the Official Journal “Riigi Teataja” (State Gazette). Changes in the application of such measures, their level, scope, or justification, would also be published in the Official Journal “Riigi Teataja” (State Gazette). The Working Party took note of these commitments.
Export Restrictions 81. noting that the Ministry of Economic Affairs had the right to impose export quotas on certain goods, some members of the Working Party asked the representative of Estonia to clarify licensing arrangements affecting trade in metals, spirits, tobacco products and medicaments and to justify export quotas/licences on gravel and clay. Some members also sought clarification on Estonia’s intentions regarding the use of non-tariff measures on exports for emergency purposes. The representative of Estonia replied that the Ministry of Economic Affairs’ right to determine export quotas had been eliminated. The last remaining export quota (on quartz sand) had been abolished and Estonia did not foresee any further quantitative regulation of export trade. As the export quota/licence on gravel and clay had been terminated on 1 January 1995, no justification would be required under GATT or WTO provisions and Estonia would seek no transitional period for this measure. Export and import licences as such did not exist, but he referred to the earlier response regarding “Licence of Activity” (in paragraphs 34 to 40 above). He added that Estonia would not apply regulations on exports beyond WTO mechanisms. 82. export control measures (licences) on scrap metal and radioactive waste material did not carry any limitation of quantity. Licences were issued automatically provided the applicant could prove that the goods had been obtained legally. Failure to do so could constitute a criminal offence. The monopoly rights of the former State Monopoly on trade in scrap metals and dangerous metal waste had been abolished by Government Regulation No. 200 “On the Approval of the Order of
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Issuing Activity Licences for Commercial Intermediation of Scrap Metal and Metal Waste” as of 15 September 1998, and the enterprise itself had been privatized. The regulation granted access to any private enterprise to trade in scrap metal, provided the enterprise fulfilled the conditions stipulated in the Regulation. All firms trading in scrap metal or radioactive metal waste were required to follow the rules established by the regulation. The representative of Estonia confirmed that all export quotas and licences and measures having similar effect had been eliminated. 83. The representative of Estonia confirmed that any remaining export control requirements were fully consistent with WTO provisions, including those contained in Articles XI, XVII, XX and XXI of the GATT 1994. The Working Party took note of this commitment.
Export Subsidies 84. Some members of the Working Party sought information about subsidies, including tax incentives related to exports, the activities of the Export Credit Fund, the consideration of wide ranging use of export incentives, and existing or planned measures to tackle market disturbances or balance-of-payments problems. The representative of Estonia said that no tax incentives, including tax holidays, existed to promote exports. He confirmed that loans from the Export Credit Fund carried 12 to 16 per cent annual interest, comparable to the commercial interest rates of 12 to 18 per cent in effect for short-term loans in Estonia in 1996. Plans existed to develop the Fund into an Export Credit and Guarantee Board which would receive the initial capital injection from the National Budget. Estonia would not consider wide ranging export incentives, but, due to an increasingly negative trade balance, had the intention to introduce moderate export incentive schemes. Enterprise- or sector- specific subsidies were not envisaged; the schemes would be of horizontal nature and allocations would be based on objective economic criteria. The representative of Estonia added that the incentives schemes would be applied in conformity with WTO requirements. 85. The representative of Estonia stated that from the date of accession Estonia would not maintain any subsidies, including export subsidies, which met a definition of a prohibited subsidy within the meaning of Article 3 of the Agreement on Subsidies and Countervailing Measures, and would not introduce such prohibited subsidies from the day of accession. The Working Party took note of this commitment.
3. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS
Industrial Policy, including subsidies 86. Some members of the Working Party requested details on any subsidies to private or State-owned enterprises and asked whether Estonia maintained any industry support to be notified in accordance with the Agreement on Subsidies and
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Countervailing Measures. Some members also asked Estonia to state its attitude regarding future resort to subsidies in the pursuit of industrial policy and clarification of the intention to restore historical trade links. 87. The representative of Estonia said that the restoration of historical trade links would involve free and balanced economic links with countries offering Estonia the best possibilities and real potential for mutually beneficial economic partnership. Estonia confirmed that it had some programmes providing subsidies to industries, in particular the Innovation Foundation, which provided grants for research and development activities, and the Law on State Support for Entrepreneurship, which regulated State support to small and medium sized enterprises. In this latter case support - loans and loan guarantees - were made available by an eleven-member Council. The Estonian Innovation Foundation was a non-profit organization, established by the Government. Its operations were coordinated by the Estonian Research and Development Council, a collective advisory body to the Government. The main functions of the Foundation were to initiate and fund State technology programmes; finance projects to improve production technology at the pre- industrial stage; promote technical and technological research and development; and to support the development of science and technology parks and production infrastructure. The Foundation provided grants for applied research (up to 50 per cent of project costs) and loans for industrial projects (maximum 75 per cent of project costs). In the period 1991-1997, the Estonian Innovation Foundation had supported 257 projects, providing grants totalling EEK 27 million and loans of more than EEK 84 million; the Foundation’s budget for 1998 amounted to EEK 30 million. Estonia provided a draft notification under Article 8.3 (Non-actionable subsidies) of the Agreement on Subsidies and Countervailing Measures regarding the activities of the Estonian Innovation Foundation to the Working Party (document WT/ACC/EST/20). 88. The representative of Estonia confirmed that any subsidy programmes would be administered in line with the Agreement on Subsidies and Countervailing Measures and that all necessary information on notifiable programmes would be notified to the Committee on Subsidies and Countervailing Measures in accordance with Article 25 of the Agreement upon entry into force of Estonia’s Protocol of Accession. The Working Party took note of this commitment.
Technical Barriers to Trade, Sanitary and Phytosanitary Measures 89. Some members of the Working Party inquired about the application of international and national standards in Estonia and the compliance with various provisions of the Agreement on Technical Barriers to Trade (TBT) and on Sanitary and Phytosanitary Measures (SPS). Regarding agriculture, some members asked about the objectives of the Food Law and the resort to sanitary and phytosanitary measures, with particular reference to Government Regulations 300 and 340 of
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1992. 90. The representative of Estonia supplied information on technical barriers to trade in document WT/ACC/EST/9 (Annex III) and a notification on sanitary and phytosanitary measures. The National Standards Board of Estonia (EVS) was responsible for standardization issues. The EVS was a correspondent member of ISO and an affiliated member of CEN, the Estonian Electrotechnical Committee was an associated member of IEC and an affiliated member of CENELEC, and the Estonian Telecommunications Board had become a member of ETSI. The EVS had accepted the Code of Good Practice for the Preparation, Adoption and Application of Standards (Annex 3 to the WTO TBT Agreement), and this had encouraged the application of international and European standards. Current Estonian standards were based mainly on standards of international organizations and on national standards of other countries. Estonian standards were harmonized with the regulation of the European Communities and were generally voluntary, except the application of some standards (e.g. on purchasing requirements of milk, on fire safety, etc.) made mandatory by ministries’ regulations and in the case of technical regulations on spirits (white vodka) and construction cement. Former USSR criteria, the so-called GOST standards, remained temporarily valid in some areas but were no longer mandatory. All standards applied equally to domestic and imported products. EVS prepared its standards programme twice a year (1 January and 1 July); the latest standards programme had also been submitted to the ISO/IEC information unit. All European standards implemented by Estonia were registered and submitted to CEN. All draft standards presented for adoption as Estonian standards, including those received from international standardization organizations, were published in the official bulletin of the National Standards Board “EVS Teataja” for comment. 91. Conformity assessments were organized in accordance with European requirements (EN 45000). Acceptance of foreign certification was based on the principle of mutual recognition between the relevant body in Estonia and its counterpart in another country. Estonia was harmonizing its conformity assessment legislation to ensure compliance with the requirements of the TBT Agreement, including the acceptance of foreign conformity assessment without a mutual recognition agreement, by the date of accession. 92. The representative of Estonia said that “high quality” and “internationally competitive food” were key objectives cited in Estonia’s Food Law, which was to serve as a basis for further legislation regulating food handling, quality, safety, control and inspection. A National Food Board had been established to deal with all matters concerning food and nutrition policy, however, its tasks had been transferred to the Ministry of Agriculture in accordance with the amendments to the Food Law of 26 June 1996. The responsibilities of the Ministry thus included planning and analysis of the status of food and nutrition, elaboration of relevant strategic proposals, drafting laws on food and food handling, organization of food
48 WTO BISD 1999 Accession safety inspection, advising authorities certifying and testing food quality and safety, and elaboration and implementation of food monitoring programmes. 93. The representative of Estonia added that border controls on plants and plant products were effected by the Plant Quarantine Department of the Plant Protection Inspectorate in accordance with Government Regulation No. 300 (of 19 October 1992) on “Regulation of arranging phytosanitary control on the State border” and amendments to this done on 15 December 1992 (Regulation No. 340) and 31 March 1995 (Regulation No. 147) as well as the Law on Plant Protection and the Temporary Regulation on the State Control, Sale, Export and Import of the Seeds of Field Crops, and the Law on Veterinary Services of 1992. Sanitary and phytosanitary measures and the work of veterinary services were in accordance with the Codex of the OIE (Office International des Epizooties), in which Estonia had been member since 1992. Goods subject to veterinary controls, border check points, requirements for veterinary certificates and the procedures for settling claims were laid down in a Decree of the Minister of Agriculture of 3 August 1994 and Government Regulation No. 17 of 10 April 1995. The authorities considered the health and safety provisions of the Food Law to be consistent with the WTO Agreement on Sanitary and Phytosanitary Measures. Amendments to the Food Law, adopted by Parliament in February 1999, included acceptance of exporters’ certificates, issued in conformity with international principles of certification, at the border. 94. Some members of the Working Party noted that Estonia had adopted no laws, regulations or administrative procedures relating to the implementation and administration of the WTO obligations on technical barriers to trade and that regulations concerning SPS were being developed. In their view, these procedures should be enacted by the time of Estonia’s accession to the WTO. 95. The representative of Estonia provided copies of draft legislation related to technical barriers to trade and sanitary and phytosanitary measures to Members for comment. He confirmed that Estonia had established an Enquiry Point as required in Article 10 of the WTO Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures (Annex B). The Enquiry Point at the National Standards Board of Estonia (EVS) was fully operational at present, and covered both TBT and SPS issues. The EVS had accepted the Code of Good Practice established in Annex 3 of the TBT Agreement. Programmes on the drafting of standards in Estonia were submitted to the ISO/IEC twice a year. Agencies drafting standards and conformity assessment or certification procedures took into account existing international standards or guidelines prior to drafting domestic legislation, and would notify WTO Members at the draft stage and take into account comments from WTO Members before finalizing regulations. Estonia submitted information on national enquiry points to the Working Party in document WT/ACC/EST/19.
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96. The representative of Estonia provided a draft notification under Article 15.2 of the TBT Agreement in April 1997 (document WT/ACC/EST/17). The Law on Technical Regulations and Standards, adopted by Parliament on 22 February 1999, provided the legal and organizational basis for standardization activities and notification procedures in Estonia. Technical regulations were published in the Official Journal “Riigi Teataja” (State Gazette). According to the Lawon Technical Regulations and Standards, a technical regulation could make reference to existing standards, which could remain voluntary, or be made mandatory standards. Detailed procedures for the notification of technical regulations would be provided in a Government Regulation, to be presented to the Government for adoption in May 1999. Preparations had begun to establish a Notification Centre at the Ministry of Economic Affairs. The Notification Centre would be responsible for the notification of technical regulations, collection of incoming notifications, collection of comments, and consultations with the authors of technical regulations on notification requirements. Institutions drafting technical regulations would be required to provide all relevant information and documentation to the Notification Centre, which would decide on notification in close co-operation with the drafting institution. The Notification Centre would forward the notification form tothe WTO Secretariat, and the TBT Enquiry Point (EVS) would file the documentation and publish a note in its official bulletin “EVS Teataja” about the draft technical regulation being available for comment. The Notification Centre would forward any requirement for consultations to the drafting institution, the Enquiry Point and the Ministry of Foreign Affairs, and the agencies would prepare a common position on the comments/requirements for consultations. The drafting institution was required to submit the adopted text of a technical regulation to the Notification Centre, which forwarded it to the Enquiry Point for filing. Concerning incoming notifications, notifications sent by the WTO Secretariat to the Notifications Centre would be forwarded to the Enquiry Point for publication, and to the relevant Ministry. Interested parties would present their comments to the Notification Centre, which would prepare the comments/requirements for consultations in close co-operation with the relevant Ministry and the Ministry of Foreign Affairs. The Notification Centre would send Estonia’s comments, requirements for consultations and detailed opinions to the WTO Member. 97. The representative of Estonia said that the Ministry of Agriculture had reviewed the Food Law, the Law on Veterinary Services, the Law on Plant Protection, the Law on Grain, the Law on Consumer Protection and the Law on Common Health with a view to ensuring their conformity with WTO requirements upon accession to the WTO, including the Agreement on Technical Barriers to Trade and the Agreement on Sanitary and Phytosanitary Measures. 98. The representative of Estonia confirmed that Estonia would apply all obligations under the WTO Agreements on Sanitary and Phytosanitary Measures and Technical Barriers to Trade from the date of accession without recourse to any
50 WTO BISD 1999 Accession transition period. The Working Party took note of these commitments.
Trade-Related Investment Measures (TRIMs) 99. The representative of Estonia said that Estonia would not maintain any measures inconsistent with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession without recourse to any transitional period. The Working Party took note of this commitment.
State trading 100. Some members of the Working Party noted that a significant portion of Estonia’s output and trade remained in State hands and that tobacco and alcohol had been subject to State monopoly. Estonia was requested to notify under Article XVII any de facto or de jure trade monopoly and trade activities of any State-owned firm benefitting from selective support or subject to State intervention. 101. The representative of Estonia replied that following extensive privatization State-owned firms accounted for less than 5 per cent of domestic trade. The process of privatization was continuing and shares in privatized companies were traded actively on the Tallinn Stock Exchange. He stressed that the influence on international trade of the shares remaining in Government ownership was difficult to estimate as Estonian law did not allow the customs authorities to disclose enterprise-specific trade information to any third party except the tax authorities. Estimates based on trade per share were not meaningful in practice because of rapid changes in share ownership. Therefore, he could only confirm a strong tendency for State-ownership to decrease as the State sold shares to the public to encourage the development of Estonia’s stock market. With the exception of Eesti Energia and Eesti Põlevkivi, the representative of Estonia said that enterprises part-privatized through the sale of State-owned shares did not constitute a State trading enterprise in the sense of Article XVII since they had no special rights or privileges in relation to any other enterprises. 102. Estonia notified under Article XVII of the GATT 1994 in its Information on State-trading (WT/ACC/EST/9 (Annex IV)) that a State monopoly had been established on scrap metal to control metal trade. The purpose of the scrap metal monopoly (EMEX) was to prevent serious crime; i.e. trade in metal stolen from unguarded installations and construction sites. Such thefts had caused extensive damage to domestic infrastructure, in particular to the operations of Estonian Railways, Estonian Energy and Estonian Telephone. The monopoly could also be used to control trade in radioactive scrap materials. However, the monopoly rights on trade in scrap metals and radioactive metal waste had been abolished by Government Regulation No. 200 “On the Approval of the Order of Issuing Activity Licences for Commercial Intermediation of Scrap Metal and Metal Waste”, in force since 15 September 1998, and the enterprise itself had been privatized.
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The representative of Estonia stated that his Government had identified the trading activities of the firms Eesti Energia and Eesti Põlevkivi as subject to the provisions of Article XVII of the GATT 1994. 103. The representative of Estonia confirmed that it was the intent of his Government to eventually eliminate its State trading rôle. He further confirmed that after accession to the WTO, Estonia would observe the provisions of Article XVII of the GATT 1994, the WTO Understanding on that Article, and Article VIII of the GATS regarding State trading, in particular abiding by the provisions for notification, non-discrimination, and the application of commercial considerations for trade transactions. The Working Party took note of these commitments.
Free Zones, Special Economic Areas 104. The representative of Estonia said that there were currently no free trade zones in Estonia.
Government Procurement 105. Some members of the Working Party asked whether Estonia intended to join the Agreement on Government Procurement and requested details about Estonia’s procurement legislation, its coverage and its conformity with WTO principles. The representative of Estonia said that the Law on Public Procurement had been adopted in May 1995 and entered into force on 1 January 1996. The Law was in line with WTO provisions. The Government had established a Public Procurement Office to coordinate and administer public procurement activities. The legislation defined four principal procedures of procurement; open tender, two- stage tendering, negotiated tendering, and single-source procurement. Open tender implied that any interested supplier could submit a bid and no negotiation would take place between the procuring entity and any tenderer. Two-stage tendering would be applied when all technical and economic factors could not be assessed a priori or the procurement carried uncertainty regarding research and development costs. Negotiated tendering would be organized in procurement subsequent to an inconclusive round of open tender (no bids received or all tenders rejected) or in case public procurement involved urgent works or public procurement was performed by the diplomatic representation of the Republic of Estonia, i.e. procurement taking place outside Estonia. Prior to the commencement of the tendering the procuring entity should notify the Public Procurement Office in writing about the performance of the tendering. Single-source procurement could only take place in the existence of sole suppliers, extraordinary needs or time pressure; as a continuation of previous procurement contracts; and when the supplier would carry out research and development resulting in prototypes. Again, the relevant notice in writing should be sent to the Office prior to the tendering procedure. In accordance with the amendments to the Law on Public Procurement of 1 January 1997, the observance
52 WTO BISD 1999 Accession of the rules established in the Law on Public Procurement was not obligatory when the objective of the public procurement was; (i) public procurement involving State secrets; (ii) printed matter and articles of virtue; (iii) scientific research and special programmes; (iv) elaboration of legal acts and legal assistance; (v) purchase of an existing building or any part thereof from a natural person; and (vi) public procurement established by other laws. 106. estonia requested observer status in the Committee on Government Procurement in a letter dated 1 October 1998 and obtained observer status in that committee on 7 October 1998. 107. The representative of Estonia confirmed that, upon accession to the WTO, Estonia would initiate negotiations for membership in the Agreement on Government Procurement by tabling an entity offer. He also confirmed that, if the results of the negotiations were satisfactory to the interests of Estonia and the other members of the Agreement, Estonia would complete negotiations for membership in the Agreement by 31 December 2000. The Working Party took note of these commitments.
Transit 108. The representative of Estonia said that Estonia had joined the “Convention on Customs for Goods in International Transit under the TIR Carnet” in April 1993. Departure and arrival formalities were completed at the customs inspection stations at the border. No customs duty, customs clearance charge, sales tax or excise tax were levied on goods in transit. 109. The representative of Estonia confirmed that his Government would apply its laws and regulations governing transit operations and would act in full conformity with the provisions of the WTO Agreement, in particular Article V of the GATT 1994. The Working Party took note of this commitment.
Agricultural Policies 110. Some members of the Working Party requested information on Estonia’s current agricultural policy, including main principles, and specific policies regarding tariffs and tariff bindings, trade measures in the grain sector, safeguards, farm support programmes and incomes policy, price controls, export subsidies, privatization and preferential trade arrangements. 111. The representative of Estonia said that the return of land to former owners had been a cumbersome process but the major part of agriculture had been privatized. Remaining State enterprises still played an important role in the development of seeds and breeds. Foreign ownership existed in the food processing industry. Estonia had no tariffs or non-tariff measures affecting agricultural imports and no subsidies or price controls on food. However, the Law on Market Arrangements, adopted by
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Parliament on 25 September 1995, would allow the introduction of tariffs. The 1994 Law on Grain had allowed the Government to restrict grain imports when domestic demand was fully covered by local production, although no quotas had ever been implemented. Agreeing that the Law on Grain was inconsistent with the WTO and the Agreement on Agriculture, the representative of Estonia informed the Working Party that the provisions in the Grain Law authorizing the use of import quotas when domestic demand was fully covered by local production had been abolished by Parliament on 25 November 1998. Estonia used tax exemptions in the years prior to accession as a measure of domestic support. 112. The representative of Estonia confirmed Estonia’s awareness of the WTO requirement not to use quantitative restrictions and to rely on customs duties and said that this rule would be followed in future policy. The representative of Estonia said that drafting of a Law on Food Licensing had not been completed as foreseen by the end of 1996 due to amendments made in the Food Law. Rather than prescribing food licensing by law, it had been decided to develop secondary legislation regulating the issuance of licences for importing food. The Government Resolution No. 249 “on the Order for Issuing State Licence for Importing Foodstuffs into Estonia” had entered into force on 1 December 1998. He stressed that licensing arrangements for food imports were of automatic nature and did not have restrictive effect on imports. 113. a member was concerned about the conformity of Government Resolution No. 249 with WTO requirements. The regulation appeared to institute a system of discretionary licensing, prohibited in Article 4.2 of the Agreement on Agriculture. In reply, the representative of Estonia said that Resolution No. 249 had been amended on 16 March 1999 to ensure that licences would be issued automatically to all importers submitting a complete licence application. 114. estonia’s commitments on agricultural tariffs, on domestic support and export subsidies for agricultural products are in the Schedule of Concessions and Commitments on Goods annexed to Estonia’s Protocol of Accession to the WTO.
Trade in Civil Aircraft 115. a member of the Working Party sought a commitment that Estonia would implement the Agreement on Trade in Civil Aircraft without exceptions or transition periods at the time of accession. 116. The representative of Estonia confirmed that Estonia would become a signatory to the Agreement on Trade in Civil Aircraft upon accession to the WTO. The Working Party took note of this commitment.
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TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS 117. Some members of the Working Party requested details about legislation and enforcement of intellectual property right protection in Estonia and the compatibility with requirements of the TRIPS Agreement. Specific questions were addressed regarding exceptions from national or MFN treatment, non-patentable inventions, protection of plant varieties, patent holders’ rights, extension of patent terms, granting of compulsory licences, judicial review, semiconductors, copyright, trademarks, industrial design and competition and anti-trust. 118. The representative of Estonia said that Estonia deemed its intellectual property right protection compatible with the TRIPS Agreement with no exceptions to the principles of national and MFN treatment. The status of legislation on intellectual property in Estonia as per January 1999 is presented in Table 7. He added that the Patent Office had opened in March 1992. During 1992 and 1994 Estonia had enacted a Patent Law; a Utility Model Law; a Trademark Law; and a Copyright Law, and provisions related to TRIPS-obligations had been included in the Law on Competition of 11 March 1998. A Law on Industrial Design Protection had been prepared and adopted by Parliament on 18 November 1997; the Law had entered into force on 11 January 1998. The Trademark Law had been amended in 1995, 1996 and 1997. Legislation on industrial property was said to be modelled on corresponding laws of the Nordic countries and European and international legislative acts. According to the Constitution, the provisions of an international treaty ratified by Parliament prevailed over national law. An indication of this rule was included in all intellectual and industrial property laws.
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Table 7: Status of Legislation on Intellectual Property in Estonia (January 1999)
TRIPS Agreement Laws and other legal provisions Effective and draft legislation addressing and covering the relating to requirements of the subject matters WTO TRIPS Agreement
Part II, Section 1 Copyright Act of 1992 Effective and full compliance Copyright and related rights The Act Amending the with WTO TRIPS requirements Criminal Code and the Code of ensured Administrative Offences of 1995
Part II, Section 2 Trade Marks Act of 1992 as Effective and full compliance Trademarks amended in 1997 with WTO TRIPS requirements ensured
Part II, Section 3 Trade Marks Act of 1992 Requirements of TRIPS Art. 22-23 Geographical Indications Competition Act of 1998 are covered. Protection of geographical indications will be addressed more specifically in a new act to be adopted in 1999.
Part II, Section 4 Industrial Design Protection Act Effective and full compliance Industrial Designs of 1997 with WTO TRIPS requirements ensured
Part II, Section 5 Patent Act of 1994 as amended in Effective and full compliance Patents 1998 with WTO TRIPS requirements Utility Model Act of 1994 ensured
Part II, Section 6 Protection of Layout-Design of Effective and full compliance Layout Designs Integrated Circuits Act of 1998 with WTO TRIPS requirements ensured
Part II, Section 7 Patent Act of 1994 Effective and compliance with Protection of Undisclosed Trade Marks Act of 1992 Industrial WTO TRIPS requirements Information Design Protection Act of 1997 ensured (protection of undisclosed Protection of Layout-Design of information during registration Integrated Circuits Act of 1998 procedures and from databases)
Part II, Section 8 Draft Regulation on Block Control of Anti-Competitive Exemptions of Some Categories Practices in Contractual of Technology Transfer and Draft Licenses Regulation on Block Exemptions of Certain Categories of Franchise Agreements
Part III, Section 3 Code of Civil Procedure of 1998 Effective and full compliance Provisional measures Competition Act of 1998, Chapter with WTO TRIPS requirements 9 «State Supervision» and ensured Chapter 10 «Liability»
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TRIPS Agreement Laws and other legal provisions Effective and draft legislation addressing and covering the relating to requirements of the subject matters WTO TRIPS Agreement
Part III, Section 4 Customs Act of 1997 Effective and full compliance Special requirements related Act of 1999 Amending the with WTO TRIPS requirements to border measures Copyright Act, the Code of ensured Administrative Offences, the Criminal Code, the Consumer Protection Act and the Customs Act
Part III, Section 5 Code of Criminal Procedure of Effective and full compliance Criminal procedures 1995 with WTO TRIPS requirements Criminal Code of 1992 ensured Act of 1999 Amending the Copyright Act, the Code of Administrative Offences, the Criminal Code, the Consumer Protection Act and the Customs Act
119. in 1994, Estonia had become full member of the World Intellectual Property Organization, joined the Patent Cooperation Treaty and restored its membership to the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works which Estonia originally joined in 1924 and 1927, respectively. The Ministry of Culture was preparing Estonia’s accession to the 1971 Geneva Convention and the 1961 Rome Convention. The texts of the Rome and Geneva Conventions had been translated into Estonian, and Estonia was expected to join the Conventions by the end of 1999. The Protocol relating to the Madrid Agreement on International Registration of Marks had entered into force in Estonia on 18 November 1998. In response to further questions, the representative of Estonia said that plant varieties were protected under the 1994 Variety Protection Law and patent protection for micro-organism strains could be granted following Estonia’s accession to the Budapest Treaty. As of 14 September 1996, Estonia had been a member of the Budapest Treaty on the International Recognition of the Deposit of Micro-organism for the Purposes of Patent Procedure. From that date, the Estonian Patent Office had accepted patent applications on the micro-organism strains and the novel use of micro-organism strains. Estonia intended to accede to the Union for the Protection of New Plant Varieties (UPOV) and the Variety Protection Law would be harmonized with the 1991 UPOV Convention. 120. Certain inventions were non-patentable (inventions contrary to public order and morality, and treatment and diagnostic methods practised on humans or animals). Patent protection was provided to equipment, methods, substances or
WTO BISD 1999 57 Decisions and Reports micro organism strains, including their combination and use for novel purposes, in accordance with Article 6 of the Estonian Patent Law. Supplementary protection certificates for pharmaceutical and agricultural chemical products would be introduced through passage of the Law on Amending the Patent Law in the first half of 1999. Provisions regarding a patentee’s exclusive rights and exceptions were found in Chapter IV (sections 15, 17, 45 and 46) of Estonia’s Patent Law. There were no restrictions on a patent owner’s rights to assign, transfer or licence rights, but a licensing agreement needed to be registered with the Patent Office to be valid. Compulsory licences could be granted by court order only (section 47) under terms and conditions consistent with Article 31 of the WTO Agreement on TRIPS. Patents were not extendable under present legislation. Parliament had adopted the Law on Amending the Patent Law on 16 June 1998 in order to establish provisions corresponding to Articles 27 and 34 of the TRIPS Agreement. In regard to Article 39.3 of the TRIPS Agreement requiring that members protect data submitted to obtain marketing approval for pharmaceuticals and agricultural chemicals that utilize new chemical entities, the Estonian Patent Office had initiated the procedure for including this provision into the Patent Law. The Estonian Patent Office had submitted the draft Law Amending the Patent Law to the Ministry of Economic Affairs for review on 16 March 1999. The draft Law would be submitted to the Government for approval on 20 April 1999. The adoption of the Law by the Parliament was scheduled before the end of 1999. According to paragraph 2 of Article 11 of the Patent Law, Estonia recognized the right of priority on the basis of an earlier patent application filed within a period of twelve months in any other WTO Member or in a Member of the Paris Convention. The Protection of Layout- Design of Integrated Circuits Act had been adopted by Parliament on 25 November 1998. 121. With respect to copyright and related rights, the representative of Estonia said that Estonia applied the principle of national treatment in the protection of works. The Copyright Law also protected works originating in countries where international treaties did not apply, provided that the other country guaranteed similar protection to the works of Estonian authors or works first published in Estonia. On 25 November 1998, Parliament had adopted the Protection of Layout-Design of Integrated Circuits Act, which also covered the protection of semi-conductor layout design. The conditions governing free use and free decompilation of computer programs were set out in Chapter IV, Sections 24 and 25, of the Copyright Law. The Law did not contain provisions on compulsory licensing of copyrightable works and sound recordings; full retroactive protection was provided under Sections 38 and 74. Section 75 prescribed the limitations on rights neighbouring on copyright. While Section 79 of the Copyright Act dealing with the management of cable retransmission by a collective management organization at the moment applied only to cable retransmission in that it had not yet been determined how the system would be applied regarding reprography rights, eg., whether any organization was needed
58 WTO BISD 1999 Accession or if the Estonian Authors’ Associations role would be enlarged. It was expected that this decision would be made by 31 December 1999 and implemented through the year 2000. The collection of a levy to compensate for the use of audiovisual works and sound recordings had begun in January 1996. 122. With regard to trade marks, the representative of Estonia said that signs registrable as trade marks were enumerated in Section 6 of the Trade Marks Law. The Law protected well known marks whether or not registered in the Republic of Estonia. Section 5 of the Law set out the rights (and limitations) granted to holders of trademarks; registration satisfied notice of the exclusive right, and no specific provisions restricted the licensing or transfer of trademarks. The registration of an assignment was not considered valid without registration. Registrability of a trademark generally did not depend on use. Applications were lodged with the Patents Office, its refusal to register a trademark (contravention of sections 7 and 8) might be contested through the Board of Appeals of Industrial Property. Decisions of the Appeal Board could be brought before a court of law. The Government intended to draft a new Trademark Law in 1999. 123. The representative of Estonia said that the Law on Industrial Design Protection had entered into force in January 1998. The legislative aspects of geographical indications of origin would be provided in a new Law, which would be drafted in 1999. For the time being, geographical indications of origin were protected indirectly through the Trademark Law and the Law on Competition. Trade secrets were not protected by separate legislation, but were covered under Article 148 of the Criminal Code. Undisclosed information was protected under the provisions governing the abuse of business secrets in the Law on Competition. Information submitted to government agencies was protected under the Public Service Law. Chapter 8 of Estonia’s Competition Law: Unfair Competition was consistent with the Paris Convention and Article 40 of the TRIPS Agreement. The Customs Law formed the legal basis for the prevention of imports of infringing goods. In accordance with Article 46 of the Customs Law, customs officers examined goods to check that their nature, origin, condition, quantity and value corresponded to the information provided in the customs declaration. Proceedings could be instituted in cases of forged, falsified or incomplete documentation. Amendments to the Criminal Code and the Code of Infringement of Administrative Law to include specific provisions on legal protection of industrial property had been approved by Parliament in 1996. 124. a member asked Estonia to become a member of the Geneva Phonograms Convention, noting that the restoration of protection for copyrighted works was required under Article 14 of the TRIPS Agreement which applies Article 18 of the Berne Convention, mutatis mutandis, to sound recordings. Protection of industrial designs, semiconductor chip layout designs and new plant varieties was also required under TRIPS. On patents, this member asked for confirmation that a
WTO BISD 1999 59 Decisions and Reports court, in deciding on a compulsory licence, would follow the procedures outlined in Article 8, paragraph 6 of its bilateral agreement with Estonia. 125. in reply, the representative of Estonia said that Estonia was preparing to accede to the 1971 Geneva Convention, the 1961 Rome Convention and the Union for the Protection of New Plant Varieties (UPOV). Accession to the Geneva and Rome Conventions, and to UPOV, was scheduled to take place before the end of 1999. Parliament had adopted the Law on Industrial Design Protection in November 1997, and the Protection of Layout-Design of Integrated Circuits Act in November 1998. 126. The representative of Estonia stated that Estonia would fully apply all the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights from the date of its accession to the WTO, without recourse to any transitional period. The Working Party took note of this commitment.
POLICIES AFFECTING TRADE IN SERVICES 127. in the interest of accelerating the process of accession to the WTO Agreement, the representative of Estonia submitted Estonia’s draft Schedule of Specific Commitments in Services (document WT/L/59), and a Revised Draft Schedule of Specific Commitments in Trade in Services (document WT/ACC/ EST/6). 128. Some members of the Working Party commented on Estonia’s draft schedule of commitments on trade in services. In their view, the initial offer was not sufficient since the documentation indicated an open services regime and Estonia had entered unbound in several modes of delivery. Specific questions covered procedures or restrictions on the entry of foreign labour, including lawyers, architects and accountants and cross-border trade in such services; market access conditions, cross-border trade, the effect of the economic stabilization programme, and recent legislation in the financial services sector; licensing of operators in telecommunications and air transport; restrictions on foreign investment; establishment of trade offices and the coverage of services in preferential trading arrangements. 129. The representative of Estonia presented a revised services schedule undertaking further commitments. According to the representative of Estonia the unbound entries in the first draft reflected the lack of specific regulations with regard to specific services. He added that visa regulations governed the temporary entry of foreigners; a residence permit and a work permit was required for foreign personnel to take up employment in Estonia. The annual immigration quota corresponded to 0.1 per cent of Estonia’s population. Foreign lawyers, architects and accountants could act as consultants to Estonian firms and there were no legal obstacles to the purchase of such services abroad. Estonia confirmed that foreign suppliers were
60 WTO BISD 1999 Accession not treated less favourably than national providers of financial services, with the exception of some special requirements concerning foreign-owned insurance companies indicated in its draft Schedule of Specific Commitments (WT/L/59). Applications to establish representation offices or subsidiaries in banking were addressed to the Bank of Estonia. Recent amendments in financial sector legislation included further regulations on prudential requirements and the adoption of a new Credit Institution Law with additional instruments for the supervisory authority and provisions on money laundering. The Estonian securities market was in its early stages of development, but growth had been substantial. The demand for insurance had been boosted by compulsory insurance for motor vehicles. 130. With regard to telecommunications, the representative of Estonia said that a foreign firm would need a foreign investment licence and register as a legal person in Estonia to do business in telecommunications. A concession conferring monopoly rights to “Eesti Telefon” (Estonian Telephone) was valid until year 2003. The Law of Broadcasting (Article 22) limited foreign ownership and possession of broadcasting transmitters to less than 50 per cent of the shares. 131. With regard to transportation, the representative of Estonia said that only companies registered in Estonia could obtain a licence for conveyance of goods and passengers; a ferry had to be owned by a citizen of Estonia or a company with headquarters in Estonia and have a minimum 51 per cent national ownership. The shipping company “Estline” currently had a monopoly concession, valid until August 1999, on the conveyance of passengers between Estonia and Sweden. Aviation licences were issued to permanent residents of Estonia or legal persons with minimum 51 per cent resident or national ownership. Air carriers operating in Estonia included Estonian Air and several foreign carriers. 132. The representative of Estonia stated that Estonia did not prohibit foreign services suppliers from establishing trade offices in any sector and that no services sectors and activities were completely closed to foreign companies. Certain services activities were subject to licensing; the required licences and the corresponding regulatory authorities are listed in Table 4. Licensing requirements such as the Foreign Investment Licence and the Licence of Activity fell under GATS Article VI (Domestic Regulation) and were accordingly not indicated in the GATS Schedule of Estonia. In sectors in which Estonia would undertake specific commitments, Estonia would not apply technical standards, licensing or qualification requirements that nullify or impair such specific requirements in a manner not complying with the criteria outlined in subparagraph 4 of Article VI of the GATS, or which could not reasonably have been expected of Estonia at the time the commitments were made. Regarding Estonia’s commitments on professional services, Estonia would provide for adequate procedures to verify the competence of professionals of any other Member. 133. Estonia’s Schedule of Specific Commitments on Services is annexed to its
WTO BISD 1999 61 Decisions and Reports draft Protocol of Accession reproduced in the Appendix to this Report (see paragraph 142 below). This Schedule of Specific Commitments on Services contains the legally binding market access commitments of Estonia in respect of services.
TRANSPARENCY
Publication of Information on Trade 134. The representative of Estonia said that Article 2 of the Law on Official Journal “Riigi Teataja” (State Gazette) stipulated 14 different groups of legislative acts (normative acts) to be published in the Official Journal “Riigi Teataja” (State Gazette), including: (i) Laws, decisions, and declaration of Parliament; (ii) decisions and regulations of the President; (iii) regulations and orders of Government; (iv) regulations of ministers; and (v) the annual report and general regulations of the Central Bank. Prompt publication of laws and normative acts ensured the highest transparency possible. He added that the Official Journal “Riigi Teataja” (State Gazette) was available on the internet (www.rk.ee/~teataja). 135. The representative of Estonia said that, at the latest from the date of accession, all laws and other normative acts related to trade would be published in the Official Journal “Riigi Teataja” (State Gazette) promptly and no law, rule, etc. related to international trade would become effective prior to such publication. He further stated that Estonia would fully implement Article X of the GATT 1994, Article III of the GATS, and the other transparency requirements in WTO Agreements requiring notification and publication.
Notification 136. The representative of Estonia said that, at the latest upon entry into force of the Protocol of Accession, Estonia would submit all initial notifications required by any Agreement constituting part of the WTO Agreement. His Government would notify its Innovation Fund at the latest upon entry into force of Estonia’s Protocol of Accession. Any regulations subsequently enacted by Estonia which gave effect to the laws enacted to implement any Agreement constituting part of the WTO Agreement would also conform to the requirements of that Agreement. The Working Party took note of this commitment.
TRADE AGREEMENTS 137. Some members of the Working Party enquired about Estonia’s preferential agreements with the European Communities and EFTA States, Latvia and Lithuania, further plans to conclude such agreements, including a possible Baltic Customs Union, and the existence of countertrade agreements with former CMEA members. Questions were also raised concerning the consistency of Estonia’s free trade agreements with the requirements of Article XXIV of the GATT 1994, in particular
62 WTO BISD 1999 Accession the obligation to cover substantially all the trade between the constituent territories. A member requested information on the scope of Estonia’s preferential agreements with particular attention to sectors where all measures and charges on trade had not yet been eliminated. 138. The representative of Estonia replied that Estonia had preferential trade agreements with EFTA States; the EU; Faroe Islands; Latvia and Lithuania; the Czech Republic; the Slovak Republic; Poland; Slovenia; Turkey; Ukraine and Hungary. In 1998, about 73 per cent of Estonia’s foreign trade was subject to preferential agreements. The Free Trade Agreement with the European Communities had entered into force on 1 January 1995, also covering new members Austria, Finland and Sweden. Estonia’s Free Trade Agreement with the European Communities had been notified to the WTO in document WT/REG8/N/1 and was being examined in accordance with normal practice (document WT/REG8/1 contained the Agreement and document WT/REG8/2 the Terms of Reference). He added that Estonia’s Europe Agreement with the European Communities also covered trade in services. The services provisions of that Agreement had entered into force on 1 February 1998 and included disciplines for movement of workers, establishment and supply of services. The services provisions of the Agreement would be notified once Estonia became a member of the WTO. The Free Trade Agreement with EFTA States had been notified to the WTO in document WT/REG28/N/1; additional relevant documentation included document WT/REG28/1 (the Agreement), document WT/ REG28/2 (Standard Format) and document WT/REG28/3 (Terms of Reference). The Free Trade Agreements with Slovenia, the Czech Republic and the Slovak Republic had been notified to the WTO in documents WT/REG37/N/1, WT/REG62/ N/1 and WT/REG63/N/1, respectively. He stated that Estonia had no countertrade agreements with countries in central and eastern Europe. The free trade agreements generally provided duty free importation and exportation of industrial goods (HS Chapters 25-97) while trade in agricultural goods were covered either in separate agreements or related protocols. Some quantitative and qualitative requirements applied to Estonia’s agricultural exports. 139. The representative of Estonia said that the 1994 Free Trade Agreement between Estonia, Latvia and Lithuania did not cover HS Chapters 1 to 24, but an agreement covering trade in farm products had entered into force on 1 January 1997. The two agreements complemented each other and, taken together, constituted a free trade area in terms of Article XXIV of the GATT 1994. He noted that Estonia had had the possibility, until the end of 1997, to regulate agricultural imports with tariffs under the Free Trade Agreement with the European Communities. Should Estonia apply import duties in the future under the terms of any of its free trade agreements, he confirmed that preferential treatment would only be accorded in the context of free trade agreements as provided for in Article XXIV of the GATT 1994.
WTO BISD 1999 63 Decisions and Reports
140. The representative of Estonia stated that his Government would observe the provisions of the WTO including Article XXIV of the GATT 1994 and Article V of the GATS in its trade agreements, and would ensure that the provisions of these WTO Agreements for notification, consultation and other requirements concerning preferential trading systems, free trade areas and customs unions of which Estonia was a member were met from the date of accession. The Working Party took note of these commitments. Conclusions 141. The Working Party took note of the explanations and statements of Estonia concerning its foreign trade regime, as reflected in this report. The Working Party took note of the commitments given by Estonia in relation to certain specific matters which are reproduced in paragraphs 15, 21, 25, 30, 41, 50, 62, 65, 71, 75, 78, 80, 83, 85, 88, 98, 99, 103, 107, 109, 116, 126, 136 and 140 of this Report. The Working Party took note that these commitments had been incorporated in paragraph 2 of the Protocol of Accession of Estonia to the WTO. 142. Having carried out the examination of the foreign trade regime of Estonia and in the light of the explanations, commitments and concessions made by the representative of Estonia, the Working Party reached the conclusion that Estonia be invited to accede to the Marrakesh Agreement Establishing the WTO under the provisions of Article XII. For this purpose, the Working Party has prepared the draft Decision and Protocol of Accession reproduced in the ��������Appendix to this report, and takes note of Estonia’s Schedule of Concessions and Commitments on Goods (document WT/ACC/EST/28/Add.1) and its Schedule of Specific Commitments on Services (document WT/ACC/EST/28/Add.2) that are annexed to the Protocol. It is proposed that these texts be adopted by the General Council when it adopts the Report. When the Decision is adopted, the Protocol of Accession would be open for acceptance by Estonia which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of Estonia to the Marrakesh Agreement Establishing the WTO.
Not reproduced
64 WTO BISD 1999 Accession
ANNEX
Table 2: Electricity prices (since 18 November 1997) Consumers with capacity 400kW or more per one substation or measuring system unit (group I)
Category Unit IA IB IC description (1EEK = 100 sent) voltage in connection point
110kV or 6-35 kV less than more 6kV
Capacity charge EEK/kW per month 53.00 58.00 64.00
and Active Energy main price sent/kWh 29.6 38.9 49.8
or daytime price sent/kWh 32.6 42.8 54.8 (07.00.-23.00)
and night time price sent/kWh 20.4 26.8 32.4
or daytime price sent/kWh 33.0 43.9 56.3 (07.00.-12.00)
daytime price sent/kWh 31.4 41.7 53.3 (12.00.-23.00)
and night time price sent/kWh 20.4 26.8 32.4
and Reactive Energy sent/kvarh 3.8 4.6 6.0 consumption
and releasing to the network sent/kvarh 7.6 8.1 8.1
Consumers with capacity less than 400kW per one substation or measuring system unit (group II)
Category Unit voltage in connection point description (1EEK = 100 sent) less than 6kV 6-35kV
Variant A Variant B II C
Consumption charge for 1-phase EEK/A per month 2.80 - - consumer
Consumption charge for EEK/A per month 8.40 - - 3-phase consumer
and Active Energy main price sent/kWh 61.0 74.6 53.2
WTO BISD 1999 65 Decisions and Reports
or daytime price sent/kWh 66.9 82.2 58.5 (07.00.-23.00) and night time price sent/kWh 36.4 44.9 36.7 or daytime price sent/kWh 68.7 - - (07.00.-12.00) daytime price sent/kWh 65.1 - - (12.00.-23.00) and night time price sent/kWh 36.4 - - and Reactive Energy consumption sent/kvarh 6.0 6.0 4.6 and releasing to the network sent/kvarh 8.1 8.1 8.1
Resellers (group III)
The category Unit description (1EEK = 100 sent)
Active Energy main price sent/kWh C or daytime price (07.00.-23.00) sent/kWh 1.06C and night time price sent/kWh 0.62C and Reactive Energy consumption sent/kvarh 4.6 and releasing to the network sent/kvarh 7.7
Households (group IV)
The category description Unit without VAT VAT included (1EEK = 100 sent)
Active Energy main price sent/kWh 55.1 65.0 or daytime price (07.00.-23.00) sent/kWh 55.1 65.0 and night time price sent/kWh 33.1 39.0
66 WTO BISD 1999 Accession
Consumers without measuring (group V)
The category description Unit (1EEK = 100 sent)
Consumption charge for EEK/A per month 77.40 1-phase consumer
Consumption charge for EEK/A per month 232.20 3-phase consumer
Night consumers and consumption regulators 100kW or more (group VI)
The category Unit voltage in connection point description (1EEK = 100 sent) 6 kV or more less than 6 kV
Consumption charge EEK/A per month 3.00 3.50
and Active Energy during night time sent/kWh 24.0 28.5
and Reactive Energy consumption sent/kvarh 4.6 6.0
and releasing to the network sent/kvarh 8.1 8.1
Table 3: Oil-shale Prices (since 1 May 1997)
Quality class MJ/kg Price for clients with the Price for clients without deviation from the average contract or for those with monthly shipment by less the deviation from the than ±15% average monthly shipment EEK/t by more than ±15% EEK/t
1 PK over 11.51 71.63 127.27 2 1PK over 10.97 70.73 125.70 3 2PK 10.26 - 10.97 69.75 123.95 4 3PK 9.59 - 10.25 68.86 122.39 5 4PK 8.54 - 9.58 67.89 120.29 6 P over 9.21 66.92 118.96 7 1P over 8.79 66.04 117.38 8 2P 7.79 - 8.79 65.13 115.79 9 3P 7.29 - 7.78 64.16 114.09 10 4P 6.28 - 7.28 63.26 112.50 11 5P 6.07 - 6.27 62.31 110.78
WTO BISD 1999 67 Decisions and Reports
Table 4: Activities subject to licensing (Activity Licence)
Activity Issuing Authority
1. Management of aviation and sea transport (exclude small Ministry of Transport and private boats), international car and railway transport (excludes Communications intra‑enterprise rail transport)
2. Geology‑related activities, mining of natural resources Ministry of Economic Affairs
3. Production and trade in objects containing precious metals and Ministry of Finance precious stones
4. Production, possession and trade in weapons, parts thereof, Ministry of Internal Affairs ammunition, or pyrotechnic equipment; repairs of weapons
5. Production and trade in medical narcotic, highly toxic, Ministry of Social Affairs radioactive, and poisonous substances. Growing plants that contain narcotic, highly toxic and poisonous substances. Purchase and possessing of medical narcotic, highly toxic, radioactive, and poisonous substances
6. All forms of medical treatment Ministry of Social Affairs
7. Production of and trade in medicines Ministry of Social Affairs
8. Import and export, as well as production and wholesale of Ministry of Economic tobacco and production thereof, and alcohol; and retail of Affairs; Municipal alcohol Governments
9. Printing and minting of money Bank of Estonia
10. Printing of securities Ministry of Finance
11. Printing of postage stamps Ministry of Transport and Communications
12. Building and management of public communications’ networks Ministry of Transport and of any kind Communications
13. Management of an educational institution of a higher or general Ministry of Education level, both vocational, or professional; together with the right to issue nation wide accepted certificates of education
14. Management of security services’ firms, installation of security, Ministry of Internal Affairs guard, and signalization systems
15. Opening and management of private detective agencies Ministry of Internal Affairs
16. Collation of measuring instruments Ministry of Economic Affairs
68 WTO BISD 1999 Accession
Activity Issuing Authority
17. Production and trade in micro‑organisms, plants, and animals Ministry of Environment created by genetic engineering
18. Insurance Ministry of Finance
19. Projecting, expertise and inspection of buildings, construction Ministry of Environment contracting activities
20. Geodetic and cartographic activities Ministry of Environment
21. Ecological expertise Ministry of Transport and Communications
22. Management of environmentally harmful substances Ministry of Transport and Communications
23. Transmission or broadcasting of radio and television Ministry of Culture programmes by means of the radio and television networks
24. Management of casinos (gambling) Ministry of Finance
25. Reproduction of the State symbols or their parts of the Republic State Chancellery of Estonia
26. Exchange management Ministry of Finance
27. Tourism Ministry of Economic Affairs
28. Ships’ agencies and organizing sea transport Ministry of Transport
29. Lotteries Ministry of Transport and Communications
30. Assessment of land property, selling and buying land Ministry of Environment
31. Activities on the securities’ market Ministry of Finance
32. Veterinary activities, veterinary practice Ministry of Agriculture
33. Temporary storage of commercial goods, customs‑storage Ministry of Finance procedures
34. Commercial trade (imports, re‑exports), wholesale and retail, Ministry of Economic and storage of imported fuels and lubricants Affairs
35. Production and repairs of weapons, ammunition, and technology Ministry of Defence for national defence purposes
36. Experiments with animals Ministry of Agriculture
37. Management of imports and exports, as well as other trade, Ministry of Economic services, repairs, and dissembling of motor vehicles and trailers Affairs
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Activity Issuing Authority
38. Assessment of personal protective equipment types, quality National Labour Inspection certification; assessment of machinery and equipment types Board
39. Logopedical aid Ministry of Social Affairs
40. Conservation, restoration, creating of repairs projects, and Ministry of Culture carrying out the corresponding activities on the objects of cultural importance (the objects of archaeological, architectural, technological, and historical value, objects of fine arts)
41. Classification of goods and measuring of goods for customs’ Ministry of Finance purposes
42. Commercial mediation of scrap metal and metal waste Ministry of Economic Affairs
43. Importation of food stuffs Ministry of Agriculture
Decision of the General Council on 21 May 1999 (WT/ACC/EST/29)
The General Council, Having regard to the results of the negotiations directed towards the establishment of the terms of accession of Estonia to the Marrakesh Agreement Establishing the World Trade Organization and having prepared a Protocol for the Accession of Estonia, Decides, in accordance with Article XII of the Marrakesh Agreement Establishing the World Trade Organization, that Estonia may accede to the Marrakesh Agreement Establishing the World Trade Organization on the terms set out in the said Protocol.
���������������������������������������������������������������������������������See under section “ Legal Instruments ”.
70 WTO BISD 1999 Accession
ACCESSION OF GEORGIA Report of the Working Party Adopted by the General Council on 14 October 1999 (WT/ACC/GEO/31) INTRODUCTION 1. The Government of Georgia applied for accession to the World Trade Organization in June 1996. At its meeting on 18 July 1996, the General Council established a Working Party to examine the application of the Government of Georgia to accede to the World Trade Organization under Article XII of the Marrakesh Agreement Establishing the WTO. The terms of reference and the membership of the Working Party are reproduced in document WT/ACC/GEO/2/Rev.4. 2. The Working Party met on 3 March 1998 under the Chairmanship of H.E. Ms E.L. Herfkens (Netherlands); and on 13 October 1998 and 28 July 1999 under the Chairmanship of H.E. Ms A. Anderson (Ireland).
DOCUMENTATION PROVIDED 3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade Regime of Georgia (WT/ACC/GEO/3), the questions submitted by Members on the foreign trade regime of Georgia, together with the replies thereto, and other information provided by the authorities of Georgia (WT/ACC/GEO/4, WT/ACC/GEO/7 and Addendum 2, WT/ACC/GEO/10, WT/ ACC/GEO/12, WT/ACC/GEO/16, WT/ACC/GEO/18, and WT/ACC/GEO/25), including the legislative texts and other documentation listed in Annex I.
INTRODUCTORY STATEMENTS 4. in his introductory statement, the representative of Georgia said that Georgia, although relatively small in size and population, was located in a strategically important transit corridor between the Black and Caspian Seas. Membership in the WTO was the most important step in Georgia’s full integration into the world trading system. His Government had declared rapid entry into the WTO the most important priority of its foreign economic policy, and a Commission on Accession had been established with representatives from virtually all ministries and departments. 5. georgia was undergoing economic transition from a centrally-planned to a market based economy, with major reforms of its trade regime, banking sector and privatization of State property. Georgia had adopted a new Constitution in 1995, and had since then undertaken a major overhaul of its legal system to harmonize to international norms. In addition to basic legislation such as the Civil Code and the Tax and Customs Codes, Georgia was introducing new legislation
WTO BISD 1999 71 Decisions and Reports in key trade-related areas such as maritime and air transport, intellectual property, standardization and certification, government procurement, privatization, and business legislation. Parliament had made a commitment that all new legislation, starting from 1 September 1998, should be in full compliance with the legal norms of the European Communities. Georgia was receiving technical assistance from individual WTO Members and international organizations in its process of reform and accession to the WTO. He assured the Working Party that the Government of Georgia would do everything required to fulfill the commitments Georgia would be undertaking in acceding to the WTO. 6. in their opening remarks, members of the Working Party welcomed the request from Georgia to accede to the WTO. Many Members were impressed by Georgia’s strong efforts from the outset to provide information on its foreign trade regime, and noted that the bilateral market negotiations had made a good start. Although Georgia maintained some measures which were inconsistent with WTO rules, such anomalies were not unusual at the beginning of an accession process. Georgia was encouraged to continue its economic and trade reforms, which would assist in accelerating the process of its accession to the WTO. 7. The Working Party reviewed the economic policies and foreign trade regime of Georgia and the possible terms of a draft Protocol of Accession to the WTO. The views expressed by members of the Working Party on the various aspects of Georgia’s foreign trade regime, and on the terms and conditions of Georgia’s accession to the WTO, are summarized below in paragraphs 8 to 179.
ECONOMIC POLICIES
Monetary and Fiscal Policy 8. The representative of Georgia said that the National Bank of Georgia was responsible for the design and implementation of monetary policy. The National Bank had been established in 1991, and the final version of the Law “on National Bank” had been approved in June 1995. In practice, the National Bank worked closely with the Ministry of Finance as monetary and fiscal policies were closely linked. 9. Georgia’s fiscal policy aimed at boosting revenue to a level to finance most current government expenditure, while relying in the main on external sources for capital outlays. Georgia had strengthened its tax and customs administration to improve revenue performance, and maintained a restrained expenditure programme with emphasis on health and education. The principal taxes levied in Georgia were value added tax; profit tax; income tax; a fixed tax on small enterprises; excises; customs duty; social security levy, medical tax and employment fund tax levied on enterprises and employees; property tax; and agricultural and urban land tax. In response to a specific question, he said that local administrations could levy taxes
72 WTO BISD 1999 Accession within the framework of national legislation (Article 6.3 of the Georgian Tax Code) on entrepreneurial activities, gambling business, health resorts, hotels, advertising, car parking, and on the use of local symbols. He confirmed that local administrative bodies had no right to impose any other kind of taxes.
Foreign Exchange and Payments 10. The representative of Georgia said that the national currency – the Lari – was traded on the Tbilisi Interbank Currency Exchange (TICEX) as well as in the Foreign Exchange Bureau Market (FXB). TICEX functioned as a wholesale market for foreign exchange between banks, while large volumes of small retail transactions were carried out in the FXB. The Government’s exchange rate policy was based on “managed float”. No fixed target was set for the exchange rate of the Lari, but the National Bank of Georgia could intervene in the TICEX auction market as a buyer or seller to smooth out temporary imbalances between supply and demand for foreign exchange. 11. georgia had become a member of the International Monetary Fund in May 1992 with a quota of SDR 111 million. Georgia had accepted Article VIII of the Articles of Agreement of the IMF in early 1997. He confirmed that the national currency was convertible on current account without any restrictions. No requirements existed on the right of legal and natural persons to obtain, bank or dispose of foreign exchange, and there were no requirements to surrender foreign exchange earned from export operations. He also confirmed that foreign currency needed for imports was equally available for goods subject to import licensing. In response to a specific question, he confirmed that a court order was required to freeze the bank accounts of domestic and foreign-owned firms.
Investment Regime 12. The representative of Georgia said that foreign and domestic investment on the territory of Georgia was regulated under the Law “on Promotion and Guarantees of Investment Activity” of 12 November 1996. Foreign investors enjoyed the same rights and protection as physical and legal persons of Georgia according to paragraph 1, Article 3 of the Law. Under this law, disputes between foreign investors and enterprises registered in Georgia could be settled in the courts of Georgia or in other fora, including arbitration, such as the International Center for the Settlement of Investment Disputes. A registration requirement for foreign investors had been abolished by the Law “on Amendments and Changes to the Law on Promotion and Guarantees of Investment Activities” of 26 June 1998. He added that Georgia had concluded bilateral investment agreements with 22 countries and was currently negotiating such agreements with 7 more countries. These countries included the United States, Canada, China, and many States in Europe, the CIS, and the Middle East. Information on investment was available from the Agency for
WTO BISD 1999 73 Decisions and Reports
Foreign Investment within the Ministry of Trade and Foreign Economic Relations. 13. The representative of Georgia said that, subject to the payment of taxes and other compulsory levies, every foreign investor had the right to transfer abroad freely and without delay all contributions to capital, profit and other monetary proceeds generated by investment activity (paragraph 5, Article 3 of the Law). These rights could be restricted by decision of court in case of bankruptcy proceedings, criminal offence or failure to meet civil obligations. A foreign investor had the right to transfer abroad property owned by him. 14. investment in certain sectors was prohibited or subject to licensing (Article 9). Permission was required in order to engage in the production of weapons and explosives; narcotic, poisonous and pharmaceutical substances; exploration and exploitation of any renewable or non-renewable substances; exploration of deposits of natural resources; establishment of casinos and gambling houses and the organization of games and lotteries; banking; insurance; issuance of securities; wireless communication services and the establishment of radio and television channels; and any other activities stipulated by the legislation of Georgia. 15. according to the Law “on Amendments and Changes to the Law on Promotion and Guarantees of Investment Activities”, investment was prohibited with regard to the creation, production and proliferation of nuclear, bacteriological and chemical weapons; construction of polygons for testing nuclear, bacteriological and chemical weapons; importation of radioactive and toxic waste; scientific research activities connected with human cloning; production of narcotic substances; cultivation of poppy, coca and hemp; and activities prohibited by international legislative acts, agreements, conventions and protocols to which Georgia was a contracting party. 16. Concerning land ownership, the representative of Georgia said that land was being privatised under two laws. The Law on Declaration of Private Ownership of Land in Use by Physical and Private Legal Persons, adopted on 28 October 1998, provided that non-agricultural land could be privatised by any Georgian natural or legal person, including 100 per cent foreign-owned legal persons. Privatisation of urban land had proceeded rapidly under this law. As of 1 May 1999, approximately 3,000 parcels had been privatised. Agricultural land could be privatised only by Georgian natural persons under the Law of Agricultural Land Ownership of 22 March 1996. Approximately 800,000 hectares of agricultural land had been privatised by about 1 million farmers under this law as of May 1999.
State Ownership and Privatization 17. The representative of Georgia said that the privatization process in Georgia had been divided into “small” and “medium/large” scale privatization. Small scale privatization had begun by identifying some 12,088 “objects”, including
74 WTO BISD 1999 Accession both unincorporated enterprises and simple assets such as machinery, buildings and vehicles. In some cases, these “objects” had been transformed into limited liability companies under the laws in force at the time; in other cases blocks of assets had been sold directly and possibly subsequently incorporated in some form by the buyers. The total number of “objects” sold exceeded the number originally identified because in some cases the objects originally identified had been divided into two or more units for sale. 18. Small scale privatization had largely been completed by May 1999, with 13,148 objects sold and a total of 405 remaining. Of the latter, some 195 objects in the health care area included a number of small hospitals and clinics, while the “Industry” category included a number of unfinished construction projects which had been impossible to sell to date. Most of the remaining marketable objects in the small privatization category would be sold by the end of 1999. “Medium/ large” scale privatization had proceeded by first identifying some 1,300 enterprises in 12 sectors. By May 1999, 1,156 of these had been converted into joint stock companies and 929 of them had been sold (i.e. the Government no longer held a majority of the shares). In many cases, all shares in these companies had been sold, and the Government continued to offer for sale the remaining shares held by it. Of the original 1,300 companies, 175 remained to be converted to joint stock companies, and of those that have been converted, some 227 remained to be sold. Enterprises not yet converted to joint stock companies included strategic units such as the railroads, airports, ports, municipal utility systems, Tbilisi subway, and major health and educational institutions - some of which would be sold, and some of which would remain in Government ownership. The unsold joint stock companies included a number of large insolvent enterprises which had proved difficult to sell. Lists of 220 joint stock companies in which the Government still held at least 50 per cent of the shares was made available to the Working Party. The objective of the Government was to complete the privatization process substantially by the end of 2000. The development and status of Georgia’s program of privatization is presented in Table 1. 19. georgian and foreign natural and legal persons could take part in the process of privatization of enterprises with one restriction; Georgian enterprises in which the Government owned more than 25 per cent of the authorized capital could not purchase privatized property. Privatization was carried out by the State Property Management Ministry through auctions of blocks of shares, direct sales and tenders. The Government intended to retain controlling blocks of shares (51 per cent) only in exceptional cases when an enterprise was of strategic interest, and the number of such enterprises was strictly limited. Employees had preference in the allocation of a certain number of shares. The greater part of State property had been privatized by vouchers, and thousands of citizens had become new owners of these assets.
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20. A specific list of objects to be privatized was approved annually by the Ministry of State Property Management in consultation with the Ministry of Economy, Justice and other appropriate ministries. The following enterprises were scheduled for privatization in the period 1997-2000: (i) telecommunication enterprises, except cable and radio broadcasting networks of strategic importance, including the First State television channel; (ii) fuel and energy sector enterprises, including electric energy, the coal industry, gas, oil extraction, and the supply of oil products; (iii) manufacturing enterprises; (iv) agriculture and food industry except training and research institutes of the Academy of Agricultural Sciences of Georgia; (v) construction related enterprises except: main municipal pipelines, water supply, sewage and a technical evaluation bureau; (vi) transport sector units except “Sakaeronavigatsia”; (vii) health services excluding State medical organisations of vital importance; and (viii) education services. Preparations to privatize Georgia’s railway infrastructure had begun. Georgian Railway would be transformed into an LLC (limited liability company), and only the railway tracks would remain State property. The representative of Georgia provided a list of joint-stock companies with the controlling block of shares kept temporarily in State hands in document WT/ACC/GEO/10, pages 3-5. Detailed lists of firms owned wholly or in part by the State as of May 1999, and objects planned for privatization in 1999, were also provided to the Working Party. He also noted that information on the privatization process in Georgia was available on the Internet at www.casebycase.org.ge and www.georgia.net.ge/mospm. 21. article 4 of the Law “on Privatization of State Property” of 30 July 1997 defined State property not subject to privatization. Excluded from privatization were land of strategic importance, minerals, water resources, territorial waters and marine economic border zones; units of historical, cultural and artistic value, State archives of historical and cultural importance, film and photo documents, State funds, State museums, archives and funds of ministries, and scientific research institutes; Georgia’s treasury and monetary reserves, reserves of precious metals, funds of national value, social security, medical insurance and other national funds; mobilization reserves and State reserves; institutions of the Academy of Sciences of Georgia; roads for general use; national cemeteries and pantheons; administrative buildings of organs of State administration; and enterprises producing radioactive materials and materials for military purpose, and testing, designing and scientific institutions. 22. Asked specifically about plans to privatize the energy sector, the representative of Georgia said that restructuring of the energy sector would be completed. The State monopoly would be eliminated gradually, and Georgia would invite foreign investment to help relieve the energy crisis. Privatization of the electric energy sector was expected to be completed in 18 months, and would proceed in several stages, as follows:
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(a) in electric distribution, approximately 75 per cent of the shares of the Tbilisi electric distribution company “Telasi” had already been privatized. Beyond that, Presidential Decree No. 58 of 14 February 1999 on Rehabilitation and Development of georgian Electric Distribution Companies and Generation Assets placed priority on the privatization, in two lots, of the electricity distribution companies of eastern and western Georgia. The Ministry of State Property Management and the investment bank Merrill Lynch had prepared a proposal for presentation to interested parties. Georgia proposed to lease the management rights of each group of companies for a period of not less than 25 years, with no right of purchase. The participants could be either Georgian or foreign legal persons; (b) in electricity generation, the Ministry of State Property Management had prepared a proposal to transfer the management rights of the joint stock companies in the hydroelectric plants to private inves tors for a period of at least 25 years. A tender to accomplish this had been published on 20 May 1999; (c) enterprises in the coal industry would be transformed into joint stock companies, but the State would retain 51 per cent ownership until investors could be found who would undertake the necessary rehabilitation and modernization; and (d) The controlling block of shares in the joint stock companies in the oil and gas industry would be sold by tender to investors willing to keep the companies in business and rehabilitate them within two years. The State companies “Saktransgasmretsvi” (gas pipeline from Russia to Armenia) and “Saktkhevadgasi” (import and export of refined oil products) would remain temporarily in State hands. The decision to privatise “Saktkhev adgasi” would be taken in agreement with the Ministry of Energy and Fuel. The State company “Saknavtobi” (oil exploration and extraction) would be transformed into a joint stock company; the shares, except for those granted to employees, would temporarily remain State property. Controlling blocks of shares in other State-owned joint stock companies in this sector would be sold in tenders, and remaining shares would be auctioned. 23. The representative of Georgia said that reliable statistics on the share of GDP accounted for by State and private sectors were not available. Roughly speaking, one third of the labour force was employed by the State and two thirds by the private sector. Of the State sector, a substantial fraction was in government. A generally accepted, but very rough estimate, was that 80 per cent of GDP was
WTO BISD 1999 77 Decisions and Reports produced by the private sector. No statistics were available on the share of imports or exports accounted for by State-owned companies. On the import side, the State share was likely to be quite small, because the majority of imports consisted of consumer goods imported by private trading companies. On the export side, the State share was larger, but no exact measure was available. 24. The representative of Georgia confirmed the readiness of Georgia to ensure the transparency of its ongoing privatization programme and to keep WTO Members informed of its progress in the reform of its transforming economic and trade regime. He stated that his Government would provide annual reports to WTO Members on developments in its programme of privatisation as long as the privatization programme would be in existence along the lines of the information provided to the Working Party during the accession process, as well as on other issues related to its economic reforms as relevant to its obligations under the WTO. The Working Party took note of this commitment.
Pricing Policies 25. The representative of Georgia said that the Cabinet of Ministers had adopted a series of Resolutions in the first four months of 1992, leading to a broadbased liberalization of prices. Additional Cabinet Resolutions in 1993 and 1994 had removed virtually all State administrative controls on prices for energy, transport and other social services. Price controls had been replaced by tariff regulation of local governments or, in the case of electricity and natural gas, by independent departments set up for this purpose. Milk prices had been liberalized in 1995 and the price of bread had been deregulated in June 1996. As a result, only natural gas, electricity and urban transport remained subject to price control. Prices for all other goods and services were determined freely by the market. 26. The representative of Georgia stated that in the application of price controls or State guidance now or in the future, Georgia would apply such measures in a WTO-consistent fashion, and take account of the interests of exporting WTO members as provided for in Article III:9 of the GATT 1994. Georgia would publish information on any State controls on goods or services that may be introduced or re-introduced in the future in its Official Journal, including any changes in current controls. The Working Party took note of this commitment.
Competition Policy 27. The representative of Georgia said that the first steps to implement an anti-monopoly policy in Georgia had been taken in September 1992, when the State Council had adopted a Decree “On the Restriction of Monopoly Activities and the Development of Competition in Georgia” and an Anti-monopoly Policy Department had been established within the Ministry of Economy. Parliament had adopted a more comprehensive Law on Monopolistic Activity and Competition in
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June 1996. An independent regulatory commission had been established to regulate prices in energy distribution, and a similar commission was under consideration in the telecommunications sector. 28. georgia had established the legislative basis for competitive markets, in particular by deregulating prices and rescinding exclusive rights previously granted to certain economic agents, and through the abolition of restrictions on competition in certain activities. The new Anti-monopoly Law required the establishment of a State register of natural monopolies. According to this register, natural monopolies existed in the provision of postal services, distribution of frequency spectrum, railway transport, pipe line services (the State Company “Sakgazi”), high-voltage power transmission (the State Company “Sakenergo”), air traffic control and dispatcher services (the State Company “Sakaeronavigatsia”), and in port services (the sea ports of Poti, Batumi and Sukhumi). Information on privatization of such monopolies is provided in paragraphs 20 and 22.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES
Powers of Executive, Legislative and Judicial Branches of Government 29. The representative of Georgia said that the activities of executive, legislative and judicial authorities were regulated by the Constitution of Georgia, the Law on the Constitutional Court of Georgia of 31 January 1996, the Law on Constitutional Jurisprudence of 21 March 1996, the Law on the Structure of Executive Power and Rule of its Activities of 15 April 1997, and the organic Law on General Courts. 30. The President of Georgia, the State Chancellery, ministries and other governmental institutions exercised executive powers. As head of State, the President of Georgia conducted and carried out the internal and external policies of the State, and ensured the functioning of governmental authorities in accordance with the Constitution. The President exercised executive power himself as well as through ministries and other governmental authorities and institutions. The State Chancellery was headed by the State Minister. The Government was a consultative body of the President of Georgia, and consisted of the State Minister and 21 Ministers. Each Minister was accountable before the President for his area of responsibility. The main ministries involved in the formulation and implementation of trade policy were the Ministries of Economy, Foreign Affairs, Trade and Foreign Economic Relations, and Finance. The President had created coordination bodies and advisory and consultative institutions to regulate relations among the entities of executive power. 31. Parliament was the highest representative body of the State according to Article 48 of the Constitution. It exercised legislative power and general control over the Government in the areas defined by the Constitution, and determined the main directions of domestic and foreign policy. The President submitted the structure of executive power and rules of its activities to Parliament for approval. Parliament
WTO BISD 1999 79 Decisions and Reports meetings were public. The representative of Georgia stated that international treaties and agreements ratified by Parliament, including the WTO Agreement, had precedence over domestic laws and other acts in Georgia other than the Constitution and constitutional law. The hierarchy of laws in Georgia is provided in paragraph 37. 32. georgia’s court system exercised judicial power independent of the other branches of Government in accordance with the Constitution of Georgia of 24 August 1995, the Law on the Constitutional Court of 31 January 1996, and the Law on Constitutional Jurisprudence of 21 March 1996. The Constitutional Court ensured the primacy of the Georgian Constitution, constitutional legacy, and the protection of human constitutional rights and freedom. The Supreme Court of Georgia supervised the implementation of justice in courts and considered cases determined by law by first instance. The Supreme Courts of the Abkhazian and Ajarian Autonomous Republics were the highest judicial bodies in these autonomous regions. The City Court of Tbilisi considered cases by first instance within the limits of its powers and supervised the activities of regional courts of Tbilisi. Regional (town) courts considered all cases of civil or criminal law or administrative infringements except cases under the jurisdiction of another court. The Procurator’s Office implemented criminal legal prosecution and supervised enquiries and sentences. Georgia’s arbitration court system had been abolished with the entry into force of the current Constitution of Georgia. Decisions or actions of customs bodies and their officials could be appealed in the courts of Georgia. The right of appeal in customs valuation matters would be regulated by the new legislative act on customs valuation. 33. noting that the right of appeal of administrative decisions to an independent body was a critical component of the rule of law embodied in WTO provisions, a member requested Georgia to describe in detail the process of appeal to the judiciary for traders contesting administrative rulings by executive agencies such as in the area of customs valuation, classification and duty, taxation of imports, standards and sanitary certification and inspection, application for import or export licences, measures taken against dumping and subsidized imports, and intellectual property protection. 34. The representative of Georgia replied that persons engaged in commercial activities could contest decisions by applying to the Court of First Instance in accordance with Article 11 of the Civil Procedure Code. The jurisdiction of the court extended to “cases arising out of public law, administrative law, tax and other relations.” The Decisions of the Court of First Instance could be appealed to appellate courts. In addition to rights of appeal mentioned in specific laws and regulations, Article 4 of the draft Code of Administrative Court Procedures provided a general right of appeal of administrative decisions in that the legality of any normative act, individual administrative action or inaction, contract of an administrative agency or obligation of compensation was an “administrative dispute” that could be appealed to specialized administrative chambers of the regional or city courts. Parliamentary
80 WTO BISD 1999 Accession approval of the new Code, however, had been delayed to the 2000 session. 35. The representative of Georgia confirmed that from the date of accession Georgia’s laws would provide for the right to appeal administrative rulings on matters subject to WTO provisions to an independent tribunal in conformity with WTO obligations, including but not limited to Article X:3(b) of the GATT 1994. The Working Party took note of this commitment. 36. Parliament was responsible for ratification of international treaties, while the President of Georgia and the other executive authorities were responsible for implementation. Parliament adopted a resolution on accession to an international treaty by simple majority of its entire composition. Ratification by Parliament was required to complete the national procedures relating to WTO accession. The Ministry of Trade and Foreign Economic Relations had prepared a Presidential Decree on Managing the WTO Relationship which addressed the responsibilities of various government institutions in fulfilling Georgia’s obligations vis-à-vis the WTO. 37. The hierarchy of normative acts in force in Georgia comprised: (i) the Constitution of Georgia and the Constitutional Law of Georgia; (ii) international treaties and agreements ratified by Georgia; (iii) the Organic Law of Georgia; (iv) Laws and Presidential Decrees; (v) Orders of the President of Georgia; (vi) Resolutions of the Parliament of Georgia; and (vii) Orders of a Minister or head of another central governmental authority of executive power. International agreements had direct applicability in the national legal system in accordance with Article 6 of the Constitution and Article 20 of the Law “on Normative Acts”. Laws, regulations and administrative orders could be applied retroactively, but normative acts establishing or approving responsibilities could not be applied retroactively.
Authority of Sub-Central Governments 38. The representative of Georgia said that the principles of coordination between the executive, legislative and judicial authorities were determined by the organic Law of Georgia on Local Governance and Self-Governance of 16 October 1997 and the Law on the Structure of Executive Power and Rule of its Activities of 15 April 1997. The Service of local administration and regional policy, responsible for implementing State policy in the area of local administration, had been established by Presidential Decree No. 105 of 14 February 1997. 39. local representative organs could levy local taxes and fees according to the Law of Georgia on Local Governance and Self-Governance of 16 October 1997. He added that in accordance with Article 3 of the Constitution, Georgia’s supreme national bodies had exclusive power to administer important trade-related areas, including customs and tariff regimes; foreign trade; standards and measurements, and sanitary measures at the border; State finances and loans, minting of money
WTO BISD 1999 81 Decisions and Reports and legislation on banking, credit, insurance and taxes; legislation on intellectual property; and legislation on trade, criminal law, civil law, and administrative and labour law. He confirmed that sub-central entities within territory controlled by the Georgian Central Government had no autonomous authority over issues of subsidies, taxation, trade policy or any other measures covered by WTO provisions. The autonomous region of Abkhazia was included in the customs territory of Georgia, but due to the existing political situation there this region was not de facto under the jurisdiction of the Central Government at present, and the local authorities did not apply the national customs tariff and other taxes. Negotiations aimed at enforcement of national legislation in Abkhazia and the former South Ossetian Autonomous Region were ongoing. There were no regions other than Abkhazia and Ossetia in which the Government anticipated any difficulty in enforcing laws and customs procedures in accordance with WTO requirements. 40. The representative of Georgia confirmed that Georgia would apply the WTO provisions, including Georgia’s Protocol of Accession, uniformly throughout the entire customs territory controlled by the Georgian Central Government, including in regions engaging in border trade or frontier traffic, special economic zones, and other areas where special regimes for tariffs, taxes and regulations are established. He further confirmed that, upon accession to the WTO, Georgian Central Authorities would ensure that the laws, regulations and other measures of government entities at the sub-national level would conform to the obligations undertaken in Georgia’s Protocol of Accession and the WTO Agreement, and would enforce them at the sub-national level in all areas controlled by the Central Government. He added that when apprised of a situation where WTO provisions were not being applied or were applied in a non-uniform manner, central authorities would act to enforce WTO provisions without requiring affected parties to petition through the courts. The Working Party took note of these commitments.
POLICIES AFFECTING TRADE IN GOODS
Trading Rights 41. The representative of Georgia said that all natural and legal persons, foreign or domestic, could engage in importation and exportation activities provided they were registered with the Taxation Department of the Ministry of Finance and with the State Department for Statistics. The Law on Business Licensing had been enacted on 14 May 1999. The Law authorized licenses in the following areas (with the responsible agency): (i) Insurance activities and mediation in insurance business (State Agency for Insurance Control); (ii) Banking activity, activity of currency exchange shops (National Bank); (iii) Production and repair of weapons and other military products and their sale (Ministry of Justice, within limits set by the National Security Council of Georgia); (iv) Air shipping, marine shipping and towing (Ministry of Transport); (v) Securities industry, i.e. the activities of broker
82 WTO BISD 1999 Accession companies, brokers’ activities, activities of stock exchanges, activity of the central depositary of securities, activity of securities registering clerks (Ministry of Finance); (vi) Lotteries and other profitable games (Ministry of Finance); (vii) Production and sale of pharmaceutical products, substances subject to special control, and medical products used in veterinary activity; activity of medical organizations (Ministry of Health); (viii) Activity of diagnostic centers in charge of technical assessment of motor transport means (Interior Ministry); (ix) Design and construction activity (Ministry of Urbanization and Construction); (x) Activities of audit firms (Auditing Council of the Parliament); (xi) Activities of private educational institutions (Ministry of Education); and (xii) Metrology and Measurement activities and repair services (State Department for Standardization, Metrology and Certification). 42. according to Article 1, the Law did not apply to: (i) the activities subject to Article 1.2 of the Georgian Law on Entrepreneurs; (ii) export or import of goods or services; (iii) activities connected with environment protection or use of natural resources, electricity or natural gas, or telecommunications and postal services, which were regulated by special laws; and (iv) production of food, including baby food, and tobacco products. Article 1.2 of the Law on Entrepreneurs stated that “Artistic, scientific, medical, architectural, advocating and notary, auditing, agricultural or forestry related activities performed by natural persons shall not be considered as Entrepreneurial activity,” and such activities were thus not subject to the Business Licensing Law. For the spheres which it regulated, the Law provided detailed procedures which the responsible agencies were obliged to follow in issuing any required licenses. These procedures were limitations on the authority of ministries to restrict or deny licenses, and were designed to protect businesses from arbitrary decisions of ministries. 43. The representative of Georgia confirmed that the former State monopoly in foreign trade had been abolished and that no restrictions existed on the right of individuals and enterprises to import and export goods into Georgia’s customs territory, except as provided in WTO Agreements. He confirmed that individuals and firms were not restricted in their ability to import or export based on their registered scope of business and the criteria for registration were generally applicable and published in the official journal. 44. The representative of Georgia confirmed that from the date of accession Georgia would ensure that all its laws and regulations relating to the right to trade in goods, and all fees, charges or taxes levied on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws and regulations in full conformity with these obligations. The Working Party took note of this commitment.
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A. IMPORT REGULATION
Ordinary customs duties 45. The representative of Georgia said that customs duties were established according to the Law No. 1316 IIs “on Customs Tariff and Duty” of 20 March 1998. Section III of the new Customs Code of 14 November 1997 also contained provisions regarding customs duties. Article 6 of the Law “on Customs Tariff and Duty” authorized the use of special tariffs and seasonal tariffs – for periods not exceeding six months in a year – to regulate trade in goods with particular variations in production or consumption. He added that that although the legal authority to apply seasonal rates existed, Georgia had so far never used seasonal rates in practice. 46. georgia was using the 1996 version of the Harmonized System nomenclature as of 1 January 1998 in accordance with Decree No. 249 of 24 December 1997 of the Chairman of the Customs Department of Georgia. Tariff revenue amounted to 58.7 million Lari, collected on imports worth some 1.2 billion Lari (US$930 million) in 1997, and 58.1 million Lari on imports worth US$1,048.6 million in 1998. 47. Customs tariffs were levied at the rate of zero, 5 per cent or 12 per cent. All customs duties were ad valorem rates. Most imports were subject to the 12 per cent rate, while the 5 per cent rate was applied to imported pharmaceuticals; capital goods, including spare parts and supplementary equipment; and specific goods used in production (listed in document WT/ACC/GEO/3, page 24). The average trade-weighted tariff amounted to 4.9 per cent in 1997. This average had declined as substantial imports were allowed in duty free as a result of free-trade agreements and free imports of donor-provided goods. The trade-weighted tariff for 1998, excluding goods entering duty-free, was 10.3 per cent.
Other duties and charges levied on imports but not on domestic production 48. The representative of Georgia confirmed that Georgia levied no duties and charges on imports other than ordinary customs duties and fees and charges for services rendered. Any such charges applied to imports after accession would be in accordance with WTO provisions. He further confirmed that Georgia would not list any other charges in its Goods Market Accession Schedule under Article II:1(b) of the GATT 1994, binding such charges at “zero”.
Tariff rate quotas, tariff exemptions 49. The representative of Georgia said that tariff exemptions were authorized in accordance with the Law “on Customs Tariff and Duty” of 20 March 1998 (Article 18) for: (i) goods for export; (ii) re-exports (against payment of customs
84 WTO BISD 1999 Accession duty, subsequently refunded, or deposition of a bank guarantee or imported goods of equal value with the Georgian Customs Department; the conditions are described in further detail in paragraph 88); (iii) goods in transit; (iv) imported goods placed in customs warehouses (dutiable upon withdrawal from the warehouse or under the terms of other customs regimes); (v) goods imported in relief due to natural disasters, accidents and catastrophes, or as humanitarian aid; (vi) goods financed by grants or concessional credits of a foreign governmental bodyor international organization, including a grant element of at least 25 per cent (defined by the Ministry of Finance); (vii) goods designated for official and personal use by foreign diplomatic and similar missions and their staff, and property imported from Georgia’s diplomatic missions; (viii) goods imported temporarily into the territory of Georgia; (ix) imported raw materials and semi-finished products designated for the production of exported products, including packaging materials; (x) goods brought by natural persons to the value of up to 300 Lari, per entry, in accordance with a list defined by Resolution of the Parliament of Georgia No. 273-II of 13 June 1996; (xi) imports of baby food and baby hygiene products as well as diabetic products; (xii) imports of Georgian classical literature and literary, artistic or scientific works of Georgian citizens published abroad; (xiii) imported pharmaceutical products (16 products in accordance with a list approved by the Ministry of Finance, the Ministry of Health and the Ministry of Food and Agriculture, enumerated in document WT/ ACC/GEO/4, page 20); and (xiv) aviation fuel, lubricants and other consumables in accordance with international aviation regulations. 50. The representative of Georgia confirmed that tariff exemptions, except those applied in the context of a customs union or free trade agreement, were applied on an MFN basis. Parliament could accord preferences under the Generalized System of Preferences, but this scheme had not yet been implemented.
Fees and charges for services rendered 51. The representative of Georgia said that a customs clearance fee equal to 0.3 per cent of the customs value was applied to import and export (other than temporary imports and exports) of all kinds of goods. There were no exceptions to this fee. Some members pointed out that this ad valorem fee, although modest, did not conform to the requirements of GATT Article VIII. In reply, the representative of Georgia said that Georgia had revised its legislation in this area so as to comply with GATT Article VIII. Under amendments to the Law of Georgia on Customs Fees, enacted 28 May 1999, the customs clearance fee had been reduced from 0.3 per cent ad valorem to 0.2 per cent ad valorem effective 1 June 1999, and would be further reduced to 0.15 per cent ad valorem, with a minimum charge of GEL 50 and a maximum charge of GEL 2,000 effective 1 January 2000. With these changes, Georgia believed this fee to be consistent with GATT Article VIII. The charge was roughly proportional to the cost of the service rendered because larger transactions involved more effort than smaller transactions. At the same time, the cap on the fee
WTO BISD 1999 85 Decisions and Reports ensured that large transactions would not pay significantly more than the cost of the service rendered. The level of the fee had been set so as to recover only about half of the estimated direct and related indirect costs of providing customs inspection and clearance services. Approximately fifty percent of the time of Customs employees was spent processing imports and exports, thus half of the total direct and indirect costs of operating the Customs Department should be recoverable through the fee. According to the most reliable estimate, the fee stipulated in the new amendments would produce revenues of about US$746,000 annually, or less than 23 per cent of the total cost of operating the Customs Department, estimated at US$3.3 million in 1998. 52. Transit cargoes were charged clearance fees of 100-300 Lari, depending on mode of transport. Temporary imports were charged 10 Lari per ton up to ten tons, and 3 Lari per ton above that amount. Fees for veterinary border services were established in accordance with Article 37 of the Veterinary Law. Fees ranged from 70-120 Lari per consignment for imported goods, 60-110 Lari for goods in transit and 75-125 Lari for exported goods. The veterinary service could charge additional fees according to established price lists, for example on animal cargoes on suspicion of disease or for violation of transportation rules. A charge for quarantine services was imposed on cargo held in quarantine, including fumigation and storage. 53. The representative of Georgia confirmed that the fees described in paragraphs 51 and 52 were the only fees for services related to imports and exports, and that, from 1 January 2000 and from the date of accession, Georgia would apply the customs declaration fee as described in paragraph 51, and would impose any fees or charges for services rendered related to importation or exportation only in conformity with Article VIII of the GATT 1994. Information regarding the application and level of any such fees, revenues collected and their use, would be provided to WTO Members upon request. The Working Party took note of these commitments.
Application of internal taxes to imports 54. The representative of Georgia said that caviar, alcoholic beverages, mineral water, tobacco and tobacco products, petrol, tyres, jewellery and motor vehicles were subject to excise tax in Georgia. Article 130 of the Tax Code stipulated the same tax rate for imported and domestic products. Excise taxes were applied at the border to imported goods at the moment of importation, and at the place of production (within 90 days of delivery or reimbursement) for domestic goods. Concerning the taxation of motor vehicles, he added that Georgia also charged owners of motor vehicles an annual tax to the benefit of the road fund, and motor vehicles were subject to a tax upon entry (including transit) into the territory of Georgia. Imported motor vehicles resold in Georgia were not subject to additional excise tax. The difference in taxation of petrol was maintained for ecological reasons.
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55. Some members noted that excise taxes on alcoholic beverages differed widely, and asked Georgia to explain the rationale for this tax structure, and identify the kind of wines and spirits produced domestically. Georgia was requested to implement an excise tax regime that would meet the criteria of Article III of the GATT, conforming to the principles outlined in recent dispute settlement panels clarifying the scope of national treatment obligations in the application of excise taxes. The representative of Georgia replied that dry, semi dry and semi sweet grape wines accounted for 80 per cent of Georgia’s production of alcoholic beverages, with sparkling wines (9 per cent), brandy (3 per cent), liqueur-vodka (6 per cent) and ethyl spirits (2 per cent) constituting the remainder. His Government recognized that certain aspects of its treatment of alcoholic beverages were not fully consistent with WTO rules. The system of customs duties, excise tax and VAT applicable to imported alcoholic beverages had accordingly been reviewed during 1998, and more recently, new amendments to the excise rates had been enacted on 25 June 1999. Effective 1 January 1999, the special rules applied to imported alcoholic beverages had been revoked, thus the same excise rates applied to imported and domestic products. In addition, the recent amendments had established uniform excise rates within the classifications of sparkling wines, fortified wines, natural wines, most spirits, and beer, reflecting the requirements of recent WTO decisions concerning excise taxation of alcoholic beverages. The applicable excise tax rates under the recent amendments are provided in Table 2. Georgia had introduced excise stamps for wine and spirits effective 20 March 1999, and for cigarettes effective 1 April 1999. Detailed regulations governing the administration of the excise stamps had been elaborated. 56. Some members also noted the differentiation in taxation pertaining to tobacco and tobacco products. The representative of Georgia replied that his Government understood that the present system was not fully consistent with WTO rules. The taxation of imported tobacco products had recently been reviewed in order to bring the taxes into full compliance with WTO requirements. The differential rates on domestic and imported tobacco products would be unified by the date of accession. 57. The representative of Georgia confirmed that, by the date of accession, all excise taxes would be applied uniformly to imported and domestic products, including cigarettes and other tobacco products, and would otherwise conform in all respects to the requirements of Article III of the GATT 1994. In particular, the excise tax on vodka would be increased to conform to Article III requirements as interpreted in recent dispute resolution cases. The Working Party took note of these commitments. 58. The representative of Georgia said that the Law on Value Added Tax, one of the constituent parts of Georgia’s Tax Code, had been adopted by Parliament and entered into force on 1 September 1997. Value added tax was levied at a
WTO BISD 1999 87 Decisions and Reports general rate of 20 per cent. VAT was applied to the wholesale price plus excises for domestic products, and the customs value, including import duty and excises, for imports. Exempt from VAT (Article 101 of the Tax Code as recently amended) were postage stamps (except for collection); Georgian and foreign currency (except for numismatic purposes) and securities; valuables confiscated or with no known owner, and valuables inherited by the State; gold to be transferred to the National Bank of Georgia; imported books and journals on science, art and fiction written by Georgian citizens; school books approved by the Ministry of Education in agreement with the Ministry of Finance; goods given to State bodies of Georgia as humanitarian assistance or charity, or in relief of natural disasters, accidents, and catastrophes; goods provided as grants, approved according to a procedure specified by Presidential Decree; goods provided in the form of grants or concessional loans (minimum 25 per cent grant element) by bilateral or multilateral international organizations; medicines falling within HS Chapter 30 (an exact enumeration of exempted products is contained in document WT/ACC/GEO/4 pages 41-81); medical technology (HS codes 90.18-90.22); baby food; fixed assets and spare parts (HS Chapters 84, 85 and 90); goods in transit and temporary imports; re- imported goods; imports for official or personal use of staff of diplomatic and similar representative offices to the extent required by relevant international agreements; private imports of goods valued at less than the threshold amount for imposition of customs duty; goods processed abroad by the exporter of the raw materials; raw materials guaranteed by collateral for the purpose of processing and exportation; and goods intended for re-export, guaranteed by collateral. 59. Some members considered the VAT exemption for works of Georgian authors and Georgian classical literature published abroad to be inconsistent with Article III of the GATT. The representative of Georgia replied that, in the view of his Government, the exemption for imports of works produced abroad by Georgian authors did not violate Article III because, as an exemption for imported products, it could not disadvantage imports in relation to domestic products. It was not in violation of Article I because it applied equally to imports from all nations. The representative of Georgia stated further that the Tax Code had been amended recently to extend the VAT exemption for certain domestic publications equally to similar imported publications. Georgia believed that these amendments had brought this part of the Tax Code fully into compliance with GATT requirements. 60. Concerning the taxation base for the imposition of excises and VAT, a member noted a provision in the tax code that the taxable transaction be the customs value of the goods, but not less than the “wholesale market price, excluding the excise and VAT” (Article 125(2)). In reply, the representative of Georgia noted that excise taxes on tobacco and alcoholic products were specific rather than ad valorem rates. He confirmed that the phrase “but not less than the wholesale market price” in the tax code had become obsolete with the implementation of new customs valuation regulations; its purpose had been to deal with situations in which the
88 WTO BISD 1999 Accession invoice value of imports was not a fair representation of the transaction value. It was expected to be deleted in the next general revision of the tax code; thus the basis for ad valorem excise taxes on imported goods was the customs value, determined in accordance with the Customs Valuation Agreement, plus the applicable tariff and other duties. 61. The representative of Georgia said that Georgia applied the destination principle in VAT taxation as from 1 September 1997. The VAT rate was accordingly identical for locally produced and imported products, including imported goods originating in other CIS countries (Article 100). 62. The representative of Georgia confirmed that, from the date of accession, Georgia would not use minimum values, including domestic wholesale prices or any other domestic prices, for the application of its domestic taxes to imports, and would apply its domestic taxes, including those on products listed in paragraphs 54 to 61 and Table 2, in strict compliance with Article III of the GATT 1994. The Working Party took note of this commitment.
Quantitative import restrictions, including prohibitions, quotas and licensing systems 63. The representative of Georgia said that licences were required for importation of certain agricultural chemicals, wild animals and plants, medicines, arms, explosives, nuclear materials, industrial waste, and tobacco products (Table 3). The licensing system was maintained to protect public health, safety and the environment, and was not intended to restrict the quantity or value of imports. He confirmed that imports from CIS and non-CIS countries were subject to equal treatment. The representative of Georgia confirmed that Georgia had no licensing requirements or quantitative restriction of any kind on imports other than those listed in Table 3. 64. import licences were obtained from the Ministry of Trade and Foreign Economic Relations or the Ministry of Health Protection, with the consent of the relevant ministry or department. Any person, firm or organization could apply for an import licence. The decision to grant a licence was required to be taken within 5 working days from the date of registration of the application. A licence was valid for the period fixed in the import contract, but not for more than one calendar year. The validity could be extended upon request. A licence could not be transferred to another importer. Asked to describe briefly the licence requirements for importation, production and sale of tobacco products, he referred to Presidential Decree No. 391 “On Activities Addressing Regulation of Production, Import, Wholesale and Retail Trade in Tobacco Products in Georgia”, but noted that this decree had not been implemented and that, in practice, such licenses were not required. The representative of Georgia confirmed that should the requirements of this Decree on the manufacture, sale and importation of tobacco products be implemented, all
WTO BISD 1999 89 Decisions and Reports provisions would be applied equally to domestic and imported goods in accordance with the provisions of Article III of the GATT. 65. The representative of Georgia confirmed that, from the date of accession, Georgia would not introduce, re-introduce or apply quantitative restrictions on imports, or other non-tariff measures such as licensing, quotas, bans and other restrictions having equivalent effect that could not be justified under the provisions of the WTO Agreement. If balance-of-payment measures were ever necessary in the future, Georgia would impose them in a manner consistent with the relevant WTO provisions, including Article XII of the GATT 1994 and the Understanding on Balance-of-Payments Provisions of the GATT 1994. The Working Party took note of these commitments.
Customs valuation 66. The representative of Georgia said that instructions on the determination of customs value had been adopted by Resolution No. 843 of the Cabinet of Ministers of 5 December 1994. These instructions provided for six methods of valuation, of which the primary method was based on the transaction value. The Ministry of Economy had been responsible for preparing a list of goods subject to minimum import prices affecting 20 product groups, including alcoholic beverages, wheat flour, oil margarine, butter, frozen fish, sugar, juices, tomato paste, cigar tobacco and jewellery products. However, the minimum import price system had been abolished in March 1998. Asked specifically about the use of world average prices in customs valuation, he confirmed that Article 5(6) of the 1996 Law on Customs Tariff had authorized such measures. However, the new Law “on Customs Tariff and Duty”, adopted on 20 March 1998, revoked the 1996 law and contained no reference to world market prices in the valuation rules established in its Article 10. 67. Having reviewed Georgia’s customs valuation legislation, a member noted that Georgia had not implemented in full the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (the Customs Valuation Agreement). According to this member, Georgia’s laws and regulations failed to address the following critical areas: (i) the provisions for assists/”goods and services” found in Article 8 and the Interpretative Notes in Annex I to the Customs Valuation Agreement did not appear to be fully implemented; (ii) the royalty provision and proceeds of subsequent resale, disposal or use provision of Article 8 of the Customs Valuation Agreement were merged with the provision for assists/”goods and services”; (iii) the related party provisions in Article 1 and the Interpretative Notes in Annex I to the Customs Valuation Agreement did not appear to be fully implemented; (iv) Georgia did not provide for Article 4 of the Customs Valuation Agreement, allowing only the importer to reverse the order of use of deducted or computed valuation methods; (v) Georgia did not include the provision concerning objective and quantifiable data and no additions other than
90 WTO BISD 1999 Accession those provided for to be included in the price actually paid or payable (Article 8(3) and (4)); (vi) Georgia did not include several prohibited methods of appraisement required by Article 7 of the Customs Valuation Agreement, as well as the obligation to inform the importer in writing of the method of appraisement used by Customs; (vii) the obligation to publish laws, regulations, etc. pursuant to Article 12 did not appear to be implemented; (viii) the Interpretative Notes in Annex I of the Customs Valuation Agreement did not appear to be fully implemented in Georgian law; (ix) Article 15(5) of the Customs Valuation Agreement concerning sole agent, sole distributor or sole concessionaire had not been implemented; (x) the Committee on Customs Valuation Decision 4.1 concerning the “Valuation of Carrier Media Bearing Software for Data Processing Equipment” had not been implemented; and (xi) the Committee on Customs Valuation “Decision on the Treatment of Interest Charges in the Customs Value of Imported Goods” had not been implemented. 68. in reply, the representative of Georgia said that the Law “on Customs Tariff and Duty” (1998) provided for customs valuation of goods based on internationally recognized practices. In accordance with this Law, new regulations had been prepared that were fully consistent with the Customs Valuation Agreement, including the Interpretative Notes to the WTO Valuation Agreement and the Decisions on “Valuation of Carrier Media Bearing Software for Data Processing Equipment” and “Treatment of Interest Charges in the Customs Value of Imported Goods.” The Ministry of Justice had approved the new regulations on 31 May 1999. Parliament had enacted an amendment to the Law on Customs Tariff and Duty, ensuring implementation of Article 13 of the Customs Valuation Agreement, on 25 June 1999. He added that within that amendment, the phrase “maximum customs value” should be interpreted to mean the customs value as determined by the Customs authorities in accordance with the Customs Valuation Regulations. 69. The representative of Georgia confirmed that from the date of accession, Georgia would fully apply the WTO provisions concerning customs valuation without recourse to a transition period, including in addition to the Agreement on the Implementation of Article VII of the GATT 1994, Annex I (Interpretive Notes) and the provisions on the Treatment of Interest Charges in Customs Value of Imported Goods and for the Valuation of Carrier Media Bearing Software for Data Processing Equipment (Decision 4.1). In accordance with these latter provisions, only the cost of the carrier medium itself would be accounted for in the customs value. He stated that Georgia would not use any form of reference price or fixed valuation schedule for the valuation of imports or to apply duties and taxes. He confirmed that, before the date of accession, the customs valuation regulations would be amended in Article 15 to provide that the right of appeal is without penalty, and in Article 10(1)(a)(iv) to provide that transportation costs are limited to “the cost of transport of the imported goods to the place of importation into Georgia”. He further confirmed that Georgia intends to annex a copy of the WTO Interpretative Notes to the Customs Valuation Agreement to its Regulations prior to accession, and will provide a copy of this
WTO BISD 1999 91 Decisions and Reports annex to the Working Party. The Working Party took note of these commitments.
Other customs formalities 70. The representative of Georgia said that the Customs Code contained rules of origin. Georgian legislation required indication of the country of origin of goods for both imported and domestic products. A certificate issued by the competent authority in the country of origin was necessary only for goods imported under preferential trade. CIS countries applied a uniform C-1 certificate, and had concluded an agreement on the general rules of determining the country of origin. Georgia did not require authentication of import/export documents by its consulates overseas. 71. detailed rules of origin had been laid down in the Decree “On Customs Tariff” of 21 October 1992. Origin criteria were based on the principles of wholly obtained or sufficient processing in another country. The wholly obtained criterion would typically be applied to minerals; plant products; livestock and livestock products; products of hunting, fishery and sea fishery; and secondary raw materials and wastes obtained from manufacturing and other operations. Sufficient processing was defined in terms of change of tariff position, the technology employed in the processing, or defined in accordance with established cost ratios. Mere storage and packaging, preparation, sorting, repackaging, simple assembly operations or mixing of goods (components) would not be considered sufficient processing. 72. The representative of Georgia said that the new Law “on Customs Tariff and Duty”, adopted by Parliament on 20 March 1998, stipulated that Georgia’s rules of origin should be based on international experience. Accordingly, new regulations on rules of origin had been prepared which were fully consistent with the Agreement on Rules of Origin. The Ministry of Justice had approved the new regulations on 31 May 1999. The new rules of origin regulations provided for acceptance of a certificate of origin from all countries. By contract, Georgia would require that any PSI company engaged by Georgia would be required to observe the provisions of the WTO Agreement on Rules of Origin. 73. The representative of Georgia confirmed that from the date of accession its laws and regulations on rules of origin would be in conformity with the provisions of the Agreement. In this regard, the requirements of Article 2(h) and Annex II, paragraph 3(d), i.e., that for non-preferential and preferential rules of origin, respectively, its customs authority or preshipment inspection authority acting on its behalf will provide upon request an assessment of the origin of the import and outline the terms under which it will be provided. The Working Party took note of this commitment.
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Preshipment inspection 74. The representative of Georgia said that Georgia had thus far not used preshipment inspection services and had no legal regulation on preshipment inspection. However, having examined proposals to improve customs collection in Georgia, his Government had decided to impose a preshipment inspection requirement on exporters. A tender to select a contractor had been issued in early 1999, and a contract was being negotiated as of July 1999. The contract was expected to run for at least two and a half years, and could be extended if deemed necessary by the Government. 75. Georgia had selected a pre-shipment inspection firm, and a contract had been signed. The negotiations on the final contract terms were expected to result in amendments to the Customs Code and implementing regulations. His Government expected that use of a pre-shipment inspection firm would improve customs collections primarily by reducing the incidence of under-valuation of imports. In addition to verifying the price of imports, the PSI firm would also be expected to verify quantity and quality in some cases, and indicate the proper customs classification. The PSI firm would be subject, by contract, to Georgian law in all of these matters. The decisions of the PSI firm would be advisory to the Customs Department, which would make the final decisions in all cases, including valuation. The decisions of the Customs Department were subject to judicial appeal. In order to protect confidentiality of business information, the recommendations of the PSI firm would not be published. Subsequent Customs Department decisions would, however, be published as provided for in Article X of the GATT. The fee structure of the contract involved a 1.19 per cent ad valorem charge, based on the FOB value of the goods, to the exporter. 76. The representative of Georgia confirmed that his Government would ensure that the operations of preshipment inspection entities would be consistent with the relevant WTO Agreements, in particular GATT Article VIII, the Agreement on Preshipment Inspection, the Recommendations of the Working Party on Pre- Shipment Inspection of 2 December 1997 and any subsequent recommendations issued by that Working Party, the Agreement on the Implementation of Article VII (the Customs Valuation Agreement), and the Agreements on Import Licensing Procedures, Rules of Origin, Implementation of Article VI (Antidumping), Subsidies and Countervailing Measures, Safeguards, and Agriculture. Georgia would ensure that any private firm performing customs duties covered by WTO rules would publish their practices and procedures as required by GATT Article X, that rulings by the firm would be advisory only to the State Department of Customs and would be appealable to the judiciary, that any rulings of general applicability would be made available to WTO members and to importers and exporters upon request, and that Georgia would, upon request of WTO members, meet to discuss the activities of such firms and their impact on trade with a view to resolving problems. He recognized
WTO BISD 1999 93 Decisions and Reports that the fee structure in the PSI contract was not fully consistent with GATT Article VIII. The Government would bring the fee structure into full compliance within two years. In any renewal of the PSI contract or any new contract, the fee structure would be fully consistent with WTO provisions, in particular Article VIII of the GATT. The Working Party took note of this commitment.
Anti-dumping, countervailing duties, safeguard regimes 77. The representative of Georgia said that Articles 10-13 of the Decree of the Council of State “On Customs Tariff” of 21 October, 1992, contained provisions on the imposition of anti-dumping and countervailing duties. He added that the 1992 decree had been replaced with the Law on Customs Tariff and Duty of 20 March 1998, which provided the legal basis, in principle, for the imposition of anti-dumping, countervailing or safeguard measures. However, this legislation had never been used. 78. The representative of Georgia confirmed that Georgia would not apply any anti-dumping, countervailing or safeguard measure until it had notified and implemented appropriate laws in conformity with the provisions of the WTO Agreements on the Implementation of Article VI, on Subsidies and Countervailing Measures, and on Safeguards. In the elaboration of any legislation concerning such anti-dumping, countervailing and safeguard measures Georgia would ensure their full conformity with the relevant WTO provisions, including Article VI and XIX of the GATT 1994 and the Agreements on the Implementation of Article VI, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards. After such legislation was implemented, Georgia would only apply any anti-dumping duties, countervailing duties and safeguard measures in full conformity with the relevant WTO provisions. The Working Party took note of these commitments.
B. EXPORT REGULATIONS
Customs tariffs, fees and charges for services rendered, application of internal taxes to exports 79. The representative of Georgia said that all exporting legal and natural persons were required to register with the State Department for Statistics. The general State register was decentralized, i.e. the entrepreneur was included in the register of any regional statistical office after registration at the local court. The State register maintained no restrictions on registration. 80. georgia did not apply customs duties on exports, except as indicated in paragraph 81. Exported or re-exported goods were exempt from customs duties. As of 1 September 1997, when the new Tax Code had entered into force, Georgia imposed VAT according to the destination principle and all exports, including to
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CIS countries, were zero rated. The regional customs offices performed customs clearance on all export cargoes. 81. effective 1 July 1998, exports of scrap metal had become subject to special duty in accordance with the Law on Regulation of Export and Re-export of Scrap and Waste of Black and Coloured Metals. The special duty had been set at 475 Lari per ton for copper, 320 Lari per ton of aluminium, and 28 Lari per ton of other metal scrap. However, Parliament had passed an amendment, eliminating the special duty, on 25 June 1999. 82. The representative of Georgia confirmed that after accession to the WTO, Georgia intended to minimize the use of export taxes and any such taxes applied would be in accordance with the provisions of the WTO Agreement and published in the Official Journal. Changes in the application of such measures, their level, scope, or justification, would also be published in the Official Journal. The Working Party took note of these commitments.
Export restrictions 83. The representative of Georgia said that Georgia maintained some export prohibitions or restrictions to protect public health, consumer welfare, the environment, the national patrimony and national security. The prohibitions or restrictions were applied equally to exports to all countries. Exports of arms and gunpowder, artwork and antiques of cultural value, as determined by a special commission within the Ministry of Culture, were prohibited. The items subject to export prohibition or licensing are enumerated in Table 4. Exports of timber were licensed to ensure the ecological balance in Georgia’s forests and optimal use of forestry resources in accordance with the Law “on Regulating the Consumption of Forests on the Territory of Georgia” of 25 June 1998. Exports of Caucasian Fir seeds were also subject to licensing. 84. export licences were issued by the Ministry of Trade and Foreign Economic Relations, except for medicines and medical supplies (Ministry of Health Protection). Licences were granted within 5 working days from the date of registration of the application. A licence was valid for the period stipulated in the export contract; maximum one year. The validity of a licence could be extended upon request. A licence could not be transferred to another exporter. 85. Some members noted restrictions on exports of ferrous and non-ferrous scrap metal and unprocessed timber, and stated that these appeared to violate Article XI of the GATT 1994. Georgia was requested to revise the restrictions and bring them into conformity with WTO provisions prior to accession, or according to a time-table agreed with WTO Members. In reply, the representative of Georgia said that a prohibition on export of scrap metal had been lifted in June 1998, and replaced by licensing and payment of special duty. A special licensing fee of 60
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Lari per cubic metre of timber, which had been introduced in March 1998, had also been terminated in June 1998. Export licences would be granted for all types of logs cut in conformity with the requirements of the State Forest Department, which required information on the forest, farm, region and section where the wood was to be cut; quantity, date and type of cutting; and information on the forest user, all in accordance with regulations issued by the State Forestry Department. 86. The representative of Georgia confirmed that any remaining export control requirements would be applied in a manner fully consistent with WTO provisions, including those contained in Articles XI, XVII, XX and XXI of the GATT 1994. The Working Party took note of this commitment.
Export subsidies 87. The representative of Georgia said that Georgia maintained no export subsidies. Other than ordinary bank loans at market interest rates, no official or other export financing facilities were available for exporters. 88. imported raw materials and semi-manufactured goods used in the production of goods for export were exempt from customs duties under Article 18 of the Law “on Customs Tariff and Duty” of 20 March 1998, which had superseded the Law on Customs Tariffs of 27 December 1996. Article 18 provided an exemption from customs duties for the “import of raw materials and semi-finished goods intended for the manufacture of export goods as well as the import of packaging material to the extent of actually exported finished products. Upon importing said raw materials, semi-finished goods and packaging material the payment of Customs duty or the retention of a bank guarantee is effected to the extent of the actually exported finished goods.” The phrase “to the extent of actually exported finished products” should be interpreted as limiting the drawback to duties paid on goods incorporated in actually exported finished products. Imported inputs used in exported goods were also exempt from VAT. He confirmed that the amount of duty drawback on exports of finished goods did not exceed the original duty paid on the imported raw materials and semi-manufactured inputs. 89. The representative of Georgia stated that from the date of accession Georgia would not maintain any subsidies, including export subsidies, which met a definition of a prohibited subsidy within the meaning of Article 3 of the Agreement on Subsidies and Countervailing Measures, and would not introduce such prohibited subsidies. The Working Party took note of this commitment.
C. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS
Industrial policy, including subsidies 90. The representative of Georgia said that the general objective of Georgia’s
96 WTO BISD 1999 Accession economic policies was to create a market economy through privatization of publicly- owned commercial enterprises, deregulation of prices and foreign investment. State- owned enterprises no longer received subsidized credits from the banking system or the Government, but some enterprises had covered their losses by running arrears on payments of taxes, wages and energy supplies. He identified the 12 largest loss-making State enterprises to be the Rustavi’s “Azoti”, the electromechanical factory at Kutaisi, Rustavi’s “Kimbochko”, the joint-stock company “Maudi”, the automobile plant at Kutaisi, the Poti shipyard, “Metsi”, “Orioni”, the manufacturer of agricultural machinery “Lilo”, the joint-stock company “Metei”, the turbine plant of Mtskheta “Tolia”, and the paper mill in Tbilisi. The Government intended to privatize these enterprises, but their privatization had proved difficult. 91. The representative of Georgia confirmed that Georgia did not maintain any prohibited subsidies, including export subsidies, within the meaning of Article 3 of the Agreement on Subsidies and Countervailing Measures. 92. The representative of Georgia confirmed that upon accession any subsidy programmes would be administered in conformity with the Agreement on Subsidies and Countervailing Measures. All necessary information on such programmes would be notified to the Committee on Subsidies and Countervailing Measures in accordance with Article 25 of the Agreement. The Working Party took note of this commitment. Technical barriers to trade, sanitary and phytosanitary measures Standards and certification 93. The representative of Georgia said that the Laws “on Standardization” and “on Certification of Products and Services” constituted the basic legal framework for activities in this area. A new standards law, however, had been drafted by European experts to meet the requirements of the TBT Agreement and enacted by Parliament. The Ministries of Construction and Urbanisation, Protection of Environment and Natural Resources, Health Protection and other departments ensured product safety requirements, construction norms and regulations, and sanitary norms and regulations. The State Department of Georgia for Standardization, Metrology and Certification (“Sakstandarti”) was the national body of standardization, metrology and certification in Georgia. “Sakstandarti” operated centres working on standardization, metrology and certification in Tbilisi and seven provincial cities, and State supervision of standard requirements and metrology norms was carried out by “Sakstandarti” through its local organizations. “Sakstandarti” was a member of the Interstate Council of Western Countries for Standardization, Metrology and Certification, and had become a correspondent member of the International Organization for Standardization (ISO) on 1 January 1998. 94. although conformity with mandatory intergovernmental (GOST) standards of the CIS countries was still technically required in Georgia, virtually all imports
WTO BISD 1999 97 Decisions and Reports were allowed entry without being required to meet these standards. Georgia was moving rapidly towards reliance on voluntary standards, based on international standards, in many areas. The application of mandatory standards to approximately 121 categories of products (as detailed in Table 5(b)) had been formally terminated by Government decree on 28 May 1999. In the remaining areas, existing GOST standards would be replaced by voluntary standards or technical regulations based on international standards in accordance with a transition plan and as rapidly as funding allowed. A plan for the development and implementation of standards in Georgia (1999-2002) was provided in document WT/ACC/GEO/28. 95. Georgia required a certificate of conformity issued by “Sakstandarti” and, depending on the product, a hygiene certificate from the Ministry of Health Protection. The list of imported products still technically subject to mandatory certification is provided in Table 5(a). In practice, however, the vast majority of imports were not required to meet these standards. He added that Georgian standards and certification requirements were not intended to distort trade or establish technical barriers to trade. Domestically-produced and imported goods, regardless of country of origin, complied with the same requirements on standards and certification. “Sakstandarti” had introduced a system of certification and documentation to eliminate technical obstacles in trade. Georgia recognized product certificates from the CIS countries, and was negotiating agreements to recognize certificates from Poland, Bulgaria, and Romania. Georgia would agree to recognize certificates of other countries in the near future. The Ministries of Health Protection and Agriculture and Food were actively involved in the certification procedure, in particular in testing health, hygiene and veterinary products, and the certification of bread. Food safety standards and requirements and labelling requirements were laid down in the Law “on Protection of Consumers’ Rights” (Chapter 1, Article 6). The Ministry of Protection of Environment and Natural Resources and the State Inspection for Technical Supervision were involved in certification related to environmental protection and safety of technical processes. Documentation had been harmonized with analogous European documents, and Western countries had recognized 55 certification bodies and 78 testing laboratories established in educational, research and other departments with the assistance of “Sakstandarti”. 96. Some members noted that Georgia’s legislation and practices in the area of standards did not meet the requirements of the Agreement on Technical Barriers to Trade (the TBT Agreement). Georgia was requested to complete a “Statement of Implementation” on technical barriers to trade and to provide specific information on the move from domestic to international standards; the provision of an operational enquiry point; acceptance of the TBT Code of Good Practice by Georgia; information on the procedure and terms for issuing certificates of conformity, including fees, required documentation, sampling, etc.; the use of manufacturers’ certification; the adoption of a national post-market surveillance system; and the replacement of mandatory standards with voluntary standards. Georgia should outline the specific
98 WTO BISD 1999 Accession deficiencies vis-à-vis WTO provisions in this area, and indicate a schedule for achieving compliance. A member sought a commitment from Georgia to abide by the requirements outlined in the Agreement on Technical Barriers to Trade as of the date of WTO accession, and confirmation that Georgia’s certificate of conformity requirements were not related to the establishment of additional barriers to trade. 97. The representative of Georgia replied that “Sakstandarti” was working closely with the Georgian-European Policy and Legal Advice Centre (GEPLAC) to bring Georgia’s standards legislation in compliance with the TBT Agreement. A Presidential Decree “On Measures Implementing the Requirements of the WTO Agreement on Technical Barriers to Trade” had been adopted on 5 December 1998. This Decree contained a detailed action plan and time-frame for implementation by the relevant authorities. The new Law on Standards had been approved by Parliament on 25 June 1999. The TBT enquiry point had been established under “Sakstandarti” and notified officially to WTO in July 1999 (document G/TBT/ ENQ/15). Article 14.5 of the new standards law required the enquiry point to publish information on standards, technical regulations and proposals. Article 15 required that time be allowed for comment and that comments received be taken into account with respect to both technical regulations and conformity assessment procedures, and that a reasonable time be allowed for producers to adjust. Article 13.2 required that conformity assessment procedures of other countries be accepted as required by Article 6 of the TBT Agreement. Article 14.4 established that the official publication of standards, technical regulations and conformity assessment procedure was in “Sakartvelos Standartebi” (published by the State Department of Standards) and “Sakartvelos Kanonmdeblobis Matsne” (Georgian Legislative News). Both these publications were available to the public. 98. The representative of Georgia confirmed Georgia’s intent to comply with the provisions of the TBT Agreement upon accession. In this regard, it was Georgia’s intention that standards, technical regulations and conformity assessment procedures would be based on relevant international standards, where they exist, except where use of different standards, technical regulations and conformity assessment procedures are justified to the TBT Committee pursuant to Article 2.4 of the TBT Agreement as necessary to fulfil the legitimate objectives of national security; prevention of deceptive practices; or protection of human health or safety, animal or plant life or health, or the environment. Any such standards, technical regulations and conformity assessment procedures would be administered so as not to create unnecessary barriers to trade. Furthermore, Georgia would accept as equivalent, technical regulations of other Members, even if those regulations differed from their own, provided its officials were satisfied that these regulations fulfilled adequately the objectives of Georgia’s own regulations. 99. The representative of Georgia confirmed that from the date of accession, all existing Soviet-era “GOST” and other regional standards would be voluntary with
WTO BISD 1999 99 Decisions and Reports respect to products imported from WTO member countries or from other non-CIS countries. GOST and other regional standards would continue to apply mandatorily only to products produced in Georgia or imported from non-WTO member CIS states. These standards would be replaced with international standards, or technical regulations based on international standards, in accordance with the timetable outlined in WT/ACC/GEO/28, and be fully replaced by May 2002. With respect to the items for which certification remained mandatory in Georgia (Table 5(a)), he further confirmed that imported products meeting either international, European, or GOST standards would be accepted. Georgia would accept conformance assessment certificates issued by internationally recognized authorities of the exporting countries, or approvals provided by recognized independent conformity assessment bodies or agencies recognized by “Sakstandarti”, with respect to these standards. Georgia would also reduce further the number of categories of imported products subject to mandatory certification prior to the end of 1999, notifying the revised list to the WTO by 1 January 2000, and would complete the process of conversion to voluntary certification in accordance with the timetable outlined in WT/ACC/GEO/28. Upon request of WTO members, Georgia would meet to discuss these measures and their impact on trade with a view to resolving problems. The Working Party took note of these commitments. 100. The representative of Georgia confirmed that Georgia would comply with all obligations under the WTO Agreement on Technical Barriers to Trade from the date of accession without recourse to any transition period. The Working Party took note of this commitment.
Sanitary and phytosanitary measures 101. The representative of Georgia said that Georgia had revised its quarantine requirements and adopted new legislation, including the Law “on Protection of Plants from Harmful Organisms” of 14 October 1994, the Law “on Agricultural Quarantine” of 15 May 1997, and a new Veterinary Law reflecting the standards established by the Office International des Epizooties (OIE). A Presidential Decree on SPS Measures had been drafted to meet the requirements of the SPS Agreement, and issued on 28 July 1999. 102. Concerning relations with relevant international organizations, he said that Georgia had applied for membership in the joint FAO/WHO Food Standards Programme-Codex Alimentarius Commission on 17 October 1997. Georgia also intended to join the International Convention on Plant Protection and the European and Mediterranean International Plant Protection Organization. Georgia’s Veterinary Department received information from the Office International des Epizooties (OIE) concerning diseases existing in various countries in the world and assessed the risks regarding dangerous infectious diseases on the basis of this information. 103. The representative of Georgia stated that Georgia’s sanitary and
100 WTO BISD 1999 Accession phytosanitary standards were intended solely for the purpose of protecting the health of human, animal and plant life, and not to create technical barriers to trade or to protect domestic producers. Compliance with Georgia’s regulations was determined by the State Sanitary Service and Department of Hygiene under the Ministry of Health Protection; the Sanitary, Quarantine and Supervision Department of the State Inspection on Plant Quarantine; and the Department of Veterinary under the Ministry of Agriculture and Food, in cooperation with the Border Veterinary, Sanitary and Phytosanitary Service. 104. The State Border Veterinary Supervision Inspection checked all imports of live animals, meat and fish, animal and fish products, animal fodder and feed supplements and veterinary preparations. A licence from the State Inspection of Plant Quarantine was required for importation, re-export or transit of goods covered by plant quarantine regulations. Traded goods covered by quarantine regulations included agricultural products, timber, seeds and seedlings, plants and plant parts, and plant products that could carry infectious diseases; hides and unprocessed wool; mushrooms, bacteria, viruses, nematodes and insects on living cultures; collections of insects, which could bring plant diseases; herbaria and seed collections; agricultural machinery, aggregates for land development, vehicles, vessels, packaging materials and industrial plants; and soil samples which could carry plant diseases. Preshipment inspection, leading to an international veterinary certificate, should be carried out where appropriate. Importation of commodities of plant origin and other items subject to quarantine required a phytosanitary certificate issued by the quarantine service of the exporting country as well as a certificate on the condition of the commodity delivered by the relevant division of Georgia’s Ministry of Food and Agriculture (Article 8 of the Law on Agricultural Quarantine). Infested or infected shipments which could not be disinfected would be returned to the country of origin or destroyed with the owner’s consent. The representative of Georgia provided detailed information on procedures followed in implementing Georgia’s sanitary and phytosanitary regime, requirements for imported animal and plant products, and a list of all quarantine pests in document WT/ACC/GEO/4, pages 99-110. 105. Some members noted that Georgia’s legislation and practices covering SPS measures appeared not to meet the requirements of the SPS Agreement. Georgia was asked to provide further information on ongoing efforts to bring its SPS legislation into conformity with the SPS Agreement, including additional steps to be taken, a time-frame for implementation, and details on any problems Georgia might have with implementation of the SPS Agreement upon accession. A member sought a commitment from Georgia to abide by the requirements outlined in the SPS Agreement as of the date of accession to the WTO, adding that the establishment of a certification system for imports that did not present unnecessary barriers to trade prior to accession would be a fundamental factor in completing Georgia’s accession process.
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106. The representative of Georgia replied that Georgia was working closely with GEPLAC (the Georgian-European Policy and Legal Advice Centre) and the Institutional Reform and Informal Sector (IRIS) to identify the specific aspects of the SPS Agreement not covered by Georgia’s existing regime. A detailed plan had been prepared on steps to bring Georgia’s SPS procedures into conformity with WTO requirements. An Interministerial Coordinating Body for SPS Implementation (ICB) had been formed and Georgia had also established the SPS enquiry point, as required by the WTO. The Interministerial Coordinating Body was chaired by the Deputy Minister of Agriculture responsible for international issues, and included a working-level body with representation from each agency concerned. The Presidential Decree on SPS Measures, issued in July 1999, provided for observance of the requirements of the SPS Agreement. Article 2 required the establishment of the SPS Enquiry Point, which had become operational in August 1998, and notified officially to WTO in April 1999 (document G/SPS/ENQ/8). Article 3.1 required SPS measures to be applied only to the extent necessary to protect human, animal, or plant health, and be based on scientific principles and supported by adequate scientific evidence. Article 3.2 required SPS measures to be based on international standards or else notified to WTO in accordance with Annex B of the SPS Agreement. Article 3.3 stipulated that they be based on risk assessments, and Article 3.4 that they would not discriminate unjustifiably between countries. Article 4 required the SPS measures of countries exporting products to Georgia to be accepted as equivalent, even when different from SPS measures adopted in Georgia, when the exporting country could demonstrate that its SPS measures achieve the same or a higher level of protection. Article 5 provided that compliance measures be consistent with Annex C of the SPS Agreement, and for a right of judicial review of administrative decisions in this area. 107. The representative of Georgia confirmed that Georgia would comply with all obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures from the date of accession without recourse to any transition period. The Working Party took note of this commitment.
Trade-related investment measures 108. The representative of Georgia stated that Georgia maintained no measures inconsistent with the Agreement on Trade-Related Investment Measures (TRIMs) at present, and Georgia was ready to undertake the obligations of the TRIMs Agreement upon accession to the WTO. 109. The representative of Georgia said that Georgia would not maintain any measures inconsistent with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession without recourse to any transitional period. The Working Party took note of this commitment.
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State-trading entities 110. The representative of Georgia said that all public sector monopolies for the supply of goods and services had been eliminated except as indicated in paragraph 27 above, and there were no parastatal or government-mandated private sector monopolies in Georgia. Remaining State-owned enterprises had no access to preferential State funding, and acted purely on the basis of commercial considerations in a non-discriminatory manner consistent with Article XVII of the GATT 1994. No Georgian enterprise carried special or exclusive privileges in the production of any good or service. At present, Georgia did not operate any State enterprise or agency, or authorize any other firm, to purchase domestic and/or imported agricultural products for export or domestic distribution. Accordingly, Georgia maintained no State-trading enterprises as defined by GATT Article XVII and the Understanding on the Interpretation of Article XVII of the GATT 1994. 111. The representative of Georgia confirmed that his Government would apply its laws and regulations governing the trading activities of State-owned enterprises and other enterprises with special or exclusive privileges in full conformity with the provisions of the WTO Agreement, in particular Article XVII of the GATT 1994 and the Understanding on that Article and Article VIII of the GATS. He further confirmed that Georgia would notify any enterprise falling within the scopeof Article XVII. The Working Party took note of these commitments.
Free zones, special economic areas 112. The representative of Georgia said that his Government planned to establish free economic zones in Poti and Batumi following the adoption of the appropriate legal basis for the creation of such zones. However, Parliament had rejected the draft law on free economic zones. 113. The representative of Georgia confirmed that if Georgia established any free zones or special economic areas, it would administer any such areas in compliance with WTO provisions, including those addressing subsidies, TRIMs, and TRIPS, and that goods produced in these zones under tax and tariff provisions that exempt imports and imported inputs from tariffs and certain taxes would be subject to normal customs formalities when entering the rest of Georgia including the application of tariffs and taxes. The Working Party took note of this commitment.
Government procurement 114. The representative of Georgia said that government procurement, whether by a ministry, agency or other governmental body, was carried out by competitive tender under Presidential Decree No. 162 of 11 February 1996 and the Cabinet of Ministers’ Resolution No. 264 “On Delivery of Products and Goods for State Needs of the Republic of Georgia” of 30 March 1993. The main entities involved
WTO BISD 1999 103 Decisions and Reports in government procurement were the Ministry of Defence, the Ministry of State Security, the Ministry of Internal Affairs, and the State Department of State Border Protection. Government procurement was carried out in a non-discriminatory manner between domestic and foreign suppliers, except for procurement of certain types of goods for the armed forces, in which case the participation of foreign companies was restricted. No statistical data were collected on government procurement in Georgia. 115. Parliament had adopted a new law on government procurement based on the UNCITRAL model law, prepared in close cooperation with GEPLAC (Georgian-European Policy and Legal Advice Centre), in December 1998. The Law would be amended to ensure full compatibility with the Agreement on Government Procurement. 116. The representative of Georgia said that Georgia intended to join the Agreement on Government Procurement. He confirmed that Georgia had requested observer status in the Committee on Government Procurement on 9 July 1999 (document GPA/W/89). 117. The representative of Georgia confirmed that, upon accession to the WTO, Georgia would initiate negotiations for membership in the Agreement on Government Procurement by tabling an entity offer. He also confirmed that, if the results of the negotiations were satisfactory to the interests of Georgia and the other members of the Agreement, Georgia would complete negotiations for membership in the Agreement by 31 December 2000. The Working Party took note of this commitment.
Transit 118. The representative of Georgia said that goods transported through the territory of Georgia were exempt from customs duty, VAT and excise taxes. On 16 April 1999, Georgia had acceded to the Convention and Statute on Freedom of Transit of 20 April 1921; the Convention on Transit Trade of Land-Locked States (New York, 8 July 1965); and the International Convention on the Harmonization of Frontier Controls of Goods (Geneva, 21 October 1982). 119. The representative of Georgia confirmed that his Government would apply its laws and regulations governing transit operations and would act in full conformity with the provisions of the WTO Agreement, in particular Article V of the GATT 1994. The Working Party took note of this commitment.
Agricultural policies 120. The representative of Georgia said that imports of agricultural products were subject only to tariffs (zero, 5 or 12 per cent) and sanitary and phytosanitary measures. There was no special export regime applicable to agricultural goods, no
104 WTO BISD 1999 Accession export credits other than those available from commercial banks, and no system of export credit guarantees or insurance cover arranged by the Government. 121. Concerning internal policies, he said that his Government was cooperating with multilateral and bilateral organizations to transform the collective agricultural system to a market-based system. Programmes included land reform, privatization of farms and agro-industry, the establishment of competitive markets in distribution services, and the development of research, education and extension services. With the assistance of European Communities counterpart funds (CPF), the Government provided - through the commercial banking system - short term working capital to traditional suppliers of inputs of fertilizers, seeds, and energy products, as well as to grain producers and traders. The Government did not engage in agricultural subsidies through price support, direct payments to farmers or in subsidized credit arrangements, other than to grape and tea producers. No budgetary resources were available to assist the residual State farms sector. The Government did not provide any export subsidies. 122. The representative of Georgia confirmed that Georgia would bind its agricultural export subsidies at zero. 123. georgia’s commitments on agricultural tariffs, on domestic support and export subsidies for agricultural products are in the Schedule of Concessions and Commitments on Goods annexed to Georgia’s Protocol of Accession to the WTO.
Trade in civil aircraft 124. The representative of Georgia said that Georgia maintained a duty-free regime for the importation of aircraft parts and other supporting equipment used in international transportation. Georgia intended to join the Agreement on Trade in Civil Aircraft upon accession to the WTO. 125. The representative of Georgia said that Georgia would, from the date of accession, implement the Agreement on Trade in Civil Aircraft without exceptions or transitional period. The representative of Georgia confirmed that Georgia would become a signatory to the Agreement on Trade in Civil Aircraft upon accession to the WTO. The Working Party took note of this commitment.
Textiles regime 126. a member asked whether Georgia would notify any quantitative restrictions on its exports of textiles to the Textiles Monitoring Board. 127. The representative of Georgia said that Georgia did not maintain any quantitative import restrictions on textile and clothing products. According to an Agreement with the European Communities (1993), Georgia’s exports of textile and clothing (HS Chapters 50 to 63) could become subject to quantitative restrictions
WTO BISD 1999 105 Decisions and Reports in the European Communities’ market if the exported volume exceeded 0.35 to 4 per cent, depending on the product, of total Community imports in the previous year. The Agreement also contained provisions against Georgian exports of textile products at prices “…abnormally lower than the normal competitive level”. However, these provisions had never been invoked, and the quantitative limits had not been applied.
TRADE-RELATED INTELLECTUAL PROPERTY REGIME General Industrial property protection 128. The representative of Georgia said that the protection of intellectual property rights was an essential element of Georgia’s economic policy. Intellectual property rights were inviolable according to Article 23 of the Constitution. The system of intellectual property protection in Georgia was designed to comply with the requirements of leading multilateral treaties in this field, including the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement), the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works. The specific provisions of Georgian law meeting the requirements of each article of the TRIPS Agreement are summarized in Table 6.
Responsible agencies for policy formulation and implementation 129. The representative of Georgia said that the Georgian National Intellectual Property Center (Sakpatenti) was responsible for matters involving industrial property (inventions, utility models, industrial designs, trade marks, service marks), and for matters involving appellations of origin and layout designs of integrated circuits. The Copyright Agency dealt with matters involving copyrights and neighbouring rights, and the Ministry of Agriculture was responsible for matters involving plant variety protection.
Participation in international intellectual property agreements 130. The representative of Georgia said that Georgia was a member of WIPO and a party to the Paris Convention for the Protection of Industrial Property (18 January 1994); the Patent Cooperation Treaty (18 January 1994); the Berne Convention for the Protection of Literary and Artistic Works (15 May 1995); and the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (20 August 1998). Georgia intended to join the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961); the Budapest Treaty on the International Recognition on the Deposit of Microorganisms for the Purposes of Patent Procedure; and UPOV (Geneva Act, 1991). Georgia
106 WTO BISD 1999 Accession had concluded a bilateral agreement with Uzbekistan on cooperation in the field of industrial property protection in 1996, and an agreement on cooperation between the patent offices of Georgia and Austria. Georgia had also concluded a bilateral agreement with Kazakstan (11 November 1997) on industrial property. This agreement was based on the Paris Convention. None of these agreements provided protection in excess of that required by the TRIPS Agreement.
Application of national and MFN treatment to foreign nationals 131. The representative of Georgia said that Georgia granted national treatment in accordance with the Paris and Berne Conventions. According to Article 1018 of the Civil Code copyright was extended to works protected by those international agreements to which Georgia was a party. Georgia would grant national and MFN treatment to Members of the WTO upon accession to the WTO.
Fees and taxes 132. The representative of Georgia provided information on State fees for patenting inventions, utility models, industrial designs, and for registration of trade marks (document WT/ACC/GEO/3, page 42). There were no fees for the protection of copyrights. Fees for other areas of intellectual property rights had not been established so far.
Substantive Standards of Protection, Including Procedures for the Acquisition and Maintenance of Intellectual Property Rights
Copyright and related rights 133. The representative of Georgia said that Georgia provided copyright protection under Book 4, section 1 of the Civil Code. The provisions of the Civil Code on copyright had been supplemented by a new law on copyright and neighbouring rights, adopted by Parliament on 22 June 1999. The Copyright Law of Georgia had been prepared on the basis of the WIPO model law. 134. The Civil Code (Article 1017) protected the moral and economic rights of authors, and neighbouring rights connected with performers, producers of phonograms and broadcasting organizations. The rights of performers, producers of phonograms and broadcasting organizations were defined in Articles 1082 to 1091. Computer program issues were regulated in Articles 1060-61. Protection did not depend on any kind of formal procedure nor on the level of protection in the country of origin. The term of protection began from the moment of creation of the work and lasted 50 years beyond the death of the author according to the Civil Code, Articles 1062 (duration), 1063 (validity) and 1508 (application of copyright law norms on pre-existing works). Article 1045, which should be read together with Articles 1039, 1040 and 1041, provided for the authors’ rights concerning
WTO BISD 1999 107 Decisions and Reports cinematographic adaptation or reproduction envisaged in Article 14 of the Berne Convention. The limitations and exceptions on the rights of authors stipulated in Articles 1050 through 1061 were confined to cases which did not conflict with normal exploitation of the work and did not unreasonably prejudice the right holder’s legitimate interests. 135. Article 6 of the Copyright law and Article 1024 of the Civil Code defined copyrightable material as (i) literary works (books, brochures, articles, computer programs, etc); (ii) drama or musical-dramatic works, choreographic, mime, and other theatrical works; (iii) musical works, with or without text; (iv) audio visual works; (v) sculptures, paintings, and architectural, graphic, lithographic and other work of visual art; (vi) pieces of decorative-applied and monumental art; (vii) pieces of theatrical-decorative art; (viii) photographic works, and works created by means analogous to photography; (ix) maps, plans, sketches, illustrations and other three-dimensional works belonging to geography, photography or other sciences; (x) derivative works; and (xi) collection of works or data representing results of intellectual creative activity. 136. The representative of Georgia stated further that rights of producers of phonograms were protected under the Law on Copyright. Article 48 granted producers of phonograms exclusive rights to use the phonogram, including the right to use, to permit or to prohibit reproduction, first distribution of a phonogram, rental of a phonogram, distribution of a phonogram by sale, rental, or by transferring ownership of copies of a phonogram; import of the copies of a phonogram for the purposes of distribution, including copies made with the consent of the right holder. Article 51.1 permitted use of a phonogram without permission or remuneration only when making (i) limited quotations for scientific, polemic, critical and informational purposes or (ii) short insertion of excerpts in the reviews of current events; with paying remuneration, during public performance and broadcast. Article 57.3 protected rights of producers of phonograms for 50 years from the first recording. If within this period a phonogram was lawfully published or broadcast, the term would be extended for 50 years from such event. Phonograms in Georgia were also protected by the Berne Convention. In addition, Georgia undertakes to join the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations within five years. 137. The law on copyright and neighbouring rights included specific provisions on economic rights (Article 16), the rights of producers of phonograms (Article 39), the rights of producers of videograms (Article 40), the distribution of phonogram and videograms (Article 41), and the rights of broadcasting organizations (Article 42), as well as certain provisions which were not reflected in the Civil Code, for example on rental rights in respect of computer programs, cinematographic works and phonograms (drafted on the basis of the EC Directive of 14 May 1991 on the Legal Protection of Computer Programs), and cable transmission rights (Article
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16(g)). Articles 18-25 of the new copyright law detailed the limitations and exceptions to the copyright owner’s exclusive rights. These were limited to cases that did not conflict with normal exploitation of the work or unreasonable prejudice the legitimate interests of the right holder. The representative of Georgia stated further that the provisions in the Civil Code were considered to be compatible with the copyright law, but that in case of conflict, the provisions of the copyright law would govern. It was expected that the provisions in the civil Code would eventually be revoked, but that this probably would not happen until a general revision of the Civil Code was undertaken. 138. With respect to pre-existing works, the representative of Georgia stated that Section 3 of the new Copyright Law provided protection for “other works . . . which are protected in accordance with those International agreements to which Georgia is a party.” Georgia was a member of the Berne Convention; therefore this provision protected any work required to be protected by that Convention. Article 27 of the Law provided that works were protected from “the moment of creation of the work” until 50 years after the death of the author. There was no distinction between works created before or after the Berne Convention came into force in Georgia; protection applied equally to both. 139. A court could order confiscation of copies of counterfeit works and phonograms and the materials and equipment needed for their reproduction, which would be handed over to the right-holder or destroyed. Counterfeit copies of works and phonograms, obtained by third parties in good faith, were not subject to confiscation (Civil Code Article 1098).
Trademarks, including service marks 140. The representative of Georgia said that a new Law “on Trademarks” had been adopted by Parliament on 5 February 1999 and had entered into force on 22 May 1999. The new Law was based on the standards of the TRIPS Agreement and the European Communities Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community Trade Mark, as amended by Council Regulation (EC) No. 3288/94 of 22 December 1994 for the Implementation of the Agreement Concluded in the Framework of the Uruguay Round. 141. The Law defined a trademark as a sign or a combination of signs which could be expressed graphically and was capable of distinguishing the goods and/or services of one enterprise from those of another. A sign could be a word; combination of words (including personal name, letters and numerals); figure; design sound mark; or three-dimensional configuration, including the shape of goods or their packaging as well as colours and combination of colours. The exclusive rights of the trademark owner, the scope of protection, and the scope of the exclusive rights were enumerated in Articles 6 and 7 of the Law. Well-known trademarks were protected by Article 3 of the Law.
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142. Trademarks were protected through registration with the Georgian National Intellectual Property Center “Sakpatenti”. The substantive examination of a trademark should be effected within eight months from the date of filing with Sakpatenti. Decisions regarding trademark registration could be challenged in the Chamber of Appeal, and the decision of the Chamber of Appeal could be appealed before a court. 143. registration of a trademark did not depend on use, but a trademark registration could be cancelled after five years of continuous non-use in Georgia. Service marks were protected in the same way as trademarks, and Georgian legislation protected well-known marks. Well-known marks were protected without registration by virtue of Article 6 bis of the Paris Convention according to Article 3.4 of the Trademark Law. Georgian legislation referred to the Paris Convention on the Protection of Industrial Property (Article 6 bis) for the definition of a “well known” mark. The requirement of Article 16.1 of the TRIPS Agreement that the law should presume confusion where an identical mark was used without authorization on identical goods and services was addressed in Article 5(1) and 6.2 of the Law. Article 6 of the Law extended the protection to similar signs for similar products. Articles 16.2 and 3 of the TRIPS Agreement were implemented through Article 6.4 of the Trademark Law. 144. A trademark certificate was valid for an initial term of 10 years from the date of registration, and could be renewed indefinitely for additional periods of 10 years. Agreements to transfer or licence a trademark needed to be registered with Sakpatenti to have juridical force.
Geographical indications, including appellations of origin 145. Some members asked about the status of protection of geographical indications, including appellations of origin in Georgia, noting that the Statute of Trademarks was deficient in a number of areas with respect to Articles 22 to 24 of the TRIPS Agreement. In particular, Article 22.3 of the TRIPS Agreement required a Member to refuse to register or invalidate registrations containing geographical indications except in instances in which such marks had been used continuously for at least 10 years or in good faith before 15 April 1994, and the TRIPS Agreement stipulated protection against use of geographical indications even when literally true but which falsely represented that the goods originated in another territory; protection, with certain exceptions, of appellations of origin for wines and spirits even against use accompanied by expressions such as “kind”, “type”, “style”, etc; and refusal or invalidation, with certain exceptions, of trademark registrations containing geographical indications for wines and spirits if they did not originate in the place named. 146. The representative of Georgia replied that a new Law “on the Protection of Appellations of Origin and Geographical Indications” had been prepared based
110 WTO BISD 1999 Accession on Articles 22 to 24 of the TRIPS Agreement and European Communities Council Regulation (EC) No. 2081/92 of 14 July 1992. The new law had been enacted by Parliament on 22 June 1999. The Government believed that the new Law met all the requirements of Articles 22-24 of the TRIPS Agreement.
Industrial designs 147. The representative of Georgia said that a new patent law, adopted by Parliament on 5 February 1999 and effective 27 May 1999, regulated the protection of industrial designs in Georgia. Applications for registration were filed with “Sakpatenti”, which granted patents to industrial designs considered novel, original and industrially applicable. The term of validity of a patent was 15 years from the date of filing of the application. A licence agreement could be registered with “Sakpatenti”. Any person engaged in non-authorized use of an industrial design could be ordered to suspend its use and the owner of the patent could claim damages. Neither the Statute on Industrial Designs nor the patent law contained any special requirements regarding the protection of textile designs.
Patents 148. The representative of Georgia said that a new Patent Law had entered into force on 27 May 1999. Under this law, the Georgian National Intellectual Property Center “Sakpatenti” granted patents for inventions which were considered novel, involved an inventive step, and were industrially applicable. The term of a patent was 20 years from the date of filing of the application. 149. Patents would not be granted for surgical, therapeutic and diagnostic methods of treatment of people and animals; species of plants and animals, and particular biological methods for breeding plants and animals; or inventions which could provoke or encourage inhumane, immoral and/or anti-social actions. Discoveries, scientific theory, or mathematical methods; results of artistic work; computer algorithms and programs; intellectual implementation methods, including education and training methods; organizational and management methods; industrial design and diagrams for planning of buildings, constructions and territories; and presentation of information would not be regarded as inventions. 150. according to the Patent Law, the patent owner had the exclusive right to use or dispose of an invention at his discretion, to make a product protected by the patent, to place the object in commerce, and to derive income from its use. The patent owner could sell or otherwise alienate a patent, or grant a licence. Non- exclusive compulsory licences could be granted after 4 years of patent issuance upon the request of any interested persons (Article 61), provided that the proposed user had made efforts to obtain a license from the right holder on reasonable terms. By the date of accession, Georgia will establish regulations concerning licensing terms and conditions that full satisfy the detailed requirements of TRIPS Article 31.
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Plant variety protection 151. The representative of Georgia said that the Law on Protection of Selection Achievements protected plant variety and animal breeders by granting a certificate. The certificate confirmed the exclusive right of its holder on selection achievement. The Law had been prepared according to the standards of the UPOV Convention (1991).
Layout designs of integrated circuits 152. The representative of Georgia said that the Patent Office of Georgia had prepared a new law on protection of layout designs of integrated circuits. The Law on Topographies of Integrated Circuits had been enacted by Parliament on 22 June 1999. His Government believed the new Law met the requirements of Articles 35- 38 of the TRIPS Agreement. The Law was provided to the Working Party.
Requirements on undisclosed information, including trade secrets and test data 153. The representative of Georgia said that the Law “on Monopolistic Activity and Competition” (Article 9.7) prohibited the collection, use and/or distribution of trade-related information or commercial secrets without consent of the proprietor. Commercial secrets were also defined and protected by Article 1105 of the Civil Code. 154. georgia’s law did not contain any express provision protecting test data for pharmaceuticals and agricultural chemicals, but relevant legislation was expected to be prepared and enacted in 1999. Agricultural products were tested and registered by the Plant Protection Department of the Ministry of Foods and Agriculture. Test data and other data were protected and not subject to disclosure until registration. Pharmaceutical products were tested by the Ministry of Healthcare. Applications were registered and marked “for internal use only”, and could not be copied or disclosed to outside persons.
Measures to Control Abuse of Intellectual Property Rights 155. The representative of Georgia said that the State Anti-monopoly Service was authorized to take measures against acts of unfair competition according to Article 21 of the Law “on Monopolistic Activity and Competition”. The Service could initiate court proceedings, requesting the cessation or prohibition of activities violating Georgia’s anti-monopoly legislation, and raise the issue of administrative and criminal liability.
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Enforcement
Civil judicial procedures and remedies 156. The representative of Georgia said that the Code of Civil Procedure, which had entered into force on 20 May 1999, stipulated that intellectual property cases were under the jurisdiction of circuit courts. The judicial authorities could order a party to desist from an infringement. Article 45.2 of the Law on Trademarks allowed a trademark owner whose rights had been violated to file a civil suit seeking cessation of the infringing activities, destruction of all materials carrying an infringing trademark, and damages. The infringer could also be fined or imprisoned. Article 69 of the Patent Law provided similar protection against infringement of patents, and Articles 47-49 of the Law on Copyright provided equivalent protection to copyright owners. Similar protection was provided by Article 16 of the Law on Geographic Indications, and by Article 15 of the Law on Topographies of Integrated Circuits.
Provisional measures 157. The Law on Intellectual Property Related Border Measures, enacted by Parliament on 22 June 1999, provided for provisional measures to prevent the import or export of goods infringing copyrights or trademarks protected under Georgian law. This Law implemented Articles 50-60 of the TRIPS Agreement. Additional protection was provided under Article 53 of the Administrative Procedure Code, and Articles 103-5 and 134 of the Civil Procedure Code.
Administrative procedures and remedies 158. The representative of Georgia said that the draft Code of Administrative Infringements contained provisions regarding intentional violation of copyright and patent rights (Article 52), and misappropriation of trademarks (Article 268).
Special border measures 159. The representative of Georgia said that the Law on Intellectual Property Related Border Measures provided that goods infringing copyright or trademark under Georgian law could, upon order of the court based on an application of the copyright or trademark holder, be detained for up to ten days. Within that time the right holder would need to initiate proceedings on the merits against the alleged infringer. The Law had been prepared specifically to implement Articles 50-60 of the TRIPS Agreement.
Criminal procedures 160. The representative of Georgia said that a commission within the Ministry
WTO BISD 1999 113 Decisions and Reports of Justice had prepared the draft Criminal Code of Georgia. The draft Criminal Code stipulated criminal penalties with respect to violation of intellectual property rights (Article 194), restriction of monopolistic activities and competition (Article 200), misappropriation of trademarks, including well-known trademarks (Article 201), false advertising (Article 205) and illegal provision or distribution of information containing commercial or banking secrets (Article 200). Penalties ranged from a fine equal to 300-1,000 times the minimum wage and up to two years’ imprisonment. 161. The representative of Georgia stated that Georgia would comply with all the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights from the date of its accession to the WTO, without recourse to any transitional period. The Working Party took note of this commitment.
POLICIES AFFECTING TRADE IN SERVICES 162. The representative of Georgia said that services sectors accounted for approximately 32 per cent of Georgia’s GDP in 1998. Georgia had drafted and adopted new laws and amended existing legislation related to trade in services to make the legislative basis consistent with the Agreements of the World Trade Organization. General laws related to services included the Constitution of Georgia; the Law “on Promotion and Guarantees of Investment Activity”; the Law “on Entrepreneurship”; the Law “on the Legal Conditions of Foreigners”; the Law “on Temporary Entry, Residence and Exit of Foreigners from Georgia”; the Law “on Monopoly Activities and Competition”; and the “Bankruptcy Law” of 25 July 1996. Licensing requirements in the services area were detailed in document WT/ACC/GEO/4, pp. 129-137. 163. Concerning specific services sectors, he said that a Law on Business Licensing, enacted on 14 May 1999, provided the framework for licensing the sectors of insurance, banking, securities, air and maritime transport, auditing services, construction and design, and private education services, including licensing agency and uniform procedures to be followed. The representative of Georgia explained earlier that banks were required to be registered with the Courts, and to hold a banking licence issued by the National Bank of Georgia. The National Bank based its administrative decisions on the Law on the National Bank of 28 June 1995 and the Law on Commercial Banks Activities of February 1996. Foreign banks operated in accordance with Georgia’s common banking legislation and were not subject to any special or additional requirements. The Insurance State Supervision Service controlled insurance activities. Licences were granted for an indefinite period of time. The Insurance Law had been amended in October 1998 to abolish restrictions on foreign ownership of insurance companies, effective upon Georgia’s accession to the WTO. The Ministry of Finance established and enforced the regulatory regime for the stock market and issuance of securities. Parliament had approved a law establishing a stock market and providing for registration and regulation of
114 WTO BISD 1999 Accession securities in Autumn 1998. Parliament had also approved amendments to the Law “on Entrepreneurship” providing for improved stockholder protection and other provisions to encourage the development of a securities market in Georgia. 164. The Ministry of Telecommunications and Postal Services regulated the telecommunication sector and postal services in accordance with the Law on Telecommunications No. 568 of 12 October 1994. The Ministry formulated legislation, regulated tariffs and charges and participated in the establishment of industry standards. Licences were issued by the Ministry of Telecommunications, on the basis of a decision of a Licensing Committee (approved by the Minister) within one month of submitting the application and documentation. Telecommunication services were provided by both State-owned and private firms. Postal services were a State monopoly in accordance with Presidential Decree No. 334 of 20 May 1996. However, foreign express companies also operated in Georgia. 165. The Ministry of Justice regulated legal services. Legal services by foreign lawyers were not regulated or restricted by Georgian legislation. A new Law on Bookkeeping and Accounting had been adopted by Parliament on 5 February 1999. Audit services were regulated by the Audit Board established under the Parliament of Georgia. Audit firms needed to have a licence from the Audit Council in order to provide audit services in Georgia. 166. The representative of Georgia confirmed that for sectors subject to domestic regulation, including licensing, Georgia applied its domestic regulatory regimes in accordance with GATS Article VI and other GATS requirements and did not discriminate against foreign suppliers. 167. The regulatory regime in the tourism sector comprised the Tourism Chart and Tourism Code (September 1995), the Law “on Tourism and Resorts” of 6 March 1997, and Amendments and Changes to the Law on Tourism and Resorts of 20 March 1998. The fee for licensing tourist activities was set at 245 Lari and applied equally to domestic and foreign firms. 168. Georgia’s Schedule of Specific Commitments on Services is annexed to its draft Protocol of Accession reproduced in the Appendix to this Report (see paragraph 181 below). This Schedule of Specific Commitments on Services contains the legally binding market access commitments of Georgia in respect of services.
Transparency
Publication of information on trade 169. The representative of Georgia said that a normative act could not take effect before its official publication (Article 38, paragraph 5 of the Law on Normative Acts of 29 October 1996). Normative acts for enactment were published either in “Sakartvelos Kanonmdeblobis Matsne” (Georgian Legislation News), “Sakartvelos
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Parlamentis Utskhebani” (Georgian Parliament News), “Sakartvelos Respublica” (official newspaper), or in the official publishing organ of the authority adopting the normative act. Publication of laws, regulations and administrative orders was a legal obligation, and laws, regulations and administrative orders could not take effect before their publication. Asked to clarify the relationship between these requirements and Article X of the GATT 1994, he confirmed that Georgia published all laws, regulations, judicial decisions and administrative rulings of general application prior to implementation. 170. a member noted that normative acts could be published in a variety of journals and asked Georgia to indicate specifically which organs were relevant to the obligations contained in Article X of the GATT and the WTO Agreements on SPS, TBT, TRIPS, GATS, Import Licensing Procedures, and Customs Valuation. Reminding Georgia that Article X and several WTO Agreements required laws, regulations, judicial decisions, and administrative rulings of general application dealing with trade to be published in a manner which permitted governments and traders to become acquainted with them, and in some cases for comment prior to finalization, this member requested Georgia to review its current diffuse publication strategy and to consider focusing its publication requirements on WTO issues in a relatively small number of publications. The current system of publication of normative acts in various publishing journals could be a source of serious confusion and lack of proper information for foreign traders. 171. The representative of Georgia replied that Art. 38.5 of the Law on Normative Acts provided the legal requirement for the publication of trade laws (among other laws). Although individual ministries and agencies could publish enactments in various ways, two sources were authoritative. “Sakartvelos Kanonmdeblobis Matsne” (Georgian Legislative News) was published weekly in three parts: (i) Parliamentary enactments; (ii) international treaties and agreements to which Georgia was a party; and (iii) regulations and other enactments of the various ministries, as approved and registered by the Ministry of Justice. A separate publication, “Sakartvelos Presidentis Budzanebulebebi da Gankargulebebi” (Decrees and Orders of the President of Georgia), published bi-weekly, contained Presidential enactments. These publications were, of course, in Georgian. Unofficial English translations were available for many important enactments from various commercial sources. He added that, from the date of accession, Georgia would publish all laws, regulations, judicial decisions, and administrative rulings of general application dealing with trade in full conformity with Article X of GATT 1994, Article III of the GATS and the other transparency requirements in WTO Agreements requiring notification and publication.
Notifications 172. The representative of Georgia said that, at the latest upon entry into
116 WTO BISD 1999 Accession force of the Protocol of Accession, Georgia would submit all initial notifications required by any Agreement constituting part of the WTO Agreement. Any regulations subsequently enacted by Georgia which gave effect to the laws enacted to implement any Agreement constituting part of the WTO Agreement would also conform to the requirements of that Agreement. The Working Party took note of this commitment.
Trade Agreements 173. The representative of Georgia said that Georgia was a member of several multilateral economic organizations, including the Customs Cooperation Council (CCC); the European Bank for Reconstruction and Development (EBRD); the United Nations Economic and Social Council (ECOSOC); the European Telecommunications Satellite Organization (EUTELSAT); the Food and Agriculture Organization (FAO); the International Atomic Energy Agency (IAEA); the International Civil Aviation Organization (ICAO); the International Fund for Agricultural Development (IFAD); the International Labour Office (ILO); the International Monetary Fund (IMF); the International Maritime Organization (IMO); the International Maritime Satellite Organization (INMARSAT); the International Organization for Migration (IOM); the International Road Traffic Organization (IRTO); the International Trade Centre (ITC); the International Telecommunications Union (ITU); the Organization for Security and Cooperation in Europe (OSCE); the United Nations Conference on Trade and Development (UNCTAD); the United Nations Development Programme (UNDP); the United Nations Economic Commission for Europe (UNECE); the United Nations Environmental Programme (UNEP); the United Nations Industrial Development Organization (UNIDO); the Universal Postal Union (UPU); the World Food Programme (WFP); the World Health Organization (WHO); the World Intellectual Property Organization (WIPO); the World Meteorological Organization (WMO); the World Bank; the International Bank for Reconstruction and Development (IBRD); the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the World Tourism Organization. 174. georgia had signed 30 bilateral agreements containing substantive provisions directly affecting foreign trade in goods and/or services. Georgia had concluded Free Trade Agreements with Armenia, Azerbaijan, Kazakstan, Moldova, the Russian Federation, Turkmenistan, Ukraine and Uzbekistan, but only those with Armenia, Azerbaijan, the Russian Federation and Ukraine had been ratified and were effective. Georgia had also signed 22 agreements on trade and economic cooperation or economic relations, as well as a number of agreements and treaties on the promotion and reciprocal protection of investment (the respective agreements are listed in document WT/ACC/GEO/3, Annex 7). Georgia had signed a Partnership and Cooperation Agreement with the European Communities on 22 April 1996. The agreement was based on reciprocal application of the MFN principle. Georgia was
WTO BISD 1999 117 Decisions and Reports a participating State in the Black Sea Economic Cooperation (BSEC), established on 25 June 1992. 175. Concerning relations with the Commonwealth of Independent States (CIS), he said that Georgia had become a CIS member on 9 December 1993. Georgia had signed the Agreement on the Creation of an Economic Union of 24 September 1993 and the Agreement on Creation of Free Trade Area within the CIS, but these agreements had never been ratified, and the Government had no intention of seeking ratification. The Agreement on Creation of Free Trade Area within the CIS bound signatories not to impose import or export duties or quantitative restrictions on goods originating in signatory countries. The Agreement provided that the parties would agree on goods to be excluded from the free trade regime, but this had not been done. The Agreement required each party to authorize free transit over its territory of goods originating in another party and destined for a third party. The Agreement also required the signatories to accord national treatment with respect to (i) domestic taxes and levies of a fiscal character, (ii) other restrictions or requirements, and (iii) rules on transit, warehousing and payment. Parties were free to take quantitative or other protective measures in response to shortages; for balance of payments reasons; or to redress significant injury caused by imports, or threat thereof, to domestic producers. Each party remained free to adopt measures to protect public health, morals, order and security, plants and animals, national treasures and intellectual property. The Coal and Metal Association Agreement, signed by 11 CIS countries, provided for the establishment of a Eurasian Association for Coal and Metal to further rational development of the coal and metal-producing industries, coordination of scientific, technical and investment policies, and promotion of beneficial conditions of supply and terms of sale. The Coal and Metal Association Agreement aimed at elaborating “recommendations for implementation of general industrial and economic policy in the field of coal and metallurgy”, but did not contain any provisions relating to preferential market access. The Agreement had never been ratified and was not in force, and the Government had no intention of seeking ratification. 176. The representative of Georgia stated that Georgia did not conduct any trade on the basis of government-mandated countertrade or barter. An agreement with the Russian Federation for 1996-97 had envisaged duty exempt barter of agricultural products in exchange for industrial goods between private sector entities, but no such trade had actually taken place, and the agreement had expired. 177. In response to specific questions on Georgia’s economic relations with other CIS countries, the representative of Georgia reiterated that only the Free Trade Agreements with Armenia, Azerbaijan, the Russian Federation and Ukraine were actually in force. The Free Trade Agreement with Ukraine had entered into force on 4 June 1996. The CIS Agreement on the Creation of an Economic Union was a framework agreement which required separate agreements in specific areas
118 WTO BISD 1999 Accession of economic activity to become effective. No free circulation of goods, services, capital or manpower had yet been implemented on the basis of this Agreement. He stressed that Georgia had no intention of joining the CIS Customs Union. He agreed that the Agreement “On Creation of Zone of Free Trade of the Commonwealth of Independent States” would need to be notified under Article XXIV of the GATT 1994 and Article V of the GATS when and if that Agreement became effective, but added that the agreement was not yet in force. 178. A member requested Georgia to submit notifications and copies of its Free- trade Area and Customs Union Agreements to the Committee on Regional Trade Agreements (CRTA) upon accession. 179. The representative of Georgia stated that his Government would observe the provisions of the WTO including Article XXIV of the GATT 1994 and Article V of the GATS in its participation in trade agreements, and would ensure that the provisions of these WTO Agreements for notification, consultation and other requirements concerning free trade areas and customs unions of which Georgia was a member were met from the date of accession. He confirmed that Georgia would, upon accession, submit notifications and copies of its Free Trade Area and Customs Union Agreements to the Committee on Regional Trade Agreements (CRTA). He further confirmed that any legislation or regulations required to be altered under its Trade Agreements would remain consistent with the provisions of the WTO and would, in any case, be notified to the CRTA during its examination of the same. The Working Party took note of these commitments.
CONCLUSIONS 180. The Working Party took note of the explanations and statements of Georgia concerning its foreign trade regime, as reflected in this Report. The Working Party took note of the commitments given by Georgia in relation to certain specific matters which are reproduced in paragraphs 24, 26, 35, 40, 44, 53, 57, 62, 65, 69, 73, 76, 78, 82, 86, 89, 92, 99, 100, 107, 109, 111, 113, 117, 119, 125, 161, 172 and 179 of this Report. The Working Party took note that these commitments had been incorporated in paragraph 2 of the Protocol of Accession of Georgia to the WTO. 181. Having carried out the examination of the foreign trade regime of Georgia and in the light of the explanations, commitments and concessions made by the representative of Georgia, the Working Party reached the conclusion that Georgia be invited to accede to the Marrakesh Agreement Establishing the WTO under the provisions of Article XII. For this purpose, the Working Party has prepared the draft Decision and Protocol of Accession reproduced in the ��������Appendix to this Report, and takes note of Georgia’s Schedule of Specific Commitments on Services (document WT/ACC/GEO/31/Add.2) and its Schedule of Concessions and Commitments on
Not reproduced.
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Goods (document WT/ACC/GEO/31/Add.1) that are annexed to the Protocol. It is proposed that these texts be adopted by the General Council when it adopts the Report. When the Decision is adopted, the Protocol of Accession would be open for acceptance by Georgia which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of Georgia to the Marrakesh Agreement Establishing the WTO.
Table 1: Progress in privatization in Georgia Privatization of enterprises, 1 January 1993 – 15 May 1999 (a) Medium/Large enterprises converted to Joint Stock Companies and subsequently sold
Enterprises converted to JSCs, by sector
Originally 1993 1994 1995 1996 1997 1998 1999 Total Remain
Industry 192 7 122 27 9 4 7 0 176 16
Chem. Eng. 31 2 10 7 2 1 2 1 25 6
Natural gas 57 0 3 11 15 3 11 1 44 13
Bread Prod. 61 0 1 2 18 2 1 0 24 37
Agriculture 383 6 192 59 42 14 10 4 327 56
Arch.&Const. 219 2 94 90 15 4 8 1 214 5
T r a d e / N a t . 81 0 31 22 8 5 4 0 70 11 Res.
Oil Products 49 0 19 8 4 1 1 0 33 16
Transport 116 3 65 28 5 3 4 2 110 6
Social Svcs 49 2 16 18 4 1 1 0 42 7
Energy 60 1 2 4 28 32 21 3 91 0
Seaports 2 0 0 0 0 0 0 0 0 2
Total 1,300 23 555 276 150 70 70 12 1,156 175
120 WTO BISD 1999 Accession
Joint Stock Companies privatized by sale of more than 50 per cent of shares, by sector Originally 1993 1994 1995 1996 1997 1998 1999 Total Remain
Industry 176 8
Chem. Eng. 25 25 0
Natural gas 44 24 20
Bread Prod. 24 24 0
Agriculture 327 259 68
Arch.&Const. 214 170 44
T r a d e / N a t . 70 44 26 Res.
Oil Products 33 27 6
Transport 110 110 0
Social Svcs 42 31 11
Energy 91 47 44
Seaports 0 0 0
Total 1,156 2 108 204 214 273 128 0 929 227
Privatization of enterprises, 1 January 1993 – 15 May 1999
(b) Small enterprises (“Objects”) sold without conversion to Joint Stock Companies Originally 1993 1994 1995 1996 1997 1998 1999 Total Remain
Total: 12,088 1,310 1,370 4,701 2,247 1,474 1,910 136 13,148 405
By Sector:
Industry: 345 26 35 103 50 30 22 3 269 76
Construction 224 11 70 67 58 40 35 3 284 2
Food/Agric. 584 54 29 125 76 92 112 5 493 91
Transport 101 4 4 40 31 20 22 0 121 0
Trade 4,532 394 717 2,184 464 465 584 59 4,867 0
Public Svc 4,970 644 481 1,685 1,160 664 999 62 5,695 0
Health Care 747 0 0 285 207 42 18 0 552 195
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Oil Products 166 149 10 1 1 1 4 0 166 0
Social Svc 246 23 20 154 171 97 100 4 569 0
Energy 33 5 4 13 3 3 5 0 33 0
Bread Prod. 140 0 0 44 26 20 9 0 99 41 Notes: 1. Total privatized exceeds the number originally identified because some units were divided. 2. remaining unsold “Health Care” includes a number of smaller hospitals and clinics. 3. Remaining unsold “Industry” includes a number of unfinished construction projects
Table 2: Rates of Excise Tax (Imported and Domestic)
Rate (Lari or No. Commodity HS Codes Quantity per cent) 1 Sparkling wines, including champagne 2204.10, 1 Liter 0.50 2204.21.10, 2204.29.10
2 Fortified wines 2204.21.90, 1 Liter 1.00 2204.29.90
3 Vermouth and other natural wines 2205 1 Liter 2.00 flavoured with extracts
4 Natural wines made of grapes which are 2204 1 Liter 0.20 not included in lines 1 or 2
5 Other fermented beverages (apple cider, 2206 1 Liter 2.00 perry, mead); mixtures of fermented beverages, mixtures of fermented and non-alcoholic beverages not elsewhere specified
6 Ethyl spirits 2207 1 Liter 0.70
7 Alcoholic beverages distilled from grape 2208.20 1 Liter 2.00 wine; Chacha
8 Whiskey 2208.30 1 Liter 2.00
9 Rum and tafia 2208.40 1 Liter 2.00
10 Gin 2208.50 1 Liter 2.00
11 Liqueurs 2208.70 1 Liter 2.00
12 Vodka 2208.60 1 Liter 1.00
13 Other distilled alcoholic beverages 2208.90 1 Liter 2.00
14 Beer 2203 1 Liter 0.12
122 WTO BISD 1999 Accession
Rate (Lari or No. Commodity HS Codes Quantity per cent) 15 Tobacco products (except raw materials)
Cigars and cigarillos 2402.10 1000 pcs 150.00
Filter cigarettes 2402.20 1000 pcs 7.50
Non-filter cigarettes 2402.20 1000 pcs 2.50
Other tobacco products and substitutes 2403 1 kilo 20.00
Rates on imported tobacco products:
Cigars and cigarillos Each 0.25
Filter cigarettes Pack 0.25
Non-filter cigarettes Pack 0.19
Other tobacco products 1 kilo 20.00
16 Jewelry 7113, 7114, 7116 35%
17 Passenger automobiles 8703 15%
18 Passenger automobile tires 4011, 4012 15%
19 Salmon and sturgeon caviar; delicacy 1604.30, 1605 20% products of fish
20 Oils and other products of distillation of 2707 except 2707.40 60% coal tar at high temperature and 2707.99
21 Petroleum oils from bituminous materials, 2709 60% crude
22 Light, medium, and heavy distillates of oil 2710.00.10 to 80% 2710.00.70
23 Liquified petroleum gases 2711.12, 2711.13, 60% 2711.14, 2711.19
24 Other oil products produced from raw oils 2710 (except 60% and bituminous minerals 2710.00.110 – 690 and 710-780)
25 Mineral water in bottles for retail sale 2201.10 and 1 liter 0.10 2202.10
Note: As of June 1999, a specific tax in lieu of excise, duty and VAT was levied on imported tobacco products as follows: filter cigarettes 0.25 lari per pack, non-filter cigarettes 0.19 lari per pack, cigars 0.25 lari per piece, and pipe tobacco 20 lari per kg. Excise taxes on domestic and imported tobacco products will be unified by the date of accession.
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Table 3: Items subject to import licensing
(a) Chemical agents for protection of plants: HS Licence is granted by the Ministry of Trade and 3808. Foreign Economic Relations with the consent of the Ministry of Protection of Environment and Natural Resources, the Ministry of Agriculture and Food.
(b) Wild animals and birds, fish, bones and hoofs Licence is granted by the Ministry of Trade and of extinct animals, wild plants, seeds of wood Foreign Economic Relations with the consent of species of forest and similar materials: HS the Ministry of Protection of Environment and 0101.19; 0102.90; 0103.90; 0104; 0105.99; Natural Resources, the Department of Forestry, 0106 (only wild animals); 0301‑0303; 0407 the Ministry of Agriculture and Food. (except poultry eggs); 0507; 0508; 0604; 0802.20; 1209.99; 1211; 1212.20; 1401‑1404; 9601.
(c) Remedies, medicines and their raw materials, Licence is granted by the Ministry of Health narcotic and psychotropic remedies, poisons: Protection. HS 0206; 0507; 0510; 1211; 1212.20; 1302; 1504 (only pharmacological preparations and their raw materials); 3001‑3004; 300660.
(d) Weapon and military equipment, special Licence is granted by the Ministry of Justice. completing products, works for their production, services in the field of military technical cooperation: HS 8506 (military purpose only); 8710; 8802 (except 8802.11; 8802.12; 8802.20; 8802.30; 8802.40); 8803.90 (except 8803.90.91); 8805.10; 8906; 9013.10; 9013.20; 9013.80, 9014; 9301; 9302; 9305 (only for fighting arms); 9306 (except: 9306.10; 9306.29; 9306.29; 930629; 930630);
(e) Gunpowder, explosives, pyrotechnic Licence is granted by the Ministry of Justice. substances: HS 3601 (except gunpowder for hunting); 3602‑3604.
(f) Nuclear materials, technologies, equipment and Licence is granted by the Ministry of Justice. installations, special non‑nuclear radioactive radiation sources: HS ; 2844; 2845; 8401.
(g) Industrial wastes. Licence is granted on the basis of the consent of the Ministry of Protection of Environment and Natural Resources.
(h) Tobacco products: 2402 and 2403 Licence granted by the Ministry of Trade and Foreign Economic Relations
The import of non toxic industrial wastes is allowed only for the purpose of industrial processing. Im- port of toxic and radioactive industrial wastes for the purpose of their utilisation, safe disposal, process- ing, interment and any other purposes is prohibited.
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Table 4: Exports subject to prohibition or licensing
According to Resolution No. 744 of 30 November 1995 of the Cabinet of Ministers of Georgia, the Law of Georgia on Regulation of Forest Exploitation of 26 June, 1998, and the Law of Georgia of Export of Scrap Metals of 26 June, 1998, export of the following is prohibited or licensed as indicated:
Prohibited:
HS 9701‑9703, 9706 Artwork and antiques of museum value
HS 9301, 9302, 9305, 9306 Weapons and gunpowder
Subject to licensing:
HS 9705 Collection materials of biology, Licence is granted in agreement mineralogy, archaeology, with the Ministries of Finance, paleontology, ethnography and Protection of Environment and numismatics: Natural Resources, Culture and the Department of Geology respectively.
HS 4401, 4403, 4404, 4406, Timber and lumber Licence is granted by the 4407 Ministry of Trade and Foreign Economic Relations on the basis of permit for cutting timber Issued by the State Forestry Department
HS 0206; 0510; 1211; 13021; Raw materials of animal and Licence is granted by the 1504.20; 1505; 3001; 3002 plant origin for medicines, Ministry of Health Protection. substances received from human organism
HS1209.99 Caucasian Fir seed Licence is granted by the Ministry of Trade and Foreign Economic Relations in agreement with the Ministry of Protection of Environment and Natural Resources.
Ferrous, copper and aluminum Licence is granted by the HS 7204, 7404, 7602 metal scrap Ministry of Trade and Foreign Economic Relations.
Table 5(a): Products Subject to Mandatory Certification
Description of Product Position Code
1 Meat and meat products Group 2
2 Fish and other aquatic invertebrates Group 3
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Description of Product Position Code
3 Milk and dairy products, birds’ eggs, natural honey, edible Group 4 products of animal origin
4 Coffee, tea, spices Group 9
5 Grain for bread Group 10
6 Cereals, starch, inulin Group 11
7 Fats, oils and their fractions of animal or plant origin. Group 15
8 Meat and fish ready for use products Group 16
9 Sugar and sugar confectionery Group 17
10 Cocoa and cocoa preparations Group 18
11 Preparations of cereals, flour, starch or milk; pastrycooks’ Group 19 products
12 Preparations of vegetables, fruit, nuts or other parts of Group 20 plants
13 Miscellaneous edible preparations Group 21
14 Beverages, spirits and vinegar Group 22
15 Prepared animal food Group 23
16 Tobacco and tobacco products Group 24
17 Edible salt 2501 00 910
18 Organic and non-organic sands 2505, 2517, 2518.20, 2513, 2514, 2620, 2530.10
19 Clay, Portland cement and related stuff 2523, 2522, 2520.20, 2570, 2617, 2508.70, 7019
20 Engine petroleum containing lead no more than 0.013 g/l 2710.00.330
21 Engine petroleum containing lead more than 0.013 g/l 2710.00.350
22 Kerosene 2710.00.510
23 Diesel fuel 2710.00.690
24 Liquid fuel (mazout) 2710.00.790
25 Lubrication and other oils 2710 00 990
26 Liquid gas for everyday purposes 2711.12.190, 2711.13.900, 2711.19
27 Fertilizers Group 31
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Description of Product Position Code
28 Coloring materials 3204, 3207
29 Essential oils and resinoids, perfumery, cosmetic or toilet Group 33 preparations
30 Washing and cleaning preparations 3401, 3402, 3405
31 Casein, caseinates, prepared glues etc. 3501.00.100, 3506.10, 4410, 4411, 4442, 2509, 5904, 6802.91, 4409.20.910
32 Photographic or cinematography goods Group 37
33 Hydraulic brakes fluid 3819
34 Floor coverings of plastics etc. 3917, 3918
35 Plastics goods 3921, 3922, 3923, 3924
36 Pneumatic tires of rubber 4011, 4012
37 Clothing 6105, 6106, 6107, 6108, 6112, 6115, 6207, 6208, 6209, 6211
38 Children’s shoes 6401, 6402, 6403, 6404, 6405
39 Natural and artificial stones 6802, 2516, 2515, 1100,
40 Slag wool, rock wool and similar warm materials 6806, 6808, 7019.51
41 Wall materials 6810.11, 6809
42 Hydroisolation materials 6811, 7212.10.100, 6810.19.100, 6807.10.100, 2714
43 Articles of cement, concrete or artificial stone 6810
44 Traffic and road works 6801, 6815, 6810.19.310, 6807
45 Ceramic articles 6901, 6904, 6914, 6910.10
46 Fire resisting materials and articles 6902, 2524, 8544
47 China dinner, kitchen, other household and toilet articles 6911
48 Dinner, kitchen, other household ceramic dishes and toilet 6912 articles
49 Steel and steel products 7210, 7216, 7219.12, 7212.20, 7217, 7304, 7306, 7307, 7309, 7314, 7317, 7604, 7606, 7608
50 Steel constructions 7308, 7610, 7612
51 Aluminum containers not expanding the 50 litres capacity 7612.90.990
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Description of Product Position Code
52 Locks 8301
53 Caps for glass bottles, corks, etc. 8309
54 Wire, rods, tubes, plates, electrodes and similar products, of 8311 base metal or of metal carbides, coated or cored with flux material, of a kind used for soldering, brazing, welding
55 Compressors and other parts for refrigerators 8418.99
56 Household air cleaning machine 8421.39.300
57 Household dish washing machines 8422.44
58 Desk, wall, floor fans 8444.51
59 Household refrigerators and freezers 8444.80
60 Air conditioning appliances 8445.10
61 Medical, surgical sterilizers 8449.20
62 Household or laundry washing machines 8450
63 Household wood work machinery 8465
64 Electric motors not exceeding 37.5 watts 8501.10
65 Motors and generators with constant electricity supply 8501
66 Motors of an output not exceeding 750 W 8501.51
67 Electric generating sets and rotary converters 8502, 8504
68 Basic elements and batteries 8506
69 Electric accumulators including their apparatus of different 8507 shapes
70 Electrical engine operated manual electric‑mechanical 8508 instruments with indulged
71 Electrical engine operated household electric mechanical 8509 machines
72 Electrical engine operated electric shavers and hair cutters; 8510
73 Alarm and lighting equipment 8512
74 Other electric household items 8516
75 Tape players and similar devices 8519
76 Tape recorders and other recording devices with or without 8520 players
128 WTO BISD 1999 Accession
Description of Product Position Code
77 Video recording and playing devices 8521
78 Fire and safety electronic alarms 8531
79 Electric devices for turning on/off the electricity, contacts, 8535 with voltage over 100 V (switches, switchboards, power reducers, fluctuation reducers, electric load, using equipment, etc.)
80 Electric filament or discharge lamps, including sealed beam 8539 lamp units and ultra-violet or infra-red lamps; arc-lamps
81 Vehicles carrying 10 or more persons (except used) 8702
82 Trucks (except used, ones for transporting radioactive 8704 products)
83 Trucks specifically used for city communication purposes 8705.90
84 Car devices and details 8708
85 Motorcycles, bikes with supporting engines with or without 8711 additional seats (except the used and sport cars)
86 Baby carriages 8715
87 Pacemakers for stimulating heart muscles 9021.50
88 Appliances and devices used in medicine, surgery, dentistry, 9048 other electric medical facilities
89 Seating furniture 9401
90 Household furniture 9403
92 Prefabricated buildings 9406
93 Various prepared stuff 9613, 9616, 9617
Table 5(b): Products Removed from Requirement for Mandatory Certification
Description of Product Position Code
Vegetables and bulbs, tuberous roots Group 7
Edible fruit or nuts, citrus and its shells and peel Group 8
Foliage beet, edible roots, lucern, edible cabbage, hay whether or 1214 not granulated
Engine and aviation petroleum 2710
Medical oxygen 2804.40
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Description of Product Position Code
Gauze and its preparations 3005.90
Lubrication means for cars, equipment and transportation means 3403.19
Matches 3605.00
Copper sulfate, packed for retail prices 3808.20
Herbicides 3808.30
Disinfectants, for use in health protection and veterinary 3808.40
Flexible insulation tubes of ethylene, vinyl chloride or other 3917.31 plastic polymers
Diaphragm of polymers of ethylene 3920.10
Contraceptives 4014.90
Latex baby’s dummy, rubber ice bubbles, rubber hothouses, 4014.99 medical rubber tubes
Appliances for individual safety reasons, rubber masks 4015.90
Surgical gloves 4015.11
Plywood veneer sheets of leaf‑bearing sorts with outward layers, 4412 veneer sheets of coniferous sorts with outward layers
Veneer preparations 4415.10
Filter for grocery products 4805.40
Wrapping paper for grocery products 4805.80
Hard paper boxes 4819.10
Hard and soft paper boxes, including bending ones, paper bags 4819.50 and bags of combined materials, glass and paper bottles
Insulation fabric 5903.90
Male, female and children knitted garments, including the clothing 6109, 6111 for babies and children before school age ‑ knitted garments ‑ male, female and children swimming and skiing suits ‑ foot ware (socks, warm pants and sweat pants)
Uncut diamond instruments – sewing discs, cutting discs 6804.21
Abrasion instruments ‑ sewing discs, cutting discs 6804.22
Abrasion powder instruments 6805
Friction materials and preparations 6813
Air balloons of 50 litre capacity at burst pressure of 1.6 Pa 7311
130 WTO BISD 1999 Accession
Description of Product Position Code
Heaters, kitchen ovens, food heaters and other similar non 7321 electrical equipment made of ferrous metal, related supplies
Copper enameled household articles 7323.92
Iron enameled household articles 7323.94
Manual garden tools (knives, etc.) 8201.10, 8201.20, 8201.30, 8201.50
Wood‑cutting instruments ‑ plate saws 8202.32
Screwdrivers 8203.20
Hammers, planes 8205.20, 8205.30
Guts 8205.40
Milling cutters 8207.70
Motorcycle and car engines 8407.34, 8407.90
Household liquid pumps, manual 8413.20
Manual household pumps 8414.20
Compressors used in refrigerating plants 8414.30
Electronic engine air conditioners for tables, wall, floor, ceiling 8414.51 with capacity of 125 kWh
Air conditioner supplies for measuring air temperature and 8415.10, 8415.82, 8415.83 humidity; conditioners without a separate regulator of humidity; ‑ for wall or window ‑ other
Refrigerator closets and containers 8418.10
Family refrigerators: compressive‑electric, absorbing, other 8418.21, 8418.22, 8418.29
Refrigerator shelves 8418.50
Water heaters or water accumulators 8419.19
Medical, surgical sterilisers 8419.20
Machines, equipment and other for preparing warm drinks or 8419.81 heating up dishes
Electric milk separators with capacity of 1 kWh and manual 8421.11 capacity of 50 litre/hour
Household dish washers 8422.11
Machines for weighting and acknowledging the wrapped goods 8423.81
Motor operated cultivators 8432.29
WTO BISD 1999 131 Decisions and Reports
Description of Product Position Code
Machines for cutting the hay, grass, etc. 8433.11, 8433.19
Machines used in milk industry 8434
Electric incubators with capacity of 4kWh 8436.21
Mixers and related machines in food industry 8438
Binding machines for brochures 8440
Machines for textile fibre weaving: ‑ carding machines;‑ looms 8445.11, 8446
Dryers for clothing 8451.21
Automatic or other sewing machines 8452.21, 8452.29
Electric household sewing machines 8452.10
Metal cutting machinery 8458, 8459
Non‑electric, manual tools 8467
Automatic and electrical typing machines, machinery for textile 8469 work
Concrete mixer 8474.31
Equipment for making mixtures of building materials 8474.39
Rubber and rubber product making machinery 8477
General machinery reducers and transmissions 8483.40
General machinery motor‑reducers 8483.40
Electrical equipment with internal burn engine for automobile 8511 transport (ignition coils, spark‑plugs, starters);generators (of constant and changeable electricity supply)
Industrial or laboratory used electric ovens and containers 8514 including special machinery for thermo‑works
Soldering irons and soldering apparatuses 8515.11
Automatic and half automatic machines and apparatus for arc 8515.31 welding of metals
Electric phone system 8517.10
Electric door bell systems 8517.81
Electrical voice devices, microphones 8518.50
Broadcasting devices and apparatus for radio/ television, television 8525 cameras
132 WTO BISD 1999 Accession
Description of Product Position Code
Radio‑phone devices, radio‑telegraph devices and other apparatus 8527 for radio broadcasting
Television receivers including video monitors and video projectors, 8528 with or without voice recording and playing devices
Constant electric network condensers of 50/60Hz. 8532.10
Electric devices for switching on/off, breaking and protecting the 8536 electricity supply or for connection to electric circuits (switches, sockets, cords, etc.)
Electric‑laser hoses for television receivers including video 8540.11, 8540.12, 8540.89 monitors with: ‑ coloured vision ‑ black and white vision ‑ vacuum display hoses
Isolated electric tubes with or without connective details, optic 8544 cables
Cars (except used, sport, snow equipped, field games vehicles) 8703
Electrical transport devices for transporting goods to ware‑houses 8709 11 900
Two wheel bikes without engine 8712 00
Photo cameras with flashes 9006 (except 9006.10, 9006.20, 9006.30, 9006.91, 9006.99)
Cine-projectors 9007.21
Slide projectors 9008.40
Electric devices and apparatus for medical, surgical, dental, 9018 veterinarian, etc. uses
Individual safe breathing devices 9020
Cardiostimulator 9021.50
Changeable electricity measurers ‑ one line ‑ multi line 9028.30
Electricity measurers and other 9018.30
Automobile speedometers 9029.20
Cathode‑beam oscilloscopes and oscillographs 9030.20
Mixed electromeasuring devices 9030.31
Voltmeters, ampere meters and other electric devices 9030 (except 9030.39)
Electric clocks 9105
Medical, surgical, dentist, veterinarian furniture 9402
WTO BISD 1999 133 Decisions and Reports
Description of Product Position Code
Lighting devices for stage, television and movie studios; for 9405 photo and movie filming; for industrial purposes; for tables and projectors
Human doll toys 9502
Receiver operated video games 9504.10
Coin or toil operated toys 9504 (except 9504.30)
Rubber masks and related diving gear 9506.29
Building material out of cement and metal Groups 25 and 69 (except 2515, 2516, 2517, 2523, 6904, 6908)
T-shirts and similar vests 6109
Liquid gas 2711.11, 2711.12
Coal 2701
Artificial leather 4111
Curing remedies 3003, 3004
Synthetic ammonia 2814
Calcium carbide 2819.10
Steel tubes 7304.10
Caprolactam
Chemical fibre and thread
Table 6: Status of Legislation on Intellectual Property in Georgia
TRIPS Part/Section Article Current Law OK Comments
Part I: General Article 1 LNR
Article 2 LNR Member Paris Convention
Article 3 PL/CL/TL/CC1018(f) Member Paris, Berne Conventions
Article 4 LNR
Article 5 LNR
Article 6 LNR
Article 7 LNR
134 WTO BISD 1999 Accession
TRIPS Part/Section Article Current Law OK Comments
Article 8 LNR
Part II: Standards
Section 1: Copyright Article 9 LNR Member Berne Convention
Article 10 CC 1060-61,CL 10,25
Article 11 CC 1088,CL 16(3), 39,40 Cinema, video
Article 12 CC 1062-63,CL 27,28
Article 13 CC 1050-61,CL 18-26
Article 14(1) CC 1082(1)(a)
Article 14(2) CC 1082(1)(b)
Article 14(3) CC 1091
Article 14(4) CC 1089,CL 16(3)
Article 14(5) CC 1062-63,CL 27-28
Article 14(6) LNR Permissive
Section 2: Trademarks Article 15 TL 3,15
Article 16 TL 3(4),6
Article 17 TL 7
Article 18 TL 20
Article 19 TL 27
Article 20 LNR Negative requirement
Article 21 TL 25(2),26
Section 3: Geographical Article 22 TL 5(e),LGI 3-5,11(1) Indications
Article 23 TL 5(e),LGI 6,11(1)(b),(c)
Article 24 LGI 14(7) Art 24(5) only, others LNR
Section 4: Industrial Article 25 PL 14 Art 25(2) LNR Designs
Article 26 PL 5(4),48(1),52
Section 5: Patents Article 27 PL 12,17
Article 28 PL 48,49,59-62
WTO BISD 1999 135 Decisions and Reports
TRIPS Part/Section Article Current Law OK Comments
Article 29 PL 24,26
Article 30 PL 52
Article 31 PL 52,61
Article 32 CPC/APA
Article 33 PL 5(1)
Article 34 PL 49
Section 6: Layout Designs Article 35 LIC 1,2,3,8
Article 36 LIC 5
Article 37 LIC 6,7
Article 38 LIC12
Section 7: Trade Secrets Article 39(1) LNR Member Paris Convention
Article 39(2) CC 1105
Article 39(3) LNR Data not required
����������������Section 8: Anti- Article 40 LNR Competition
Part III: Enforcement
������������������Section 1: General Article 41 CPC 191-199, 364, APC to be enacted spring Obligations TL45, Dft APC 53 2000
Section 2: Civil/Admin. Article 42 CPC2,5,83,102,103,201 Procedures
Article 43 CPC 134
Article 44 CPC 191-199, Draft APC to be enacted spring APC 53 2000
Article 45 CC 408-415, CPC 43-54
Article 46 CC 1098, TL 45,LBM 9(2)
Article 47 LNR Permissive
Article 48 CC 408-415, CPC 43-54
Article 49 Draft APC 5 APC to be enacted spring 2000
����������������������Section 3: Provisional Article 50(1) LBM 3,4, CPC 191-199 Measures
136 WTO BISD 1999 Accession
TRIPS Part/Section Article Current Law OK Comments
Article 50(2) LBM 3-5, APC 53, CPC 191-199
Article 50(3) CPC 103-5, 134
Article 50(4) CPC 194, 286
Article 50(5) LBM 5, CPC 198
Article 50(6) LBM 6, CPC 192
Article 50(7) LBM 7, CPC 199
Article 50(8) APC 5
Section 4: Border Article 51 LBM 3-5 Measures
Article 52 LBM 5
Article 53 LBM 5,7
Article 54 LBM 5
Article 55 LBM 6
Article 56 LBM 7
Article 57 LBM 8
Article 58 LNR Permissive
Article 59 LBM 9
Article 60 LBM 10
Section 5: Criminal Article 61 Old CrC 162, new CrC Procedures 194,201
Part IV: Acquisition Article 62 PL23-47,TL12- Procedures 18,CC1024
Part V: Dispute Settlement Article 63 LNA 38, 61
Article 64 LNR
Part VI: Transitional Article 65-67 LNR Arrangements
Part VII: Institutional Article 68-73 LNR WTO Institutional Arrangements Arrangements
LEGEND (KEY): ����������������������������������APC administrative Procedure Code CC Civil CodeCode C ClL Copyright lawLaw
WTO BISD 1999 137 Decisions and Reports
CPC Civil Procedures CodeCode CrC Criminal CodeCode CrPC ������������������������Criminal Procedure Code lBMLBM lawlaw on Border MeasuresMeasures liCLIC lawlaw on integratedIntegrated CircuitsCircuits lgi lawLaw on appellationsAppellations of originOrigin and geographicalGeographical indicationsIndications lna lawlaw on normativeNormative A actscts lnr legislationlegislation notNot requiredRequired PlPL Patent lawLaw TlTL Trademarks lawLaw
ANNEX I Laws, Regulations and Other Information Provided to the Working Party by Georgia - draft Decree of the President of Georgia “On Foreign Trade responsibilities with respect to the World Trade Organization”; - Tax Code of 13 June 1997, as amended to 8 June 1999; - law on Promotion and Guarantees of Investment Activity of 12 november 1996, with amendment of 26 June 1998; - law on Concessions of 21 December 1994; - resolution of the Tbilisi Municipality City Board No. 07.03.45 of 29 September 1994 On Making Minor Corrections to the Tbilisi Municipality City Board’s Resolution No. 03.06 of 24 April 1993 and approving the Instruction for Fixing Rental Change For the Use of Land Plots in Tbilisi; - law on Privatization of State-owned Property of 30 May 1997, as amended to 24 December 1998; - law on Administration and Allocation of State-owned, Non-allocated, non-Agricultural Land of 28 October 1998; - law on Declaration of Private Ownership of Non-Agricultural Land in Possession of Physical Persons and Private Legal Persons of 28 October 1998; - List of remaining non-privatized government owned firms as of May 1999; - draft General Administrative Code of Georgia (May 1999); - draft Code of Administrative Court Procedures of Georgia (May 1999); - law on Entrepreneurs No. 577-16 of 28 October 1994, as amended to 19 February 1999; - Customs Code of Georgia of 14 November 1997, as amended to 13 october 1998;
138 WTO BISD 1999 Accession
- law on Customs Tariffs and Duty of 20 March 1998, as amended to 2 april 1999; - law on Customs Fees of 18 February 1998, as amended to 28 May 1999; - regulations Concerning Order of Determining the Customs Value of goods Imported to Georgia, approved on 31 May 1999; - regulations for Determining the Country of Origin of Goods Imported to georgia, approved on 31 May 1999; - decree No. 391 of the President of Georgia “On Activities Addressing regulation of Production, Import, Wholesale and Retail Trade in Tobacco Products in Georgia”, as amended to 7 June 1999; - Presidential Decree No. 322 of 23 June 1997 On the Regulation for admission of Goods Received Through Grants at the Customs of georgia, Registration of Grants and Control Over Their Application, as amended by Presidential Decree of 28 October 1997; - Presidential Decree of 5 December 1998 “On Measures for the implementation of Requirements of the Agreement on Technical Barriers to Trade of the WTO”; - Law on Establishing of the Unified Metering System No. 374-IS of 6 September 1996; - law on Standardization of 25 June 1999; - Law on Product and Service Certification of 6 September 1996, as amended to 30 April 1999; - Plan of the measures on the consecutive planning of the requirements of international standards, sanitary, veterinary, phytosanitary and ecological norms; - decree of the Ministry of Agriculture and Food No. 2-166 of 19 June 1997 On Approval of the Regulation for Use of Paid Service Tariff of the State Inspection of Phytosanitary Quarantine; - law on Agricultural Quarantine of 15 May 1997; - law on Government Procurement of 9 December 1998; - Civil Code of Georgia of 26 June 1997; - law on Copyright and Neighbouring Rights of 22 June 1999; - law on Trademarks of 5 February 1999; - law on Appellations of Origin and Geographical Indications of 22 June 1999;
WTO BISD 1999 139 Decisions and Reports
- law on Patents of Georgia of 5 February 1999; - law on Layout Designs of Integrated Circuits of 22 June 1999; - articles 194/201of the Draft Criminal Code of Georgia (May 1999); - law on Intellectual Property Related Border Measures of 25 June 1999; - law on Protection of Selected Achievements of 18 October 1996; - law on Protection of Consumer Rights of 20 March 1996; - law on Monopolistic Activities and Competition of 25 June 1996; - law on Advertising of 18 February 1998; - law on Audit of 7 February 1995, as amended to 27 June 1997; - law on the National Bank of Georgia of 23 June 1995, as amended to 13 october 1998; - law on Activities of Commercial Banks of 23 February 1996, as amended to 24 December 1998; - law on Insurance of May 2, 1997, as amended to 30 October 1998; - law on the Securities Market of 24 December 1998; - Free Trade Agreement between Georgia and Armenia of 14 August 1995; - Free Trade Agreement between Georgia and Azerbaijan of March 1996; - Free Trade Agreement between Georgia and the Russian Federation of 3 February 1994; - Free Trade Agreement between Georgia and Ukraine of 4 June 1996; - Free Trade Agreement between Georgia and Uzbekistan of 4 September 1995; - agreement on Establishment of the Inter-State Euro-Asian Corporation of Coal and Metallurgy of 24 September 1993; - agreement between the European Communities and the Republic of georgia on Trade in Textile Products; - law on Statistics of 12 November 1997; - Statistical data on foreign trade of Georgia by commodity groups (1996); and - Statistical data on foreign trade of Georgia by HS (1996-1997).
140 WTO BISD 1999 Accession
Decision of the General Council on 6 October 1999 (WT/ACC/GEO/32)
The General Council, Having regard to the results of the negotiations directed towards the establishment of the terms of accession of Georgia to the Marrakesh Agreement Establishing the World Trade Organization and having prepared a Protocol for the Accession of Georgia, Decides, in accordance with Article XII of the Marrakesh Agreement Establishing the World Trade Organization, that Georgia may accede to the Marrakesh Agreement Establishing the World Trade Organization on the terms set out in the said Protocol.1
1 See under section “ Legal Instruments ”.
WTO BISD 1999 141 Decisions and Reports
ACCESSION OF JORDAN
Report of the Working Party Adopted by the General Council on 17 December 1999 (WT/ACC/JOR/33 and Corr. 1)
Introduction 1. The Government of the Hashemite Kingdom of Jordan applied for accession to the General Agreement on Tariffs and Trade (GATT 1947) in January 1994 (document L/7378). At its meeting on 25 January 1994, the GATT 1947 Council of Representatives established a Working Party to examine the application of the Government of Jordan to accede to the General Agreement under Article XXXIII of the General Agreement. Following the conclusion of the Uruguay Round, Jordan requested accession to the World Trade Organization (WTO) under Article XII of the Marrakesh Agreement establishing the World Trade Organization. In accordance with the decision adopted by the WTO General Council on 31 January 1995, the existing GATT 1947 Accession Working Party was transformed into a WTO Accession Working Party. The terms of reference and the membership of the Working Party are reproduced in document WT/ACC/JOR/5/Rev.3. 2. The Working Party met on 28 October 1996; 4 July 1997; 22 July 1998; 22 October and 24 November 1999 under the Chairmanship of H.E. Mr. K. Kesavapany (Singapore).
Documentation provided 3. The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade Regime of Jordan, the questions submitted by Members on the foreign trade regime of Jordan, together with the replies thereto, and other information provided by the authorities of Jordan (L/7533, WT/ACC/ JOR/2, WT/ACC/JOR/3 and Add.1, WT/ACC/JOR/8 and Add.1, WT/ACC/JOR/9, WT/ACC/JOR/13, WT/ACC/JOR/14, WT/ACC/JOR/18, WT/ACC/JOR/22, WT/ ACC/JOR/23, WT/ACC/JOR/24, WT/ACC/JOR/25, WT/ACC/JOR/26, WT/ACC/ JOR/27, WT/ACC/JOR/28, WT/ACC/JOR/30 and WT/ACC/JOR/32), including the legislative texts and other documentation listed in Annex I.
Introductory statements 4. in his introductory statement in 1996, the representative of Jordan said that Jordan was approaching the next century in an environment radically different from that of its early decades of development. In the 1970s and 1980s, Jordan had invested heavily in developing its human resources, relying on high levels of external financing and remittances of Jordanians working abroad. Jordan’s inability
142 WTO BISD 1999 Accession to meet its external obligations had led to an economic stabilization programme being introduced at the end of the 1980s. The stabilization policies had been successful, even with the return of more than 400,000 expatriate workers. The Government had pursued an ambitious reform agenda, including fiscal and trade reform, since the early 1990s to stabilize the economy, improve efficiency and broaden the role of the private sector. The current account deficit had declined sharply reflecting solid export growth, improved earnings from tourism and increased worker remittances. Jordan’s medium-term reform programme aimed at sustaining annual growth of real GDP at minimum 6 per cent and export growth of around 10 per cent, rates of inflation in line with those of industrialized countries, current account deficits below 3 per cent of GDP and accumulation of foreign exchange reserves. 5. economic reform was geared towards liberalization and dismantling of all barriers to trade, investment, labour, capital, payments and services. The Government had drafted a customs law based on international best practice. Actions to improve customs clearance included streamlining of the temporary entry and duty drawback regime, a “green channel” for easy clearance of imports and computerization, upgrading and training of customs staff. The Government had also taken initiatives to review and revise the main economic laws governing economic activity, and had established a Privatization Unit at the Prime Ministry to coordinate various privatization initiatives and ensure transparency of the process. Domestic reforms were consistent with the direction of multilateral reform, but Jordan had not waited for world-wide liberalization to take decisions deemed in its own best interest. 6. a strong multilateral trading system was vital to Jordan, and Jordan was preparing to link its economy with the global economy. Jordan’s economic cooperation and trade relations with the world community were characterized by a sincere commitment to obligations towards its partners. Some WTO obligations would entail constraints on policies and regulations affecting certain sensitive industries. Jordan was ready to negotiate a fair deal that would accommodate the interests of all parties concerned within the spirit of WTO multilateral agreements, and hoped for a successful accession which would take into account Jordan’s situation as a developing country with a small economy. Accession to the WTO would give Jordan the chance to work along with member countries to strengthen the multilateral trading system to the advantage of all members. 7. in their opening remarks, members of the Working Party welcomed the request from Jordan to accede to the WTO. Jordan’s accession would reinforce the universality of the WTO. Jordan was commended for its efforts to overcome economic difficulties, and accession to the WTO was expected to assist in consolidating the reforms. Members looked forward to close co-operation with Jordan with a view to concluding the accession process successfully as quickly as possible. Noting Jordan’s wish to avail itself of certain transitional arrangements, some members supported this request while other members stated that such requests
WTO BISD 1999 143 Decisions and Reports would be given sympathetic consideration and decided case-by-case on the basis of substantiated needs. 8. The Working Party reviewed the economic policies and foreign trade regime of Jordan and the possible terms of a draft Protocol of Accession to the WTO. The views expressed by members of the Working Party on the various aspects of Jordan’s foreign trade regime, and on the terms and conditions of Jordan’s accession to the WTO are summarized below in paragraphs 9 to 247.
ECONOMIC POLICIES
Monetary and fiscal policy 9. The representative of Jordan said that current economic policies aimed at fiscal and monetary stability. The public budget deficit had been reduced through subsidy cuts, expenditure restraint and increasing revenue. Food subsidies had been reduced, the domestic price for petroleum derivatives increased, and a programme to improve the performance of loss-making public enterprises such as Royal Jordanian Airlines, Public Transportation Corporation and the Agricultural Marketing Organization had been implemented. Draft legislation had been submitted to the Council of Ministers to remove all privileges enjoyed by the Housing Bank, consistent with maintaining its obligations to low-income housing. The Housing Bank had become a commercial bank and no longer enjoyed any privileges. Food subsidies had been eliminated recently, and Royal Jordanian Airlines and Public Transport Corporation were undergoing privatization. 10. on the revenue side, an expanded tax base was accompanied by more efficient tax collection, including the introduction of a general sales tax (GST), replacing the former consumption tax. The system of income tax implemented through the Income Tax Law (No. 14 of 1995) taxed profits or gains earned or accrued in Jordan on the basis of annual self-assessment. Tax rates ranged from 5 to 30 per cent for individuals and 15 to 35 per cent for companies. Exempted from income tax were non-profit welfare, cultural, educational, sports or health institutions and cooperative societies; land invested in agriculture or poultry, cattle, fish or bee breeding; capital gains earned on equipment, apparatus, land, real estate, bonds and shares; salaries paid to non-Jordanian diplomatic envoys; salaries and wages of non-Jordanians paid by branches of foreign companies; salaries and wages paid by non-operating foreign companies registered in Jordan according to the Companies Law; interest due on deposits of national and foreign persons and companies; income accrued from patents, copyrights or rewards; income specified in agreements on the prevention of double taxation; and income explicitly exempted by the Investment Promotion Law (No. 16 of 1995) and by means of bilateral or multilateral agreements. The tax exemptions applied equally to foreign enterprises.
144 WTO BISD 1999 Accession
11. Monetary policy aimed at monetary stability to ensure price stability and adequate financing of economic activity. The objective was achieved by controlling the money supply while reducing monetary control restrictions; consolidation of foreign currency reserves; continued liberalization of interest rates; the establishment of a deposit insurance corporation; and Central Bank supervision of all financial institutions.
Foreign exchange and payments 12. The representative of Jordan said that the national currency - the Jordan dinar (JD, equal to 1,000 fils) - had been pegged to the US dollar at the official buying and selling rates of JD 0.708 and 0.710, respectively, since 23 October 1995. Jordan had formally accepted the obligations of Article VIII, sections 2, 3 and 4 of the Articles of Agreement of the International Monetary Fund as from 20 February 1995. Thus, foreign exchange payments for current account transactions were not restricted in Jordan. Concerning capital transactions, the representative of Jordan said that inward transfers of capital were not restricted, but outward transfers were subject to approval by the Central Bank of Jordan (CBJ). Transactions pertaining to foreign investment had been completely liberalized. The CBJ allowed capital transfers to Arab countries on a reciprocal basis. Residents were allowed to carry or transfer up to JD 35,000 in foreign exchange to meet current payments for invisibles such as travel, education, medication, pilgrimage, residence abroad and family assistance without prior approval from the Central Bank. Applications for amounts in excess of JD 35,000 would be considered positively in the light of the applicant’s needs. As of 1997, outward transfers were fully liberalized. 13. licensed banks could purchase any amount of foreign currency against Jordan dinars from their customers on a forward deal basis, and could sell foreign currencies forward to customers paying for imports into Jordan. 14. Forward contracts in major currencies against the Jordan dinar were permitted for specified commercial transactions, including commodity imports, provided the authorized banks covered such operations abroad. Each dealer’s forward transactions were subject to quantitative limits, but the CBJ could offer a forward exchange facility in respect of forward exchange cover provided by Jordanian banks for corporations and projects of vital national interest. Foreign exchange regulations had been modified to permit banks to execute asset-swap operations from foreign currencies into Jordanian dinars for all customers. 15. exchange permits were required for goods subject to import licensing, and were granted automatically once the import licence had been obtained. Exchange permits were issued by the Foreign Exchange Control Department of the Central Bank of Jordan against a fee of 0.1 per cent to recover related administrative costs. Although exchange permits were no longer required, banks still collected the 0.1 per cent fee on some categories of transfers for payment to the Central Bank. The
WTO BISD 1999 145 Decisions and Reports fee was being revised to narrow the categories of transfers subject to it with a view to its eventual elimination. The fee was not applied to transfers issued for government departments, non-resident accounts in foreign currency, and certain approved institutions and individual transfers of less than JD 300. 16. He confirmed that private sector firms could borrow abroad freely and that no government approval was necessary. Export proceeds were not subject to any repatriation requirements. There were no taxes or subsidies on purchases and sales of foreign exchange; the fees and charges for such transactions were determined freely in the market.
Investment regime 17. The representative of Jordan said that the Investment Promotion Law No. 16 of 1995 had superseded the Encouragement of Investment Law No. (11) for 1987 and the Arab and Foreign Investment Law No. (27) for 1992. A Higher Council of Investment Promotion had been formed under the Chairmanship of the Prime Minister, and an “Investment Promotion Corporation” was entrusted with the implementation of the law, including acting as inquiry point regarding information on investment. 18. Business enterprises were incorporated in Jordan either as General Partnership and Limited Partnership Companies, Limited Liability Companies, Limited Partnership in Shares or Public Shareholding Companies. Applications for registration were submitted to the Controller of Companies at the Ministry of Industry and Trade. For general and limited partnership companies, the application should be accompanied by the original partnership agreement and a statement signed by each of them; for limited liability companies the company’s Memorandum and Articles of Association, on the approved forms for this purpose, should be included. The statement should be signed before the Controller or any person authorized by him, a Notary Public or a licensed lawyer. An application for registration as a public shareholding company was accompanied by the company’s Articles of Association, the Memorandum of Association, the names of the promoters of the company and the names of the promoters’ commitment conducting the formation procedures. The Articles of Association and the Memorandum of Association were signed before the Controller or any person authorized by him, a Notary Public or a licensed lawyer. Foreign investors registered their companies as Jordanian companies with the Companies’ Registrar at the Ministry of Industry and Trade. A branch of a foreign company would need to submit to the Controller of Companies a copy of its Articles of Association and Memorandum of Association, as well as written documentation certifying that the company had been approved by the concerned authority in Jordan for operating in Jordan. The representative of Jordan provided detailed information on the fees levied in connection with registration of companies in document WT/ ACC/JOR/30.
146 WTO BISD 1999 Accession
19. Tax incentives were provided by virtue of the Investment Promotion Law for any project related to industry, agriculture, maritime transport and railways, hospitals and hotels. The Council of Ministers could add any other sector in accordance with the Kingdom’s needs. In January 1997, the Council of Ministers had added leisure and recreational compounds, and convention and exhibition centres to the list of projects benefiting from tax incentives provided under the Investment Promotion Law. All imported fixed assets needed for the establishment of a project were exempted from import duties, sales tax and other import fees and charges (with the exemption of municipal taxes) provided these assets were imported into the Kingdom within three years from the date of the Investment Promotion Committee’s decision approving their importation. The Committee could extend this period if considered justified due to the nature of the project or the size of the work required. Imported spare parts for a project were exempt from import duties, sales tax and other import fees and charges (with the exception of municipal taxes) provided the value of such parts would not exceed 15 per cent of the value of the fixed assets for which they were required, and provided that these parts would be imported into the Kingdom or used in the project within 10 years of the date of commencement of production or the work. Fixed assets required for the expansion, development or modernization of a project were exempt from import duties, sales tax and other import fees and charges (with the exception of municipal taxes), if they would lead to an increase in production capacity for the project of not less than 25 per cent. The exemptions would also cover any increase in the value of the fixed assets resulting from price increases, freight charges or changes in exchange rates. Hotels and hospitals enjoyed further exemptions from fees and taxes on purchases of furniture and supplies for renewal or renovation once every seven years. 20. reductions in income and social services taxes to the level of 25, 50 or 75 per cent were granted depending on the nature of the activity and the location of the project. The reduction could amount to 100 per cent in certain areas approved by the Council of Ministers. The exemptions from income and social services tax were applicable for 10 years, starting from the date of commencement of works (services projects) or production (manufacturing projects). An additional exemption, not exceeding four years, could be granted if the project was expanded, developed or modernized with a resulting increase in production capacity (one year for each increase of not less than 25 per cent). 21. The Investment Promotion Law did not differentiate between domestic and non-Jordanian investors, and no preferences were linked to export performance or domestic content requirements. Article 24 of the Investment Promotion Law stipulated that non-Jordanian investors investing in any project governed by the Law should be afforded the same treatment as Jordanian investors. The Law guaranteed foreign investors the transfer of profits and repatriation of the foreign capital invested. According to the Investment Regulation No. 39 for 1997, issued in accordance with Article 24 of the Investment Promotion Law No. 16 of 1995,
WTO BISD 1999 147 Decisions and Reports non-Jordanian ownership could not exceed 50 per cent in any project or economic activity in the sectors of construction, trading and trade services (excluding the right to import and export as outlined in paragraph 50 below), and mining. Except for these three sectors, a foreign investor could own 100 per cent of the equity in a Jordanian entity. The Investment Promotion Corporation was preparing legislation to define clearly the scope of trade services covered by the foreign equity restrictions. Non-Jordanian investment in securities listed on the Amman Financial Market was subject to a provision (Article 6) that payment be made from the sale of convertible foreign currency. The amount of non-Jordanian investment in any project should be minimum JD 50,000, except in public shareholding companies (JD 1,000).
State ownership and privatization 22. The representative of Jordan said that Jordan’s economic strategy called for a much larger role of the private sector in the economy. The Government aimed at reducing its own involvement in the production and distribution of goods and services. Some sectors previously reserved for public investment such as telecommunications and power generation were being opened to private investors, and new public-private partnerships were being forged. Rapid implementation of the privatization programme in a transparent manner was a key objective of the Government. 23. The Council of Ministers had appointed an interministerial committee, headed by the Prime Minister, to steer the overall privatization plan. A Privatization Unit, located in the office of the Prime Minister, assisted in the privatization process, and the World Bank supported the institutional capacity to implement the programme through the Institutional Development Fund (IDF). The main responsibilities of the Privatization Unit at the Prime Ministry included: (a) coordination of the preparation of divestiture transactions; (b) managing the teams of technical experts and short-term external advisers; (c) managing the marketing efforts of enterprises undergoing divestment; (d) negotiations with stockholder groups; (e) execution of transactions; and (f) dissemination of information on progress in privatization. 24. The privatization programme aimed at increasing enterprise efficiency. The operational performance of some public enterprises was expected to improve by according greater autonomy to enterprise management in administrative and investment decision, and the sale of shares to reputable strategic investors.
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Substantive steps towards eventual privatization had been taken in the energy and telecommunication sectors. The Government intended to restructure public enterprises in the transport sector. The Government had decided that the first phase of the programme would involve the privatization of the Jordan Telecommunication Corporation (JTCC), the Jordan Electricity Authority (JEA), Irbid District Electricity Company (IDECO), Jordan Electric Power Company (JEPCO), Aqaba Railway Corporation (ARC), Jordan Cement Factories Company (JCFC), Public Transport Corporation (PTC) and the Jordan Tourism and Spa Complex Co. at Zerqa Mai’n. The Government would also sell its minor stakes (less than 5 per cent) in public shareholding companies and partially dispose of other shareholdings such as those in Arab Potash Co. and the Jordan Phosphate Mines Co. (under study). 25. The representative of Jordan said that Jordan’s privatization process was free from discriminatory practices or discretionary investment authorizations. Foreigners of all nationalities could participate in Jordan’s privatization process within the legislation in force. International consultants, investors and developers were invited to compete for bids related to privatization through local and international media.
Pricing policies 26. The representative of Jordan said that his Government was removing price controls gradually on certain commodities with a view to the eventual liberalization of all prices at the retail level. Jordan applied price and profitability control, as well as price cap control, on certain domestic and imported products. The products subject to controls are listed in Table 1.
Table 1: Price controls in Jordan
HS Code Product name
PRICE CONTROL ex 0713.20 Chickpeas, seeds of a kind used for sowing ex 0713.40 Lentils, seeds for a kind used for sowing ex 1001 Wheat, seed of a kind used for sowing ex 1214.90 Vetches and similar forage, seeds of a kind used for sowing animal feed.
1001.10, ex 1001.90 Wheat
1101.00 Flour
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HS Code Product name ex 1905.90 Bread – Arabic, Tanouri, Taboun, Armenian, and Baladi ex 2302 Bran ex 2523.29 Cement, Portland , bagged ex 2523.29 Cement, Portland , not bagged ex 2523 Cement, Sulphate resistant, bagged ex 2523 Cement, Sulphate resistant, not bagged ex 2711.13 Liquid gas Butane ex 2710.00 Leaded (gasoline) ex 2710.00 Super (gasoline) ex 2710.00 Unleaded (gasoline) ex 2710.00 Jet Fuel (airplanes’ fuel) ex 2710.00 Kerosene 2710.004 Diesel 2710.005 Fuel oil ex2714.90 Asphalt, w/o containers ex 2714.90 Asphalt, in containers ex 2710.00 Diesel for Ships ex 3002, ex 3003, ex 3004 Medicaments for human use ex 2201.90 Water
2716.00 Electrical Energy
PROFITABILITY CONTROL ex 3002, ex 3003, and ex 3004 Medicaments for human use ex 3002, ex 3003, and ex 3004 Medicine for veterinary use
PRICE CAP ex 0401.30 Fresh Cow Milk ex 1003.00 Barley, seed of a kind used for sowing ex 2005.90 Houmos, ex 2005.90 Qudsieh, ex 2005.90 Fool, ex 2005.90 Musabaha, ex 2106.90 Falafel Sandwiches, and Falafel pieces, sold in unclassified restaurants
27. a committee - comprising representatives of merchants and the Ministries of Supply and Agriculture - set prices based on costs, and allowed a 17 per cent profit margin for wholesalers and retailers. The same maximum profit margin applied in case of similar imported products. Revisions of the established prices
150 WTO BISD 1999 Accession could take place every six months. In most cases the revisions were requested by importers due to changes in import prices, for example, for wheat of bread-making quality. The price controls had originally affected 66 food products. In response to specific questions, he confirmed that prices of dried milk, sugar and rice were not fixed when imported by private enterprises. Except for the regular Jordanian loaf of bread, prices of all bakery and pastry products were determined freely by the market. Price controls had been liberalized on imported and locally-produced cigarettes. 28. Prices for utilities (electricity, water, solar heating and natural gas) and petroleum products, except lubricants, were controlled to support low-income groups. Electricity prices had recently been raised to rationalize the use of energy and increase the financial viability of electricity production. Water charges had also been increased, including the adoption of a progressive tariff for irrigation water, to rationalize use and ensure cost recovery for water and sanitation services. 29. Some members noted that the use of price controls on imported chilled meat, but not on domestically-produced chilled meat, would appear to violate the national treatment obligations of GATT Article III, and asked how Jordan intended to bring this item into conformity with WTO requirements. These members sought a commitment from Jordan that it would observe the provisions of Article III concerning the application of maximum prices to imports, with particular emphasis on the provisions of paragraphs 4 and 9, that Jordan would notify its current price controls on imports and domestic goods and services to the Working Party, and that any subsequent such controls will be published in an official journal for the information and review of traders. A member added that grading requirements applied to meat by Jordan were arbitrary and unjustifiable, and that the maintenance of such a regime after accession would deny its exporters benefits to which they would be entitled under Article III:4 of GATT 1994. This member therefore requested that the grading requirements and the pricing regime associated with those requirements be eliminated prior to accession. 30. in reply, the representative of Jordan said that price control affected imported wheat and medicaments for human use; profitability control was applied to imported medicaments for human and veterinary use; and the price cap was applied on imported barley. The controls on imports were also applied on the same domestically-produced items Therefore, these price controls and caps did not violate the national treatment provisions of Article III of the GATT 1994. He added that Jordan did not intend to liberalize the prices of products remaining under price control before acceding to the WTO. However, Jordan would ensure that the price control mechanisms applied in Jordan be in conformity with Article I and III of the GATT 1994, and with the transparency requirements of the WTO. He confirmed that Jordan had eliminated price controls on imported chilled meat. Legal measures to eliminate this practice had been adopted in October 1999. The representative
WTO BISD 1999 151 Decisions and Reports of Jordan stated that there was no relation between the meat grading requirements and the pricing regime. Jordan was preparing new technical regulations on meat that would retain a grading system in line with the grading system of the concerned member. The main purpose of the grading requirements in Jordan would be to provide information to consumers. 31. The representative of Jordan confirmed that prices for goods in every sector of Jordan were determined freely by market forces with the exception of those listed in Table 1. Current price controls on imported fresh and chilled meat had been eliminated at the end of October 1999 in accordance with the “Instructions on the Elimination of the Price Cap on Imported Meat” issued by the Ministry of Industry and Trade. Price controls existed on State services (e.g. vehicle inspection, passport fees), customs clearing agents services, public warehouses, transport services for passengers and goods, telecommunication services, professional medical services offered by the Government, car liability insurance services, and ticketing services by travel agents. Price cap was applied on professional medical services, certain banking services, money exchange services, commission on services rendered by securities dealers, hotel room rates, internal tourism tour packages, tour packages with bed and meal, meal prices at hotels, bed and breakfast rate for country’s official guests, vegetables and fruits auctioning services, and legal services. All other prices of services were determined freely by the market. 32. The representative of Jordan confirmed that Jordan would apply, from the date of accession, the price and profitability controls described in paragraphs 26-31 and Table 1 and any applied in the future, in a WTO-consistent fashion, and would take account of the interests of exporting WTO Members as provided for in Article III:9 of the GATT 1994. Jordan would publish any list of goods and services subject to State price controls in the Official Journal, including any changes regarding existing price controls. The Working Party took note of these commitments.
Competition policy 33. The representative of Jordan said that a draft Law on the Prevention of Monopolistic Practices and Encouragement of Competition had been submitted to Parliament for review and approval. An English translation of the law, once available, would be provided to the Working Party.
FRAMEWORK FOR MAKING AND ENFORCING POLICIES 34. The representative of Jordan said that Jordan was a constitutional monarchy. The King and the Council of Ministers constituted the executive branch of government. The legislative system comprised the King and Parliament, which was formed by an Upper House of 40 dignitaries appointed by the King, and a Lower House of 80 deputies elected by the people. The constitution (Article 97) guaranteed an independent judicial system, i.e. the civil and criminal courts,
152 WTO BISD 1999 Accession including the magisterial courts, courts of First Instance and courts of Appeal. 35. The Council of Ministers was responsible for issuing regulations based on the different relevant laws. Regulations of the Council of Ministers should be approved by the King and published before coming into effect. According to the Customs Law, the Council of Ministers decided on changes in tariff rates upon proposals of the Tariff Council, formed by the Minister of Finance, the Minister of Industry and Trade, and the Director General of the Customs Department. The Council of Ministers was empowered to restrict importation or exportation of certain goods, restrict totally or partially the right to import or export goods to certain entities, or exempt goods from import and export licensing requirements upon proposal of the Minister of Industry and Trade. 36. The Ministry of Industry and Trade supervised the formulation and execution of policies related to industry and trade. The Ministry’s functions included the implementation of major trade-related legislation such as the Import/Export Law and regulations, the Companies Law, the industrial property laws, the Insurance Law and the Trade Marks Law; negotiation of trade and economic agreements and protocols; and representing the Government in bilateral, regional and international meetings. The Ministry of Industry and Trade could, upon a proposal from or in coordination with the authority concerned, subject certain imports or exports to prior approval of this authority. 37. The Customs Department within the Ministry of Finance administered the flow of goods across borders according to the laws and regulations in force. The main tasks of the Department, which consisted of 16 directorates, 28 customs house centres, 8 bonded custom houses, and 6 passenger customs border centres included the application of customs duties on imported goods; administration of temporary entry and/or drawback facilities for exporters, diplomatic missions, regional offices and projects; implementation of exemptions accorded to entities such as charitable organizations and beneficiaries; collection of sales tax; handling of violations of the Customs Law such as smuggling, fraud and false information; organization of special patrols to combat smuggling; and performing auditing checks on all customs statements. The Ministry of Health was responsible for registration of imported and locally-produced medicaments. 38. The representative of Jordan said that draft laws would normally be submitted to the Council of Ministers for consideration by the Ministry or agency concerned with the subject-matter. Approved by the Council of Ministers, the law would be sent to the Bureau of Legislation to be put in proper legal form prior to submission to Parliament. Laws were discussed and approved separately by both Houses of Parliament. A Law passed by both Houses was submitted to the King for his consent and signature. Once this step had been completed the Law would become effective 30 days after publication in the Official Gazette or as stipulated in the Law. International agreements and treaties signed by Jordan needed to be
WTO BISD 1999 153 Decisions and Reports ratified by Parliament only if they entailed expenditure on behalf of the Treasury or affected the rights of Jordanian citizens. All treaties were required to be published in the Official Gazette in order to be enforceable. 39. The representative of Jordan said that unless a law designated a different court, civil courts had jurisdiction in all civil matters, including trade. Jordanian courts could also decide on cases beyond their jurisdiction if the litigants agreed. Trade issues heard by civil courts could be referred to the magisterial courts (cases within a JD 750 value limit), the Courts of First Instance (which also served as courts of appeal for magisterial court decisions), the Courts of Appeal, and the Court of Cassation. The Court of Cassation decided on challenges regarding judgements of the Courts of Appeal in civil cases. It also decided on points of law or procedure if reference to the Court of Cassation was allowed by the presiding judge of the Court of Appeal. In certain cases the Court of Cassation could decide to return the case to the Court of Appeal for reconsideration. Matters of fact relating to litigants’ rights not objected to before the Court of First Instance could not be raised before the Court of Appeal, and those not raised before the Court of Appeal could not be raised before the Court of Cassation. 40. natural or legal persons contesting administrative decisions could take the matter to the High Court of Justice, which was specialized in administrative jurisdiction. Customs and income tax matters were decided by specialized courts. Customs decisions could be appealed to the Customs Court of First Instance, whose judgements could be appealed to the Customs Court of Appeal and further to the Court of Cassation. Issues of intellectual property infringement were addressed by the Civil Courts. Apart from the granting of amnesty or partial pardon to convicted individuals and sanctioning the execution of capital punishment, the King had no power to overrule any court judgement, civil or criminal. Religious Courts mainly heard cases involving marriage, divorce, wills and legacies and had no jurisdiction in civil or criminal cases or issues related to domestic and foreign trade. 41. a member asked Jordan to clarify the right of appeal to a separate judicial authority in matters covered by WTO Agreements. In reply, the representative of Jordan said that Jordan had adopted the system of two-tier litigation. This rule applied in the civil or administrative courts, thus every decision of a judicial character was subject to appeal in Jordan in one form or another. In the absence of a special court of first instance, all administrative-related decisions were considered decisions of the first court and subject to appeal to the High Court of Justice. The High Court of Justice had jurisdiction to hear a limited list of appeals mentioned in the High Court Law or in other special laws, such as trade marks and patents. Decisions concerning customs, income tax, and compensation under imminent domain were appealed to the civil system of courts as provided by special provision in the relevant laws. The Court of Customs and the Customs Court of Appeal had jurisdiction to hear all customs-related issues and penalties. Decisions of the Customs Court and the Court
154 WTO BISD 1999 Accession of Appeal were subject to review of the Court of Cassation. However, decisions regarding prior approval for importation would be subject to appeal to the High Court of Justice in accordance with the general theory of Administrative Law. 42. Concerning the division of authority between central and sub-central government, the representative of Jordan said that the central Government was responsible for all matters related to the national economy and foreign trade. Autonomous public entities and private agencies shared in implementing national economic policies, including trade. 43. The representative of Jordan stated that if Jordanian laws or other acts should be found to contradict international treaties or agreements, the provisions of the international treaty or agreement, such as the WTO, would apply. The representative of Jordan confirmed that sub-central entities had no autonomous authority over issues of subsidies, taxation, trade policy or any other measures covered by WTO provisions. He confirmed that the provisions of the WTO Agreement, including Jordan’s Protocol, shall be applied uniformly throughout its customs territory and other territories under Jordan’s control, including in regions engaging in border trade or frontier traffic, special economic zones, and other areas where special regimes for tariffs, taxes and regulations are established. He added that when apprised of a situation where WTO provisions were not being applied or were applied in a non-uniform manner, central authorities would act to enforce WTO provisions without requiring affected parties to petition through the courts. The Working Party took note of these commitments.
POLICIES AFFECTING TRADE IN GOODS
Trading rights (the right to import and export) 44. Some members requested Jordan to clarify the right of firms and individuals to trade, i.e. to import and export goods, to understand better how Jordan’s conditions compared with the requirement of GATT Articles III:4 and XI. Specifically, Jordan was asked to outline the trading rights of (i) fully domestically-owned firms; (ii) firms with less than 50 percent foreign equity; (iii) firms with more than 50 percent foreign equity; and (iv) fully foreign-owned firms. For each category, Jordan should also indicate who would be entitled to register as Jordanian firms with the right to import for own use (e.g. in manufacturing), import for further distribution, or export. In reply, the representative of Jordan provided a detailed report on the right to trade (WT/ACC/JOR/25). Jordan’s legislation distinguished between import/export for a commercial purpose (further distribution and sale, including wholesale and retail) and non-commercial purpose (own use). 45. Commercial trade could be effected by companies or sole proprietorships having specified “engaging in trade activities” among their objectives at the time of registration. In this respect, Jordanian legislation distinguished between Jordanian
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(including foreign-owned) companies and foreign companies. Jordanian companies were companies established and registered in Jordan, and having Jordan as the principal place of operation. According to the Non-Jordanian Investment Promotion Regulation for 1997, foreign equity in a Jordanian company engaged in trade and trading services (including distribution services and import/export for commercial purposes) could not exceed 50 per cent. In addition, foreign investors in a Jordanian trade and trading services company were required to deposit minimum JD 50,000 with a Jordanian bank to effect the registration of such a company (except for public share holding companies). A foreign company, such as a branch of a company incorporated abroad, could be registered for trade and trading services in Jordan, in which case the minimum capital requirement of JD 50,000 would not apply. Registration could be either temporary, for the purpose of implementing a specific project or tender in Jordan, or permanent. However, permanent registration of foreign companies carrying out regular business in Jordan was subject to approval by the relevant Ministry. 46. individuals, Jordanian or foreign, did not have the right to import or export for commercial purposes. However, a Jordanian natural person could register a “sole proprietorship”, an option which was not available to foreigners wishing to engage in commercial trade. Foreign individuals could register as a sole proprietorship and import for non-commercial purpose after obtaining a special import card. Imports or exports for non-commercial purposes (own use) could be effected by Jordanian companies regardless of the level of foreign equity, foreign companies registered in Jordan, or domestic or foreign individuals. Imports for own use would be limited to items relevant to attain the stated objectives of the entities concerned. 47. A firm engaging in importation and exportation for commercial purposes was required to hold a valid import card, as stipulated in the Instructions on Import No. 1 of 1999. Import cards were issued automatically by the Trade Directorate in the Ministry of Industry and Trade after the importer had received a certificate of registration from the Importer’s Registration at the Ministry of Industry and Trade. An application for registration in the Importer’s Registration should be accompanied by a valid profession licence and include information such as the name, address, capital and trade name of the company or enterprise. Profession licences were issued to natural and legal persons registered in Jordan which were members of the Chamber of Commerce or Chamber of Industry, and which had had their premises inspected/approved by the local municipality. Membership in the Chamber of Commerce or Chamber of Industry was automatic provided membership fees were paid. 48. The registration certificate of a company or merchant should be attached to the application for individual enterprises, whose capital should not be less than JD 5,000. Provided the documentation was in order, the import card would be issued within 30 minutes at no cost. The card was valid for one year (ending on
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28 February), and could be renewed annually subject to the usual documentation requirements, including a renewed profession licence. An import card could not be cancelled. The Ministry could not refuse an application for an import card. Identical criteria applied for import cards issued to all persons, entities and institutions regardless of nationality and economic sector. 49. The import card provided the importer with a special number and a special file which facilitated the clearance of imported goods through customs. Goods could also be imported without a valid import card, but would then be subject to a fine equal to 5 per cent of the value of the imported goods. This fine was applied evenly to imports from all sources. 50. a member expressed concern that since Jordan’s regulations did not distinguish between importing or exporting and providing services, such as distribution, after importation those regulations could be considered a restriction on imports and inconsistent with Article XI of GATT 1994. Moreover, application of an economic needs test in the context of registering importers would have an adverse effect on the terms of competition between imported and domestically produced goods. The representative of Jordan recognized the distinction drawn in the WTO between the right to import and export under the GATT and the right, under the GATS, to provide services such as distribution, and transportation, with respect to imported goods. Without prejudice to Jordan’s schedule of commitments on services, Jordan would modify the relevant laws, regulations and requirements to permit foreign firms, including sole proprietorships to register as importers without limitation on equity or application of an economic needs test, including for branches of foreign firms permanently registered in Jordan. 51. Some members requested Jordan to provide a WTO justification for the import card rule, and considered the fine for importing without a card disproportionate. The representative of Jordan replied that import cards were used for identification and statistical purposes, and that the fine was designed to ensure that importers complied with the requirements. Jordanian and foreign companies which had not been registered as “engaging in trade activities” or “importing” could avoid the 5 per cent penalty on imports for own use by requesting a special import card. Imported personal effects were not affected by the import card rule as these were cleared unconditionally by customs. 52. The representative of Jordan said that Jordan’s requirements on the right to trade would not in any way contradict Articles III, XI, and VIII of the GATT 1994. The representative of Jordan confirmed that no restrictions existed on the right of foreign and domestic individuals and enterprises to import and export goods and services into Jordan’s customs territory, except as provided for in WTO Agreements. He confirmed that individuals and firms were not restricted in their ability to import or export based on their registered scope of business and the criteria for registration of companies in Jordan were generally applicable and published in the official
WTO BISD 1999 157 Decisions and Reports gazette of Jordan. 53. The representative of Jordan confirmed that from the date of accession Jordan would ensure that its laws, regulations and requirements relating to the right to import and export and all fees, charges or taxes levied on such rights would be in full conformity with its WTO obligations, including Articles VIII:1(a), XI:1 and III:2 and 4 of the GATT 1994 and that it would also implement such laws and regulations in full conformity with these obligations. The Working Party took note of this commitment.
1. Import Regulation
Customs tariff 54. The representative of Jordan said that the customs law had been revised and amended to make it compatible with WTO requirements, ensuring transparency and simplified customs procedures. A new Customs Law, replacing the Customs Law of 1983, had been published on 1 October 1998, and had entered into force on 1 January 1999. Jordan had begun using the Harmonized System nomenclature on 1 January 1994, and the HS 96 nomenclature had entered into force on 1 March 1997. The Customs Law No. 20 of 1998 had been reviewed to assess its WTO conformity. Although the Customs Law No. 20 of 1998 largely conformed to WTO requirements, certain amendments were needed in order to bring it into full conformity. Key subject areas to be addressed were (i) non-preferential rules of origin (Articles 24-26), which would be substantially revised to incorporate the Harmonized Rules of Origin once finalized by the WTO in co-operation with the World Customs Organization; (ii) customs valuation (Articles 28-32), where the language of some articles would be changed in the areas covering the definition of transaction value, deductive value, and prohibited methods. Jordan was also publishing, in the form of an Instruction, the interpretive note on customs valuation in 1999; (iii) customs user fees, to include a provision ensuring that customs user fees reflected the cost of services rendered in accordance with Article VIII of GATT 1994; (iv) border enforcement of intellectual property rights, providing a basic legal framework which would be further elaborated through Regulations, and (v) countervailing duty and safeguard measures, where existing language in Article 15 would be amended because Jordan had enacted a Law on safeguards and was preparing Regulations on countervailing measures. Jordan was in the process of preparing these amendments, and planned to enact them in 2000. 55. The representative of Jordan said that tariff rates had been streamlined and reduced. The tariff bands had been reduced to six (0, 5, 10, 20, 30 and 40 per cent). The average trade-weighted tariff had fallen from 34.1 per cent in 1994 to 16.7 per cent in 1996, and the share of customs duties in government revenue had declined from 25 per cent in 1992 to 10 per cent in 1995. As of 1 January 1997, the
158 WTO BISD 1999 Accession maximum tariff amounted to 40 per cent (except for alcohol and tobacco). Jordan had reduced the 40 per cent tariff band to 35 per cent in September 1999. Before the end of 2000, the maximum tariff was expected to be reduced to 30 per cent, except for manufactured tobacco and tobacco substitutes (70 to 100 per cent), and alcoholic beverages (50 per cent and 180 per cent). Jordan maintained combined (ad valorem and specific) duty rates on bananas, grapes, apples, calves, and sheep and goats. Jordan had no intention to abolish these compound rates.
Other duties and charges 56. The representative of Jordan said that Law No. 7 on Unifying Other Taxes and Fees had been passed in March 1997, consolidating all other import duties and charges into the ordinary rate of customs duty. The fees and taxes that had been incorporated into customs duties included a consolidated surcharge (6 per cent); the municipalities and universities fees (2 per cent and 4 per cent, respectively); the 1969 surcharge tax (5 per cent on items exempt from customs duty, 3 per cent on dutiable items); and a 5 per cent import fee. 57. The Council of Ministers had decided to eliminate a fee of 86.5 fils (JD 0.0865) per packet (20) of imported cigarettes, which had been levied in accordance with the decision of the Economic Security Commission No. 16 of 20 September 1984. The revenue had been earmarked for support of some agricultural products. Jordan planned to impose an internal tax on imported and domestically-produced cigarettes. Such a tax would be imposed in full conformity with Article III of the GATT 1994. Imported radios were subject to fees levied in accordance with by- Law No. 20 for 1966 of the Ministry of Post and Telecommunication. The fees amounted to JD 0.2 for one-wave transistor radios, JD 0.3 for two-wave radios and JD 0.4 for radios with three wave bands. In addition, JD 0.5 was levied on each transistor radio with an electric transformer, and JD 2 on each radio operated by electricity. Asked to explain the purpose of the fees levied on imported transistor radios, the representative of Jordan said that the purpose had not been specified in the legislation introducing these fees, i.e. the Regulation of Wireless Receivers and Transmitters No. 30 of 1966 and the 1934 Wireless Telegraph Law (Article 4). Article 90 of the Telecommunications Law No. 13 of 1995 had repealed the aforementioned regulation and Law, thereby eliminating the import fee on transistor radios. Asked by a member about the WTO justification for an import charge on imported sheep and goats (JD 2 per head) and calves (JD 10 per head), the representative of Jordan said that the Law on Unifying Taxes and Duties No. 7 of 1997 would be amended prior to accession. Jordan would reintroduce compound tariff rates for sheep and calves, as was the case before February 1997. 58. The representative of Jordan confirmed that from the date of accession Jordan would levy no duties and charges on imports other than ordinary customs duties and fees and charges for services rendered. Any such charges applied to
WTO BISD 1999 159 Decisions and Reports imports after accession would be in accordance with WTO provisions. The Working Party took note of this commitment. 59. The representative of Jordan further confirmed that Jordan would not list any other charges in its Goods Market Access Schedule under Article II:1(b) of the GATT 1994, binding such charges at “zero”.
Tariff rate quotas, tariff exemptions 60. The representative of Jordan said that tariff rate quotas were not applied in Jordan, but tariff exemptions had been granted for basic production inputs, basic food products, necessary health and medical goods, and capital goods and equipment for agriculture and industry. Tariff-exempt imports had accounted for almost 60 per cent of the total value of imports in 1996, 50 per cent in 1997, and 38 per cent in 1998. These figures included duty-free imports by diplomatic, charitable, educational and medical institutions, certain imports governed by bilateral trade agreements (protocol trade), imports by certain government institutions, and imports under the Investment Promotion Law. 61. The new Customs Law No. 20 of 1998 had cancelled all import duty exemptions for government-owned firms and government institutions (except grants and donations). Duty exemptions remained for 10 companies in accordance with agreements with the Government or concessions, granted at the time of their establishment (Table 2). The import duty exemptions were set to expire automatically on the date stipulated in the concessions and agreements. The beneficiaries were share holding companies with significant private participation - the Jordan Phosphate Mines Co. Ltd., the Jordan Petroleum Refinery Company, the Jordan Cement Factories Company, the Arab Bridge Maritime Company, the Arab Potash Company, the Jordanian Electric Company, the Irbid Governorate Electric Company, the Jordanian Tanning Company, the Vegetable Oil Industries Co. Ltd., and the Arab Company for Manufacturing White Cement. The products subject to import duty exemptions were used by the exempted companies for production and operations purposes. The following goods imported by these companies were not exempt from import duties: cars and spare parts, tyres, petroleum products, vans and buses and their spare parts, stationery, computer devices, air-conditioners, hand tools, consumption materials, goods and materials used for housing employees, and products similar to Jordanian products. These companies were not exempt from income tax, and the tariff exemptions were not contingent upon export performance.
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Table 2: Company-specific tariff exemptions in Jordan
Company Name Terms of concessions and agreements; conditions; and expiration
Jordan Phosphate Mines The company has exclusive mining rights of Phosphate for four different Co. Ltd. mines in Jordan, which are granted based on Law No. 12 of Natural Resources 1968. Mining rights are usually granted for thirty years and are subject to renegotiations and renewal once they expire. The company also has the exclusive right (indefinite term) to import, store and sell explosive materials used in the local market for mining and quarrying purposes.
Jordan Petroleum The concession Law No. 19 of 1958 was issued to approve the concession Refinery Company agreement signed between the Jordanian Government and the Petroleum Refinery Company. The term of concession grants the company the exclusive right to refine oil and sell in Jordan. The company alone shall have the right to import oil and Hydrocarbon necessary to the local market. The concession expires in 2008.
Jordan Cement The Jordan Cement Factories has a concession for fifty years and it is Factories Company valid from 1951 to 2001. The company has the exclusive right to search, extract and produce cement and its by-products in any area or land of the Hashemite Kingdom of Jordan for the purpose of supplying the local market with all its cement demand. The concession expires in year 2001.
Arab Potash Company The Arab Potash Company has a concession Agreement which was granted in 1958 and for 100 years according to law No. 16 of 1958, issued to approve the concession agreement. The company has the exclusive right to mine and extract Dead Sea minerals from the Dead Sea. The concession expires in year 2058.
Jordan Tanning The Jordanian Tanning Co. has a concession agreement that was granted Company in 1962, for forty years, according to the Law No. 9 which approved the concession agreement. The company has the exclusive right to import and export rawhides and skins and also it has exclusive right to export tanned leather. The concession expires in year 2002.
Jordan Electric The Jordanian Electric Co. has a concession agreement that was granted in Company 1961 for fifty years according to Law approving the concession agreement. The company has exclusive right to distribute electric power to Amman, Zarqa, Madaba, Salt areas and suburbs with electricity power. The concession expires in year 2012. The company is not engaged in international trade activities and does not have exclusive right to generate power. Its main objective is to distribute electric power in the above mentioned areas (natural monopoly with regard to power distribution at the local level).
Irbid Governorate The Irbid Electric Co. has a concession agreement that was granted in Electric 1961, for fifty years, according to Law No. 1 of 1961 approving the concession agreement. The company has the exclusive right to distribute electric power to Ajlun, Irbid, Mafraq and Jerash areas. The concession expires in year 2011. The company is not engaged in international trade activities and does not have exclusive right to generate power. Its main objective is to distribute electric power in the above mentioned areas (natural monopoly with regard to power distribution at the local level).
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Company Name Terms of concessions and agreements; conditions; and expiration
Vegetable Oil Industries The Vegetable Oil Factories Co. has exclusive right to produce vegetable Co. Ltd. Ghee (Margarine) to the local market. Concession agreement was granted in 1956 for thirty years according to agreement and has been extended for another fifteen years. The concession expires in year 2001. However this is not implemented in practice.
Arab Company for There is no concession agreement between the Jordanian Government and Manufacturing White the Arab Company for Manufacturing White Cement. Cement The company has an exemption from paying customs duties of indefinite validity, as per cabinet decision dated 10 November 1984.
Arab Bridge Maritime The company has a concession agreement that was granted in 1985 for fifty Company years according to Maritime cooperation agreement between three Arab countries (Jordan, Egypt, and Iraq). The company has the exclusive right to transport cargo, mail and passengers from Aqaba to Noueibe and return. The company is registered in Panama and, therefore, is not subject to Jordanian laws on income tax.
62. The representative of Jordan added that the customs exemptions provided for the Jordan Phosphate Mines Co. Ltd. would be eliminated upon accession to the WTO, as stipulated in Council of Ministers Decision No. 12-9-76 of September 1999. He noted that the concessions granted to the Arab Bridge Maritime Company would expire in 2035. 63. The representative of Jordan confirmed that the exemptions on customs duties for certain imports by the 10 companies listed in Table 2 will expire as indicated in that table, and will not be renewed. As noted in Table 2, the customs exemption for Arab Company for Manufacturing White Cement had been granted for an indefinite period of time, in accordance with the Council of Ministers’ Decision dated 10 November 1994. The Working Party took note of this commitment. 64. Charitable organizations were registered in a special registry at the Ministry of Industry, and received an import licence from the Ministry to import goods duty free upon recommendation from the Ministry of Social Development, certifying that the goods to be imported were for charitable purposes. Duty-free imports were allowed for medical equipment and medications (approval of the Minister of Health and Minister of Finance/Customs); fixed equipment and apparatus and educational apparatus received as donations or grants for use in schools and institutions run by charitable organizations (recommendation from the Minister of Social Development and approval by the Minister of Finance/Customs); clothes, food, furnishings (carpets and curtains) received as donations or grants to orphanages, old peoples’ homes and hospitals (upon direction from the Minister of Social Development and approval of the Minister of Finance/Customs); donations and grants of construction materials for building mosques, churches or schools belonging to religious or
162 WTO BISD 1999 Accession charitable organizations accredited by the Ministry of Social Development; and hearse cars (95 per cent tariff reduction). Educational and medical materials and all other apparatus, equipment, machines and spare parts, including transport vehicles, were also fully exempt from customs duties when used by schools, institutions and programmes for handicapped persons. 65. The tariff exemptions granted for imported capital goods and related spare parts in investment projects are described in the section “Investment regime”. Agricultural products exempted from customs duties were wheat and flour, and certain fruit and vegetables imported under bilateral trade agreements with Arab countries, Israel and Palestinian Authority according to an agricultural calendar. 66. Some members noted that the seasonal exemptions for customs duties and import fees for certain agricultural products were not applied on a most favoured nation basis. In reply, the representative of Jordan said that Jordan intended to conform to the MFN requirements of WTO. Jordan would maintain seasonal exemptions from customs duties accorded as trade preferences to some Arab countries in the context of the Arab Free-trade Area.
Fees and charges for services rendered 67. a member noted that Jordan imposed overtime fees and non-tariff ad valorem charges for re-exported goods, and that the fee assessed for authentication of invoices and certificates of origin increased for goods worth more than JD 10,000. Jordan was requested to bring its fees and charges for services rendered into conformity with Article VIII of the GATT 1994. 68. in reply, the representative of Jordan said that certain fees and charges were imposed for services rendered to the importer. A detailed report was provided to the Working Party in document WT/ACC/JOR/27. Veterinary charges were levied in accordance with by-law No. 17 for 1987, issued in accordance with the Agriculture Law No. 20 for 1973, and their amendments. He added that audio-visual material was screened to protect public morals according to Law No. 52 of 1951, and the fees for movies (JD 50); video films and visual discs (JD 3); and audio discs, computer and electronic games, and audio cassettes (JD 1), were below the cost of the services rendered. 69. an overtime fee equal to 0.2 per cent of the c.i.f. value of imported goods worth more than JD 50 (0.1 per cent for goods in transit) was charged for services rendered by staff of the Customs Department during official working hours and for performing difficult and risky tasks. He confirmed that these fees would be brought into conformity with Article VIII of the GATT 1994 upon enactment of amendments to the Customs Law No. 20 (expected during Parliament Ordinary Session November 1999- February 2000). The overtime fee would be replaced by an import processing fee of 0.2 per cent of the transaction value, minimum JD
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10 and maximum JD 250 per transaction. All trade would be subject to this fee, and revenues from the fee would be used to support the overall operations and infrastructure of the Customs Department in connection with customs processing (Article 161D of the Customs Law). The transit fee would be levied at a fixed rate of JD 20 per transaction. 70. A member noted that Jordan required consular certification of commercial bills, and considered the certification by consulates and Chambers of Commerce of documents unnecessary. Moreover, the requirement created an additional charge on imports, and an additional burden to import trade not applied to domestic goods, incompatible with the provisions of the Agreement on Rules of Origin and Article VIII of the GATT. Jordan was accordingly requested to eliminate this practice. 71. in reply, the representative of Jordan said that consular fees were levied in accordance with by-law No. 1 for 1989 based on Article 2 of the Law on consular fees No. 36 for 1947. The fees were levied for certification of commercial bills not paid at the time of certification by the consular authority in the exporting country, and ranged from JD 2 for bills less than JD 100 to JD 50 for bills worth JD 50,000-100,000 with an additional JD 2 charged for each JD 10,000 in excess of JD 100,000. Certificates of origin issued by a consular authority were subject to a fee of JD 2 per certificate. Appropriate legal measures to bring the consular fees for certification of commercial bills into conformity with Article VIII of the GATT 1994 would be taken, and a flat fee of JD 21 per transaction would apply from the date of Jordan’s accession to the WTO. Jordan would introduce amendments to the Customs Law No. 20 of 1998 and Regulations No. 1 of 1989 on Consular Services and Fees during the second half of 2002 to eliminate the consular authentication requirements. 72. The representative of Jordan confirmed that from the date of accession, Jordan would impose any fees or charges for “services rendered” to importation or exportation only in conformity with Article VIII of the GATT 1994. He further confirmed that the fee described in paragraph 71 for the authentication or certification of import documents by Chambers of Commerce or consular officials in the exporting country would be fixed at JD 21 per transaction from the date of accession. The practice of requiring such certifications would be eliminated by 31 December 2002. Information regarding the application and level of such fees, revenues collected and their use, would be provided to WTO Members upon request. The Working Party took note of these commitments.
Application of internal taxes 73. Some members noted that Jordan applied sales tax rates which differentiated between imported and domestically-produced goods in violation of Article III of the GATT 1994, and asked which steps Jordan was taking to eliminate this differential treatment. A member observed that, under a number of provisions of the General
164 WTO BISD 1999 Accession
Sales Tax Law of 1994, as amended, national treatment was not accorded in the taxation of imported goods, and asked that the Law be brought into full conformity with the requirements of Article III:2 of GATT 1994 prior to accession. This member stated that the General Sales Tax law provisions not in conformity with Article III:2 of GATT 1994 were (i) Article 6, which provided for two schedules of goods subject to the supplementary sales tax, whose purpose was to compensate for reductions in import duties; (ii) Article 7, which provided that the Council of Ministers could wholly or partially exempt any locally produced goods from the tax; (iii) Schedule 1, which consisted of goods not subject to sales tax including locally produced furniture, locally produced dried legumes, locally produced solar water heaters and a number of other locally produced items, but not imported like products; (iv) Schedule 2, which consisted of goods subject to 20 per cent sales tax, but retained separate columns for the rate applicable to local and imported goods, as long as the rates were not the same; (v) Schedule 3, which consisted of goods subject to specific sales tax, but retained separate columns for the rate applicable to local and imported goods, as long as the rates were not the same; and (vi) Schedule 5-A, which consisted of imported goods subject to supplementary sales tax, including natural and mineral water and carbonated and alcoholic beverages. 74. in reply, the representative of Jordan said that a General Sales Tax was applied in Jordan, and imported goods were taxed at the border based on the duty- inclusive customs value. Jordan intended to remove the differential rates of General Sales Tax prior to accession. The Ministry of Finance was preparing amendments to the General Sales Tax Law to bring the application of General Sales Tax into full conformity with Article III of the GATT 1994. Parliament was expected to adopt these amendments during its Ordinary Session November 1999-February 2000. The amendments would ensure national treatment with regard to the application of general sales tax. Products subject to the (amended) specific rates of sales tax are listed in Table 3.
Table 3: Products subject to specific sales tax
Tax rate (JD) No. Product Unit (domestic or imported)
1 All kinds of cement Ton 10.000
2 Iron for construction Ton 50.000
3 Mineral lubricating oils Kg 0.200
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Tax rate (JD) No. Product Unit (domestic or imported)
4 Natural and mineral water 0.020 Gas water including soda water in Litre - reusable container 0.166 - disposable container 0.175
5 Fizzy drinks (a) for immediate consumption - reusable container Litre 0.166 - disposable container Litre 0.175 (b) Concentrates in -drums that yield 96 bottles/25 cl. Drum 3.984 capacity each Drum 19.920 -drums that yield 480 bottles/ 25cl. capacity each
6 Beer including non-alcoholic beer Litre 0.600
7 Unsaturated Ethel Alcohol Litre 0.330
8 Alcoholic drinks including wine. Litre 1.000
9 Tobacco (a) ordinary Kg 2.000 (b) Mixed with fruit syrup Kg 2.000
10 Snuff Kg 2.000
11 Chopped tobacco Kg 0.500
12 Cigar Kg 15.000
13 Cigarettes box /20 a) For local consumption 0.170 b) for the same brand names sold to armed 0.130 forces.
75. The representative of Jordan stated that Jordan, as of the date of accession, will be applying sales tax for both imported and locally-made goods in conformity with Article III of the GATT 1994. Some imported products were subjected to 10 per cent general sales tax while locally produced goods were exempt. The products involved were agricultural plastic houses; furniture; wool blankets, covers, and mattresses, quilts, and towels; yeast and bread improvements; active and inactive lime and calcareous masonry; smoke stack stoves and their parts; dried leguminous
166 WTO BISD 1999 Accession vegetables subjected to any manufacturing process such as peas, chick peas, beans, kidney beans, lentils of field beans; egg carton holders; solar heaters; knitted textiles; milled products including spices, thyme, and other herbs; and energy- saving insulation materials for building purposes. After the enactment of the amendments to the General Sales Tax Law, the above-mentioned locally produced goods would no longer be exempted from general sales tax. A 13 per cent general sales tax would be applied on all imported and locally produced goods mentioned above except gas and kerosene heaters which were exempt from sales tax regardless of whether these were imported or locally-produced. The representative of Jordan added that the General Sales Tax Law had been amended in July 1999 to raise the tax rate from 10 per cent to 13 per cent. 76. The representative of Jordan stated that, from the date of accession, Jordan will apply its domestic taxes, including those on products listed in Table 3, in compliance with Articles I and III of the GATT 1994. The Working Party took note of this commitment.
Quantitative import restrictions, including prohibitions, quotas and licensing systems 77. The representative of Jordan said that, although imports had been liberalized in recent years and numerous non-tariff barriers had been eliminated, importation of some products was still prohibited or subject to prior approval or import licensing. The goods banned from importation into Jordan are listed in Table 4. Banned goods would be refused entry or clearance by customs, and would need to be re-exported to the country of origin or to the Free Zone.
Table 4: Banned imports
HS Code Products
39.15 Plastic Waste
87.03 Passenger cars using other than benzene as fuel
78. Some members pointed out that Jordan’s bans on imports of plastic waste, mineral water, table salt, used cars, and cars using fuel other than petrol were intended to limit imports and were inconsistent with Article XI of the GATT and the Agreement on Agriculture. Jordan was requested to confirm that all these restrictions would be eliminated or amended no later than upon accession to bring them into line with WTO provisions. In reply, the representative of Jordan said that mineral water and salt had been banned from importation for socio-economic reasons. Price controls on table salt had been lifted in June 1997 as a first step
WTO BISD 1999 167 Decisions and Reports towards liberalization. Jordan had eliminated the import ban on mineral water in April 1999, and the ban on table salt and cars older than five years in September 1999, and intended to lift the other bans. Importation of diesel-engine saloon cars and taxis was not allowed because of the environmental pollution they were causing. Diesel-engine trucks were accepted because they mostly operated outside the congested areas. His Government was encouraging Jordanians to replace older cars with newer (and safer) models. Owners of old cars used in public transport were eligible for duty-free importation of new cars provided the old car was surrendered to the State or retired from service. 79. He added that Jordanian standards on cars had been suspended and were likely to be totally withdrawn. The ban on importation of diesel powered saloon cars would remain until Jordan’s refinery had been modernized to produce diesel fuel with lower sulphur content. The prohibition on import of plastic waste would not be lifted as processing of plastic waste was considered a major environmental problem in Jordan. 80. The representative of Jordan said that prior approvals were issued under specific conditions by certain government institutions. Prior approvals were required to import from all countries (including those with which Jordan had preferential agreements) for all products listed in Table 5. Prior approvals were granted automatically to private sector importers of rice and sugar and there were no import quotas or restrictions on the imported quantity. Private sector imports of cigarettes required prior approval and an import licence from the Ministry of Industry and Trade, but there was no import quota. Prior approvals to import electric and electronic video games were granted only to shops licensed to use or deal with such games.
Table 5: Prior approvals (measure in force prior to accession)
HS Code Product Party Granting Approval Justification
1. 10.06 Rice - Ministry of Industry and Statistical purpose Trade (MIT)
2. 11.01 Wheat flour MIT Statistical purpose
3. 17.01 Sugar MIT Statistical purpose
4. 10.01 Wheat MIT Statistical purpose
5. 10.03 Barley MIT Statistical purpose
6. 10.05 Corn MIT Statistical purpose
7. Chapter 1 Live animals Ministry of Agriculture Health
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HS Code Product Party Granting Approval Justification
8. 0511.10 Frozen animal Ministry of Agriculture Health semen
9. Chapter 2 Fresh chilled and Ministry of Agriculture Health frozen meat
10. 1509 Olive oil Ministry of Agriculture Social
11. Chapter 93 All kinds of arms Ministry of Interior, Public National security and ammunition Security Dept. (PSD)
12. 36.01 All kinds of PSD National Security 36.02 explosives 36.03 36.04
13. 82.11 Pen knives and PSD National Security similar articles Public order
14. 95.01 Children automobile PSD Safety toys operated with fuel
15. 9503.20 Remote control and PSD Safety toy aeroplanes
16. 95.04 Electrical and PSD Public moral electronic video games machines
17. 85.43 Self-defence PSD National Security electrical equipment Public order
18. 28.44 Radio-active Ministry of Energy & National Security materials and Mineral Resources Health uranium Safety Environment
19. 85.25 Wireless Telecommunications National Security transmitters and Regulatory Commission Safety receivers (TRC) Health
20. 85.31 Wireless alarm TRC National Security equipment Health
21. 8543.209 All kinds of remote TRC National Security 8526.92 control equipment Safety (except those for Health television and video)
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HS Code Product Party Granting Approval Justification
22. 8526.91 Radar apparatus TRC National Security Safety Health
23. 85.25 Transmission and TRC National Security reception stations Safety Health Environment
24. 85.25.201 Cellular telephone TRC National Security systems Safety Health Environment
25. 85.17.11 Cordless telephones TRC National Security Health
26. 8518.10 Cordless TRC National Security microphones Health
27. 85.17 Electrical equipment TRC Safety for line telephony Environment and telegraphy
28. 8543.899 Decoders TRC National Security Health
29. 85.29 Satellites TRC National Security 8529.101 Safety 8543.891 Health
30. 90.09 Coloured Central Bank of Jordan National Security photocopying machines
31. 29.41 Medicaments, Ministry of Health (MOH) Health 30.02 antibiotics, human 30.03 blood, vaccines 30.04
32. 2106.90 Food preparations MOH Health used by athletes
33. 2827.51 Bromides of MOH Health potassium
34. 13.02 Food colourings MOH Health
35. 68.11 Sheets and pipes of MOH Health asbestos
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HS Code Product Party Granting Approval Justification
36. 04.02 Milk and foods for MOH Health 2106.90 children
37. 21.05 Ice cream and other MOH Health edible ice
38. 84.70 Postage franking Ministry of Post and National Security machines Communications
39. 2903.4 Halogenated Public Corporation Safety 2903.46 derivatives of for Protection of the Environment hydrocarbons Environment
40. 2903 Frion gas Public Corporation Safety for Protection of the Environment Environment
41. 8430.4 Boring machinery Ministry of Water & Conservation of for water Irrigation Natural Resources
42. Chapters Military clothing General Command of the National Security 61+62 Armed Forces
81. import licenses were required for goods (i) originating in countries and territories which had trade agreements and protocols with Jordan, i.e. Bahrain, Egypt, Iraq, Israel, Kuwait, Lebanon, Libya, Morocco, Oman, Palestinian Authority, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen; (ii) imported by banks, companies under establishment, farms, handicraft businesses, hospitals, hotels, newspapers, religious, scientific and charitable organizations; (iii) imports by individuals for personal, non-commercial use; (iv) goods, neither prohibited nor restricted and whose total value exceeded JD 2,000, brought into the country by passengers; (v) imports of companies, organizations and individuals registered with official bodies to establish development projects in Jordan; (vi) imports by foreign contractors and companies including their branches registered in Jordan as foreign entities; and (vii) imports by foreign entities permitted to operate a resident branch in Jordan to conduct business outside Jordan and non-Jordanian individuals working in media establishments. Product-specific import licences were required for the items listed in Table 6. The import licences were maintained for statistical purposes and to administer the tariff exemptions provided under the respective agreements.
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Table 6: Import licences
HS Code Item
ex 19.05 Biscuits
ex 87.03 Used vehicles
ex 2201.10 Mineral water
ex 84.18 Refrigerators
ex 84.18 Freezers
84.14.30 Compressors
ex 04.02 Milk for industrial use
ex 40.12 Used automobile tires
ex 85 Used electronic equipment
82. The representative of Jordan said that import licences were issued free of charge, and most Ministries did not charge fees for the issuance of prior approvals. Legislation on prior approvals, which varied from one institution to another, did not stipulate any time-limit for the issuance of prior approvals. The process could therefore take from one day to one year, provided all required documentation had been submitted. In certain cases (arms, ammunition, explosives and pen knives), only licensed importers could apply for prior approvals. In general, the main determinant in granting prior approval was the nature of the product and its impact on health, safety, the environment, national security, public order and morals, and the conservation of natural resources. Imports of chemical products were subject to general safety conditions, i.e. availability of appropriate storage facilities and proper procedures for the transportation, handling and labelling of products. Telecommunications equipment and toys were checked or subject to laboratory tests to ensure that they would not threaten national security, health, safety, or the environment. Asked whether Jordan provided an opportunity for other countries to comment in writing on new procedures, or products to be added to the list of goods subject to prior approval, he replied that there were no restrictions on other countries providing written comments. 83. Some members noted that Jordan applied quantitative restrictions and import licensing which could not be justified as exceptions to the requirements of GATT Article XI. Some of the measures also appeared to violate GATT provisions on MFN and national treatment. Jordan was requested to eliminate or amend these measures prior to accession. The representative of Jordan stated that Jordan intended to conform to Article XI of the GATT 1994 no later than upon accession, and that Jordan would eliminate or amend all restrictions which were inconsistent
172 WTO BISD 1999 Accession with Article XI before the end of 1999. His Government was reviewing the list of products subject to prior approval, and would eliminate those items that could not be justified under WTO rules by the date of accession. Legislation to bring the current regime into full conformity with WTO requirements would be enacted prior to accession. 84. The representative of Jordan provided a report on import/export licensing in document WT/ACC/JOR/28, including a detailed proposal for the application of a new licensing regime. He proposed to eliminate the current system of licensing and prior approvals and replace it with an automatic and non-automatic import licensing regime in accordance with the WTO Agreement on Import Licensing Procedures. Non-automatic licenses would be applied in accordance with the provisions of Article 3 of the Agreement on Import Licensing Procedures, and would be required to regulate (i) quantitative restrictions (e.g. quotas) in accordance with the Agreement on Safeguards and Article XIX of the GATT 1994, or in accordance with Article XII and Article XVIII of the GATT 1994, and the Understanding on Balance-of- Payments Provisions of the GATT 1994; (ii) importation of goods likely to cause threat to safety, environment, health, national security, public order and moral; and (iii) goods having an impact on the conservation of natural resources (for example, water). Imported used electronic goods would be provided national treatment in accordance with Article III of the GATT 1994 following customs clearance. Only three types of “used” goods (used electrical equipment, used tires and used photocopiers) would be subject to non-automatic import licensing. Used goods were usually not accompanied by catalogues or warranties. The main purpose of non- automatic licensing on these two types of goods was to obtain information from the importer on the condition of such goods given the health, safety and environmental concerns associated with these products. 85. automatic licensing would be applied for administrative and statistical purposes, such as the monitoring of trade flows and collection of statistics, in accordance with the provisions of Articles 1 and 2 of the Agreement on Import Licensing Procedures. Automatic licences would be issued within a maximum of ten working days after submission of all relevant documentation, as required under Article 2.2.(a)(iii) of the Agreement. Automatic import licenses would be required for goods subject to the provisions of trade protocols (currently applied to Syria for a specific list of items); dairy products (HS Chapter 4) and fresh fruits and vegetables (Chapters 7 and 8) imported from counties with which Jordan has trade agreements; and for the goods listed in Table 7. Non-automatic licenses would be issued for the protection of health, safety, environment, national security, public order and moral, and the conservation of natural resources for products listed in Table 8. He confirmed that importation of such goods were not subject to quantitative restrictions at present.
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Table 7: Goods Subject to Automatic Import Licensing
HS Code Item Line Authority Ex 19.05.30 Biscuits Ministry of Industry and Trade (MIT) ex 22.01.10 Mineral water MIT 25.01 Table salt MIT 10.06 Rice MIT 11.01 Wheat flour and other wheat products MIT 17.01 Sugar MIT 10.01 Wheat MIT 10.03 Barley MIT 10.05 Corn MIT 24.02.20 Cigarettes MIT Ex 97.05.00 Stuffed wild animals Ministry of Agriculture 20.02.90 Tomato paste Ministry of Agriculture 15.09 Olive oil Ministry of Agriculture 29.03.4 Halogenated derivatives of Public Corporation for Protection of hydrocarbons the Environment Ex84 and ex85 New electric equipment MIT 85.25.10 Wireless transmitters and receivers; Telecommunications Regulatory 85.25.20 transmission and reception stations Commission (TRC) 85.25.201 Cellular telephone systems TRC 85.43.209 All kinds of remote control TRC 85.26.92 equipment (except those for television and video)
Table 8: Goods Subject to Non-Automatic Import Licensing
HS Code Item Justification Line Authority
Ex 40.12 Used automobile tires Safety MIT
Ex 84 and ex 85 Used electric equipment Health, safety and MIT environment ex90.09 Used photocopiers (more than Health and safety MIT three years old)
04.02 Milk for industrial use Health MIT
Chapter 1 Live animals Health Ministry of Agriculture
0511.10 Frozen animal semen Health Ministry of Agriculture
Chapter 2 Fresh chilled and frozen meat Health Ministry of Agriculture
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HS Code Item Justification Line Authority
Chapter 31 Fertilizers Environment Ministry of Agriculture
38.8 Insecticides, fungicides, Health and Ministry of Agriculture herbicides, disinfectors environment
12.09 Seed and fruits, used for Plant health Ministry of Agriculture sowing
30.03 Veterinary medicines Animal health Ministry of Agriculture 30.04
Chapter 93 All kinds of arms and National security Ministry of Interior, ammunition Public Security Department (PSD)
36.01 All kinds of explosives National security PSD 36.02 36.03 36.04
82.11 Pen knives and similar articles National security PSD Public order
95.01 Children automobile toys Safety PSD operated with fuel
95.03.90 Remote control and toy Safety PSD airplanes
95.04.10 Electrical and electronic video Public moral PSD games machines
85.43 Self-defense electrical National security PSD equipment Public order
Ex 28.34.299 Ammonium Nitrates National security PSD Public order
28.44 Radio-active materials and National security Ministry of Energy & uranium Health Mineral Resources Safety Environment
85.31 Wireless alarm equipment National security TRC Health
85.26.91 Radar apparatus National security TRC 85.26.10 Safety Health
85.17.11 Cordless telephones National security TRC Health
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HS Code Item Justification Line Authority
8518.10 Cordless microphones National security TRC Health
85.17 Electrical equipment for line Safety TRC telephony and telegraphy Environment
85.43.899 Decoders National security TRC Health
85.29.101 Satellites National security TRC 85.43.891 Safety Health
90.09 Colour photocopying National security Central Bank of Jordan machines
29.41 Medicaments, antibiotics, Health Ministry of Health 30.02 human blood, vaccines (MOH) 30.03 30.04
21.06.90 Food preparations used by Health MOH athletes
28.27.51 Bromides of potassium Health MOH
33.02 Food colourings Health MOH
68.11 Sheets and pipes of asbestos Health MOH
04.02 Milk and foods for children Health MOH 21.06.90 1901.10 1901.90
21.05 Ice cream and other edible ice Health MOH
84.70.90 Postage franking machines National security Ministry of Post and Communications
29.03.4 Frion gas Safety Public Corporation Environment for Protection of the Environment
84.30.4 Boring machinery for water Conservation of Ministry of Water & Natural Resources Irrigation
Chapters 61 Military clothing National security General Command of the and 62 Armed Forces
86. The representative of Jordan said that any reason for the refusal of a license would be in full conformity with the requirements of the Agreement on
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Import Licensing Procedures, in particular Articles 1.6, 1.7 and 1.8, as well as with all other requirements of the WTO Agreement. The issuing authority would be entitled to cancel an import licence and refund the fees if importation of goods were to become prohibited, or restricted to a specific entity. However, for the entire period that an import or export licence remained in force, the rights of any trader would not be revoked on the grounds that exclusive trading rights in relation to the product or products concerned were being accorded to another entity. Licences could also be cancelled in emergency situations, such as the spread of disease in a specific country. The circumstances leading to such cancellations would be defined more closely in the implementing regulations to the Law on Imports. He confirmed that Jordan’s amended legislation, regulations and instructions would be notified to the Committee on Import Licensing procedures for examination, together with the questionnaire on import licensing procedures, in accordance with the notification time table presented in document WT/ACC/JOR/31. 87. A member sought clarification of the objective of the import licensing requirements applied to milk for industrial purposes. The representative of Jordan replied that such requirements were applied to prevent deceptive practices and considered the measure to be in conformity with Article 2.2 of the WTO Agreement on Technical Barriers to Trade. The member rejoined that the risks associated with the non-fulfilment of this objective were not clear, and hence it was not clear how such a measure should be considered necessary to prevent deceptive practices and why it was in conformity with Article 2.2. This member also stated that the measure appeared to be used to provide protection to the domestic dairy industry, and considered that such a measure could not be in conformity with Articles III:4 and XI:1 of GATT 1994, as well as with Article 2.2 of the WTO Agreement on Technical Barriers to Trade. 88. The representative of Jordan confirmed that Jordan would, from the date of accession, eliminate and shall not introduce, re-introduce or apply quantitative restrictions on imports, or other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements, licensing requirements and other restrictions having equivalent effect that cannot be justified under the provisions of the WTO Agreement. Any further amendments to the import licensing regime after accession would be fully in accordance with all relevant provisions of the WTO, including the Agreement on Import Licensing Procedures. Jordan would replace non-automatic import licensing with automatic import licensing for “milk for industrial use” within 3 years from the date of accession. He further confirmed that the legal authority of the Government of Jordan to suspend imports and exports or to apply licensing requirements that could be used to suspend, ban, or otherwise restrict the quantity of trade will be applied from the date of accession in conformity with the requirements of the WTO, in particular Articles XI, XII, XIII, XVIII, XIX, XX and XXI of the GATT 1994, and the Multilateral Trade Agreements on Agriculture, Application of Sanitary and Phytosanitary Measures, Import Licensing
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Procedures, Safeguards and Technical Barriers to Trade. The Working Party took note of these commitments.
Customs valuation 89. a member stated that it considered the Customs Valuation Agreement a fundamental component of the Uruguay Round Agreement. This member encouraged Jordan to incorporate the WTO Customs Valuation Agreement into its legislation as soon as possible and certainly no later than the date of accession. 90. The representative of Jordan said that the 1998 Customs Law, which was based on the WTO Customs Valuation Agreement, included provisions on customs valuation in its Articles 28 to 32. The Law required valuation based on self-declaration by importers, and stipulated that the transaction value, rather than the “normal” value be used for customs valuation purposes. Customs duties were calculated on the basis of the c.i.f. value of imports on the registration date of the customs valuation form. In mid-1996, a reference price database for valuation of goods had been initiated by customs, but this database no longer existed. 91. The Customs Law No. 20 of 1998 conformed largely to the WTO Customs Valuation Agreement. The Law contained a definition of related persons similar to that of Article 15.4 of the Customs Valuation Agreement, except that Jordanian Law limited family relation to third degree. He confirmed that the Customs Law incorporated the Article 5.2 valuation method, and that customs practices would comply with Article 5.2 of the Customs Valuation Agreement. The right of further appeal (beyond the Customs Court) was guaranteed by Law, and he considered Article 80 of the Customs Law, which stipulated that a decision of the Director General of the Customs Department could be contested at the Customs Court within 15 days, would meet the requirements of Article 11.3 of the Customs Valuation Agreement. He considered the confidentiality provision in Article 10 of the Agreement to be covered by Article 175 of the Customs Law. A provision on the valuation of lost or damaged goods would be addressed in instructions of the Minister of Finance, which would also be issued to incorporate the interpretative notes in Jordanian legislation. 92. a member requested that Jordan provide the regulations implementing the Interpretative Notes to the WTO Valuation Agreement, stressing that Article 14 of the WTO Valuation Agreement which incorporated the Interpretative Notes as an integral part of the Agreement and the Articles of the Agreement could not be read and applied without reference to the respective Interpretative Notes. This member also sought verification of Jordan’s implementation of Decisions 3.1 (software) and 4.1 (treatment of interest charges) of the Committee on Customs Valuation and confirmation by Jordan that (i) Articles 1(d) and 1.2(a) of the WTO Valuation Agreement concerning related parties had been fully implemented in Jordan’s Customs Law; (ii) Jordan would eliminate the inconsistency identified
178 WTO BISD 1999 Accession in their deductive value provision in the Amendments to the Customs Law; (iii) Article 31C(i) concerning implementation of other provision was designed to cover the regulations, i.e. the Interpretative Notes, software decision and interest decision; and (iv) that Jordan would implement a provision to cover fully the confidentiality requirement of Article 10 of the WTO Valuation Agreement. 93. The representative of Jordan replied that a review of the Customs Law No. 20 had been completed in March 1999, and Jordan had prepared draft amendments to address these points and ensure full conformity with the WTO Customs Valuation Agreement (to be submitted to Parliament in November 1999). He confirmed that Article 1(d) and Article 1.2(a) of the Agreement concerning related parties had been fully implemented in Jordan’s Customs Law, and Article 31C(i) concerning implementation of other provision was designed to cover the regulations, i.e. Interpretative Notes, software decision and interest decision. Jordan was preparing “Instructions on Implementing Customs Valuation”, addressing the interpretative notes and the valuation of software and interest charges. These instructions would be adopted upon enactment of the Amendments to the Customs Law. 94. The representative of Jordan confirmed that Jordan would fully apply the WTO provisions concerning customs valuation from the date of accession without recourse to a transition period, including the Agreement on the Implementation of Article VII of the GATT 1994. In this regard, the Customs Law and its implementing regulations incorporated Annex I (Interpretative Notes) and provisions for the Valuation of Carrier Media Bearing Software for Data Processing Equipment (Decision 4.1). The Working Party took note of these commitments.
Rules of origin 95. The representative of Jordan said that the 1998 Customs Law (Articles 24-27) provided the legal framework for the application of rules of origin. A certificate of origin indicating the initial origin was required for imported products from all countries. The certificate should be issued by an authorized body in the exporting country. The authorized body, for example a Ministry, Chamber of Commerce or Chamber of Industry, should be acknowledged by the World Customs Organization. 96. For products exported from Jordan, the Chamber of Industry issued certificates of origin for licensed factories. The Industrial Development Directorate in the Ministry of Industry and Trade checked the certificate, i.e. whether the factory existed and the products were made in the factory, and whether the local manufacturing percentage complied with the minimum stipulated in the bilateral agreement. 97. Jordan’s preferential rules of origin depended on the bilateral agreement with each country, and were essentially based on the value added or local content.
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The principle of minimum 40 per cent value added was applied in trade arrangements with Arab countries, and 35 per cent in trade with Israel. 98. The representative of Jordan said that Jordan planned to adopt the Harmonized Rules of Origin once finalized by the WTO in co-operation with the World Customs Organization. Jordan would ensure conformity with the Agreement on Rules of Origin as soon as the Harmonized Rules of Origin had been finalized. 99. Having reviewed Jordan’s existing legislation, a member said that Articles 24-27 of the Customs Code were inadequate in addressing the provisions of the Agreement on Rules of Origin. Jordan was requested to develop legislation establishing rules of origin based on international norms. In reply, the representative of Jordan said that Jordan was preparing draft amendments to the Customs Law No. 20 to ensure conformity with the WTO Rules of Origin (to be submitted to Parliament in November 1999). 100. The representative of Jordan stated that, from the date of accession, Jordan’s preferential and non-preferential rules of origin would comply fully with the WTO Agreement on Rules of Origin. The requirements of Article 2(h) and Annex II, Paragraph 3(d) of the Agreement would also be fully implemented prior to accession. He also stated that in any event, from the date of accession, Customs would provide an assessment of the origin of the import upon the request of an exporter, importer or any person with a justifiable cause. Any request for such an assessment would be accepted even before trade in the goods concerned began. Any such assessment would be binding for three years. The Working Party took note of these commitments.
Other customs formalities 101. The representative of Jordan said that the Government had implemented a scheme permitting ISO 9000 certified industries to benefit from a “Green Channel” for imports of materials, equipment and components used in the production of exports. The green channel involved acceptance of invoices presented by exporters on the basis of trust, with reliance on ex-post random auditing of factory premises. A feasibility study had been undertaken to prepare the implementation of x-ray inspection services on all border crossing points to facilitate the inspection of lorries, trucks and tankers.
Preshipment inspection 102. The representative of Jordan said that Jordan did not have a system of preshipment inspection, and did not intend to establish such a system in the foreseeable future. 103. The representative of Jordan stated that if Jordan in the future engaged the services of a pre-shipment inspection service provider Jordan would ensure that
180 WTO BISD 1999 Accession the requirements of the Agreement on Preshipment Inspection were implemented in full. He confirmed that Jordan would ensure that the operations of any such preshipment inspection firm would meet WTO norms, including the establishment of charges and fees consistent with Article VIII of the GATT 1994, observance of due process and the transparency requirements of the relevant WTO Agreements, in particular Article X of the GATT 1994, the Agreement on Preshipment Inspection and the Agreement on the Implementation of Article VII of the GATT 1994, as well as the substantive provisions of these Agreements. The Working Party took note of these commitments.
Anti-dumping, countervailing duties, safeguard regimes 104. The representative of Jordan said that Jordan had enacted the National Production Protection Law (“the Law on Safeguards”) on 1 October 1998 (a detailed comparison between the provisions of the Law and the Agreement on Safeguards is provided in document WT/ACC/JOR/18, pp.33-42). He added that, in order to implement the Law, Article 14 of the Law required the Council of Ministers to issue a regulation covering the (i) fees to be collected from petitioners for protection; (ii) conditions to be fulfilled by protection petitioners, as well as details about the evidence and documents to be submitted with the petition; (iii) procedures for investigating the petitions and the scope of the investigations; (iv) matters to be addressed by the report including the recommendation to the Minister regarding the protection petition; and (v) the maximum period for applying the protection measures as well as the procedures and conditions pertaining to any extension or re-imposition of such measures. Jordan was in the process of drafting these regulations. He added that 17 petitions had been filed with the Ministry of Industry and Trade since the Law had entered into force in December 1998. No decisions had been taken regarding any of these cases. 105. a member was concerned that Jordan’s Safeguard Law might not fully reflect WTO provisions concerning safeguards, anti-dumping, and countervailing duties, and sought a commitment from Jordan not to apply any such measures until WTO-consistent legislation had been put in place. Should Jordan be unable to complete the implementation of WTO-consistent legislation by the date of accession, this member requested the Government of Jordan to commit to refrain from imposing any anti-dumping, countervailing or safeguard measures until WTO- consistent legislation had been enacted and properly notified to the appropriate WTO Committees. 106. in reply, the representative of Jordan said that the National Production Protection Law had been enacted, published in the Official Gazette and forwarded to the WTO Secretariat. Jordan was preparing regulations to implement the Agreement on Subsidies and Countervailing Measures and the Agreement on Implementation of Article VI of the GATT 1994 (anti-dumping). Jordan was reviewing the National
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Production Protection Law and the draft anti-dumping and countervailing duty legislation to ensure their conformity with the provisions of the relevant WTO Agreements. 107. The representative of Jordan said that Jordan would not apply any anti- dumping, countervailing or safeguard measure to imports from WTO Members until it had notified and implemented appropriate laws in conformity with the provisions of the WTO Agreements on the Implementation of Article VI, on Subsidies and Countervailing Measures and on Safeguards. He confirmed that Jordan would ensure that such legislation would be in full conformity with the relevant WTO provisions, including Article VI and XIX of the GATT 1994 and the Agreement on the Implementation of Article VI, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards. After such legislation was implemented, Jordan would only apply any antidumping duties, countervailing duties and safeguard measures in full conformity with the relevant WTO provisions. The Working Party took note of these commitments.
2. Export regulation
Customs tariffs, fees and charges for services rendered, application of internal taxes to exports 108. The representative of Jordan said that a certificate of registration of the enterprise was the only requirement for engaging in exporting. 109. asked to list all charges on exports - whether called fees, taxes or tariffs – the representative of Jordan said that exports to Syria and Iraq were licensed and subject to JD 2 stamp duty, collected by the Ministry of Industry and Trade. The Customs Authority collected a fee of JD 25 per ton on exports of scrap and waste of iron, brass and aluminium. Export fees collected by the Natural Resources Authority are listed in Table 9, and fees on exported agricultural products collected by the Ministry of Agriculture are listed in Table 10. The Jordan Export Development Corporation (JEDCO) also charged fees for services provided to exporters under the trade agreements with Lebanon, Libya and Saudi Arabia. JEDCO charged 1 per cent on all transactions with Libya, and on certain goods traded with Lebanon (1 per cent) and Saudi Arabia (0.25 per cent).
Table 9: Export fees on mining and quarry products
Product Fee (JD per ton)
Crushed stones 0.2
Building stones 0.3
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Product Fee (JD per ton)
Marble and granite 1.0
Travertine and marble crushes 0.5
Crude xyolite 1.0
Clay, clay derivatives and kaolin 0.5
Tripine biototite and diatomite 0.3
Silicate, gypsum, pure limestone, feldspar, volcanic 0.2 turf and bituminous mineral oil
Dolomite and basalt 0.1
Table 10: Fees on exports of agricultural products
Type of fee Amount (fils)
1. Fumigation of consignments 250f/ton
2. inspection and checking 250f/ton
3. inspection of live animals:
Bovines, camels and pigs 50 f/head
Horses 50 f/head
Sheep, goats and deer 20 f/head
Cats, dogs and wild animals 100 f/head
Birds 20 f/bird
4. animal interdiction fees/quarantine
Bovines, camels and pigs 80 f/head
Horses 90 f/head
Sheep, goats and deer 20 f/head
Cats, dogs and wild animals 100 f/head
Birds 20 f/bird
5. animal watering
Camels, horses, bovines and big animals 10 f/head/day
Sheep, goats and small animals 5 f/head/day
6. disinfection fees:
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Type of fee Amount (fils)
Ships transport 1-100 head JD 2
Ships transport 1,000 tons. JD 3
Ships transport 4,000 tons. JD 5
Ships transport more than that JD 7
Any other vehicles JD 0.5 each
110. a 2 per cent inspection fee, which the representative of Jordan considered a fee for services rendered, was levied on re-exported foreign goods. For imported goods undergoing some additional processing in Jordan, the value added would need to be 40 per cent or more for a product to be considered a Jordanian export. Exempt from the fee were exports by diplomatic missions and their staff; personal belongings; articles exempt from import customs duties; used household furniture; project machinery and equipment imported on a temporary basis; foreign goods re-exported directly from stores and warehouses; and any item exempt by decision of the Council of Ministers upon recommendation from the Minister of Finance. Re-exported goods were also subject to customs overtime fees (0.2 per cent of the declared value). 111. The representative of Jordan said that the 2 per cent fee on re-exported foreign goods would be eliminated upon enactment of amendments to the Law on Unifying Taxes and Duties No. 7 of 1997 in January 2000. In the future, Customs would charge a flat fee of JD 15 per transaction for export processing, and JD 20 per transaction for goods in transit. In his view, these fees equalled the approximate cost of the services rendered. The overtime fee would be converted into a JD 15 export processing fee through the Amendments to the Customs Law No. 20 of 1998. The mining fee was considered an export duty and would continue to apply. In response to questions by a member, the representative of Jordan confirmed that all imports and exports would be subject to import and export processing fees, respectively, and that the revenues from these fees would only be used to support the overall customs operations and infrastructure connected with customs processing of imported and exported goods in accordance with Article 161D of the Customs Law.
Export restrictions 112. The representative of Jordan said that products of Jordanian origin generally did not require export licenses. A licence was required for exports to protocol trade countries for consignments of a value exceeding JD 1,000 irrespective of origin, i.e. Jordanian or foreign. Export licences were required in trade with Syria and Iraq as Jordan was committed to certain banking arrangements in transactions with these countries. Exports to other countries were exempt from the export licence
184 WTO BISD 1999 Accession requirement by virtue of by-law No. 74 of 1993 for Exports and Imports. A licensing requirement for re-exported foreign goods of a value exceeding JD 1,000 had been abolished. 113. Some products were subject to prior approval before exportation (Table 11). These approvals were in themselves considered export licences.
Table 11: Exports subject to prior approval (prior to accession)
Product Institution granting approval
Wheat Ministry of Industry and Trade
Wheat flour and other wheat products (semolina, bran, « broken wheat)
Sugar «
Rice (ordinary brand) «
Milk for industrial use «
Ewes and cows Ministry of Agriculture
Precious metals, including gold and silver bullion and coins Central Bank of Jordan
Marble slabs Natural Resources Authority
Broken marble «
Mineral ores «
Radioactive materials and sources, and exhausted uranium «
Fresh fruit and vegetables destined to protocol trade Agricultural Marketing Organization countries
114. Some members questioned whether the prior approval system was consistent with GATT Article XI. In reply, the representative of Jordan said that most of the products subject to such approval prior to exportation were strategic food products. The system was being phased out, and would with time be brought in line with the requirements of GATT Article XI. Prior approvals had been eliminated for Halibuna (milk) and precious metals (including gold and silver bullion and coins). 115. The representative of Jordan outlined a new export licensing regime in his report on import/export licensing (document WT/ACC/JOR/28). Existing prior approvals of exports would be eliminated and replaced by automatic export licensing for the items listed in Table 12. Jordan planned to eliminate sugar, macaroni and vermicelli, and rice from export licensing. In addition, Jordan would maintain automatic export licence requirements on all products exported to Iraq and Syria
WTO BISD 1999 185 Decisions and Reports from the date of accession. Table 12: Goods Subject to Automatic Export Licensing
HS Code Item Line Authority
10.01 Wheat MIT
11.01 Wheat flour and other wheat products MIT (semolina, bran, broken wheat)
17.01 Sugar MIT
19.02.111 Macaroni and vermicelli MIT 19.02.191
10.06.10 Rice (ordinary brand) MIT 10.06.20
25.15 Marble slabs Natural Resources Authority (NRA)
25.17.41 Broken marble NRA
Chapter 26 Mineral ores NRA
Ex Chapter 25 The argillaceous material extracted from the NRA Dead Sea
28.44 Radioactive materials and sources, and NRA exhausted uranium
15.09 Olive Oil Ministry of Agriculture
Chapters 7 and 8 Fresh fruit and vegetables destined to Ministry of Agriculture protocol trade countries
116. The representative of Jordan confirmed that any export control requirements remaining in place on the date of accession would be fully consistent with WTO provisions, including those contained in Articles XI, XVII, XX and XXI of the GATT 1994. The Working Party took note of this commitment.
Export subsidies 117. The representative of Jordan said that the Central Bank had operated an export promotion facility since 1980. The Central Bank refinanced export credits charging interest at 2 percentage point below the prevailing discount rate. Such refinancing was available to any company registered in the Jordanian Official Registry of Companies, thus any exporter, regardless of sector, could benefit from the interest rate subsidies on loans granted by the Central Bank of Jordan. The main objective of this arrangement was to encourage banks to meet exporters’ demand for credit. The Central Bank provided advances to authorized banks, i.e. all banks
186 WTO BISD 1999 Accession licensed to operate in Jordan, against export letters of credit and bills for collection. The maximum duration of advances extended against such documentation was 9 months. The maximum limit on pre-shipment credit amounted to 75 per cent of the exporter’s letter of credit, while post-shipment credit could be extended for up to 90 per cent of the value of bills of lading and drafts. Exported products were required to satisfy a local value added criterion (minimum 25 per cent) to be covered by the scheme. The interest and commission charged on advances extended by licensed banks and financial institutions to exporters should not exceed 9.0 per cent annually. The estimated total value of the subsidy facilities had declined from a high of nearly JD 40 million in 1994 to less than JD 10 million in 1995. A financing facility operated by the Industrial Development Bank for commodities stored for export purposes had been discontinued on 1 January 1997. 118. The Jordan Export Development and Commercial Centres Corporation (JEDCO), originally founded to execute trade protocols with Arab countries on behalf of the Government, had been reorganized in 1995. JEDCO - an autonomous non-profit organization owned by the Ministry of Industry and Trade, the Jordan Federation of Chambers of Commerce and the Amman Chamber of Industry - received no budgetary assistance from the Government. The Board of Directors, comprising senior government officials, principals of the Kingdom’s business organizations and leading industrialists, appointed the General Manager. The current functions of JEDCO were of technical and promotional nature, principally assisting industrialists in upgrading products, adapting to international standards and development of marketing and technical capabilities. 119. Firms manufacturing for exports were granted duty exemptions under a temporary entry scheme. The scheme applied to direct imports as well as to wholesale purchases from bonded commercial warehouses. A duty drawback arrangement allowed exporters to be refunded duty paid on imported materials subsequently used in the production of exports. The refund was calculated according to a specific formula for each product. The temporary entry and duty drawback systems had been improved during 1996 through the introduction of computerization. 120. The representative of Jordan did not consider the import duty exemptions accorded to 10 companies (see “Tariff rate quotas, tariff exemptions”) prohibited subsidies under the Agreement on Subsidies and Countervailing Measures. The beneficiaries were share holding companies with significant private participation, thus item (d) of Annex I (Illustrative List of Export Subsidies) of the Agreement did not apply in this case. He acknowledged that although the import duty exemptions might be considered actionable subsidies under the Agreement, the purpose of these subsidies was to encourage production and they were not intended to cause adverse effects to the interests of other countries. Moreover, the import duty exemptions were not contingent upon export performance or import substitution. Jordan would be ready to take appropriate action, including immediate elimination or reduction
WTO BISD 1999 187 Decisions and Reports of such subsidies, if other countries could prove in accordance with the Agreement that such subsidies were causing injury to their industry. 121. The representative of Jordan said that, as a result of the negative effects of the Gulf War on Jordan’s economy and exports, his Government had decided in 1993 to encourage Jordanian producers to diversify production and focus on non- traditional markets. The Council of Ministers had accordingly decided (Decision No. 3394 of 1994) to exempt from income tax profits of exports to non-protocol countries and territories - i.e. all countries and territories except Israel, Lebanon, Palestinian Authority and Saudi Arabia - excluding traditional Jordanian export items such as phosphates and potash. The Arab countries trading with Jordan under bilateral and protocol trade agreements, thus excluded from the tax-exemption scheme, accounted for around 45 per cent of Jordan’s exports. 122. The legal basis for exempting profits earned from exportation wholly or partly from income tax was Article 3(c) of the Income Tax Law No. 57 of 1985 and its amendments. The decision was taken by the Council of Ministers upon recommendation of the Minister of Finance. The income tax exemptions were accorded to enterprises which could provide official documentation (e.g. customs declarations) to the Income Tax Departments proving their export earnings. He added that the Higher Council for Investment had approved the establishment of Jordanian Export Companies specialized in exportation of national products and goods. These companies were also exempt from payment of income tax. According to Decision No. 12/11/4 of 30 December 1997 of the Council of Ministers, all companies with a minimum paid capital of JD 2 million, registered in accordance with the Jordanian Company Law and specialised in “external marketing, advertising and exporting local products” were eligible to become Jordanian Export Companies. The functions of these companies should be limited to exportation, marketing, and promotion of Jordanian products abroad. The companies were required to buy from local producers, and could not act as a paid agent only. 123. Some members noted that Jordan maintained measures which were not in conformity with the WTO Agreement on Subsidies and Countervailing Measures. Jordan’s interest rate subsidies for loans to promote exports and the income tax exemption for profits from exports, including for the establishment of Jordanian Export Companies, would appear to be prohibited subsidies within the meaning of Article 3 of the SCM Agreement. These members sought the immediate elimination or revision of the export subsidies programme. Jordan was requested to provide a notification of the remaining subsidies in place from previous use of the programme, and a specific commitment to terminate all remaining such subsidies prior to 31 December 2002. 124. The representative of Jordan said that Jordan recognized that its income tax exemption on export sales was not in conformity with WTO requirements. At present, Jordan maintained two types of export subsidies. The Income Tax Law
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No. 57 of 1985 and its amendments authorized the Council of Ministers to grant partial or total exemptions from income tax for profits on certain exports. Pursuant to this Law, a Decision (No. 3394 of 1994) had been issued exempting from income tax profits on all exports (except phosphate and potash) to non-protocol countries and territories, i.e. all countries and territories except Israel, Lebanon, Palestinian Authority and Saudi Arabia. The other form of export subsidy was the scheme whereby the Central Bank discounted commercial documents to finance Jordanian exports at below-market interest rate. Jordan had evaluated the Jordanian Export Companies programme to determine whether or not it would fall under Article 3 of the SCM Agreement, and the Council of Ministers had decided to eliminate the legal authority for establishing Jordanian Export Companies in November 1999. He added that no such companies had been established. Jordan planned to seek transition for phasing out prohibited subsidies (as defined in Article 3 of the Agreement on Subsidies and Countervailing Measures) under Article 27 of the Agreement on Subsidies and Countervailing Measures. Prohibited subsidies, granted prior to repealing the laws authorising them, would remain valid for the duration agreed upon when they had been granted. A member held the view that Jordan was not automatically entitled to any phase-out period for such subsidies, or to leave any provisions of them in place for the duration agreed upon when they were granted after accession. 125. The representative of Jordan stated that the following programmes were export subsidies, which met a definition of a prohibited subsidy within the meaning of Article 3 of the Agreement on Subsidies and Countervailing Measures: (i) the Income Tax Law No. 57 of 1985 and its amendments, which authorized partial or total exemptions from income tax for profits on certain exports, and Decision No. 3394 of 1994 pursuant to this Law, which exempted from income tax profits on all exports (except phosphate and potash) to non-protocol countries and territories, i.e. all countries and territories except Israel, Lebanon, Palestinian Authority and Saudi Arabia; and (ii) the discount facility below the going interest rate for commercial documents operated by the Central Bank of Jordan. He confirmed that Jordan had taken appropriate legal measures in September 1999 (Council of Ministers Decision No. 12-9-76) to eliminate these export subsidies by 31 December 2002. 126. The representative of Jordan confirmed that Jordan would eliminate the export subsidies described in paragraph 125 by 31 December 2002. He further confirmed that from the date of accession, Jordan would not maintain nor introduce any other prohibited subsidies. The representative of Jordan stated that, in accordance with Article 28 of the WTO Agreement on Subsidies and Countervailing Measures, these two export subsidy programs would be notified upon accession. The Working Party took note of these commitments.
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3. Internal policies affecting foreign trade in goods
Industrial policy, including subsidies 127. The representative of Jordan said that industrial policy in Jordan had become market oriented, rather than development oriented, since 1988. The Government had reduced its involvement in and supervision of industrial organizations. The Ministry of Industry and Trade assisted the development of industry by (i) helping to develop a business services sector responding to the increasing needs of the industrial sector; (ii) strengthening upstream and downstream industrial linkages; (iii) encouraging “package contracts” which fostered full capacity utilization at existing enterprises and increasing trade opportunities in local and export markets; and (iv) promoting industrial subcontracts and partnerships. 128. The Central Bank had allocated JD 10 million in 1994 and a JD 5 million credit ceiling in 1995 to finance new industrial projects and expansion of existing enterprises. The loans were granted through the Industrial Development Bank as medium term credit (maximum 5 to 7 years) at low rate of interest (6 per cent). The Industrial Development Bank charged the lenders an annual interest margin and commission of 2.5 per cent for its services. 129. Concerning adjustment measures in the energy sector, the representative of Jordan said that the Jordan Electricity Authority (JEA) had been transformed into a public share holding company (NEPCO) in 1996. The company was 100 per cent owned by the Government and operated on a commercial basis. Private sector investment in electricity generation was permitted. The Ministry of Energy and Natural Resources (MEMR), assisted by an international consulting firm, was studying the establishment of the first Independent Power Project in Jordan. An independent and transparent regulatory commission would be established to regulate the power sector, including electricity pricing. 130. in the oil and gas sector, the National Resources Authority (NRA) had been partly transformed into a national company for exploration and drilling in 1995. The National Petroleum Company, formed in part with assets separated from the NRA, held a concession on the gas-producing Risha area. NPC’s drilling operations had been separated into a new private company in conformity with the Council of Ministers’ Resolution of 4 October 1997. The NRA was authorized to negotiate joint ventures with international companies to generate investment. 131. The representative of Jordan confirmed that upon accession any subsidy programmes with the exception of those noted in paragraph 125 of this Report would be administered in conformity with the Agreement on Subsidies and Countervailing Measures. All necessary information on such programmes would be notified upon accession to the Committee on Subsidies and Countervailing Measures in accordance with Article 25 of the Agreement. The Working Party took note of this commitment.
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Technical barriers to trade, sanitary and phytosanitary measures
(a) Standards and certification 132. The representative of Jordan said that the Jordan Institution for Standards and Metrology (JISM) was the official body for the preparation and publication of Jordanian Standards. JISM had been established in 1995 by virtue of the Standards and Metrology Law No. 15 for 1994, and was the legal and actual successor of the Jordanian Directorate of Standards (founded in 1972). The main tasks of JISM were to (i) prepare, approve, revise and amend Jordanian mandatory or voluntary standards and monitor their application; (ii) maintain a national system for metrology and supervise its implementation; (iii) grant quality marks and certificates of conformity; (iv) control, test and hallmark the approved fineness of precious metals and jewellery; (v) adopt and approve standards of other countries and of Arab, regional and international organizations, provided that such standards were issued in Arabic or English; and (vi) to cooperate and coordinate with Arab, regional and international institutions in the area of standardization and metrology. JISM was a participating member of the Arab Organization for Industrial Development and Mining (AIDMO), a corresponding member of the International Organization for Standardization (ISO), a corresponding member of the International Organization for Legal Metrology (OIML), and a contact point for the Codex Alimentarius Commission. The Jordan Quality Mark was a voluntary certification system, granted upon request. Products for which the quality mark was sought were tested for compliance with relevant Jordanian Standards. The programme covered foodstuff, feeds, chemicals, soaps, detergents, cosmetics, paints and varnishes, adhesives, pesticides, fertilizers, petroleum products, electrical and electronic appliances, batteries, cables, telecommunication equipment, construction materials and other consumable goods. JISM was updating the current Quality Mark System to comply with the requirements of ISO/IEC Guide 65. 133. Standards were elaborated in technical committees. JISM circulated draft standards by mail to interested parties such as the Chamber of Industry, the Chamber of Commerce, the Consumer Protection Association, research institutions and testing laboratories, and relevant ministries, and allowed a period of 60 days for comment (according to the draft instructions on Preparation of Jordanian Standards, to replace Instructions No. 4:1995). As of early 1998, JISM had begun publication of a quarterly newsletter (“Standards and Metrology News”) describing the status of ongoing work on standards. Interested parties could obtain copies of the standards work programme from the JISM Information Centre (the TBT Enquiry Point from the date of accession). Jordanian standards, titles, numbers or bibliographic information were published in Arabic and English in the Jordan Standards Catalogue. Jordan was working constantly on harmonising its standards with international standards.
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134. domestic and imported goods were required to meet national standards and technical regulations applied to protect the health and ensure the safety of consumers. The Ministry of Health was responsible for technical regulations regarding drugs, including vaccines and sera for human use and food, while technical regulations for veterinary medicines, sera, vaccines, pesticides, meat, fertilizer, animal feed, and seedlings fell under the responsibility of the Ministry of Agriculture. Inspections of food and agriculture products at the border were carried out by a committee comprising officials from JISM, the Ministry of Health, the Ministry of Agriculture and the customs department. Samples were tested at Ministry laboratories or other accredited laboratories to ensure they met the set standards before being released from customs. Jordan applied internationally recognized standards when these were available. He emphasized that only consignments containing products subject to Jordanian mandatory standards were tested. 135. asked whether Jordan had any automatic recognition procedures for imported products manifestly conform to accepted international standards where Jordanian standards did not exist, the representative of Jordan said that samples of imported products, for which there was a Jordanian mandatory standard, were subject to verification through laboratory testing in Jordan. Testing was conducted by laboratories accredited by JISM at the request of JISM. Certificate of conformity was not required. No verification procedures were applied on imported goods if Jordanian standards did not exist. Jordan had no standards for medicines or medical equipment; importers of such goods provided documentation indicating circulation of the imported medical equipment in the country of origin. Importers of medicines were required to register the imported product at the Ministry of Health (MOH). Registration was based on manufacturer’s specification and/or international standards (e.g. USP, BP, EP, etc.). Imported medicine was subject to laboratory analysis by MOH to ensure conformity with the information provided at the time of registration. No certification was required for importation of medicine or medical equipment. However, medicine containing materials of human origin required certification from the health authority that each donor be tested free of HIV (1,2), HBs Ag and Hbc. As for shelf-life requirements for drugs and vaccines, these were determined by the Ministry of Health case-by-case in accordance with the stability study submitted by the manufacturer of the product. 136. The representative of Jordan said that existing legislation and practices would need to be changed to comply with the WTO TBT Agreement in respect of the elaboration and implementation of standards and mandatory requirements, border inspections and the establishment of a TBT enquiry point. The current Standards and Metrology Law addressed only standards, and did not cover international guides and recommendations, although the Jordan Institute for Standards and Metrology used such guides and recommendations as reference in the preparation of its regulations. At present, JISM issued both voluntary and mandatory standards. The mandatory standards would need to be replaced by technical regulations based on the protection
192 WTO BISD 1999 Accession of health, safety and environmental aspects. Most current Jordanian standards were based on descriptive characteristics rather than performance. Article 11 of the Draft Law on Standards and Metrology stipulated that the Director General would appoint a technical committee to revise existing standards. Proposed drafts would be submitted to the Board for adoption as standards or technical regulations. Jordanian Standards were reviewed continuously for the need to be updated according to the policy of the Standardization Department. All standards published before 1995 were mandatory. As per November 1999, JISM had published more than 210 voluntary standards (of a total 1,320 existing standards) since the enactment of the Standards and Metrology Law No. 15 of 1994. The current number of mandatory standards was 1,110. The objective of JISM was to replace current mandatory standards with voluntary ones, or with mandatory technical regulations consistent with the provisions of the WTO TBT Agreement, and JISM would need extensive technical assistance from WTO Members and other sources to accomplish this goal as soon as possible. JISM was at present assisted by the German GTZ project in this regard, and had adopted the ZOPP methods for annual planning. 137. The representative of Jordan stated that Jordan’s Standardization Department was gradually reviewing the remaining 1,110 mandatory standards to replace them with voluntary standards or with technical regulations, consistent with Article 2 of the TBT Agreement. No less than one quarter of the remaining standards would be converted each year after accession, and Jordan intended to complete the process of conversion by 31 December 2003. The Working Party took note of this commitment. 138. inspection procedures at the border would need to be streamlined. Currently, each consignment was tested to ascertain compliance with Jordanian mandatory standards regardless of whether the product had already been subjected to any conformity assessment procedure. JISM had prepared a plan for product inspection to ensure that procedures would be simplified and no more restrictive than necessary, and shortening the time period for inspection, sampling and testing. According to this plan, JISM intended to (i) consolidate testing activities; (ii) reduce the time needed for border inspection by 30 per cent by the end of 2001. Customs centres would send samples taken directly to the testing laboratories, and samples taken at the border would be given priority by the testing laboratories; (iii) accept foreign certificates of conformity, if issued by bodies recognized or accredited by JISM; (iv) establish sampling procedures in accordance with international standards; (v) improve coordination between different inspection bodies in Jordan to avoid overlapping; and (vi) improve the capability of the inspection system in the Control Department of JISM by training of staff, acquisition of international references on acceptable inspection procedures, and computerization. The TBT inquiry point would be established as a division within the information centre at JISM. The inquiry point would collect all regulations affecting international trade from other government institutions, and a mechanism would need to be devised
WTO BISD 1999 193 Decisions and Reports to strengthen the communication channels between the inquiry point and these institutions. JISM had started work on a survey of governmental institutions to strengthen communication between the inquiry point and these institutions. In addition, JISM was preparing a web site for the Enquiry Point, providing access to the relevant government institutions for their contributions. Moreover, Article 21 of the draft Law on Standards and Metrology required all official bodies to respond within five days to requests from JISM for all necessary information concerning technical regulations, conformity assessment procedures and copies of such, thereby allowing JISM to respond to inquiries promptly. 139. The representative of Jordan said that Jordan was reviewing its current legal regime for conformity with the TBT Agreement. An overview of the existing regime and an action plan for implementation of the TBT Agreement were provided in document WT/ACC/JOR/22 (Attachments A and B). Law No.15 on Standards and Metrology would be replaced by a new draft Law on Standards and Metrology, to be adopted by Parliament during its Ordinary Session November 1999-February 2000, to address TBT and SPS requirements (except seed control). Jordan was ready to implement fully the TBT Agreement upon accession provided that technical assistance and support (including financial means) would be provided by WTO Members with regard to modernization of testing laboratories in Jordan, border inspection, sampling procedures as well as training of personnel. The Jordanian Institute of Standards and Metrology would act as TBT enquiry point. He added that Article 18 of the draft Law on Standards and Metrology, to be enacted by the end of 1999, provided for publication of a notice in JISM’s newsletter of all proposed technical regulations and conformity assessment procedures prior to adoption to permit reasonable time for comments to be considered before adoption of the final rule, as required in Article 2.9 of the TBT Agreement. He added that when adopting standards, Jordan would adhere to the Code of Good Practice (Annex 3 of the TBT Agreement), incorporated by reference in Article 11.10 of the draft Law on Standards and Metrology, which meant, in practice, that notice of a standard would be published at least 60 days prior to its planned enactment to allow interested parties opportunity to comment in JISM’s newsletter. Article 18.b of the same draft Law stipulated that all adopted technical regulations, conformity assessment procedures and standards be published promptly in the official gazette. Technical regulations, conformity assessment procedures and standards came into effect after their publication. 140. The representative of Jordan confirmed that Jordan would comply with all obligations under the WTO Agreement on Technical Barriers to Trade from the date of accession without recourse to any transition period. The Working Party took note of this commitment.
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(b) Sanitary and phytosanitary measures 141. The representative of Jordan said that the Ministries of Agriculture and Health maintained sanitary and phytosanitary technical regulations to ensure that locally-produced and imported foods, plants, plant parts and by-products, animals and animal by-products, agricultural chemicals, fertilizer, and veterinary medicine were safe and did not endanger human, animal or plant health and life, or the environment. In Jordan, samples were collected at local markets and tested for pesticide residue, animals were examined before slaughter, and carcasses were examined to determine their suitability for human consumption. All sanitary and phytosanitary regulations were published in the Official Gazette, and traders could consult this information at the Chambers of Commerce in Jordan. Jordan was a member of the Codex Alimentarius Commission, Prior Informed Consent (PIC), the International Office of Epizootics (OIE), the Food and Agriculture Organization (FAO), the World Health Organization (WHO) and the International Atomic Energy Agency (IAEA), and worked together with these organizations in establishing and applying sanitary and phytosanitary measures. Jordan was not a member of the International Plant Protection Convention, but adopted and implemented the standards of this organization. Jordan was a member of the European Plant Protection Organization and the Near East Plant Organization. 142. import activities were governed by the Agriculture Law No. 20 for 1973 and other relevant regulations and instructions issued by the Ministry of Agriculture and the Ministry of Health. A health certificate was required for each shipment. Imported goods not satisfying Jordan’s sanitary and phytosanitary requirements were re-exported or destroyed. In 1997, 65 consignments (out of 51,000 customs transactions) had been re-exported because they did not meet Jordanian requirements. The most frequent cause of non-compliance related to shelf-life requirements for foodstuffs. Consignments of live animals, frozen and chilled meat, poultry meat, hatching eggs, pesticides, seeds, seedlings and plants, animal fodder and organic fertilizers were subject to inspection or quarantine. Control measures applied in Jordan to control pests included the use of pesticides, soil fumigation with methyl bromide and soil solarization, if possible. 143. Concerning shelf-life requirements for foodstuffs, the representative of Jordan said that these were based on Jordan Standard 288/1994 “Shelf Life for Foodstuff” and Jordan Standard 401/1997 “Shelf Life for Infant and Children’s Foodstuff”, issued and administered by the Jordan Institution for Standards and Metrology. The standards had been prepared by specialised technical committees, taking into consideration the climatic and storage conditions in Jordan. The shelf- life requirements applied equally to imported and domestic goods. 144. a member observed that Jordan’s regulations on shelf-life did not conform with international norms and were inconsistent with the provisions of the SPS and TBT Agreements that require the use of sound science to establish such requirements.
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The food safety risk that could be prevented with mandatory shelf-life dates had not been specified, nor had Jordan demonstrated what impact non-fulfilment, i.e. the absence of a shelf-life date, would have. This member also maintained that the imposition of mandatory shelf-life terms on an arbitrary, across-the-board basis on numerous products was not an appropriate solution to the concerns expressed, and emphasized that it was in the interest of both the exporter and the importer to assure that there would be sufficient shelf-life remaining on imported products for them to be purchased and consumed within the optimum quality period. This member expressed the view that an arbitrary requirement for half the shelf-life, enforced by the Government, was not a useful way to address this concern. He suggested that mandatory shelf-life dating should be eliminated for “shelf-stable foods”, in the context of adopting the Ministerial Decrees that will implement the WTO TBT and SPS Agreements in Jordan, and that regulations and procedures be established in line with international norms for “highly perishable refrigerated” food products to gradually replace these requirements with a scientific regulatory framework, e.g., within one year. In reply, the representative of Jordan said that the new draft Law on Food did not contain any provision on half shelf-life requirements. The Draft Law on Food was expected to be enacted in December 1999. Once enacted, all articles in the Law on Public Health connected with food, including half-shelf life requirements, would become inapplicable, including Article 69 (1.b). 145. The representative of Jordan confirmed that Jordan would initiate immediately the process of examining its shelf-life standards (JS:401:1977 and JS 288:1994) in light of international scientific practices on shelf-stable food products to identify shelf-stable products currently appearing on the lists of these two standards. He further confirmed that Jordan would eliminate shelf-stable products from the coverage of these two standards by 30 June 2000. He added that Jordan would establish within one year regulations and procedures in line with international norms for “highly perishable refrigerated” food products to gradually replace remaining shelf life requirements on these products with a scientific regulatory framework by 31 December 2000. The Working Party took note of these commitments. 146. The representative of Jordan added that Jordan had conducted an assessment of its SPS legislation and determined that new laws would have to be enacted in order to fully conform to the SPS Agreements. Jordan had prepared a new draft Law on Agriculture (to address SPS plant and animal provisions) and a Draft Law on Food (covering SPS food aspects). The draft laws would bring Jordan’s foreign trade regime into full conformity with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. Jordan was ready to implement fully the SPS Agreement upon accession provided that technical assistance and support (including financial means) would be provided by WTO Members with regard to modernization of testing laboratories in Jordan, border inspection, sampling procedures as well as training of personnel. The Ministry of Agriculture would act as SPS enquiry point.
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147. a member sought information on Jordan’s plans to reform the activities of four separate bodies (the Ministry of Health, Ministry of Agriculture, JISM and the Greater Amman Municipal authorities) involved in the testing and/or sampling of frozen foodstuffs, which appeared to have had negative trade effects. This member also inquired about measures applied to imported meat, notably inspection requirements at the border supplemented by additional inspection within Jordan, which appeared to be more trade-restrictive than necessary. Moreover, Jordan required imported meat or meat from imported animals to be refrigerated separately from other meat and sold separately from domestically-produced meat, which, in the view of this member, was inconsistent with the provisions of Article III of GATT 1994. Jordan also maintained a prohibition on the use of powdered milk as an input in the production of UHT milk and yoghurt. This member requested the abolition of all remaining prohibitions on the use of powdered milk by industrial users of dairy products, as those measures were trade distorting and had no valid WTO justification, and a commitment from Jordan that guidelines or rules be developed in relation to the entry into Jordan of live animals, frozen meat, milk powder, and frozen butter to ensure full conformity with the requirements of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. 148. The representative of Jordan replied that the new Laws on Agriculture, Standards and Metrology, and Food Control, all to be enacted before the end of February 2000, defined clearly the relevant mandates for the Ministry of Agriculture, the Ministry of Health, and the Jordan Institute of Standards and Metrology. Jordan was evaluating the process of sampling, inspecting and testing of food to streamline and eliminate any redundancies observed with the assistance of the World Bank and USAID. The reform process would be completed by the end of June 2000, and by then the activities of all Jordanian bodies involved in the testing and/or sampling of frozen foodstuffs would be in conformity with all relevant provisions of the Agreement on the Application of Sanitary and Phytosanitary Measures, including those relating to Control, Inspection and Approval Procedures (Annex C). The refrigeration requirements for meat were applied to protect consumers against deceptive practices in the absence of legislation on consumer protection. 149. The representative of Jordan confirmed that, as from the date of accession, unnecessary inspections of imported meat and meat from imported animals would be eliminated, and national treatment would be accorded fully to such products as part of Jordan’s program for the development and adoption of guidelines and/ or rules for food inspection and testing procedures. The new Law on Agriculture would include provisions of Annex C of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. All instructions and testing procedures would be in accordance with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, in particular its Annex C. To address concerns over the lack of national treatment for and the unnecessary inspection of imported meat and meat from live animals, he confirmed that Jordan would make a particular
WTO BISD 1999 197 Decisions and Reports commitment to abide by the provisions of paragraphs 1(a), 1(e) and 1(g) of Annex C from the date of accession. Jordan would implement the least trade restrictive requirements possible to prevent deceptive practices vis-à-vis consumers of meat, taking into account the national treatment requirements of Article III of GATT 1994. All remaining prohibitions on the use of powdered milk by industrial users of dairy products would be abolished as soon as legislatively possible upon accession, and in any event no later than within 12 months from the date of accession. The Working Part took note of these commitments. 150. asked whether Jordan was considering working towards the concept of equivalence, the representative of Jordan said that Jordan accepted ISO procedures. His Government also intended to issue new regulations for the acceptance of sanitary and phytosanitary measures of other countries. The exporting countries would need to demonstrate that their measures achieved the same level of consumer health protection as in Jordan. Jordan was prepared to accept inspection certifications from other countries based on agreement. Jordan did not apply stricter sanitary and phytosanitary measures than set out by international standards organizations on any product. 151. The representative of Jordan confirmed that Jordan’s sanitary and phytosanitary standards system would be in compliance with WTO provisions under the Agreement on the Application of Sanitary and Phytosanitary Measures as of the date of accession to the WTO, and that Jordan would apply all measures of the Agreement on the Application of Sanitary and Phytosanitary Measures in a least trade distortive manner from the date of accession without recourse to any transition period. The representative of Jordan further confirmed that, without recourse to any transition period and in conformity with the SPS Agreement, no stricter rules than those laid out by international organizations such as OIE will be applied. The Working Party took note of this commitment.
Trade-Related Investment Measures (TRIMs) 152. The representative of Jordan said that Jordan did not maintain any measures inconsistent with the TRIMs Agreement. His Government applied the principle of national treatment and did not resort to performance requirements which could affect trade. 153. The representative of Jordan said that Jordan would not maintain any measures inconsistent with the TRIMs Agreement and would apply the TRIMs Agreement from the date of accession without recourse to any transition period. The Working Party took note of this commitment.
State trading entities 154. The representative of Jordan said that the government sector was gradually
198 WTO BISD 1999 Accession moving out of importing food products. The private sector could now import all products previously subject to government monopoly such as rice, sugar, wheat, barley, frozen meat and poultry, and his Government had thus far never refused to provide prior approval for goods where this was required. The Directorate of Internal Trade at the Ministry of Industry and Trade continued to import wheat and one brand of dried milk (Halibuna) in competition with the private sector. He noted that any private sector importer could import milk powder into Jordan. The Directorate of Internal Trade at the Ministry of Industry and Trade sold fodder products directly to farmers through its distribution outlets. 155. The Jordan Civil Consumers Corporation (JCCC) was an enterprise organized for the benefit of government employees. JCCC operated on a commercial basis and sold imported and Jordanian products at its outlets at prices slightly below the regular market prices. The Agricultural Marketing Organization (AMO) was an agricultural marketing board regulating trade in agricultural products with other Arab countries in accordance with bilateral trade agreements or trade protocols. In this regard, AMO issued recommendations to the customs department whether or not to exempt imports from customs duties in compliance with the agreements. AMO also monitored the quality of imports to ensure compliance with Jordanian quality standards. AMO did not engage in actual importation or exportation, and did not interfere regarding the prices of products imported or exported. AMO served as an information centre as it collected trade and price statistics and other relevant information. AMO conducted market studies; researched new export markets; assisted private sector participation at international trade fairs and exhibitions; published brochures, guidebooks and newsletters for producers, exporters and importers; and monitored the quality of fresh produce exported from Jordan. 156. asked about the activities of the Agricultural Marketing and Processing Company (AMPCO), the representative of Jordan said that this was a company in the process of being privatized. AMPCO owned and operated processing plants for tomatoes and citrus fruit, and marketed agricultural produce locally and internationally. The company had no exclusive trading rights. 157. importation and exportation of some products were reserved for particular enterprises in accordance with their laws. The products and companies involved are listed in Table 13. The enterprises could also benefit from tariff exemptions granted by the Council of Ministers upon special decision. All companies, except the tyre manufacturers, had been granted customs duty exemptions. The representative of Jordan added that the exclusive rights were provided as part of the concession packages and agreements with these companies, and that the exclusive rights would continue to be in effect for the duration of the concessions.
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Table 13: Exclusive rights to import or export
HS Code Product Enterprise Reason for restriction
41.01 Natural raw leather Jordan Tanning Co. The Law of the Company 41.02 41.03
27.09 Petroleum and derivatives, Jordan Petroleum Refinery The Law of the Company excluding mineral oils Company (JPRC)
73.11 Gas cylinders for house use JPRC The Law of the Company
25.23 Black cement Jordan Cement Factories Co. The Law of the Company
28.34 Ammonium Nitrate Jordan Phosphates Mining The Law of the Company and Co. (JPMC) because it is also used as input for explosives
25.10 Raw Phosphates JPMC The Law of the Company
36.01 Gun Powder, salt and JPMC The Law of the Company and 36.02 explosives for security reasons 36.03
40.12 Used automobile tires Tyre factories For safety and ecological reasons
158. Some members queried whether the enterprises mentioned had the right to restrict trade, in which case Jordan was requested to indicate how it would amend this practice to bring it into conformity with Article XI of the GATT. Jordan was requested to describe the special or exclusive privileges relating to importation and exportation by completing the State trading questionnaire for the Jordan Tanning Company, the Jordan Petroleum Refinery Company, the Jordan Cement Factories Company, the Jordan Phosphates Mining Company, the Fertilizers Company, the Arab Potash Company, and the Arab Company for Manufacturing White Cement. Some members sought confirmation that Jordan was prepared to notify firms with special and exclusive privileges as State trading enterprises within the meaning of Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII, and to observe the provisions of the WTO, including Article XVII of the GATT in their operation. 159. in reply, the representative of Jordan said that the enterprises listed in Table 13 traded on the basis of market demand and their own needs. The fact that these firms received tariff exemptions did not, in his view, make them State trading companies. Having reviewed Jordan’s State trading activities according to the definition provided under the Understanding on the Interpretation of Article XVII of the GATT 1994, Jordan had identified - in document WT/ACC/JOR/26 - six State
200 WTO BISD 1999 Accession trading entities, and provided a justification for not including two further activities (Table 14(a) and 14(b)).
Table 14(a): State trading entities identified by the Government of Jordan
Entity Name Nature of Exclusivity Legal Justification Duration
Jordan Cement Jordan Cement Factories has the Prime Minister Concession is for 50 Factories exclusive right to import cement Instruction dated years. It will expire and its by-products. 10 September 1951 and in 2001 Concession agreement dated 6 December 1951
Jordan Tanning JTCL has the exclusive rights to Law No. 9 of 1962 Concession is for 40 Company Co. import and export rawhides and years. It will expire Ltd. (JTCL) skins. JTCL also has exclusive 2002. rights to export tanned leather.
Jordan JPMC has exclusive mining rights Based on Law No. 12 of Exclusive right for Phosphate of phosphates for four different Natural Resources 1968 mining (and de facto Mines Co. Ltd. mines in Jordan. Mining Rights No.1 and export) of phosphate (JPMC) Hasa, Rusaifa, and Wadi Al- No.2 1968 is for 30 years. Abyad locations mining rights are Prime Minister Expiration date valid from 17 December 1968 to instructions dated is 1998 for Hasa, 1998. 29 May 1979 Rusaif, and Wadi Shaidiah location Mining rights (explosives Al-Abyad and 2017 are valid from November 1987 for Shaidiah. to 2017.
Mining rights are subject to re- Exclusive right negotiation and renewal once they for the import and expire. sale of explosive Although there are no legal materials is restrictions on any persons for indefinite according exporting phosphate, JPMC de to Prime Minister facto does not sell phosphate to Instructions of 1979. private traders for export purpose. JPMC also has the exclusive rights to import, store and sell explosive materials used for mining and quarrying purposes.
Jordan The term of concession grants the The concession Law The concession Petroleum company the exclusive right to No. 19 of 1958 was expires in 2008. Refinery Co. refine oil and sell in Jordan. The issued to approve the company has the exclusive right concession agreement to import oil and Hydrocarbon signed between the necessary to the local market. Jordanian Government and the Petroleum Refinery Company.
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Entity Name Nature of Exclusivity Legal Justification Duration
The Vegetable The company has the exclusive Agreement signed on Concession Oil Industries right to refine and produce 27 March 1956 agreement was Co. ltd. margarine of plant origin. granted in 1956 The company has the exclusive for thirty years and right to export margarine as extended for another per the concession agreement; fifteen years. The however this is not implemented concession will in practice expire in 2001.
The Ministry Exclusive rights to import Wheat Decision of Ministry of No time limit on of Industry and Bran for animal feed. Industry and Trade such rights Trade
Table 14(b): Entities that do not meet the definition of Article XVII of the GATT 1994 according to the Government of Jordan
Entity Name Justification
Agricultural Marketing AMO does not engage in any international trade activities. Organization (AMO)
Used tires Used tires may not be imported unless for the purpose of re-threading. Any company may import used tires for re-threading purpose if such company has re-threading facilities. There are no restrictions on establishing re-threading facilities in Jordan. Currently, there are eight companies engaged in this activity.
160. The representative of Jordan stated that his Government had identified the following six entities as State Trading companies: Jordan Cement Factories, Jordan Petroleum Refinery Co. Ltd., Jordan Tanning Co. Ltd., Jordan Phosphate Mines Co. Ltd., the Vegetable Oil Industries Co. Ltd., and the Ministry of Industry and Trade. His Government had identified the trading activities of the entities listed above as subject to the provisions of Article XVII of the GATT 1994, and is prepared to notify these firms as State trading enterprises within the meaning of Article XVII and the Understanding upon accession. 161. The representative of Jordan confirmed that after accession to the WTO, Jordan would observe WTO provisions, in particular, Article XVII of the GATT 1994, the WTO Understanding on that Article, and Article VIII of the GATS regarding State trading, with respect to the State-owned enterprises and other enterprises and entities with special or exclusive privileges identified in paragraphs 154-160 of this report, in particular abiding by the provisions for notification, non-discrimination, and the application of commercial considerations for trade transactions. The Working Party took note of these commitments.
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Free zones, special economic areas 162. The representative of Jordan said that four free zones were currently operating in Jordan. The Aqaba Free Zone, occupying an area close to one million square metres, served transit trade and goods imported through the port of Aqaba. The Zone was fully equipped with infrastructure, goods handling equipment, storage warehouses, paved open yards and cold-storage facilities. The Zarqa Free Zone covered an area of some 5.5 million square metres, serving industrial and commercial investment. The Sahab free zone covered an area of 62,000 square metres, and the Queen Alia International Airport Free Zone an area of 20,000 square metres. In addition, four livestock/private free zones operated in Jordan. 163. The free zones had been established to encourage local and foreign investment, introduction of new technology, transit trade and export oriented industries and were open to any local, Arab or foreign investor. Investors registered with the Companies Registrar. Industrial and services projects established in the free zones enjoyed benefits in the form of (i) profits exempt from income tax for a period of twelve years; (ii) the remuneration of non-Jordanian employees was exempt from income tax and social services tax; (iii) goods imported into the free zones were exempt from customs duties and any other taxes and fees; (iv) no licensing fees or real estate taxes were applied to the buildings constructed within the free zones; and (v) the capital invested and profits earned could be freely repatriated. Goods exported from the free zones, other than to Jordan, were also exempt from customs duties and any other taxes and fees. 164. The representative of Jordan confirmed that free zones or free economic zones in Jordan would be fully subject to the coverage of the commitments taken in the Protocol of Accession, and that Jordan would ensure enforcement of its WTO obligations in those zones, including those commitments derived from the TRIPS Agreement. He also confirmed that, when goods produced or imported into the zones under the special tax and tariff regime existing in these areas enter into the rest of Jordan, normal customs formalities, tariffs and taxes would be applied. The Working Party took note of this commitment.
Government procurement 165. The representative of Jordan said that government procurement practices were governed by several laws and regulations depending on the nature and purpose of the procurement. Two public departments – the Cooperation Organization and the National Aid Fund – enjoyed autonomy in their procurement according to their rules and regulations. Excluding these two bodies, the overall value of goods and services purchased by the public sector amounted to around JD 145 million annually. 166. Purchases of supplies for government departments were subject to
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Supplies Regulation No. 32 for 1993 and the Tenders Instructions No. (1) of 1994 issued by the Minister of Finance. The General Department of Supplies/Ministry of Finance were responsible for such procurement, which was normally conducted by tendering through the Central Tendering Committee. The committee comprised three permanent members from the General Supplies Department (GSD), the Ministry of Industry and Trade and the Ministry of Finance, and two members from the government department applying for the actual purchase. 167. Tender notices were published in local newspapers for three consecutive days. The announcement included the tender identification number, information on the requested product, the price and final date of sale of the tender documents, and the closing date and time for the submission of offers. Bids were evaluated according to criteria depending on the general and special conditions as well as the technical specifications set out in the tender documents. Several elements of the offer would be considered, including the price, running costs, the need for spare parts and maintenance, and the commercial capability and reputation of the bidder. Most procurement was conducted by open tender, but in some cases limited tendering would be applied, in which case a shortlist of qualified bidders would be drawn up on the basis of technical merits and experience. The Secretariat of the tenders committee in the General Supplies Department announced the winning bid on a special announcing board (at the GSD) or by any other method devised by the Director General, allowing four days for objections to be submitted by any participant. The tenders committee would consider the objections and issue its decision. A supplier which continued to dispute the award of a contract could seek redress through the national courts. Public works contracts were tendered through the Ministry of Public Works. 168. local products were given preference over imported products in government tenders. A 15 per cent preferential margin was accorded to Jordanian products provided the terms and conditions (including quality) were otherwise equal to imported products. Moreover, a contractor procuring imported products should buy these in the local market rather than by direct importation. Jordan did not have any trade agreements with other countries covering public procurement. Offset arrangements were infrequent and would be handled on a case-by-case basis. 169. The representative of Jordan said that work would be undertaken in November 1999 to table a request for observer status in the GPA Committee. 170. The representative of Jordan confirmed that, upon accession to the WTO, Jordan would initiate negotiations for membership in the Agreement on Government Procurement by tabling an entity offer. He also confirmed that, if the results of the negotiations were satisfactory to the interests of Jordan and the other members of the Agreement, Jordan would complete negotiations for membership in the Agreement within a year of accession. The Working Party took note of these commitments.
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Transit 171. The representative of Jordan said that Jordan applied the principles of the international agreement for road transportation known as TIR. Transit trade was subject to a toll equal to 0.3 per cent of the value of the goods in transit (maximum JD 200). Transit goods destined to free zones were exempt from the fee. Jordan also charged a diesel fee of JD 80 on transit trade. 172. Jordan also applied the principles of the Arab Transit Agreement signed on 14 March 1977. The Arab Transit Agreement was part of the Arab regional trade arrangements within the Arab League. The agreement was based on the same principles as the TIR, but set ceilings on the transit fees for Arab vehicles. 173. Some members noted that transit charges on Arab vehicles were lower than for other transporters, and asked how Jordan intended to end its discriminatory system of transit charges. The representative of Jordan acknowledged that the fee for goods passing through Jordan in accordance with the Arab Transit Agreement amounted to 0.3 per cent, as against 0.4 per cent for other goods, but did not consider the system discriminatory. In addition, trucks registered in countries which were not signatories to the Arab Transit Agreement were subject to some specific fees regardless of the nature of the goods they were carrying. Loaded trucks paid JD 75 for loads not exceeding 30 tons, JD 100 for loads between 30 and 40 tons, and JD 150 for loads exceeding 40 tons, as well as a fee of JD 15 for each one-body loaded truck and JD 25 for a loaded truck and trailer. Empty one-body trucks were subject to a fee of JD 5, while an empty truck and trailer paid JD 10. Jordan also charged JD 10 for guard and security escort.
Agricultural Policies
(a) Imports – description of the types of border protection maintained 174. The representative of Jordan provided detailed information on Jordan’s agriculture sector and agricultural policies in document WT/ACC/JOR/14. Concerning measures pertaining to agricultural imports, he said that import regulations had changed substantially in recent years in Jordan. The former Ministry of Supply had been the sole importer of essential foodstuffs until 1997. The private sector could now import almost any agricultural product against payment of prevailing import duties and taxes, and provided the imported product met local quality standards. A ban on imported mineral water - to support local production in a disadvantaged area – had been lifted in April 1999. 175. import licences were required for most goods, in particular those originating in, and imported from, countries and territories with which Jordan had concluded bilateral trade agreements and protocols on trade in agricultural goods (details on the agricultural agenda with Lebanon is provided in document WT/ACC/JOR/8,
WTO BISD 1999 205 Decisions and Reports details on the import arrangements with Oman, Yemen and Palestinian Authority are found in document WT/ACC/JOR/13). Prior approval from the Ministry of Agriculture was required for importation of live animals; fresh, chilled and frozen meat; and frozen animal semen – essentially to ensure that the imported animals and animal products met local health standards. The Ministry of Industry and Trade issued prior approvals for importation of rice, powder milk, wheat and wheat derivatives, sugar, barley, corn, and milk for manufacturing purposes. The Ministry of Industry and Trade monitored the local market to ensure adequate supply of essential foodstuffs, and would make purchases internationally if private sector imports proved insufficient. The prior approval system was a temporary measure which the Government intended to abolish once satisfied that the private sector would respond fully to price signals in the Jordanian market. 176. Some members noted import restrictions on live sheep which, in their view, would appear to be a violation of Article XI as well as Article III:4 (national treatment). The representative of Jordan replied that Jordan had recently changed its regulations regarding importation of live sheep. A previous import restriction based on weight had been changed to a requirement that the imported sheep should be maximum 1.5 years old, as older sheep were more prone to carry diseases, and because Jordan currently did not have the technical capacity to cope with the inspection of imported sheep. However, Jordan was modernizing its veterinary inspection services. A technical committee formed by representatives of the Ministry of Agriculture, the Jordan Institution for Standards and Metrology and the private sector was developing technical regulations for live sheep and carcasses. The restriction on importation of sheep older than 1.5 years would be eliminated as soon as these technical regulations had been adopted (expected in 1999). Jordan had eliminated a requirement that the share of imported ewes/yearlings could not exceed 10 per cent of the total number of imported sheep in November 1999. The Ministry of Agriculture conducted periodic and systematic inspections of domestic farms to control any disease. 177. The representative of Jordan confirmed that the age restriction on imported sheep, described in paragraph 176, would be eliminated no later than 30 April 2000. The Working Party took note of this commitment.
(b) Exports 178. exports of agricultural products were generally unrestricted except for some fruit and vegetables Jordan exported to Lebanon and Israel under bilateral agreements subject to maximum limits (quotas). Jordanian exporters were obliged to comply with standards and other requirements in the importing country, and export of, for example, horticultural products typically required a certificate of origin issued by the Chamber of Commerce and approved by the Agricultural Marketing Organization, a health certificate issued by the Plant Protection Department of the
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Ministry of Agriculture, and an EURI certificate for exports to the EU.
(c) Internal policies – i.e. description of, and the budgetary expenditure and any revenue foregone involved in each of the domestic support measures in place 179. The representative of Jordan said that although the direct contribution of agriculture in Jordan’s GDP was no more than around 5 per cent, it was estimated that about 25 to 30 per cent of economic activity was based on agriculture. The Government supported local producers through a combination of means including procurement of domestic production, and provision of inputs such as seeds, water, credit and livestock feed. The Government also financed agricultural extension services and scientific research to improve productivity in the agriculture sector. The principal institutions involved in producer support were the Ministry of Agriculture; the Ministry of Industry, Supply and Trade; the Jordan Cooperatives Association (JCA); the Jordan Valley Authority (JVA); and the Agricultural Credit Corporation (ACC). 180. in the past - to ensure production of basic foodstuffs and fodder - the former Ministry of Supply had purchased wheat, lentils, chickpeas and barley from farmers at prices announced during the planting season. The Government no longer purchased commodities from farmers but maintained strategic food reserves. At the end of May 1998, the Ministry of Supply had become a directorate within the Ministry of Industry and Trade. 181. The representative of Jordan said that the Agriculture Marketing Organization (AMO) was a government agency formed in 1987 to organize and develop the marketing of processed and unprocessed agricultural products. He stressed that the Agricultural Marketing Organization had never been involved in any commercial activity of importing, exporting, selling or distribution of any goods, and that the AMO had never been involved in any trading operation on behalf of Jordan’s Government. Concerning the importation and exportation of fresh fruits and vegetables, he noted that importation of fresh fruits and vegetables was allowed year round from all countries without any restrictions and subject to pre-set custom duty, except from countries with which Jordan had trade protocols. Imports from member countries of the Arab Free Trade Area (AFTA) were subject to Arab Calendars set by AFTA, allowing member countries to charge the full customs tariff on their imports of fresh produce from other member countries during time periods agreed upon in the above mentioned calendars. Imports from some Arab countries with whom Jordan had bilateral trade agreements were subject to the terms and conditions of the signed agreements and their attached calendars, which enabled imports to enjoy full exemption from custom duties during periods set in the calendars. The role of the AMO in this regard was to manage this process by issuing recommendations to the customs department on whether or not to exempt imports from customs duties in compliance with each of the mentioned agreements, and to
WTO BISD 1999 207 Decisions and Reports monitor the quality of imports and ensure that they complied with Jordanian quality requirements and standards. In addition, the AMO was responsible for conducting market studies in local and international markets; assisting and organizing private sector participation in international trade fairs and exhibitions; introducing new high value horticultural products; publishing guidebooks, brochures, and newsletters on production, marketing, handling, backing and exportation of horticultural products; and monitoring and controlling the quality of fresh produce in Jordan, including imported and exported products. The AMO maintained a complete database on local and international prices, and statistics on production, imports and exports of fresh horticultural products. 182. The Agricultural Marketing and Processing Company (AMPCO) had been established in 1987 to stimulate production and processing of tomatoes and citrus fruit. The Government currently owned 88 per cent of its shares, but the company was scheduled for full privatization by the end of 1999. AMPCO had paid guaranteed prices to tomato farmers in the early 1990s, but was now competing with two other processors for available supplies. The maximum price paid to tomato producers was now set relative to processing costs and international price trends for processed tomatoes. AMPCO had held exclusive rights to import four primary horticultural crops until 1995, when its monopoly rights had been removed. 183. The Jordan Cooperatives Association (JCA) provided farmers with supplies and inputs at outlets throughout the country. Its members could obtain inputs at prices slightly below ordinary market prices. One of JCA’s primary current functions was to distribute certified seeds to farmers at subsidized prices, but this practice would be abolished in 1999. The JCA no longer provided loans to members at less than market interest rates, but some of the loans granted before 1989 were still outstanding. The value of forgiven loans amounted to approximately JD 32,000 in 1997. 184. The Jordan Valley Authority (JVA), operating within the Ministry of Water and Irrigation, supplied water to agricultural producers and monitored development in the Jordan Valley to ensure that water use would not exceed the available supply. JVA had until recently charged horticultural producers for water below cost, but this subsidy had been virtually eliminated in 1997. Producers elsewhere in Jordan had no access to subsidized water. 185. The Agricultural Credit Corporation (ACC) provided soft loans (6 to 8.5 per cent annual interest) to farmers and agribusiness investors. ACC loans were either operational loans of 12 24 month duration or development loans to be repaid over a maximum of 15 years. In 1996, ACC had provided JD 8 million in operational loans, primarily as seasonal or short-term financing of production. ACC development loans were in strong demand, not just because of the discounted interest rates and lack of commissions and fees, but also because commercial banks generally refused to provide loans with maturity beyond three years. Farmers and
208 WTO BISD 1999 Accession processors had outstanding debts totalling JD 181 million at the end of 1997. The estimated interest subsidy amounted to JD 350,000 on operational loans and JD 330,000 on development loans in 1997. The agriculture sector also benefited from the subsidy component (maximum 1 percentage point) embodied in the rediscount and advance rates established by the Central Bank. 186. The representative of Jordan said that subsidies had been removed on wheat, sugar, rice and animal fodder. In line with this policy reform, the price of bread had been increased from 85 to 250 fils per kg, balanced by cash transfers to affected household meeting an income eligibility criterion. In addition, families with monthly income of less than JD 500 had received coupons from the Ministry of Industry and Trade to obtain rice, sugar, and condensed milk (Halibuna) at subsidized prices. The coupon system had been replaced by a cash subsidy programme for government employees at the end of 1997. Selected commodities – fresh cow milk, yoghurt, and imported fresh meat – were subject to ceiling prices established in negotiations between the Ministry of Industry and Trade and representatives of the private sector. 187. agricultural income was exempt from income tax. The exemption applied to domestic sales as well as to exports. 188. The representative of Jordan said that Jordan intended to stimulate agricultural growth and to improve resource management by directing and encouraging farmers towards growing agricultural products with high economic value. The Ministry of Agriculture had identified high-value agricultural products suitable to Jordan’s climatic and agronomic conditions, but not yet commonly produced in Jordan. The products were suggested to producers as alternatives to current crops by the extension and advisory services of the Ministry of Agriculture. In addition, the Agricultural Marketing Organisation featured the products at international trade fairs and supported experimental shipments of such products to potential export markets. He considered these measures “Green box” policies. 189. Members of the Working Party agreed that Jordan had AMS of JD 1,539,199 and Jordan agreed to reduce this by 13.3 per cent over seven years from the date of accession. Those Members also considered that for the purposes of Article 6.4 of the WTO Agriculture Agreement, Jordan was a developing country. Jordan did not grant any export subsidies to agricultural products. The representative of Jordan confirmed that Jordan would bind agricultural exports subsidies at zero in its goods schedule. The Working Party took note of this commitment. 190. Jordan’s commitments on agricultural tariffs, on domestic support and export subsidies for agricultural products are in the Schedule of Concessions and Commitments on Goods annexed to Jordan’s Protocol of Accession to the WTO.
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Trade-related Intellectual Property Rights (Trips)
1. General (a) Industrial property protection 191. The representative of Jordan said that his Government recognized the importance of introducing new laws and amending existing laws pertaining to intellectual property taking into consideration the international intellectual property conventions and the conditions for entry into the World Trade Organization. 192. Some members requested Jordan to submit to the Working Party a plan of action for implementation of the WTO TRIPS Agreement by the date of accession. In their view, Jordan should use the period of its accession negotiations to make the necessary changes in the area of intellectual property rights to meet WTO norms, and, as a consequence, Jordan was expected to be in conformity with the WTO TRIPS Agreement from the date of accession to the WTO, without recourse to any transitional period of non-application. The representative of Jordan replied that Jordan had launched a major reform of its intellectual property regime in 1999. The status of ongoing reforms (November 1999) is presented in Table 15.
Table 15: Status of legislation on intellectual property rights in Jordan (November 1999)
Law Status of Draft Expected approval date (Parliament)
Amendments to the Law on Enacted as a Law, entering into force Trademarks No. 33 of 1952 on 1 December 1999
Law on Patents Enacted as a Law, entering into force on 1 December 1999
Amendments to the Law on Enacted as a Law, entered into force Copyrights No. 22 of 1992 on 2 November 1999
Law on Industrial Design Referred to Parliament January 2000
Law on Integrated Circuits Referred to Parliament January 2000
Law on Geographical Referred to Parliament January 2000 Indications
Law on Trade Secrets and Referred to Parliament November 1999 Unfair Competition
Law on Plant Variety Referred to the Legislative Bureau at November 1999 Protection the Council of Ministers
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Law Status of Draft Expected approval date (Parliament)
Amendments to the Law on Enacted as a Law, entering into force Trademarks No. 33 of 1952 on 1 December 1999
Regulations/ Status of Draft Expected Adoption Date Instructions
Regulations on Border Being drafted; submission to the CM Upon enactment of Enforcement of Intellectual is expected in December 1999 Amendments to the property Rights Customs Law
Regulations on Copyrights Being drafted; submission to the CM January 2000 is expected in December 1999
Regulations on Integrated Being drafted; submission to the CM Upon enactment of the Law Circuits is expected in December 1999 on Integrated Circuits
(b) Responsible agencies for policy formulation and implementation 193. The representative of Jordan said that various institutions were responsible for the formulation and implementation of laws and regulations pertaining to intellectual property rights, including the Houses of Parliament, the Council of Ministers, the Ministry of Industry and Trade, the Ministry of Agriculture, the Ministry of Culture, the Courts of Law, the Customs Department, the National Library, as well as television and radio stations.
(c) Participation in international intellectual property agreements 194. The representative of Jordan said that Jordan was a member of the Paris Convention for the Protection of Industrial Property and the Arab Agreement for the Protection of Copyrights. Jordan’s accession to the Berne Convention (1886) for the Protection of Literary and Artistic Works had been approved by the Council of Ministers, and had come into force in July 1999. The Berne Convention superseded national laws after its publication. Jordan was considering the possibility to accede to the Madrid Agreement (1891) concerning the International Registration of Marks; the Protocol Relating to the Madrid Agreement concerning the International Registration of Marks (1989); the Nice Agreement (1957) concerning the International Classification of Goods and Services for the purposes of the Registration of Marks; the “PCT” Patent Cooperation Treaty (1970); and the Rome Convention (1961) for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations. His Government envisaged to accede to these agreements within 5 to 7 years. However, until the time of accession to these agreements, Jordan would comply with the requirements of the TRIPS Agreement upon accession to the WTO.
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(d) Application of national and MFN treatment to foreign nationals 195. The representative of Jordan said that the current industrial property laws provided foreign nationals with treatment equal to that of Jordanian nationals. Article 38 of the Copyright Protection Law would be amended to ensure that non- depositing of a copyright work at the Documentation Centre would not affect the author’s rights as stipulated in the Law. International conventions and reciprocity conditions would be taken into consideration with respect to the protection of works of foreign authors published abroad. The current Copyright Protection Law (Article 53) provided protection only for works published or reproduced in Jordan by Jordanian and foreign authors, and works of Jordanian authors published abroad. Protection of works published abroad would be accorded protection in the near future, as Jordan was joining the Berne Convention. The Amendment Copyright Law had been published on 1 October 1998. Its Article 45 stipulated that non-filing of a work of art would not affect the rights of the author provided for in the Law.
2. Substantive standards of protection, including procedures for the acquisition and maintenance of intellectual property rights
(a) Copyright protection 196. The representative of Jordan said that protection of copyright in Jordan was governed by the Copyright Protection Law No. 22 of 1992. Amendments to the Copyright Law had been enacted in October 1998 and September 1999. The Law (Article 3 (a) and (b)) protected original works of literature, art and science irrespective of type, importance or purpose, including works of art expressed in writing, sound, drawing photography and motion such as books, speeches, plays, musical compositions, films, applied art, three-dimensional works, and computer software. The Law (paragraph D of Article 3), as amended by the Copyright Amendment Law No. 14 of 1998, provided protection to compilations of data. The exclusive rights of the author were enumerated in Articles 8 and 9 of the Law and the terms of protection were laid down in Articles 30 to 32. Works of an author were protected for his lifetime and for fifty years after his death (or the death of the last surviving co-author); protection for 50 years from the date of publication was provided for cinematographic and television works, any work whose author or right holder was a legal entity, any work published for the first time after the death of its author, and anonymous and pseudonymous works; and computer programs, translated works, paintings, manuscripts, sculptures, drawings, pictures, architectural and geographical maps or topography, surface or three-dimensional maps were protected for 50 years after the death of the author. 197. article 17 of the Copyright Law permitted the use of published works without the authorization of the right holder for educational, vocational training, cultural or religious purposes on certain conditions. The representative of Jordan considered this provision to be in full conformity with Article 10(2) and (3) of the
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Berne Convention. Regarding compulsory licensing, he said that Jordan’s rules concerning the granting of licences for translation or copying had been amended to be compatible with the regulations of the Annex to the Berne Convention relating to developing countries. Article 11 of the amended Copyright Protection Law allowed any person, upon obtaining a licence from the Ministry of Culture, to translate a work into Arabic, provided three years had lapsed since the date of first publication. 198. The Copyright Amendment Law No.14 had been enacted in October 1998 to ensure compliance with the TRIPS Agreement. Changes had been required to meet the obligations with respect to compilations of data (Article 10 of the TRIPS Agreement); terms of protection (Article 12); limitations and exceptions (Article 13); protection of performers, producers of phonograms and broadcasting organizations (Article 14); and enforcement (Articles 41 to 61). Rental rights were provided according to Article 3(b) and 9 of the Copyright Protection Law, but the Law would be amended to give all producers of sound recordings the right to allow or prohibit direct and indirect copying of their sound recordings, or rental of the original copies of recordings. Jordan would also provide retroactive protection for sound recordings in accordance with Article 14 of the TRIPS Agreement and Article 18 of the Berne Convention. 199. Some members requested, with respect to protection of copyrights, that Jordan clarify through regulations the meaning of Article 27 of the Law on the Protection of Copyright (1992), as amended by Article 7 of the Law Amending the Copyright Protection Law (1999), and its intention to apply this provision in very narrow circumstances. The representative of Jordan stated that the meaning of the referenced provision would be clarified in regulations that will provide that the authority in Article 27 applies only in the situation in which the author of a work is deceased and the work has never been published in the author’s lifetime. In such circumstances, the Minister shall first seek the permission of the author’s heirs or successors to publish the work, and if such permission is not granted within six months, the Minister shall have the right to publish only the work’s substance. 200. Some members also requested clarification regarding the meaning of the phrase “for financial gain” in Article 9 of the Law on the Protection of Copyright (1992), and, in particular, whether Jordan intended to limit the author’s exclusive rights in this manner, given that doing so would be inconsistent with the Berne Convention and TRIPS Agreement. The representative of Jordan replied that no such limitation was intended. Regulations under this law would be issued to clarify the meaning of the phrase, and would provide that the term “for financial gain” in Article 9 would not preclude the ability of the author or right holder from engaging in, authorizing or prohibiting any non-commercial exploitation of his work; except for those non-commercial exploitations explicitly permitted by the law without the authorization of the author or right holder, provided that such exploitations were limited to certain special cases, and provided that such exploitations did not conflict
WTO BISD 1999 213 Decisions and Reports with a normal exploitation of the work and did not unreasonably prejudice the legitimate interests of the right holder. (b) Trademarks, including service marks 201. The representative of Jordan said that protection was afforded under the Trademarks Law No. 33 of 1952, effective since 1 July 1952. Jordan followed the international classification of goods according to the Nice Agreement, and the Trademarks Law did not provide protection of service marks in classes 35 to 42 of the Nice Agreement. Separate application should be filed with respect to each class of goods. 202. The Jordanian authorities could refuse registration of a mark on grounds outlined in Article 8 of the Trademarks Law. Applications accepted by the Trademark Registrar were published in the Official Gazette, allowing a three-month period for filing of opposition by any interested party. All decisions of the Trademark Registrar could be appealed to the Higher Court of Justice. A published trademark was registered, and the certificate of registration was issued, in the absence of opposition. A registered trademark was valid for 7 years from the date of filing of the application, and could be renewed indefinitely for periods of 14 years (the registration periods would be changed to 10 years in the amended Trademarks Law). Proof of use was not a prerequisite for renewal of a registered trademark, and Jordanian law did not recognize the non-use of a trademark due to special circumstances in trade as valid grounds for cancellation due to non-use. Among the justifications for non-use of a trademark, he mentioned commercial circumstances (such as recession), and special commercial circumstances including force majeure due to war, floods, Law of God, or Law or action of Government. Any person, including the owner of an unregistered trademark, had the right to object to the initial request for registration within three months of its publication in the Official Gazette, could demand cancellation of the mark registration, but could not file a civil court case demanding compensation for damages and losses. 203. The current law did not allow the registration of identical or similar trademarks for the same goods or any other protected related goods. No provision in Jordanian law prohibited the licensing of trademarks. The recordation of an assignment was mandatory according to the law. Concerning protection of well- known marks, the representative of Jordan said that Article 8, paragraph 6 of the 1952 Trademark Law had been used in courts to protect well-known marks. Article 25 of the Trademark Law provided for invalidation of trademarks registered in contradiction of Articles 6, 7 and 8 of the Trademark Law. Well-known marks for goods and services could not be registered in Jordan except in the name of the legitimate proprietor. 204. The representative of Jordan said that the existing Trademarks Law had been amended to comply with obligations under the TRIPS Agreement in September
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1999. The changes included introduction of protection for service marks, well- known marks and collective trademarks; extension of the grace period for non-use of a trade mark from 2 to 3 years; introduction of punishment for infringement of well-known marks; and allowing assignment of a trademark with or without good will.
(c) Geographical indications, including appellations of origin 205. The representative of Jordan said that Jordan had no specific legislation covering the subject yet. Geographical names were protectable in accordance with Article 8 (paragraphs 6 and 7) of the Trademarks Law, and this provision had been used in courts to protect geographical indications. Jordan had prepared a draft law to protect geographical indications. The draft law had been submitted to Parliament in November 1999. In his view, the draft law complied with the requirements of the TRIPS Agreement.
(d) Industrial designs 206. The representative of Jordan said that industrial designs were protected under the Patents Designs Law No. 22 of 1953, effective since 17 February 1953, and the Patents and Designs Order No. 1 of 1953. Industrial designs were registered with the Patents and Industrial Design Office at the Ministry of Industry and Trade. An industrial design was not subject to novelty examination for registration purposes, but the industrial design registrar would determine whether the design had a certain degree of novelty and quality, and was useful with distinguished design and arrangement. Designs could be registered under 15 classes, based on the materials the goods were made from, under the Patents Designs Law. A design could be registered for more than one class, but a separate application was required for each class. Textile designs were protected under Jordanian legislation. 207. A design registration was valid for five years as of the date of filing the application, and could be renewed twice, each time for a period of five years. Rejections by the Registrar could be appealed to the High Court of Justice within one month. Any infringement or non-authorized use of a registered design was punishable under the current design law. The Patents Designs Law contained no provision for compulsory working or licensing. 208. The draft Industrial Design Law had been referred to Parliament in November 1999.
(e) Patents 209. The representative of Jordan said that patents were granted under the Patents Designs Law No. 22 of 1953 and the Patents and Designs Order No. 1 of 1953. Once filed, the patent application was examined with respect to compliance
WTO BISD 1999 215 Decisions and Reports with the formalities and patentability provided for under the Patents Designs Law. Jordan’s Patent Office could stipulate any amendment necessary to bring the application into conformity with the Law. Formal examination was conducted only on patents belonging to Jordanians and those filed for the first time in Jordan. There were no examiners at the Patent Office. In all, 1,935 patents had been issued in Jordan by the end of January 1997. Foreign-owned patents had mainly been issued for pharmaceuticals, chemicals, solar energy, construction materials, machinery and mechanics, while patents issued to Jordanian nationals were mostly related to public safety, solar energy, electrical equipment, chemicals and mining. 210. The patent owner’s rights were set out in Article 4 of the Law, and there were no restrictions on the owner’s rights to assign, transfer, or licence rights under a patent except for patents of military significance. However, Jordan required the working of patents in Jordan, although the current law contained no definition of “working of patents”. A patent would be subject to compulsory licensing under the provisions of the Law if the owner of a patented invention did not satisfy the working requirement within three years of the date of granting the patent. A decision to revoke a patent could be reviewed by the High Court of Justice. Infringements of the right of a patentee were punishable under the provisions of the current Patents Designs Law. 211. The representative of Jordan said that the existing patent legislation would need to be modified in view of Article 31 of the TRIPS Agreement to put more stringent conditions on the use of a patented invention without the authorization of the right holder. The new Law adopted TRIPS criteria for compulsory licensing. Existing legislation also did not provide the owner of a patent the exclusive right to prevent a third party from making, offering for sale, selling or importing a product or the process resulting in that product without his consent as required under Article 28:1(a) and (b) of the TRIPS Agreement. The patent legislation would also be revised to provide for a term of protection of 20 years from the date of filing, as against 16 years under present legislation. Moreover, the Patents Law No. 8 of 1986 limited the patentability of chemical products, and would be amended to extend patent protection to pharmaceuticals and agricultural chemical products. He added that the new Patent Law provided protection to patents in respect of pharmaceutical products, but entrusted Cabinet with the authority to implement these provisions. Article 36/E/2 stated that “The provisions of paragraphs(C) and (D) of this Article shall come into force one month after the issuance of a decision to the effect by Cabinet during a period which does not exceed three years from the date of Jordan’s accession to the World Trade Organization.” 212. Some members requested that Jordan clarify whether use of a patent without the authorization of the right holder could be authorized to permit the exploitation of a patent which could not be exploited without infringing another patent, and, if such use could be authorized, to explain the consistency of the Jordanian Patent Law
216 WTO BISD 1999 Accession with Article 31(1) of the TRIPS Agreement. The representative of Jordan replied that the Patent Law of 1999 provided no authority to the Government to authorize the use of a patent without the authorization of the right holder for the purpose of exploiting a patent which could not be exploited without infringing another patent. He added that, for the sake of transparency, this clarification will also be reflected in any implementing regulations issued under the Patent Law. 213. Some members also requested that Jordan clarify when the Cabinet would issue the decision referenced in Article 36(E) of the Patent Law (1999) to ensure that the provisions of Article 36(C), specifically, the availability of product patent protection for “chemicals related to medications, or pharmaceutical or food final products,” should come into effect. In reply, the representative of Jordan confirmed that the necessary steps would be taken by the Cabinet to ensure that the provisions of Article 36(C) would come into force no later than 2 April 2000, and that product patent protection for chemicals related to medications, and pharmaceutical and food products, would be available from that date. 214. Some members also requested Jordan to clarify how it would ensure that, before Jordanian regulatory authorities approve the marketing of a pharmaceutical or agricultural chemical product, those authorities would coordinate with the Patent Office to ensure that such marketing approvals would not conflict or interfere with the enjoyment of patents on that product. The representative of Jordan replied that this question would be clarified through a Cabinet decision issued prior to Jordan’s accession, which would require that, prior to issuance of marketing approval of any pharmaceutical and agricultural chemical products, the relevant Ministries in Jordan must determine the existence of a patent covering a product for which an application for marketing approval had been filed by a party other than the patentee, and must not approve such application for marketing approval until the date of the expiration of such patent. 215. Some members also requested that Jordan clarify the meaning of the term “unfair commercial use” in its draft Unfair Competition Law to ensure protection of undisclosed test data submitted to the government as a condition for obtaining marketing approval of pharmaceutical and agricultural chemical products utilizing new chemical entities, as required by TRIPS Article 39.3. The representative of Jordan replied that Jordan would amend its draft Unfair Competition Law as follows: “Jordan will protect against unfair commercial use of undisclosed test or other data submitted in support of applications for marketing approval of pharmaceutical or of agricultural chemical products which utilize new chemical entities, by providing that no person other than the person that submitted such data may, without the permission of the latter person, rely on such data in support of an application for product approval for a period of at least five years from the date on which Jordan granted marketing approval to the person that produced the data.” The representative of Jordan added that this amendment to the Unfair Competition
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Law would be applicable to any application for marketing approval pending on or filed after the date of enactment of that law. 216. The representative of Jordan said that the draft Patent Law (DPL) satisfied the requirements of Article 27 of the TRIPS Agreement as its Article 6 provided protection for inventions which were new, involved an inventive step, and were capable of industrial application. Article 30 of DPL stated expressly that pharmaceutical and chemical final products would be patentable. The rights of the patent owner were regulated under Article 21 of DPL and allowed him/her to prevent third parties from exploiting, commercially using, selling, offering to sell, or importing products or - in the case of a patented process - to prevent third parties from using without authorisation the process, selling, offering to sell, or importing a product produced by the process, as well as the right to dispose of the patent inter vivos, in succession, or to licence the patent. 217. Concerning the filing of patent applications containing claims for medical drugs, pharmaceutical compositions and food products, a member noted that Article 70.8 of the TRIPS Agreement stipulates that Members shall provide a means by which applications for patents for such inventions can be filed as from the date of entry into force of the WTO Agreement. In reply, the representative of Jordan said that the filing of patent applications containing claims for medical drugs, pharmaceutical compositions and food products would be accepted as from the date of entry into force of the Law (Mail Box Requirement), i.e. one month after its publication in the Official Gazette. 218. Some members requested Jordan to clarify whether importation of a patented product would qualify as exploitation and use of a patent within the meaning of the second sub-paragraph of Article 22 of the Patent Law (1999). The representative of Jordan replied that importation of a patented product would be considered exploitation and use of the patent, such that the situation would not satisfy the criteria of Article 22, second sub-paragraph. He added that, for the sake of transparency, this clarification would also be reflected in any implementing regulations issued under the Patent Law. In case WTO Members in the future should adopt an interpretation of the TRIPS Agreement pursuant to Article IX of the Agreement Establishing the WTO contradicting the aforementioned, Jordan reserved the right to abide by this interpretation of the TRIPS Agreement. 219. Some members also requested that Jordan clarify the meaning of the condition in Article 37 of the Patent Law concerning “if the importation was legal”, and to clarify whether the situation involving a breach of contract would render such importation illegal, and whether administrative procedures and regulations were available to patent owners to assist in the control of unauthorized importation of patented products. The representative of Jordan replied that in situations in which there had been a breach of a contract with respect to imported products, such products would not be considered to be legally imported within the meaning of
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Article 37 and their importation would be prohibited. He noted, however, that the patent holder was required to notify the appropriate Jordanian customs authorities of the identity of parties authorized to import the patented product into Jordan, in which case measures would be available to prevent the entry into the Jordanian market of such unauthorized imports. He added that, for the sake of transparency, this clarification would also be reflected in implementing regulations issued under the draft Customs Law. In case WTO Members in the future should adopt an interpretation of the TRIPS Agreement pursuant to Article IX of the Agreement Establishing the WTO contradicting the aforementioned, Jordan reserved the right to abide by this interpretation of the TRIPS Agreement.
(f) Plant variety protection 220. The representative of Jordan said that Jordan had no existing legislation covering the subject. A draft New Plants Variety Law had been referred to the Legislative Bureau at the Council of Ministers in November 1999.
(g) Layout designs of integrated circuits 221. The representative of Jordan said that Jordan had referred the Layout Designs Draft Law, which covered Articles 35-38 of the TRIPS Agreement, to Parliament in November 1999.
(h) Requirements on undisclosed information, including trade secrets and test data 222. The representative of Jordan said that Jordan had no specific legislation covering the subject. However, the Jordan Civil Code of 1976 provided protection for trade secrets in employment contracts. Jordanian legislation also allowed compensation for damages and losses if the owner of a trade secret could prove that damage had been inflicted on him. He considered existing legislation fulfilled the requirements of Article 10bis of the Paris Convention, incorporated by reference in Article 39 of the TRIPS Agreement. 223. Asked specifically about implementation of Article 39.3 of the TRIPS Agreement, which provides for a special protection regime for data submitted for registration of new pharmaceutical and agrochemical products, the representative of Jordan said that Article 39.3 of the TRIPS Agreement would be implemented through the Trade Secrets and Unfair Competition Draft Law, which had been referred to Parliament in November 1999.
3. Measures to control abuse of intellectual property rights 224. The representative of Jordan said that the Copyright Law No. 22 of 1992 included provisions (Articles 42, 46, 47 and 51) on the control of abuse of
WTO BISD 1999 219 Decisions and Reports copyright. Article 36 of the draft amended copyright law would give copyright office staff in the Department of the National Library the status of judiciary officers in implementing the provisions of the Law. Article 22/3 of the Patents Designs Law stipulated the conditions under which the owner of a patent could be ordered by a court of law to grant a licence for use of his patent. Regulations to control abuse also existed under the Trademarks Law and the Patents Designs Law. The amended trademarks law would address the issue of contractual licensing of trademarks.
4. Enforcement
(a) Civil judicial procedures and remedies 225. The representative of Jordan said that the Jordanian Civil Code, the Code of Civil Procedure, the Merchandise Law, and the Trademark Law contained provisions relating to civil judicial procedures and remedies. A detailed comparison of Jordanian legislation with Articles 42-48 of the TRIPS Agreement was provided in document WT/ACC/JOR/18 (pp.66-69). Damages for injury in infringement cases could be claimed with reference to Articles 256 and 257 of the Jordan Civil Code.
(b) Provisional measures 226. The representative of Jordan said that procedures invoked in accordance with the Jordanian Code of Civil Procedure (Articles 32 and 115) corresponded to the conditions, effects, and requirements mentioned in Article 50 of the TRIPS Agreement. His Government was taking steps to ensure systematic applicability of these provisions to intellectual property rights.
(c) Administrative procedures and remedies 227. The representative of Jordan said that no administrative procedures and remedies were available at present.
(d) Special border measures 228. The representative of Jordan said that the 1998 Customs Law contained provisions providing for the prohibition of importation of goods contradicting the provisions of intellectual property laws. The copyright law, trademark law and draft patent law contained provisions regarding the prohibition of importation of infringing goods. However, customs control and enforcement of intellectual property laws needed further elaboration, and his Government was currently revising these provisions. The Cabinet of Ministers was expected to approve new regulations on border enforcement of intellectual property rights upon enactment of Amendments to the Customs Law.
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(e) Criminal procedures 229. The representative of Jordan said that Jordanian legislation contained no special procedures beyond those laid down in the Trademarks Law and the Merchandise (Commodities) Marks Law No. 19 of 1953. The actions considered unlawful and the penalties for trademark infringement were defined in Article 38 of the Trademarks Law. Violations were punishable by imprisonment ranging from three months to one year and/or a fine ranging from JD 100 to JD 3,000. With respect to patent violations, any person imitating or using a patent without the permission of the patent holder, or giving false indication of a patented article, would be liable to imprisonment ranging from three months to one year and payment of a fine ranging from JD 100 to JD 3,000 according to the new draft amended patent law. 230. The representative of Jordan stated that Jordan would apply fully all the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights from the date of accession to the WTO, without recourse to any transitional period. The Working Party took note of this commitment.
Policies affecting trade in services 231. The representative of Jordan said that trade in services was regulated under various laws and regulations, the most important of which were the Investment Promotion Law No. 16 for 1995, the Companies Law No. 1 for 1989, the Foreign Investment Regulation No. 39 for 1997, the Central Bank Law No. 19 for 1979, the Foreign Exchange Law No. 95 for 1966, the Banks’ Law No. 24 for 1971, the Money Exchange Dealings Law No. 37 for 1992, the Labour Law No. 37 for 1988, and the Residency and Foreigners Affairs Law No. 5 for 1991. 232. The banking system in Jordan consisted mainly of the Central Bank of Jordan (CBJ), banks licensed by the CBJ, and specialized credit institutions. The licensed banks comprised fourteen commercial banks (including five branches of foreign banks), five private investment banks, and two Islamic banks. In addition, Jordan had five specialized credit institutions. There were no numerical limitations on the establishment of branches of foreign banks. Under the current banking law, the minimum capital of a licensed bank should not be less than JD 5 million. This minimum capital requirement had been raised by CBJ to JD 20 million for national banks. In the meantime, foreign banks were being urged to increase their capital to JD 10 million. In practice, no limitations were imposed on licensed banks regarding the number or total value of their operations. The CBJ had drafted a new banking law consistent with international banking standards. 233. insurance services were regulated by the Insurance Law No. 30 for 1984 and its amendments on the control of insurance activities, and Regulation No. 33 of 1995 regarding insurance companies. Insurance companies were supervised by the Office of the Controller of Insurance in the Ministry of Industry and Trade. Jordan
WTO BISD 1999 221 Decisions and Reports operated its insurance supervisory system in accordance with GATS commitments, including Article VI and the obligations of the Financial Services Annex. In 1998, 27 insurance companies - with a total capital of JD 65.5 million - operated in Jordan. The minimum capital for a Jordanian (domestically constituted) insurance company was JD 2 million, or JD 4 million for a branch of a foreign company or its accredited agent. The capital requirement for a Jordanian (domestically constituted) reinsurance company was minimum JD 20 million. The limitation that non-Jordanian investors could own up to 50 per cent of the capital of an insurance company was being removed in accordance with scheduled commitments. All insurance companies registered in Jordan were required to be member of a Federation. Before commencing operations, an insurance company was required to deposit with a commercial bank an amount to protect the holders of insurance policies against any default on its part. 234. Concerning telecommunication services, the representative of Jordan said that the sector was regulated by the Telecommunications Law No. 13 for 1995. The sector was in the process of restructuring. An independent Telecommunications Regulatory Commission had been established, while policy formulation and development was carried out by the Policy Department within the Ministry of Posts and Telecommunications. The national operator – the Jordan Telecommunication Company (JTC) had been transformed into a State-owned company as a first step towards privatization. The JTC held a monopoly on the provision of basic telephone services, while licences had been issued to private suppliers of cellular mobile telephone, data, paging and pay-phone services. 235. Tourism activity was essentially private-sector oriented. In the past, the Government had owned a substantial stake in the Jordan Hotels and Tourism Company, but the shares had been sold to a private company. The sector was expanding rapidly, and new hotels were built with private Jordanian and foreign capital. Tourist bus transportation had been a monopoly held by a private company until 1994, but this sector was now open to other service providers. 236. The representative of Jordan said that Arab economic agreements contained some provisions on facilitating the movement of workers among the countries. The Agreement on Facilitating and Developing Commercial Exchange between Arab States (AFTA) aimed at providing special facilitation to services related to commercial exchange between member states. Article 18 of the Agreement referred to transport services, stating that members should cooperate in facilitating transportation between each other, and transit trade of Arab goods among member states. 237. Jordan’s Schedule of Specific Commitments on Services is annexed to its draft Protocol of Accession reproduced in the Appendix to this Report (see paragraph 249 below). This Schedule of Specific Commitments on Services contains the legally binding market access commitments of Jordan in respect of services.
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Transparency
Publication of information on trade 238. The representative of Jordan said that the Constitution of Jordan provided that laws should be published in the Official Gazette. According to provision No. 93 (ii) of the Constitution, a law came into force after its promulgation by the King, thirty days from the date of publication in the Official Gazette, unless the law specifically stated another date of entry into force. The date of entry into force was stipulated in the first article of each law. 239. The representative of Jordan said that from the date of accession all laws, regulations, decrees, judicial decisions and administrative rulings of general application related to trade would be published in a manner that fulfils the WTO requirements. As such, no law or regulation related to international trade would become effective prior to such publication in the official Gazette. He further stated that all laws which were amended to comply with the WTO Agreements contain provisions which require such publication. Decrees which affect international trade will be published either in the Official Gazette or in the bulletin of Chamber of Industry and Commerce. Final judicial judgements of the highest courts will be published in the Journal of Jordanian Bar Association. Jordan’s Constitution and other laws currently in place or listed in document WT/ACC/JOR/32 as slated for near-term enactment would implement fully Article X of the GATT 1994 and the other transparency requirements in WTO Agreements requiring notification and publication.
Notifications 240. The representative of Jordan said that, at the latest within six months of the entry into force of the Protocol of Accession, Jordan would submit all initial notifications required by any Agreement constituting part of the WTO Agreement. Some notifications, as provided for in WT/ACC/JOR/31, will be made immediately after accession. Any regulations subsequently enacted by Jordan which gave effect to the laws enacted to implement any Agreement constituting part of the WTO Agreement would also conform to the requirements of that Agreement. The Working Party took note of these commitments.
Trade agreements 241. The representative of Jordan said that Jordan was a member of several multilateral economic organizations which aimed at promoting trade and economic cooperation among its members, including the International Monetary Fund, the International Bank for Reconstruction and Development, the Multilateral Investment Guarantee Agency, the World Intellectual Property Organization and the International Labour Organization. Among the regional institutions, Jordan was a
WTO BISD 1999 223 Decisions and Reports member of the Arab Monetary Fund, the Islamic Development Bank, the Arab Fund for Economic and Social Development, and the Arab Council for Economic Unity. 242. Jordan had concluded bilateral trade agreements with many countries (listed in Annex 7 of document WT/ACC/JOR/3). These agreements were generally based on the MFN principle, although some agreements with Arab countries included trade preferences. Preferential treatment was accorded to specific goods included in protocols annexed to these agreements. However, Jordan had terminated all trade protocols, except with Lebanon, in 1995. The representative of Jordan said that the bilateral agreements did not include countertrade and barter arrangements. In the past, trade with Sudan had been subject to countertrade and barter, but these arrangements had not been renewed. The trade agreement with Iraq essentially provided Iraqi oil in exchange for Jordanian exports. Previously, the agreement had a credit arrangement component, but this was no longer the case (since 1997). Jordan had concluded bilateral investment promotion and protection agreements with Germany, France, Turkey, Switzerland, Malaysia, Romania, United Kingdom, Tunisia, Yemen, Egypt, Italy, Algeria, Indonesia, the United States, the Czech Republic, Poland, the Netherlands and Morocco. 243. Jordan was a member of the Arab Common Market Agreement (ACM) together with Egypt, Iraq, Mauritania, Libya, Syria and Yemen. Jordan was also a member of the Agreement for Facilitating and Developing Trade Exchange among Arab States. Members of the Agreement – Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen – exempted various products from customs duties and taxes, including agricultural and livestock products; raw materials; goods and products with at least 40 per cent value added in the exporting country (or minimum 20 per cent value added if all inputs were imported from Arab countries); and goods and products produced by joint Arab enterprises. Further products could be added to the preferential arrangement (the current product coverage is provided in document WT/ACC/JOR/8 pp.75-76). The Agreement also eliminated all non-tariff measures (quotas, bans and other quantitative restrictions); however, the agreement had not functioned as envisaged. In June 1996, the Arab League/Economic and Social Council had decided to replace the Agreement with a new free-trade area agreement. Jordan signed the Arab Free Trade Area Agreement (AFTA) on 1 January 1998, activated in March 1998, and implemented the first round of tariff cuts on that date, but on a reciprocal basis, i.e. the reductions were only effective for other Arab League members implementing the same reductions. Tariffs between member countries would be eliminated over a ten-year period. Pursuant to full implementation of the Agreement, Jordan would eliminate import duties on approximately 94 per cent of its (six digit) tariff lines, and AFTA would cover about 21 per cent of Jordan’s trade. The AFTA Agreement itself did not include provisions on the application of non-tariff measures, but the AFTA implementation programme prohibited the use of non-tariff measures such as quantitative restrictions and import licensing for non-
224 WTO BISD 1999 Accession exempt and non-prohibited products. Although the implementation programme did not cover non-tariff measures applied to prohibited and exempted products, Jordan did not intend to use non-tariff measures except where non-tariff measures were applied by other Parties to the agreement (reciprocal treatment). The AFTA Agreement did not cover services. 244. Jordan had concluded an agreement with Egypt to create a free-trade area among them by 2005. Customs duties and other equivalent taxes were reduced by 10 per cent annually. Some 48 products, representing 1,450 tariff lines at the six- digit level, were temporarily excluded from the agreement. Agricultural products also benefited from the tariff reductions, except for certain fruit and vegetables which were subject to seasonal restrictions. The agreement was not yet effective as Egypt had not ratified the agreement. Jordan had signed a free trade area agreement with Algeria. Further details concerning Jordan’s regional trade relations with neighbouring countries are described in Table 16.
Table 16: Preferential treatment granted under Jordan’s bilateral agreements
Bilateral agreement with: Preferences granted:
Bahrain Full free-trade area agreement
Egypt Free-trade area by 2005
Israel 10 per cent tariff reduction for 66 products originating in Israel
Kuwait Free movement for agricultural and livestock products. Customs duties and equivalent taxes reduced by 20 per cent annually for specific industrial products
Libya Free movement for all products originating in both countries
Oman Free movement for agricultural, livestock and fish products
Palestinian Authority Duty free access for 60 products originating in the Palestinian Territories
Qatar Mutual exemptions from customs duties for agricultural products and natural resources. Lists of duty free industrial products to be established.
Saudi Arabia Duty free treatment for 166 products
Sudan Customs duties exemptions for agricultural, livestock and industrial products
Syria Customs duties exemptions for agricultural, natural resources and industrial products
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245. in 1977, Jordan had signed a cooperation agreement with the EC which offered Jordan seasonal preferential treatment (tariff cuts) for some of its agricultural exports. Jordan had subsequently negotiated a new agreement within the Euro- Mediterranean partnership agreements, leading to a free-trade area to be reached after 12 years from the date of entry into force of the partnership agreement. The partnership agreement also covered services, social and cultural affairs, and financial cooperation. Jordan ratified the agreement in late Summer 1999. All industrial products and natural resources originating in Jordan would enter duty free in the EC, while EC industrial products benefited from annual duty reductions over the 12 year implementation period. The agreement excluded some products originating in the EC from preferential treatment. The agreement contained specific import procedures and safeguards with respect to trade in agricultural products. Tariff rates applied by Jordan are detailed in document WT/ACC/JOR/18, page 74. Jordan expected that about 65 per cent of the goods imported from the EC would receive preferential treatment. The trade-weighted average tariff applicable to imports from the EC was 24.51 per cent. 246. Some members asked Jordan to provide details of its Agreement with the United States on duty free areas. The representative of Jordan replied that the United States had proposed the concept of Qualified Industrial Zones (QIZ), extending duty free status to products of the West Bank, Gaza Strip and Qualified Industrial Zones. Thus far, only the Irbid (Al-Hassan) Qualifying Industrial Zone had been established in Jordan. The QIZ provided non-reciprocal duty free access to the United States’ market, provided the products fulfilled certain conditions. The direct cost of producing operations performed in the QIZ should account for at least 35 per cent of the appraised value of a product at the time of entry into the United States. This could result either by (i) at least one-third (or 11.7 per cent) being contributed by the Jordanian manufacturer in the QIZ, one third by an Israeli manufacturer(s), and the remainder by production at the QIZ, the West Bank/Gaza Strip, in Israel or in the United States; or (ii) by Jordanian and Israeli manufacturers maintaining at least 20 per cent of the total production cost of QIZ-produced good(s), including originating materials, wages and salaries, design, research and development, depreciation of capital investment, overhead expenses, including marketing expenses, etc. 247. The representative of Jordan stated that his Government would observe the provisions of the WTO including Article XXIV of the GATT 1994 and Article V of the GATS in its trade agreements, and would ensure that the provisions of these WTO Agreements for notification, consultation and other requirements concerning free trade areas and customs unions of which Jordan was a member were met from the date of accession. The Working Party took note of these commitments.
Conclusions 248. The Working Party took note of the explanations and statements of Jordan
226 WTO BISD 1999 Accession concerning its foreign trade regime, as reflected in this report. The Working Party took note of the commitments given by Jordan in relation to certain specific matters which are reproduced in paragraphs 32, 43, 53, 58, 63, 72, 76, 88, 94, 100, 103, 107, 116, 126, 131, 137, 140, 145, 149, 151, 153, 161, 164, 170, 177, 189, 230, 240 and 247 of this report. The Working Party took note that these assurances and commitments had been incorporated in paragraph 2 of the Protocol of Accession of Jordan to the WTO. 249. Having carried out the examination of the foreign trade regime of Jordan and in the light of the explanations, commitments and concessions made by the representative of Jordan, the Working Party reached the conclusion that Jordan be invited to accede to the Marrakesh Agreement Establishing the WTO under the provisions of Article XII. For this purpose, the Working Party has prepared the draft Decision and Protocol of Accession reproduced in the ��������Appendix ���������������to this report, and takes note of Jordan’s Schedule of Concessions and Commitments on Goods (document WT/ACC/JOR/33/Add.1) and its Schedule of Specific Commitments on Services (document WT/ACC/JOR/33/Add.2) that are annexed to the Protocol. It is proposed that these texts be adopted by the General Council when it adopts the report. When the Decision is adopted, the Protocol of Accession would be open for acceptance by Jordan which would become a Member thirty days after it accepts the said Protocol. The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of Jordan to the Marrakesh Agreement Establishing the WTO.
Not reproduced.
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ANNEX 1
Laws, Regulations and Other Information Provided to the Working Party by Jordan - Companies Law No. 22 of 1977; - Customs Law No. 16 of 1983; - law No. 20 on Customs (1998); - a Law Amending the Customs Law - Law No. (__) of the Year 1999; - law No. 14 for 1992 - Import and Export Law; - regulation No. 74 (1993) - Import and Export Regulation; - law No. 7 on Unifying Other Taxes and Fees (1997); - Draft Law Amending the Unification of Fees and Taxes Imposed on imported and Re-Exported Goods Law for the Year 1999 (11 october 1999); - law No. 6 (1994) – General Sales Tax Law; - draft Law Amending the General Sales Tax Law – Law No. (__) of the year 1999 (30 September 1999); - income Tax Law No. 57 of 1985, Law No. 2 of 1992 and Law No. 14 of 1995; - national Production Protection Law No. 4 of 1998 (Safeguards Law); - investment Promotion Law No. 16 of 1995 and Regulations; - regulation No. 39 (1997) – Non-Jordanian Investments Promotion regulation; - law No. 15 of Standards and Metrology, effective 16 January 1995 (unofficial translation); - draft Law on Standards and Metrology Law No. (__) of the Year 1999 (11 October 1999); - instructions No. 4 for the Year 1995 – Preparation of Jordanian Standards; - Quality Mark Regulations No. 49 for the year 1996; - Quality Mark Institutions; - TBT Conformity Table (11 October 1999); - Jordanian Standards Nos. 288 and 401;
228 WTO BISD 1999 Accession
- agricultural Law No. 20/1973; - draft Law on Agriculture (30 September 1999); - draft Law on Food Control Law No. (__) of the Year 1999 (11 October 1999); - SPS Conformity Table – Food (11 October 1999); - SPS Conformity Table – Agriculture (11 October 1999); - regulation No. 32 (1993) – Government Procurement Regulation; - Tenders Regulation No.1 of 1994; - Commodities’ Marks Act No. 19 of 1953; - Patents and Designs Law and Rules (1953); - draft Law No. (…) for the year 1999 Patent Law (as adopted by Parliament in September 1999); - Trade Mark Law and Regulations in Hashemite Jordan (1 July 1952); - draft Law No. (…) for the year 1999 Amending The Trademarks Law (as adopted by Parliament in September 1999); - draft Amended Copyright Law No. 22 of 1992; - draft Law No. (…) for the year 1999 - A Law Amending The Copyright Protection Law (as adopted by Parliament in September 1999); - TRIPS Copyright Conformity Table (11 October 1999); - TRIPS Trademarks Conformity Table (11 October 1999); - TRIPS Geographical Indications Conformity Table (11 October 1999); - TRIPS Industrial Designs and Models Conformity Table (11 October 1999); - TRIPS Unfair Competition and Trade Secrets Conformity Table (11 october 1999); - TRIPS Patents Conformity Table (11 October 1999); - TRIPS Layout Designs of Integrated Circuits Conformity Table (11 october 1999); - Selected articles from specific Laws related to the implementation of the TRIPS Agreement: - Code of Civil Procedure - No. 24 of 1988; - High Court of Justice Law - No. 11 of 1989;
WTO BISD 1999 229 Decisions and Reports
- Criminal Procedure Law - No. 9 of 1961; - evidence Law - No. 30 of 1952; - Criminal Law - No. 16 of 1960; - Civil Code - No. 43 of 1976. - Banking Legislation in Jordan (1994); - law No. 9 Amending the Law on the Control of the Insurance Business and Regulation No. 33 of the year 1995 on Insurance Companies (unofficial translation); - Telecommunications Law No. 13 of 1995; and - Securities Law of 1997 (unofficial translation).
Decision of the General Council on 17 December 1999 (WT/ACC/JOR/34)
The General Council, Having regard to the results of the negotiations directed towards the establishment of the terms of accession of the Hashemite Kingdom of Jordan to the Marrakesh Agreement Establishing the World Trade Organization and having prepared a Protocol for the Accession of the Hashemite Kingdom of Jordan, Decides, in accordance with Article XII of the Marrakesh Agreement Establishing the World Trade Organization, that the Hashemite Kingdom of Jordan may accede to the Marrakesh Agreement Establishing the World Trade Organization on the terms set out in the said Protocol.
See under section “ Legal Instruments ”.
230 WTO BISD 1999 General Council
GENERAL COUNCIL
REVIEW OF THE DISPUTE SETTLEMENT UNDERSTANDING (Abstract from WT/GC/M/48)
The Chairman, in the absence of Mr. Akao, Chairman of the Dispute Settlement Body (“DSB”), read out the latter’s statement. Pursuant to the Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), the Ministerial Conference was invited to complete a full review of dispute settlement rules and procedures under the WTO within four years after the entry into force of the WTO Agreement. The Ministerial Conference was to take a decision on whether to continue, modify or terminate such dispute settlement rules and procedures. The review had been begun by the DSB in early 1998, at which time the then-Chairman had held extensive informal consultations to determine how Members wished to proceed with the review. Informal comments submitted by Members were compiled by the Secretariat, and informal DSB meetings had been held during the remainder of 1998 based on those comments. At its special meeting on 8 December 1998, the DSB had agreed to the following:
“In the light of the requirement that a full review of the dispute settlement rules and procedures take place within four years after the entry into force of the Agreement Establishing the World Trade Organization, the Dispute Settlement Body has conducted extensive discussions in informal meetings. However, as the discussions have not been completed and there remain a number of suggestions by Members that have yet to be considered, there is a consensus to continue discussions beyond the end of this year. The DSB therefore has agreed to propose to the General Council that it decide to continue and to complete the review process including the preparation of the report by the end of July 1999.”
This had been reported to the General Council at its meeting in December 1998, where the then-Chairman of the DSB had also reported that there had been ten informal meetings of the DSB of which half had been devoted to discussing the issues on the basis of informal suggestions submitted by delegations. The General Council had taken note of the report of the DSB and had taken the following decision:
WTO BISD 1999 231 Decisions and Reports
“Concerning the continuing review of the Dispute Settlement Understanding, the General Council decides to continue and to complete the review process including the preparation of the report by the end of July 1999.” At the conclusion of the first reading of the third revision of the compilation of comments submitted by Members, the Chairman had proposed continuing the discussions in a number of areas in order to complete the review. Frequent informal meetings of the DSB on the DSU review had been convened under Mr. Akao’s chairmanship through the end of July 1999 on the basis of Members’ agreement to proceed in this manner. At its meeting in February 1999, the General Council had had an extensive discussion regarding a possible interpretation of the relationship between Articles 21.5 and 22 of the DSU. At the end of that discussion the Chairman of the General Council had concluded as follows: “Some delegations had considered that these matters could appropriately be the subject of interpretation. However, many others clearly did not, and most had registered their concern about voting. There had been a large measure of support for taking these issues up in the DSU review on an urgent basis. He had heard no delegation oppose this initiative. He believed that the sense of the meeting was that he, as Chairman, should urge the DSB to consider these matters on an urgent basis and to endeavour to reach agreement on how to clarify these provisions before the end of July.” The DSB had engaged in such discussions at a number of informal meetings with respect to the issue of implementation. Intensive discussions had taken place up to the 31 July deadline and had continued in informal sessions even after that date, as all Members had attempted in good faith to reach agreement on a recommendation to modify the WTO dispute settlement rules and procedures. These discussions had not concluded by the 22 September meeting of the DSB, and no agreement had been reached at that meeting on a recommendation to continue the review. In light of the above, the Chairman of the DSB requested the General Council to consider how to proceed and what action to take, if any, in regard to the DSU review. [...] (Abstract from WT/GC/M/50) The Chairman recalled that at its meeting on 6 October the General Council had heard a statement by the then-Chairman of the Dispute Settlement Body (DSB) concerning the mandated review of the Dispute Settlement Understanding (DSU), and had had an extensive discussion of how to proceed and what action to take in regard to this review. It had been agreed at that meeting to revert to this matter at the present meeting.
232 WTO BISD 1999 General Council
Mr. Bryn (Norway), Chairman of the DSB, recalled that in accordance with the Ministerial Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes, the Ministerial Conference had been invited to complete a full review of dispute settlement rules and procedures under the WTO within four years after the entry into force of the Agreement Establishing the WTO. He recalled in particular that the last paragraph of the Decision provided that the Ministerial Conference will take “a decision on the occasion of its first meeting after the completion of the review, whether to continue, modify or terminate such dispute settlement rules and procedures”. It had not been possible to reach agreement on a report by the DSB on the question of the DSU review. Therefore, he had been authorized by the DSB to make a statement in his capacity as Chairman on his own responsibility. He believed that the elements of that statement reflected the general trend of the discussions on this matter in the DSB on 27 October and 3 November 1999. However, that statement should be read in conjunction with the individual statements by Members at DSB meetings, setting out specific national positions. His statement was as follows: 1. i wish to note the oral����������� report to �������������������������the General Council on 6 October 1999 of Mr. Akao, then Chairman of the DSB. That report provides a review of the discussions and actions taken pursuant to the Ministerial Decision (Marrakesh) and the General Council Decision, taken at its meeting of 9-11 and 18 December 1998, to continue and complete the review process by end of July 1999. in light of the discussions in the DSB at its meeting on 27 October and 3 November 1999, I would note the following points: 2. The 31 July 1999 deadline for the completion of the review process has lapsed. Informal consultations among some interested delegations have continued after 31 July 1999. 3. it is my impression that there is a consensus view that the WTO dispute settlement rules and procedures have proved an effective and important instrument in enforcing the rules of the multilateral trading system and that it could be further improved. 4. accordingly, I would propose that the General Council: (a) take note of all the discussions that have taken place during the review; and (b) note that in the context of the informal consultations among some interested delegations mentioned above, it is still possible that proposals to amend the DSU which may constitute a consensus can
See WT/GC/M/48, page 25.
WTO BISD 1999 233 Decisions and Reports
emerge in time for a decision at the Third Ministerial Conference. Many representatives expressed appreciation to the DSB Chairman for his statement and to Mr. Suzuki (Japan) for the text he had produced. [...] APPOINTMENT OF THE NEXT DIRECTOR-GENERAL Decision adopted by the General Council on 22 July 1999 (WT/L/308) The General Council, Greatly appreciating the intensive consultations carried out by the Chairman of the General Council with regard to the appointment of the Director- General of the Organization, Decides to appoint: - the Right Honourable Mike Moore of New Zealand as Director- General for 3 years from 1 September 1999 to 31 August 2002 to be followed by - H.E. Dr. Supachai Panitchpakdi of Thailand as Director-General for 3 years from 1 September 2002 to 31 August 2005; Agrees that neither shall be eligible for reappointment as Director-General, nor shall his period of office be extended; Further agrees that in March 2002 the General Council shall re-confirm the availability of Dr. Supachai for office and, if Dr. Supachai is not available, the process for the appointment of a new Director-General shall commence immediately, with one of the Deputy Directors-General to be appointed by the General Council as acting Director-General if the appointment process is not concluded by 1 September 2002; Also agrees that if Mr. Moore vacates office prior to 31 August 2002, he shall be followed immediately by Dr. Supachai who shall serve for only 3 years; Further agrees that the Director-General shall appoint Deputy Directors- General in consultation with Members, taking into account the views of the other designated Director-General, and the need to maintain equitable geographical balance and being bound by any decisions of the General Council with regard to ensuring continuity at the senior management level of the Organization; and Affirms that this decision shall not constitute a precedent for future appointments of Directors-General, whose term shall be of four years, and resolves that, in order to improve and strengthen the current rules and procedures, a comprehensive set of rules and procedures for such appointments shall be elaborated and adopted by the end of September 2000.
234 WTO BISD 1999 Dispute Settlement Body
DISPUTE SETTLEMENT BODY
Adoption of the Agenda (Abstract from WT/DSB/M/54)
[...] the Chairman recalled that on 25 January he had ruled to the effect that item 7 should remain on the proposed agenda. That ruling was based on a long-standing GATT/WTO practice. In accordance with that practice any Member could suggest items for inclusion in the proposed agenda. At that meeting, some delegations had considered that the ruling was correct since, in accordance with Rule 6 of the Rules of Procedure, the proposal to delete item 7 from the agenda constituted a modification of the proposed agenda and no consensus had been reached to modify the agenda. Due to lack of consensus on the adoption of the agenda the meeting had been suspended in order to allow time for consultations on, inter alia, the Director-General’s proposal. On 26 January, an informal DSB meeting had been convened to discuss possible courses of action. He and the Director-General had held consultations with delegations, including the EC and the United States in an effort to find a solution. To this effect, an informal proposal had been received from the EC and a formal proposal from other Members. He regretted that to-date no solution had been found. The Chairman’s role was to settle procedural questions related to the conduct of business. The Rules of Procedure for meetings of WTO bodies should not modify the rights and obligations of Members under the WTO Agreement. In particular, they should not be so interpreted as to block meetings in cases where a Member had the right to request a specific decision unless there was a consensus against such a request. He proposed that the meeting continue on the basis of the proposed agenda including the three items under “Other Business”. He also proposed that item 7 be considered first. Any point of order in relation to item 7 could be taken up during the consideration of that item. The representative of the European Communities said that he did not wish to challenge the Chairman’s ruling. The EC was prepared to work on the basis indicated by the Chairman and wished to proceed to the substance of item 7. It was the EC’s view that the DSB’s decision to adopt the agenda had to be taken by consensus. It appeared that the Chairman had reversed this and that in future the agenda would be adopted unless the DSB decided by consensus not to do so. Rules 6 and 7 of the Rules of Procedure were the prerogative of Members and were not part of Chapter VI of the Rules of Procedure dealing with the conduct of business. Therefore, the Chairman could not rule on this matter. In the case at hand, the EC believed that the Rules of Procedure were being modified, and in accordance with Rule 39 of the Rules of Procedure, the General Council had the authority to revise these Rules. The EC did not wish to pursue this issue and despite its reservations
WTO BISD 1999 235 Decisions and Reports would accept the Chairman’s proposal in order to be able to deal with the substance of item 7. The representative of Saint Lucia said that in the spirit of compromise, her delegation wished to move forward with the agenda on the understanding that the adoption of the agenda was not a tacit ruling on the jurisdiction of the DSB to deal with any item on the agenda and that the issue of competence, as a point of order, might be raised at any time before a substantive discussion so as to deal with the competence of the DSB at any time thereafter. The representative of the Philippines said that his delegation had concurred with the Chairman’s ruling. The Philippines considered that the Chairman had the authority to make the ruling. He noted that the Chairman had stated that the Rules of Procedure would not prevail over the substantive rights of Members under the DSU. It was his delegation’s understanding that the Chairman’s ruling was based on automaticity in the DSU provisions and would only apply to the DSB, not to other WTO bodies. The Chairman proposed that the DSB adopt the agenda and that item 7 be taken up for consideration as the first item on the agenda.
COMPETENCE TO REVIEW THE LEGAL VALIDITY OF A REQUEST TO AUTHORIZE THE SUSPENSION OF CONCESSIONS OR OTHER OBLIGATIONS (Abstract from WT/DSB/M/54)
[...] the Chairman said that he had decided to reject the point of order made by Saint Lucia because he could not take a decision on the legal validity of the US request and whether that request was in conformity with Article 22. This would be tantamount to an interpretation of the DSU provisions which was not within the powers of the Chairman. His decision was motivated in particular by the need to preserve the automatic nature of the DSU with regard to the establishment of panels, the adoption of reports, and the authorization of suspensions. To allow Members to block such measures for any reason, or for reasons not explicitly provided in the DSU, would jeopardise the dispute settlement system. His decision was consistent and in conformity with his previous decisions and, in particular, with his decision taken at the DSB meetings when he had not allowed the EC’s request under Article 21.5 to be blocked, in spite of the fact that delegations had raised objections to the request. His decision would not leave the EC without defense. The EC could still prevent the authorization of suspension of concessions by requesting that the issue of the level of suspension be submitted to arbitration as stipulated in Article 22. The EC could bring before arbitration the fact that the appropriate level of suspension
236 WTO BISD 1999 Dispute Settlement Body should, in the circumstances be at a zero level. He underlined that his decision was not an interpretation of the DSU provisions. It was without prejudice to any future decisions which might be taken in other WTO bodies. Since he had rejected the point of order, he proposed that the DSB proceed with the consideration of the US request.
RELATION BETWEEN ARTICLES 21.5 AND 22 OF THE DSU (Abstract from WT/DSB/M/54)
[...] the Chairman ����������������������������������������������������������said that after the consultations with the two parties, he wished to present the text of the proposal which contained a few changes. He then read the following: i have reviewed carefully the statements made and the discussion which took place yesterday in the DSB and I can therefore state the following. Having reflected at length overnight and taking into account the long-established practice of concensus decision-making in the GATT and WTO, I am convinced that it will not be appropriate to vote on this matter which affects the fundamental operation of the dispute settlement understanding. However, in reviewing the statements made at the meeting last night and after consulting a number of Members, I believe that we must find a solution to the problem we now face. In that spirit and keeping in mind the proposals on the table, including those of Japan, a number of developing countries, the European Communities and the Director-General, I would suggest the following: First, a number of delegations have highlighted the lack of clarity in how Articles 21.5 and 22 should be interpreted and the sequence in which they should be applied. I believe that many of these concerns are legitimate, but we face the problem of how to solve our problem in this dispute today, without undermining the spirit and letter of the DSU and, in particular, its provisions on concensus, automaticity and time-limits. I think that the best approach is to proceed by separating the Banana case from the more general systemic issues. The solution to the banana matter would be totally without prejudice to future cases and to the question of how to resolve the systemic issue of the relationship between Article 21.5 and 22 of the DSU. Second, the two parties will agree to proceed immediately to consultations under Article 4 of the DSU in an effort to find a mutually agreed solution to their problems. That result is always the aim of the DSU and I am convinced that negotiations in good faith could resolve all problems. Third, as to bananas the original panel is now engaged in two Article 21.5 proceedings. In light of the request by the United States under Article 22.2
WTO BISD 1999 237 Decisions and Reports and assuming the EC make a request for arbitration under Article 22.6, the same individuals could be given the task of arbitrating the level of suspension. Let me be absolutely clear - a request for arbitration under Article 22.6 will mean that the DSB will not authorize suspension of concessions at today’s meeting. After the arbitrator’s award is circulated, a new request for suspension of concessions could be made to the DSB at that time, and the DSB would be required to grant authorization, consistent with the decision of the arbitrator, unless there is a concensus against it. There remains the problem of how the panel and the arbitrators would coordinate their work, but as they will be the same individuals, the reality is that they will find a logical way forward, in consultation with the parties. In this way, the dispute settlement mechanisms of the DSU can be employed to resolve all the remaining issues in this dispute while, recognizing the rights of both parties and respecting the integrity of the DSU. To assist the arbitrators, I will make sure that the minutes of this meeting are made available to them to take into account, as they deem appropriate. Fourth, as to the systemic issues concerning the relationship of Articles 21.5 and 22, they must be resolved expeditiously. A number of Members have proposed that the issue of this relationship should be referred to the General Council. I will propose to the Chairman of the General Council that this matter be taken up by that body and that it inform the DSB of the results of its discussions as soon as possible. Secondly, I will make this a priority issue for discussion in the DSU review, and I am prepared to conduct informal consultations on this matter at an early date. [...] The Chairman proposed that the DSB take note of the statements made and agree that the matter be referred to arbitration by the original panel in accordance with Article 22.6 of the DSU. The DSB so agreed. [...]
EXTENSION FOR THE APPLICATION OF THE RULES OF CONDUCT (Abstract from WT/DSB/M/54)
The Chairman recalled that at the DSB meeting on 25 November 1998, he had stated that in accordance with Section IX of the Rules of Conduct contained in document WT/DSB/RC/1 and adopted by the DSB on 3 December 1996, “the Rules of Conduct shall be reviewed within two years of their adoption and a decision shall be taken by the DSB as to whether to continue, modify or terminate these Rules”. At that meeting, he had also stated that he had not detected a particular desire among delegations to conduct a comprehensive review of these Rules and reach a decision in respect thereof prior to the end of 1998. In the light of this, he
238 WTO BISD 1999 Dispute Settlement Body had proposed that, unless delegations had objections, the DSB could decide, at its next regular meeting, to continue to apply the current Rules of Conduct as contained in document WT/DSB/RC/1 and review them at a later stage, as necessary. Since thus far he had not received any objections from delegations on this matter, he wished to propose that the DSB decide to continue to apply the current Rules of Conduct as contained in document WT/DSB/RC/1 and review them at a later stage, as necessary. The DSB so agreed. [...]
Time-Period for appeal expiring in the month of August (Abstract from WT/DSB/M/65) [...] The representative of the European Communities drew attention to the fact that the time-periods under Article 16.4 of the DSU in respect of three Reports of Panels in which the EC was a complainant would expire in August. These Panel Reports were the following: (i) “Chile – Taxes on Alcoholic Beverages” (WT/DS87/ R – WT/DS110/R); (ii) “Argentina – Safeguard Measures on Imports of Footwear” (WT/DS121/R); and (iii)”Korea – Definitive Safeguard Measure on Certain Dairy Products” (WT/DS98/R). In order to comply with the requirements of Article 16.4, the EC would have to request three special DSB meetings during the month of August. To avoid problems which such meetings could create for the WTO’s work, the EC would be prepared to accept the postponement of consideration of these Panel Reports and the extension of the corresponding time-periods for appeal to a future meeting of the DSB at the beginning of September. He underlined that such extension would be granted by the DSB on the understanding that the rights of the parties to the disputes with respect to adoption or appeal of these Panel Reports were preserved, as if such adoption had been requested within the 60-day period specified in Article 16.4 of the DSU. In order to do so it would be necessary for the DSB to agree by consensus to extend the time-periods in question. The Chairman said that the EC had made a practical proposal to postpone consideration of three Panel Reports on the understanding that the rights of the parties to appeal the Reports would be preserved. The representative of Korea said that his delegation was aware that the deadline for the adoption of the Panel Report on “Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products” would expire in the month of August. Like the EC, Korea would also have some practical difficulties if the panel or Appellate Body proceedings were to be initiated during the Summer break. However, despite this potential logistical problem, Korea could go along with the proceedings according to the time-frame stipulated in Article 16.4 of the DSU.
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Nonetheless, if a consensus was reached on the EC’s proposal, Korea was prepared to join the consensus, provided that its right to appeal was fully preserved. The representative of Argentina said that his delegation supported the EC’s proposal to extend the deadline under Article 16.4 of the DSU. However, it should be clear that the rights of the parties to appeal the Panel Reports were preserved even if the DSB was convened after the 60-day period required under Article 16.4 of the DSU. The representative of Chile said that his country would not object to a consensus on the EC’s proposal, if such a consensus was reached. However, it should be clear that this proposal concerned three specific Panel Reports, and if there was a consensus, the DSB’s decision should refer to these three specific cases. He noted that this was the first time that the DSB was extending a 60-day time- period stipulated in Article 16.4 of the DSU. The Chairman noted that three countries, which had been involved in the cases referred to by the EC, had no objections to the EC’s proposal. He asked whether any other delegations had any objections to the EC’s proposal. The representative of Mexico said that his delegation had no objections to proceed as proposed by the EC provided that, as stated by Chile, reference was made to the three cases and that this was an agreement between the parties to the dispute. The representative of the Philippines said that his delegation would not object to the consensus on this matter provided that it was understood that this would not establish a practice of requiring the DSB consent to extend specific time- periods under the DSU when the parties to the dispute had reached agreement. This should not constitute a precedent. The DSB took note of the statements and agreed to the EC proposal to postpone the consideration of the three Panel Reports referred to by the European Communities. [...] Review of the Dispute Settlement Understanding (Abstract from WT/DBS/M/70) [...] The Chairman noted the oral report to the General Council made by then Chairman of the DSB, Mr. Akao. That report contained a thorough summary of the discussions on the DSU Review. In his view, any report to the General Council should be based on Mr. Akao’s oral report. During the consultations on the content of a report to the General Council, he had been impressed with a constructive approach of all delegations. It was his understanding that some interested countries had continued to discuss possible amendments to the DSU. He therefore wished to invite Mr. Suzuki
240 WTO BISD 1999 Dispute Settlement Body of the Japanese delegation, who had chaired the informal discussions, to report in his personal capacity on the progress made thus far. Mr. Suzuki made the following statement: i will report in my personal capacity as the chairman of the informal group of interested Members on the DSU review, as was explained by the Chairman of the DSB. [...] The Chairman said that, as indicated by Mr. Suzuki, no consensus had yet been reached on the text, but it seemed that there were not so many outstanding issues and that further consultations could be held to try to reach a consensus thereon. He asked delegations to provide their views on this matter. He recalled that, in accordance with the Ministerial Decision, a recommendation had to be made as to whether to continue, modify or terminate the DSU rules and procedures. [...] The Chairman noted the statements made by delegations and said that he would prepare a report which would take into account different positions. He recognized that delegations wished that the report be as factual as possible. He proposed that the DSB revert to this matter at its reconvened meeting on 3 November. The DSB took note of the statements and agreed to revert to this matter at its meeting on 3 November. Upon resumption of the meeting on 3 November 1999, the Chairman said that on the basis of the discussion held on 27 October 1999, he had prepared the following statement to be read out at the General Council meeting on 4 November: 1. The Chairman’s statement would note the Oral Report to the General Council on 6 October 1999 of Ambassador Nobutoshi Akao, then Chairman of the Dispute Settlement Body. That report provides a review of the discussions and actions taken pursuant to the Ministerial Decision (Marrakesh) and the General Council Decision, taken at its meeting of 9-11 and 18 December 1998, to continue and complete the review process by end of July 1999. 2. The DSB notes that the 31 July 1999 deadline for the completion of the review process has lapsed, and also notes that informal consultations among interested delegations have continued after 31 July 1999. 3. The DSB wishes to underline the consensus view that the WTO dispute settlement rules and procedures have proved an effective and important instrument in enforcing the rules of the multilateral trading system and that it could be further improved. 4. accordingly, the Chairman would propose to the DSB that it: (a) recommend that the General Council take note of all the discussions that have taken place during the Review; and
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(b) note that in the context of the informal consultations among interested delegations mentioned above, it is still possible that proposals to amend the Dispute Settlement Understanding which may constitute a consensus can emerge in time for a decision at the Third Session of the Ministerial Conference. The Chairman said that he would make that statement on his own authority and he would indicate that the statement had received broad support. Delegations were invited to present their views which would be reflected in the minutes of the present meeting. In his statement to the General Council, he would refer to the statements made in the DSB by stating that his statement should be read in conjunction with the individual statements of delegations. He proposed a technical change to the statement that he had just read out, namely to bring up the chapeau of paragraph 4 so that paragraphs 2 and 3 would become subparagraphs under that chapeau. He also wished to add the word “some” in paragraphs 2 and 4(b) to further qualify the words “interested delegations. [...] The Chairman said that he would make a statement on his own responsibility with the consent of the DSB. Since it was not possible to agree on a report of the DSB he had to make it clear to the General Council that his report was not a consensus report. He had therefore proposed to make a statement rather than to seek agreement on a report. [...] Appointment of Appellate Body Members (Abstract from WT/DBS/M/70)
[...] the Chairman recalled that the DSB had considered this matter at its meeting on 27 October and had agreed to revert to it at the present meeting. He recalled that at that meeting, he had proposed that the DSB agree to the following: (i) to renew the terms of Mr. James Bacchus and Mr. Christopher Beeby for a final term of four years; (ii) to commence a process to ensure the rapid replacement of the two Appellate Body Members who had expressed their desire to leave, following the process used in 1995 to select the original seven Appellate Body members, which would involve nominations by WTO Members, by 17 December 1999, and the establishment of a Selection Committee composed of the Director General, together with the 1999 Chairs of the General Council, the DSB, and the Councils for Trade in Goods, Trade in Services and TRIPS, with a view to a recommendation being made to the DSB for a decision at its meeting in March 2000; and (iii) to extend the terms of Mr. Said El Naggar and Mr. Mitsuo Matsushita until the end of March 2000. He asked whether the DSB could agree to his proposal. [...] The DSB �����[...] agreed to the proposal outlined by the Chairman.
242 WTO BISD 1999 Trade Policy Review Body
TRADE POLICY REVIEW BODY
APPRAISAL OF THE OPERATION OF THE TRADE POLICY REVIEW MECHANISM Report to Ministers (WT/MIN(99)/2)
I. INTRODUCTION 1. The Trade Policy Review Mechanism (TPRM) was established in 1989 on a provisional basis and confirmed by Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization. Paragraph F of Annex 3 requires that the Trade Policy Review Body (TPRB) “shall undertake an appraisal of the operation of the 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.” 2. The TPRB agreed on 27 January 1999 on a procedure to appraise the operation of the TPRM. Subsequently the TPRB held 12 informal meetings, in the period January to September 1999, and adopted this Report to Ministers on 5 October 1999. The meetings considered issues and proposals brought forward by Members and was assisted by a Secretariat non paper.
II. TPRM MISSION AND OBJECTIVES 3. The TPRB reaffirmed the relevance of TPRM’s mission as defined in Annex 3. The TPRM had been conceived as a policy exercise and it was therefore not intended to serve as a basis for the enforcement of specific WTO obligations or for dispute settlement procedures, or to impose new policy commitments on Members. The Mechanism should continue to focus on improved adherence by all Members to rules, disciplines and commitments made under the Multilateral Trade Agreements and, where applicable, the Plurilateral Trade Agreements, and hence contribute to the smoother functioning of the multilateral trading system, by achieving greater transparency in, and understanding of, the trade policies and practices of Members. Accordingly, the 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. Reviews under the Mechanism should continue to take place, to the extent relevant, against the background of the wider economic and development needs, policies and objectives of the Members concerned, as well as of their external environment. Greater attention should be given to transparency in government decision-making on trade policy matters, in line with Paragraph B of Annex 3.
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4. The TPRM had functioned effectively and its objectives were generally being achieved, although not all Members had yet been reviewed. The Mechanism had demonstrated that it had a valuable public-good aspect, particularly in its contribution to transparency. The Mechanism had also been a catalyst for Members to reconsider their policies, had served as an input into policy formulation and had helped identify technical assistance needs. 5. The TPRB welcomed the resource-saving aspects of using, under the authority of Annex 3, trade-relevant macroeconomic information from other intergovernmental organizations, especially under the aegis of the Marrakesh Ministerial Declaration on the “Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking”. Under the implementation of this Ministerial Declaration, information from, and cooperation with, other intergovernmental organizations had been useful to the TPRM and these practices should be pursued. Nevertheless, the different mandates of the WTO and other organizations required that the TPRM maintain its capacity for its own analysis, it being the only multilateral mechanism undertaking comprehensive evaluations of trade policies and their coherence within a given economic setting.
III. PROCESS OF PREPARING REVIEWS 6. The TPRB found that the process of preparing reviews was satisfactory, although it saw room both for further streamlining and for the review process of developing and least developed countries (LDCs) to give greater attention to technical assistance needs. The entities associated with the Integrated Framework for technical assistance to LDCs were encouraged to take into account the appreciation arrived at by the Trade Policy Reviews for LDCs. In general, present practices regarding Secretariat visits to capitals, and for the drafting and verification of Secretariat reports were thought appropriate. To avoid duplication, and, where relevant, upon authorization by the Member concerned, there should be a two way flow of information between the Trade Policies Review Division (TPRD) and other parts of the WTO Secretariat, including the Integrated Database; however, this should safeguard restricted information and not affect Members’ rights and obligations.
IV. SECRETARIAT AND GOVERNMENT REPORTS 7. The TPRB saw the Secretariat and Government reports as complementary. Governments were free to define the structure and coverage of their own reports, but were encouraged to keep them short, WTO-relevant and forward-looking, highlighting recent trade policy development and future policy directions and their impact on trade. 8. The Secretariat should retain its capacity to prepare autonomous, in-depth reports that allowed the TPRB to arrive at an independent, fully informed evaluation
244 WTO BISD 1999 Trade Policy Review Body of a Member’s trade policies and practices. The present structure and coverage of Secretariat reports was generally satisfactory; care should continue to be taken that the reports achieve an appropriate balance between the traditional and relatively new areas of the WTO. Reports should be WTO relevant, comprehensive and self contained. The TPRB saw scope for making the Summary Observations of the Secretariat report more readable and for presenting in relevant parts of the report subsequent developments on issues raised at the previous review.
V. TPRB MEETINGS 9. The TPRB considered that the current frequency of reviews provided a balance amongst numerous competing considerations, including TPRM objectives, particularly the smoother functioning of the multilateral trading system, the need to maintain a realistic workload, and the benefits of reviewing all Members soon. 10. a solution had been found to past frequent rescheduling and “bunching” of TPRB meetings. Nevertheless, the TPRB reiterated the importance for Members under review to respect deadlines, thus avoiding slippages in the overall review programme, and of scheduling TPRB meetings to avoid overlaps with other major WTO meetings. Members should continue to be informed regularly of progress in the review programme and of possible delays affecting it. 11. The TPRB judged two half-days as an appropriate time span for a TPRB review, and a day in between as desirable. More interactive discussion was encouraged, as was greater participation in reviews of smaller Members, if possible at a rank reflecting the high-level representation often sent by Members under review. Reviews could highlight changes since the previous review. 12. The TPRB felt it essential to meet the agreed four weeks lead time for document distribution in all WTO official languages, as active participation in reviews depended on the timely availability of documents. The TPRB favoured flexibility on the lead time to submit written questions, as well as on the role and number of discussants. Current practice concerning minutes of meetings was seen as appropriate, as was the inclusion of written questions and answers in minutes. Members were encouraged to provide written answers whenever possible during the TPRB meetings. Questions left unanswered during the review should be answered in writing, with responses made available to the Membership; on this there should be a regular follow-up by the WTO Secretariat.
VI. DISSEMINATION 13. The TPRB considered present dissemination practices as satisfactory. Members noted the value of building awareness within the wider public of the work of the TPRB. Taking existing publication arrangements and budgetary implications into account, the fullest possible dissemination of reviews was encouraged,
WTO BISD 1999 245 Decisions and Reports particularly through the Internet.
VII. RESOURCES 14. The TPRM absorbs some 5% of the WTO’s Annual Budget. By the end of the 1999, the Mechanism will have conducted reviews of 71 Members, counting the European Union as one. The growing WTO Membership and the importance of reviewing all Members, including LDCs, at least once as soon as possible meant that all efforts should continue to be made for maximum efficiency in the use of TPRM resources. 15. Efforts to maximize efficiency might include: (i) a more considered use of grouped reviews; (ii) more frequent use of consultants, with financial resources made available by Members on a voluntary basis, although such bilateral contributions should not replace core budgetary funding for the Mechanism; and (iii) shorter, more focused reports and meetings. 16. To maximize efficiency, in addition, some Members suggested that a change in the review cycle should be considered, but no agreement was reached.
VIII. CONCLUSIONS • The TPRM is functioning effectively and its mission and objectives remain important. • all Members, including LDCs, should be reviewed at least once as soon as possible. • Efforts should continue to be made to achieve maximum efficiency in the use of resources allocated to the TPRM. • greater attention should be given to transparency in government decision- making on trade policy matters, in line with Paragraph B of Annex 3. • reviews should continue to take place, to the extent relevant, against the background of the wider economic and development needs, policies and objectives of the Member concerned, as well as of its external environment. • The Mechanism should maintain its capacity to undertake independent analysis, while continuing to use, under the authority of Annex 3, trade-relevant macroeconomic information from other intergovernmental organizations. • To avoid duplication, and, where relevant, upon authorization by the Member concerned, there should be a two way flow of information between the TPRD and other parts of the WTO Secretariat, including the Integrated Database; however, this should safeguard restricted information and not affect Members’ rights and obligations.
246 WTO BISD 1999 Trade Policy Review Body
• Care should continue to be taken that reports achieve an appropriate balance between the traditional and relatively new areas of the WTO. • Further improvements in the focus and readability of reports should continue to be sought. • deadlines for the review process should be met and Members should continue to be informed regularly of progress in the review programme. • Steps should be taken to make review meetings more interactive, with greater participation by Members. • The TPRB should undertake a further appraisal of the operation of the TPRM not more than five years after the conclusion of the Third WTO Ministerial or as requested by a Ministerial Conference.
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COUNCIL FOR TRADE IN GOODS
ILLUSTRATIVE LIST OF RELATIONSHIPS BETWEEN GOVERNMENTS AND STATE TRADING ENTERPRISES AND THE KINDS OF ACTIVITIES ENGAGED IN BY THESE ENTERPRISES
Adopted by the Council for Trade in Goods on 15 October 1999 (G/STR/4)
I. INTRODUCTORY COMMENTS 1. Pursuant to paragraph 5 of the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994 (“the Understanding”), this Illustrative List shows the kinds of relationships which exist between governments and state trading enterprises and the kinds of activities which such enterprises engage in, which may be relevant for the purposes of Article XVII. It is based on the Article XVII notifications made since 1980. 2. The List does not represent a definition of what constitutes a state trading enterprise or an attempt to further refine or interpret the definition of “state trading enterprise” as provided in Article XVII of GATT 1994 and its Interpretative Notes or the working definition contained in the�������������Understanding . R�����������������������������ather, the List is based on a catalogue of those relationships and entities which have been previously included in notifications and, as such, reflects examples of relationships with governments and activities which various individual Members considered relevant in their notification of state trading enterprises. While this List reflects the past practice of individual Members rather than consensus standards, Members could find the List useful in guiding their notification decisions. 3. While the List is as comprehensive as possible, it is not exhaustive. There may be other relationships or activities that may be relevant for the purposes of Article XVII. Conversely, none of the elements listed necessarily identifies a state trading enterprise, as certain of the relationships/activities listed could involve, or be engaged in by, entities which do not meet the criteria set out in the agreed definitions of “state trading enterprise”. 4. it remains the prerogative and responsibility of each Member to determine whether an enterprise under its jurisdiction falls within the agreed WTO definitions and thus should be notified under Article XVII. Equally, any Member which has reason to believe that another Member has not adequately met its notification obligation has the right to proceed as provided for in paragraph 4 of the Understanding. This list in
See attached Annex for the full text of GATT Article XVII paragraphs 1(a) and (b), the Interpretative Notes to Article XVII, and the working definition in paragraph 1 of the WTO Understanding on Article XVII.
248 WTO BISD 1999 Council for Trade in Goods no way affects the rights and obligations of Members under the Understanding and under Article XVII of GATT 1994 and its Interpretative Notes.
II. USER’S GUIDE TO THE ILLUSTRATIVE LIST 5. It is recalled that three fundamental elements are identified in the working definition of “state trading enterprise” contained in paragraph 1 ofthe Understanding: (i) a governmental or non-governmental entity, including marketing boards; (ii) the granting to the enterprise of exclusive or special rights or privileges; and (iii) a resulting influence, through the enterprise’s purchases or sales, on the level or direction of imports or exports. 6. Thus, a notifiable state trading enterprise has a relationship to the government through the latter’s granting of a right or privilege and conducts an activity which influences the level or direction of imports or exports. It is suggested that, by looking at the type of relationship the entity has with the government as a result of the latter’s granting of an exclusive or special right or privilege, at the type of activity the enterprise engages in and through which it influences the level or direction of imports or exports, and finally by examining the interaction between the two, the Member may be better able to determine whether the enterprise should be notified. The lists in Sections III and IV which follow are included forthis purpose. It should be noted that the activities of a state trading enterprise may not be limited to those derived from the rights/privileges granted to it and may include other activities. 7. This preliminary guidance as to the basic elements of a state trading enterprise should help Members’ consideration of the two sections which follow.
III. RELATIONSHIPS WITH GOVERNMENT 8. The following types of relationships between enterprises and governments should be considered as possible indications of the existence of a state trading enterprise. As mentioned in the section on “Introductory Comments”, no one relationship described necessarily identifies an enterprise as falling within the agreed WTO definitions of “state trading enterprise”. The enterprise which���������������������������������������������������������� is granted exclusive or special rights or privileges in the exercise of which it influences through its purchases or sales the level or
Not included are entities, or government Ministries, that have only regulatory authority in areas relevant to international trade.
WTO BISD 1999 249 Decisions and Reports direction of imports or exports is: (a) a branch of government or a government-owned (or partially owned) enterprise; or (b) entirely separate from government (i.e. neither a branch of government nor fully or partially owned by the government), whether established to carry out government-mandated policies or programmes subject to legislated controls, or whether established for commercial purposes; this includes entities which are established and maintained under legislation and financed and controlled by the producers of the product over which they have marketing authority. in addition, the enterprise purchases or sells a given product or group of products, either directly or indirectly through third parties under contract or transfer of right; and one or more of the following applies: (i) the enterprise is specially authorized or mandated by the government to do one or more of the following: - control and/or conduct import or export operations; - distribute imports; - control domestic production, processing, or distribution. (ii) all or part of the enterprise’s activities are supported by government in one or more of the following ways, and the support afforded is specific or more favourable to the enterprise and not generally available to other entities, or is not warranted by purely commercial considerations: - budget allocations; - interest rate/tax concessions; - guarantees (e.g. for loans or against business failure); - revenue from the collection of tariffs; - preferential access to foreign exchange; - any off budget support or assistance.
250 WTO BISD 1999 Council for Trade in Goods
IV. ����������ACTIVITIES ENGAGED IN BY STATE TRADING ENTERPRISES 9. The following activities are of the kind which might be engaged in by a state trading enterprise. An enterprise might engage in one or more of these activities, which can be directly related to importation, exportation, or the trade regime, or which can be related to trade in an indirect way. As mentioned in the section on “Introductory Comments”, no one activity or combination of activities necessarily identifies an enterprise as falling within the agreed WTO definitions of “state trading enterprise”. (a) Controls or conducts imports or exports; (b) administers multilaterally or bilaterally agreed quotas, tariff quotas or other restraint arrangements, or other import or export regulations; (c) issues licences/permits for importation or exportation; (d) determines domestic sales prices of imports. (e) enforces the statutory requirements of an agricultural marketing scheme and/or stabilization arrangement; The following activities were included in some notifications: (i) authorizes or manages domestic production and/or processing of domestic production; (ii) determines the purchase price and/or sales price of domestic production; (iii) Manages domestic distribution of domestic production and/or imports; (iv) Undertakes purchases and sales of domestic production based on pre-determined floor and ceiling prices (intervention purchases/sales); (v) issues credit guarantees for producers, processors, exporters, or importers; (vi) engages in export- and support-related activities such as storage, shipping, processing, packaging, and insurance; (vii) Controls or conducts marketing or distribution of processed products through subsidiaries or joint ventures in import markets;
The list refers to activities of a state trading enterprise for a given product or group of products.
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(viii) Exercises quality control functions for imports or domestic production, including for export; (ix) engages in promotional activities for exports and/or domestic consumption; (x) Procures and maintains emergency stocks of certain strategic and/or agricultural goods; (xi) negotiates or administers long-term bilateral contracts (including government-to-government) for exports and/ or imports; (xii) Undertakes purchases or sales necessary to fulfil contractual obligations entered into by the government.
ANNEX
article XVII:1(a) of GATT 1994 reads as follows: “Each contracting party undertakes that if it establishes or maintains a State enterprise, wherever located, or grants to any enterprise, formally or in effect, exclusive or special privileges, such enterprise shall, in its purchases or sales involving either imports or exports, act in a manner consistent with the general principles of non-discriminatory treatment prescribed in this Agreement for governmental measures affecting imports or exports by private traders.” article XVII:1(b) of GATT 1994 reads as follows: “The provisions of sub- paragraph (a) of this paragraph shall be understood to require that such enterprises shall, having due regard to the other provisions of this Agreement, make any such purchases or sales solely in accordance with commercial considerations, including price, quality, availability, marketability, transportation and other conditions of purchase or sale, and shall afford the enterprises of the other contracting parties adequate opportunity, in accordance with customary business practice, to compete for participation in such purchases or sales.” The Interpretative Notes to Article XVII read as follows: “Paragraph 1: The operations of Marketing Boards, which are established by contracting parties and are engaged in purchasing or selling, are subject to the provisions of sub-paragraphs (a) and (b). The activities of Marketing Boards which are established by contracting parties and which do not purchase or sell but lay down regulations covering private trade are governed by the relevant Articles of this Agreement. The charging by a state enterprise of different prices for its sales of a product in different markets is not precluded by the provisions of this Article, provided that such different prices are charged for commercial reasons, to meet conditions of supply and demand in export markets.
252 WTO BISD 1999 Council for Trade in Goods
“Paragraph 1(a): Governmental measures imposed to insure standards of quality and efficiency in the operation of external trade, or privileges granted for the exploitation of national natural resources but which do not empower the government to exercise control over the trading activities of the enterprise in question, do not constitute “exclusive or special privileges”. “Paragraph 1(b): A country receiving a “tied loan” is free to take this loan into account as a “commercial consideration” when purchasing requirements abroad. “Paragraph 2: The term “goods” is limited to products as understood in commercial practice, and is not intended to include the purchase or sale of services. “Paragraph 3: Negotiations which contracting parties agree to conduct under this paragraph may be directed towards the reduction of duties and other charges on imports and exports or towards the conclusion of any other mutually satisfactory arrangement consistent with the provisions of this Agreement. (See paragraph 4 of Article II and the note to that paragraph.) “Paragraph 4(b): The term “import mark-up” in this paragraph shall represent the margin by which the price charged by the import monopoly for the imported product (exclusive of internal taxes within the purview of Article III, transportation, distribution, and other expenses incident to the purchase, sale or further processing, and a reasonable margin of profit) exceeds the landed cost.” Paragraph 1 of the Understanding reads as follows: “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.”
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COMMITTEE ON MARKET ACCESS
DISSEMINATION OF THE INTEGRATED DATA BASE Adopted by the Committee on Market Access on 31 May 1999 (G/MA/IDB/3)
This document describes the dissemination practices for the Integrated Data Base (IDB), for the information of users of the IDB.
A. METHODS OF DISSEMINATION
Methods of Dissemination 1. once the IDB submissions have been processed by the Secretariat, the in- formation can be distributed as file copies at the tariff line level (in MS Access for- mat or in text-delimited format) or via the IDB CD-ROM. With the IDB CD-ROM, users have the possibility to view and print information at the tariff line level or at summary levels. However, it is not possible to transfer information in an electronic format from the CD-ROM, for use with other PC desktop software. The IDB CD- ROM is the principal dissemination medium for Members and international organizations. Before the PC IDB was established, file copies were distributed only upon request from individual Members and those international organizations with which the WTO has a formal cooperation agreement, and to those international organizations that had received written authorization from Members. With the IDB Internet File Transfer Facility, IDB users will have the possibility of transferring IDB files to their PCs via the Internet. Furthermore, the Secretariat has begun work on the IDB dissemination database, which will be made available to authorized us- ers via a reporting application developed using Internet technology. The reporting application will provide facilities similar to those provided with the IDB CD-ROM, as well as data extraction facilities. Internet File Transfer Facility 2. The PC IDB project includes the establishment of a password-protected Internet site for file distribution. This facility is operational although access has not yet been given to Members. The site will be accessed using an Internet browser by entering the address of the site and a user-identification code and password (hereafter referred to as password). The passwords will be maintained by the Secretariat. 3. The site is composed of four areas and access to each area would be maintained by passwords. The first area, the “production” area, would be available to all authorized users. The list of authorized users would be determined according to the dissemination practices agreed upon by Members (refer to section D – Dissemination Practices). After the IDB submissions have been processed by the
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Secretariat and approved by Members, they would be posted to this area where authorized users could transfer the files to their PCs using an Internet browser. The second area would contain “private directories” for individual Members and acceding countries or territories. These directories would be accessible only by the country concerned and the Secretariat. They would be used to forward IDB submissions to the Secretariat and to receive files from the Secretariat. The third area would be a “provisional” area containing the processed files that had not yet been approved by Members (refer to section B for further information). The fourth area would contain an electronic bulletin board where Members could introduce references to public sources of tariff and trade information (refer to section E for further information). 4. The Internet site address and passwords would be distributed to Members, via the heads of delegations in Geneva, by the Secretariat. The Secretariat would ensure a strict control on the issuing of passwords to delegations. Each Member would have its own password and it would be possible to establish several passwords for a given Member if required. The passwords would be changed periodically. The Internet site would also have a logging facility to track files downloaded by individual users. Furthermore, the information would be automatically encrypted/ decrypted during the transfer operation. 5. Once IDB files have been posted to the production area, the Secretariat would lose control on the imparting of these files to unauthorized parties, regardless of the security measures established to prevent this. It would then be the responsibility of Members to advise the Secretariat of required changes in passwords, to ensure that the IDB dissemination practices are respected. Access rights to the Internet site could be removed at any time by deleting the password from the list of authorized users.
The IDB CD-ROM 6. The IDB CD-ROM in its present version was developed when the ID was still resident on the mainframe computer. It will henceforth be sourced from the PC IDB. The IDB CD-ROM contains tariffs and imports for IDB reporting countries and an application for analysis. The application contains features for selection of products according to tariff and trade criteria and for the compilation of seven types of reports. The CD-ROM files are stored in a binary format that can only be exploited by the CD-ROM application. With the present version of the IDB CD- ROM analysis software, it is not possible to transfer information in an electronic format from the CD-ROM, for use with other PC desktop software. The information can only be viewed or printed screen by screen.
The IDB Dissemination Database 7. The Secretariat has begun work on the IDB dissemination database,which
WTO BISD 1999 255 Decisions and Reports would be geared towards the production of reports. It is planned to make this dis- semination database available to users via a reporting application developed us- ing Internet technology. The IDB processed files would be transferred from the individual MS Access databases (one database for each reporting country) to the dissemination database, in which data for all reporting countries would be stored. The Internet reporting application would provide facilities for the user to define and submit a query and retrieve the results. As with the IDB File Transfer Facility, ac- cess to the dissemination database would be password-protected and data would be encrypted during transfer. The application would contain facilities similar to those now available with the IDB CD-ROM, with additional enhancements to provide greater flexibility in the selection of data and creation of reports. Facilities to ex- tract the IDB information for use with other PC desktop software, either at tariff line level or summary levels, would be introduced. Internet Technical Considerations 8. The efficiency of using Internet technology for IDB data transfer operations and IDB data analysis would depend on the type and speed of the client’s Internet connection, as well as the number of concurrent clients accessing the IDB server. As the number of concurrent clients on the server grows, the performance could decrease. The Internet traffic at the time of the operation could also affect response time. Those IDB users with a slow Internet connection might have to rely on alternatives, such as file copies distributed on CD-ROM’s or the use of the IDB CD- ROM to conduct analyses of the IDB information.
Conclusions 9. access rights to the File Transfer Facility, the IDB CD-ROM and the IDB Dissemination Database would be established according to dissemination practices agreed upon by Members (refer to section D). To avoid complex password administration, the same access rights and passwords would be used for both the IDB File Transfer Facility and the IDB Dissemination Database. The IDB information would be distributed according to the methods described in this note.
B. MEMBERS’ APPROVAL OF PROCESSED SUBMISSIONS 10. Members have suggested that there should be a period of sixty days for the reporting Member to approve the files processed by the Secretariat. In order to be efficient and provide Members with timely IDB information, pending the receipt of Members’ approval, the processed files would be disseminated via the Internet File Transfer Facility with a “provisional” status, meaning that they may be subject to revision. These provisional files would be distributed to all WTO Members and also to those acceding countries or territories that have provided IDB submissions. All such provision al files would be automatically deemed approved if the Member had not submitted revisions within sixty days. In addition, when provisional files
256 WTO BISD 1999 Committee on Market Access had been revised, the Secretariat would post a note on the Internet File Transfer Facility indicating on a broad level the changes that had been made and the degree of change (i.e. minor/significant changes to nomenclature, trade data, tariffs, etc). Furthermore, Members would be able to transmit changes to their files at any time after formal approval had been notified to the Secretariat.
C. DISTRIBUTION OF ORIGINAL SUBMISSIONS 11. Members have offered differing opinions as to whether submissions received from Members, before their processing by the Secretariat and defined as “original” submissions, should be distributed. Some Members have suggested that original submissions be circulated to those Members who have also provided submissions, possibly by means of the Internet File Transfer facility, where a private “library” might be established to store the original submissions. Other Members have stated that the Secretariat should not undertake any distribution of original submissions, that is, before they are processed by the Secretariat. The original submissions received thus far for fifty-eight Members and three acceding countries or territories comprise more than three thousand three hundred individual files. These original files are sometimes incomplete or are later replaced with revised data. Sometimes, hard-copy documentation provided with the submissions is required to interpret the electronic information. Furthermore, in posting files to the Internet File Transfer Facility, they must be transferred one at a time and a description must be entered for each file. Therefore, the administrative effort on the part of the Secretariat associated with distribution of original submissions, via whatever medium (Internet, diskette copies, etc), would be substantial. Another consideration in circulating original submissions relates to non-mandatory IDB information in original submissions. Some Members have already advised the Secretariat that they do not wish for this information to be included in the IDB, thus precluding the circulation of these submissions to others. 12. in view of these considerations, original submissions would not be distributed as a general practice. However, original submissions could be distributed by the Secretariat with the written authorization of the Member that had provided the data.
D. DISSEMINATION PRACTICES
Background 13. The GATT Council launched the original (mainframe) IDB in its decision of 10 November 1987 (BISD 34S/66, L/6290) and established the Informal Advisory Group (IAG) on the IDB, in which experts from all Contracting Parties were invited to participate. The IAG’s mandate was to provide guidance to the Secretariat in the preparation of the IDB and to report to the GATT Council on the
WTO BISD 1999 257 Decisions and Reports progress of the work. With respect to the dissemination of the information, the Council Decision stipulated that all Contracting Parties would have full access to the database. However, during the Uruguay Round, most countries did not supply annual IDB submissions on a regular basis. They supplied base and offered duties and their updates for the market access negotiations. These trade negotiation files were exchanged among Contracting Parties only with authorization of the countries concerned. The IDB trade negotiation files were not made available to all WTO Members until the first version of the IDB CD-ROM was distributed in June 1995. In October 1995, the Committee agreed to allow international organizations access to the IDB for internal use. Annex 1 lists the international and regional organizations that have been provided IDB information in the past. Furthermore, the WTO has entered into formal cooperation agreements with the IMF and the World Bank (refer to document WT/L/195). These agreements state that these organizations are granted access to the IDB. Annexes 2 and 3 contain extracts of the agreements pertaining to the IDB.
Current dissemination practices 14. The current dissemination practices are a continuation of those followed in the past. In June 1997, the Committee adopted a document (G/MA/IDB/1/ Rev.1), which sets out the modalities and operations of the IDB. With respect to dissemination of the IDB, the document states: “The IDB contains information already in the public domain – customs tariffs published in the national tariff schedules, concessions available in the WTO list of concessions and import statistics available from national statistical authorities. This IDB information had been available to all WTO Members and to international organizations for their internal use. This is the present policy followed by the Secretariat in the dissemination of the IDB on the CD-ROM, but it may need to be reviewed.” On 2 December 1997, the Committee on Market Access took a decision to allow acceding countries to have access to the IDB (G/MA/IDB/1/Rev.1/Add.1). Access is conditional on the acceding country having provided its submission to the IDB as described in document G/MA/IDB/1/Rev.1, within respect of the agreed-upon deadlines.
Types of Information for Distribution 15. While IDB information can be distributed through various methods (refer to section A), access to tariff line level data should be distinguished from access to the present version of the IDB CD-ROM. Tariff line level data can be further analyzed using PC desktop software, while the IDB CD-ROM only permits the viewing and printing of tariff line and summary data.
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Members’ Access to the IDB 16. in light of the GATT Council Decision of 10 November 1987 (BISD 34S/66, L/6290), the Committee on Market Access Decisions of 27 June 1997 (G/MA/IDB/1/Rev.1) and 2 December 1997 (G/MA/IDB/1/Rev.1/Add.1) and the Decision of the General Council of 16 July 1997 (WT/L/225), access to the IDB is available to all WTO Members and also to those acceding countries or territories that have provided IDB submissions. 17. Some Members have expressed concern with respect to the level of compliance by Members to the IDB notification requirement thus far, and have noted that technical assistance continues to be available to all Members to help them fulfil this obligation. These Members have recognized that this non-compliance is generally due to limited resources available in delegations and national capitals to deal with the many WTO notification obligations, or to limited technical capacity. 18. in view of these considerations, Members considered that efforts to encourage such Members that have not been able to make IDB submissions should be stepped up. Accordingly, such Members would be requested to convey the nature of difficulties faced by them in making IDB submissions so that they couldbe assisted in dealing with difficulties faced by them either through technical assistance or other steps considered appropriate by Members. 19. in light of the need to assure the broadest possible participation of Members in the IDB and full compliance with the 16 July 1997 Decision of the General Council (WT/L/225) concerning supply of information to the IDB, Members agreed that the Market Access Committee would undertake prior to 1 June 2000 a review of the operation of the IDB and of IDB related technical assistance activities. If, at the time of the review, participation of Members in the IDB falls substantially below the current level of participation, access to the IDB data will be temporarily suspended until adequate participation is secured again, unless other steps considered appropriate by Members are agreed.
Members Use of the IDB Information 20. it is understood that Members are free to use and distribute their own processed IDB files as they wish. However, the files of other Members can only be used internally by governments.
WTO Secretariat’s Access to the IDB and use of the IDB Information 21. The WTO Secretariat would have full access to the IDB files for internal use. The use of IDB information in WTO publications usually covers market access, regional agreements, agriculture, economic analyses, trade policy reviews, etc. When IDB information at the detailed tariff line level is to be published, agreement would be sought from the concerned parties.
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Data to be Distributed 22. The Secretariat would make available to authorized users any processed information that was ready for dissemination regardless of whether the submission had fully complied with the notification requirements.
Other Organizations’ Access to the IDB 23. at the Committee’s meetings of March and June 1998, Members presented their preliminary views on the distribution of IDB data to international organizations for their internal use. Members favoured the drawing up of a list of organizations that would be granted access. Annex 1 lists the international organizations that have been given access in the past. In this context, the Secretariat noted the WTO’s undertaking with regard to the formal agreements with the World Bank and the IMF. 24. With respect to the definition of “internal use”, the understanding in the past was that these organizations could not under any circumstances distribute the detail files outside their organization and could not publish any information at the tariff line level. However, it was understood that they could publish certain aggregated information with the proviso that the WTO was cited as the source of the original data. It has been suggested that the most detailed level of aggregated information that could be published would be at the level of HS four-digit headings. In the future, a condition of providing IDB information to international organizations would be the publishing of a standard disclaimer associated with any use of the IDB data. This disclaimer would state that any conclusions or analyses were the responsibility of the authors and did not necessarily represent the opinion of the WTO. 25. in view of the formal co-operation agreements with the World Bank and the IMF (refer to Annexes 2 and 3), special arrangements apply to these two institutions. The formal agreement reached with the World Bank provides the World Bank with access to processed IDB files at the tariff line level once those files had been approved by Members. The Secretariat would recommend giving the Bank access to the Internet File Transfer Facility to reduce the Secretariat’s administrative work. With respect to the IMF, similar arrangements as those afforded to the World Bank would be made, should the IMF request IDB information at the tariff line level. All international and other organizations would be provided with access according to the terms described in the following paragraph. If the IMF or World Bank intends to publish IDB data, it must obtain advance approval, like other international organizations, as set out in paragraph 26. 26. The Committee on Market Access must approve requests for access to the IDB by international organizations and by other organizations. As a contingency of acquiring access, all organizations must agree to inform the Committee on
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Market Access, through the WTO Secretariat, of any intended publication of IDB aggregated data (i.e. at the level of HS four-digit headings or more aggregated) or analyses derived from IDB data, prior to publication. All organizations must also agree to obtain the individual Member’s approval for the publication of any information more detailed than the level of HS 4-digit headings. Furthermore: (1) organizations would be given access only to the IDB CD-ROM in its present version (without extraction facilities) for internal use, under the explicit understanding that the information was the copyrighted material of the WTO, and that redistribution of tariff line level data beyond the staff of these organizations was prohibited. A disclaimer as described above would be an additional condition of using or publishing information, analyses or conclusions that have been derived from the data contained in the IDB. (2) The World Bank would continue to have access to the processed IDB files at the tariff line level once those files had been approvedby Members, and in future via the Internet, in view of the existing formal cooperation agreement between the WTO and the Bank, subject to the provisions described above on the use and publication of IDB data. (3) The IMF would be accorded the same arrangements as the World Bank, should it request access to the IDB information, in view of the existing formal cooperation agreement between the WTO and the IMF, subject to the provisions as described above on the use, publication and distribution of IDB data. (4) any requests for IDB information not covered above would require the written authorization of Members concerned. (5) Those organizations that previously had access to the IDB would be accorded access in accordance with the table in Annex 1.
Distribution of the IDB Database Design and Software 27. The distribution of the IDB database design and software to international and/or regional trade organizations for internal use should take place only when it benefits the IDB and the WTO. In preliminary discussions with Members on this issue, it has been suggested that such transfer should be an integral part of a joint effort of both organizations to collect and disseminate the trade and tariff data of the countries concerned. Before such cooperation is initiated, most if not all of the organization’s membership should have provided their outstanding submissions to the IDB. Furthermore, cost-recovery could well be an issue. It has also been pointed out that should such cooperation be initiated, it would be the responsibility of individual WTO Members to furnish their processed IDB files to the secretariat of the regional organization. As such, any legal, copyright or intellectual property
WTO BISD 1999 261 Decisions and Reports rights issues would be the responsibility of the WTO Member and not the WTO Secretariat.
E. ELECTRONIC INFORMATION FROM PUBLIC SOURCES 28. Some Members have suggested that electronic tariff and trade-related information, already available from public sources, could be supplied by Members to the Secretariat for inclusion in an electronic library. Members have also stated that the Secretariat should not undertake any undue administrative work to accomplish this. The Secretariat believes that there could be substantial administrative work on its part to maintain this library. However, several alternatives could be envisaged. One alternative would be to incorporate links in the Internet File Transfer Facility or in the WTO public Web Site to the Internet sites of organizations or other bodies where such information is available. Another alternative could be to create an electronic bulletin board where Members and the Secretariat could introduce references to sources of public information relating to tariffs and trade. This could be done by posting the Internet address or indicating how to otherwise contact any national or international organizations as well as public or private institutions from which the data in question is available. 29. in order to minimize the administrative work of the WTO Secretariat while at the same time providing a vehicle for identifying public sources of information on tariffs and trade, an electronic bulletin board would be set up at the WTO where Members and the Secretariat could introduce references to sources of public information on tariffs and trade.
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Annex 1
International Organizations that have been given access to the IDB in the past
Organization Current Access / Remarks Proposed Access
International Monetary The IMF receives the IDB CD-ROM. A CD-ROM for internal use Fund formal cooperation agreement (see Annex only, and access to tariff line 2) was approved by the General Council files for internal use only and then signed with the IMF in December 1996, entitling the IMF to receive tariff line level files.
World Bank The World Bank receives the IDB CD- CD-ROM for internal use ROM. A formal cooperation agreement only and access to tariff line (see Annex 3) was approved by the General files for internal use only Council and then signed with the Bank in April 1997, entitling the Bank to receive tariff line level files.
UN Conference for Before the Uruguay Round, UNCTAD CD-ROM for internal use Trade and Development regularly received copies of the Tariff Study only files. During the Round, it received the trade negotiation files of those Members who gave their formal approval to the Secretariat.
UN Statistics Division The Secretariat and UNSD have exchanged Import files with the import files for many years, with the permission of the Member approval of Members concerned. However, concerned this has not included submissions for the PC IDB.
Organization for The OECD was given the trade negotiations CD-ROM for internal use Economic Cooperation files for those Members who gave their only and Development formal approval to the Secretariat. The OECD also receives the IDB CD-ROM
Food and Agricultural The FAO receives the IDB CD-ROM CD-ROM for internal use Organization only
Inter-American The IaDB has received the IDB CD-ROM CD-ROM for internal use Development Bank to assist them in assessing their analytical only (IaDB) requirements for the FTAA negotiations.
World Customs The WCO has received the IDB CD-ROM CD-ROM for internal use Organization only
Other Aggregated information from the IDB that Aggregated information has already appeared in WTO publications is from WTO Publications only sometimes provided upon request.
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Annex 2
Extracts from the formal cooperation agreement between the WTO and the IMF Paragraph 9 “ For the purpose of this Agreement, the Director-General of the WTO and the Managing Director of the Fund shall ensure cooperation between the staffs of the two institutions and, to that end, shall agree on appropriate procedures for collaboration, including access to databases, and exchanges of views on jurisdictional and policy issues. Comment: This general provision affirms the practice of cooperation between the staffs of the two institutions. The details of staff contacts can be determined by the Director-General of the WTO and the Managing Director of the Fund pursuant to their authority to implement the Agreement (see below, paragraph 14 on implementation). Issues for discussions may include the balance-of-payments implications of the Uruguay Round on least-developed and net-food-importing developing countries and other matters of interest to both organizations that either may propose for consideration. On access to databases, the Fund’s staff will make available to the WTO Secretariat upon request the publications files, in print, tape or other appropriate form, of the International Financial Statistics (IFS), Balance of Payments Statistics (BOPS), Government Financial Statistics (GFS), Direction of Trade Statistics (DOTS) on the following understanding: (a) these are the copyrighted work of the Fund and redistribution beyond the WTO Secretariat is prohibited; and (b) at least three copies each will be provided on a complimentary basis. The Fund’s staff will also make available to the WTO Secretariat upon request historical data and aggregate projections in the WEO [World Economic Outlook]. Sympathetic consideration will be given to specific additional requests pertaining to the IFS, BOPS, GFS and DOTS databases, as well as requests for projections of individual country data to be used in the WEO and for other statistics, subject to confidentiality requirements restricting the release of the information requested. The WTO Secretariat will provide to the Fund’s staff access to the Integrated Database of the WTO and to final schedules of commitments of WTO Members on the understanding that the material provided is the copyrighted work of the WTO and redistribution beyond the Fund’s staff is prohibited. In addition, six complimentary copies of the WTO annual
The texts following “Comment:” are an integral part of the agreement.
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International Trade report will be provided to the Fund’s staff. The WTO Secretariat will give sympathetic consideration to requests by the Fund’s staff for other statistics. It is understood that any information provided under paragraph 9 may be subject to a confidentiality constraint under paragraph 13. ”
Paragraph 13 “ Each party to this Agreement shall ensure that any information communicated under this Agreement shall be used only within the limits specified by the other party. Comment: This paragraph commits each institution to preserve the confidentiality of material received from the other organization. Because of the general wording of the paragraph, the obligation extends to use of the information whether within or outside the institution.”
Annex 3
Extracts from the formal cooperation agreement between the WTO and the World Bank Paragraph 7 “ For the purposes of this Agreement, the President of the World Bank and the Director-General of the WTO shall ensure cooperation between the staffs of the two institutions who, to that end, as appropriate, shall share access to databases, undertake joint research and technical cooperation activities and exchange views on policy issues. Comment: This general provision affirms the practice of cooperation between the staffs of the two institutions. The details of staff contacts can be determined by the President of the World Bank and the Director-General of the WTO pursuant to their authority to implement the Agreement (see below, paragraph 11 on implementation). Issues for discussion may include the implications of the Uruguay Round on least-developed and net-food-importing developing countries, the roles of trade and trade policy in enhancing economic growth in Africa, and other matters of common interest that either organization may propose. The World Bank will provide the WTO Secretariat access to the Bank Economic and Social Database (BESD), as well as three complimentary
The texts following “Comment:” are an integral part of the agreement.
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copies in appropriate form (print, diskette or CD-ROM), of the World Debt Tables, World Bank Atlas, World Development Indicators, Trends in Developing Economies and African Development Indicators. The World Bank staff will also make available upon request the Statistical Annex of the Global Economic Prospects and the Developing Countries. The World Bank staff will give sympathetic consideration to requests by the WTO Secretariat for other statistics. Any material provided to the WTO will be on the understanding that it is the copyrighted work of the World Bank and redistribution beyond the WTO Secretariat is prohibited. The WTO Secretariat will continue to provide the World Bank staff access to the Integrated Database of the WTO and to final schedules of commitments of WTO Members on the understanding that the material provided is the copyrighted work of the WTO and that its redistribution beyond the World Bank’s staff is prohibited. It is understood that any information provided under paragraph 7 may be subject to a confidentiality constraint under paragraphs 9 and 10. This paragraph also provides for the institutions to develop joint research and technical assistance projects in areas of common interest.”
Paragraph 9 “ Subject to such limitations as may be necessary for safeguarding of confidential material, the World Bank and the WTO shall arrange the timely exchange of information, reports and other documents of mutual interest. Comment: This provision provides for a regular exchange of documentation between the two Institutions. The WTO will provide the World Bank with the Trade Policy Review Reports, Summary Records and Reports of Councils, Committees or other bodies, and reports of WTO Members to these organs. In addition, six complimentary copies of the WTO annual International Trade report will be provided to the World Bank’s staff. The WTO Secretariat will give sympathetic consideration to requests by the World Bank’s staff for other information, publications and statistics. The World Bank will provide the WTO with six complimentary copies of World Development Report, and Global Economic Prospects and the Developing Countries. The World Bank staff will give sympathetic consideration to other requests for information and publications by the WTO Secretariat. Within this provision it is understood that, in cases where a policy
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framework paper (PFP) is being prepared, and in the context of discussions on recipients of the PFP, the World Bank’s staff will suggest to its missions to indicate to the country concerned the WTO’s interest in receiving such documents. It is understood that any information provided under this Paragraph may be subject to a confidentiality constraint under this Paragraph and Paragraph 10.”
Paragraph 10 “ Each party to this Agreement shall ensure that any information communicated under this Agreement shall be used only within the limits specified by the other party. Comment: This paragraph commits each institution to preserve the confidentiality of material received from the other organization. The general wording of the paragraph entails the possibility that restrictions may be placed on the use of the information either inside or outside the institution.”
CONSOLIDATED TARIFF SCHEDULES DATABASE TECHNICAL CO-OPERATION PROJECT
Agreed by the Committee on Market Access on 22 June 1999 (G/MA/63) Consolidated Tariff Schedules Database Technical Co-operation Project 1. The establishment of consolidated loose-leaf schedules on goods has been under discussion in the Committee on Market Access since its first meeting on 31 May 1995. Among the issues dealt with by the Committee were: the information to be included in the consolidated schedules and the introduction of amendments to the schedules resulting from changes in the Harmonized System (HS) in 1996. These discussions resulted in the Decision on the Establishment of Loose-leaf Schedules on Goods (G/L/138) being approved by the Council for Trade in Goods on 29 November 1996. The Decision addresses inter alia the legal status of the schedules and the information to be included in the schedules. It provides that the consolidated schedules “shall be binding instruments, replacing all previous schedules for all purposes relating to a Member’s rights and obligations under the WTO, except with respect to historical Initial Negotiating Rights (INRs). The schedules therefore shall contain all necessary information in order to reflect the exact situation in respect of each tariff concession and commitment.” 2. The tariff concessions of all Members are available in the Secretariat.
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However, for many Members, the information is not consolidated (i.e. in one list, containing all concessions to-date in a given nomenclature). The most recent concessions are contained in several sources�������. �����������������������������These include the pre-Uruguay Schedules and rectifications to these schedules, the Uruguay Schedules and their rectifications, Accession Schedules, ITA Schedules and other concessions such as pharmaceuticals and distilled spirits. A good part of this information is already available in electronic format but, for the most part, not in a standardized database format.
Proposal 3. To improve the situation regarding the consolidation of Members’ tariff concessions, the Secretariat has outlined a proposal to construct the consolidated Tariff Schedules Database. In this proposal, it is assumed that the Secretariat would prepare draft files of consolidated tariff concessions for developing countries, and without seeking, in principle, additional information. 4. developed countries would prepare their submissions for the Tariff Schedules Database using the electronic format developed by the Secretariat. Upon request, the Secretariat might also provide those countries with the software tools developed in the course of the project. 5. The project would cover the formatting and consolidation of the tariff schedules of around one hundred developing countries.���������� The���������������������� result would be a database containing the consolidated draft tariff schedules, composed of the data elements as described in Annex 1. All elements described in the Decision on the Establishment of Loose-leaf Schedules on Goods (G/L/138) have been included. The database would be established as a working tool only, without implications as to the legal status of the information stored therein. However, the database would accurately reflect Members’ concessions. The Secretariat would furnish Members with their consolidated draft schedules files. Members would then notify their approval to the Secretariat and could submit their consolidated schedules to the Secretariat according to the usual procedures.����������� �������������������������������This would also enable Members to take further action in order to submit the required documentation related to HS changes. 6. The Secretariat has analysed the different cases that may occur when preparing the tariff schedules. These cases and the corresponding work to be carried out can be summarized as follows:
Additional information is provided in the annex. The South African Customs Union (SACU) Members are counted as one. This might not be necessary for Members that have already furnished the required documentation for the introduction of the HS 1996 in their schedules. However, these Members would need to approve the contents of their database files.
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Case 1: Countries that have provided complete HS 1996 schedules (14 countries) - standardize complete HS 1996 schedule - introduce ITA and/or other rectifications (9 countries) - no ITA, no rectifications (5 countries) Case 2: Countries that have provided the list of items affected by HS 1996 changes and have a complete Uruguay Round schedule (7 countries) - standardize list of concessions affected by HS 1996 changes - introduce the Uruguay Round concessions that were not affected by the HS 1996 changes - introduce ITA and/or other rectifications (6 countries) - no ITA, no rectifications (1 country) Case 3: Countries that provided the list of items affected by HS 1996 changes and do not have a complete Uruguay Round Schedule (5 countries) - standardize list of concessions affected by HS 1996 changes - introduce the Uruguay Round concessions that were not affected by the HS 1996 changes - add pre-Uruguay Round concessions not reported in the Uruguay Round Schedule - introduce ITA and/or other rectifications (3 countries) - no ITA, no rectifications (2 countries) Case 4: Countries that did not provide HS 1996 documentation and have a complete Uruguay Round Schedule (50 countries) - standardize complete Uruguay Round Schedule - transpose to HS 1996 (if applicable for the Member) - introduce ITA and/or other rectifications (7 countries) - no ITA, no rectifications (43 countries) Case 5: Countries that did not provide HS 1996 documentation and do not have a complete Uruguay Round Schedule (24 countries) - standardize Uruguay Round Schedule - transpose to HS 1996 (if applicable for the Member) - add the pre-Uruguay Round concessions that were not reported in the Uruguay Round Schedule
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- introduce ITA and/or other rectifications (4 countries) - no ITA, no rectifications (20 countries) 7. Situations would arise when the Secretariat would require assistance from Members in determining how the information should be recorded (i.e. when correlation tables are not available). For these cases, the Secretariat would provide the Member with a list of the items affected (at the HS1992 or HS1996 six-digit level or at the tariff line level) and the corresponding information for the concessions. The Member would then decide on the recording of the tariff lines and the corresponding concession information. 8. Where possible, this list would also contain proposals to solve these problems, which would be developed according to two of the methods recommended in the Decision of 12 July 1983 (GATT Concessions under the Harmonized Commodity Description and Coding System - BISD 33S/135 - L/5470/Rev.1). These are: (a) applying the lowest rate of any previous heading to the whole of the new heading. (b) applying the arithmetic average of the previous rates of duty. Proposals could also be developed by the Secretariat on the basis of the following methods, if the Member concerned makes the request and provides the information to establish trade allocations for the items in question. (c) applying the rate previously applied to the heading or headings with the majority of trade. (d) applying the trade-weighted average rate of duty for the new heading.
Funding and time frame 9. The project would be funded through special contributions to the technical assistance programme and would be carried out in one year.
270 WTO BISD 1999 Committee on Market Access
Annex 1 Data Elements for Inclusion in the Consolidated Tariff Schedules Database
Concessions Notes
Tariff line Note number Tariff suffix (ex) Note text Source of concession Note link to tariff line(s) Certification indicator Product level Product description Base duty - ad valorem Base duty - other Base duty units Base duty - binding Bound duty - ad valorem Bound duty - other Bound duty units Special safeguard Implementation period from Implementation period to Present INR Earlier INR’s (if available) Earlier concessions (if available) Present Legal Instrument First Legal Instrument (if available) Other Duties and Charges: odC ad valorem duty odC other duty odC duty units odC Textual information Comments
Refer to the following pages for an explanation of each data element. Data Elements for inclusion in the Consolidated Tariff Schedules Database N.B. In addition to the data elements described in the Decision on the Establishment of Loose-leaf Schedules on Goods (G/L/138), a few additional data elements have been added for internal use by the Secretariat to facilitate the establishment of electronic tools for data formatting and consolidation of schedules.
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Tariff line number or The customs tariff line number (or HS code) associated with the HS code product for which a concession was offered. Each entry in the database would have a number associated with it (including HS and tariff headings). Suffix (Ex) Indicates that the concession pertains to part of the tariff line or HS code. Source of the This would indicate the source of the concession (pre-UR, UR, concession HS 1996, ITA, rectifications, etc). This data element has been introduced to facilitate the consolidation of concessions by the Secretariat but might be of use to Members that are carrying out the work themselves. Certification Shows whether or not the concession had been certified. This has indicator been included at the request of Members. Values could be: Y (Yes) N (No) Product level This element has been introduced to define the hierarchical structure of the schedule’s nomenclature in the database. It is used in conjunction with the tariff line to uniquely identify each tariff line and is required for the conversion tools developed by the Secretariat. For Members that are carrying out the work themselves, it would not be required if HS and tariff heading numbers were recorded using a numbering scheme that does not contain duplicates. Values could be: 02 - 06 HS 2-digit through HS 6-digit headings 07 - 98 other headings according to the hierarchy of the schedule 99 Tariff line The following example illustrates the use of the product level, which would be automatically generated by the software conversion tools that have been developed by the Secretariat:
Original Product description Bound Standardized Product product code duty product code level
0101 Horses, asses, mules and hinnies, live: 0101 4
- horses: 01011 5
- - pure-bred breeding animals: 010111 6
0101.11 10 - - - within tariff quota (no 1)* 5 01011110 99
0101.11 90 - - - other 10 01011190 99
272 WTO BISD 1999 Committee on Market Access
- - other: 010119 6
- - - for slaughter: 0101191 7
0101.19 11 - - - - within tariff quota (no 5)* 3 01011911 99
0101.19 19 - - - - other 6 01011919 99
- - - other: 0101199 7
0101.19 91 - - - - within tariff quota (no 1)* 2 01011991 99
- - - - other: 01011992 8
0101.19 92 - - - - - of a height exceeding 1,48 m 5 01011992 99
0101.19 93 - - - - - of a height exceeding 1,35 m 4 01011993 99 but not exceeding 1,48 m
0101.19 94 - - - - - of a height not exceeding 3 01011994 99 1,35 m
Product Description Tariff line or HS heading description Base duty - ad Ad valorem duty rate used as the base rate in the most recent valorem negotiations. Base duty - other Specific, mixed, compound or other base duty, where applicable. Base duty units Where applicable, unit of specific or other duty. Base duty binding Binding status of the base duty. Possible values could be: B (Bound) U (Unbound) Bound duty - ad Ad valorem duty of the latest concession. valorem Bound duty – other Specific, mixed, compound or other duty. Bound duty units Where applicable, unit of specific or other duty. Implementation Start year of the first reduction. period (from) Implementation End year when the final concession is implemented. period ( to) Special Safeguard Indication that the Special Safeguard provision is applicable indicator to the tariff line or HS code (applicable only for agricultural products). Possible value could be «SSG».
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INRs on the present WTO Member(s) holding Initial Negotiating Rights (INR’s) on concession the present concession. INR’s on earlier If available, WTO Member(s) holding INRs on earlier concession(s) concession(s). Earlier concessions If available, duty level of concessions granted for historical INRs. Legal instrument WTO Legal instrument in which the present concession on the containing the product was established (e.g. UR/94) present concession Legal instrument If available, WTO / GATT legal instrument in which the first containing the first concession on the product was established (e.g. G/47, T/51) concession Other duties and Other duties and charges applicable to the tariff line - this charges - ad valorem can consist of ad valorem and specific elements or textual duty information. Other duties and Other duties and charges applicable to the tariff line – this charges - other duty can consist of ad valorem and specific elements or textual information. Other duties and Where applicable, unit of specific or other duty. charges - other duty units Other duties and Other information on duties and charges applicable to the tariff charges line - textual information Comments Comments relating to the individual concessions could be recorded here. Notes Notes would be recorded in a separate table and would consist of a note number, textual information and links to the tariff line entries (or HS headings) to which the note is applicable.
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Annex 2
Situation of Schedules of WTO Members The attached table reflecting the situation of schedules of WTO Members was prepared for information purposes. It is intended to assist 1) the project team in the Secretariat in its preparation of the draft files of consolidated tariff concessions for developing country Members, and 2) developed country Members which are expected to prepare submissions for the Tariff Schedules Database. Additionally, the Secretariat has indicated the next stage of work which remains to be done with respect to a Member’s schedule. This work derives from obligations in connection with the introduction of the Harmonized System or its changes, for example and is independent from the work carried out by the Secretariat under the Consolidated Tariff Schedules Database Project. In order to facilitate the reading of the table, some background information has been provided.
Background Information all WTO Members have a WTO schedule of tariff concessions which is either annexed to the Marrakesh Protocol to the GATT 1994 or to a Protocol of Accession. Some Members have also schedules pre-dating the Uruguay Round which reflect concessions granted previously. Following the entry into forceof the Harmonized System������ (HS) on 1 January 1988 (HS88), the pre-UR schedules of those GATT contracting parties which are also contracting parties to the HS Convention were required to be transposed into the HS.��� The GATT Committee on Tariff Concessions developed procedures for this purpose (BISD 30S/17). A certain number of schedules have been transposed, certified and annexed to Protocols. Some Members undertook to renegotiate their schedules in connection with the implementation of the HS and have either completed the process or are under waiver. The situation regarding pre-UR schedules is set out in column 4 of the table. The term “None” is used for those Members that have no GATT schedule of concessions. However, these Members did submit a schedule either during the Uruguay Round or at the time of their accession following the Uruguay Round. Column 5 indicates whether the schedules of WTO Members are annexed to the Marrakesh Protocol or to a Protocol of Accession.
The Harmonized System (HS) nomenclature, which was developed in the World Customs Organization (formerly the Customs Cooperation Council) entered into force on 1 January 1988 through a Convention. As of 13 November 1998, the HS Convention had 81 contracting parties (EC counted as one) and an additional 70 countries applying the HS without being contracting parties to the HS Convention. Article 3 of the HS Convention obliges HS contracting parties to ensure that their customs tariff and statistical nomenclatures are in conformity with the Harmonized System. It is to be noted that those contracting parties which were not contracting parties to the HS, but nevertheless apply the HS in their national customs tariff also undertook this exercise in order to keep the authentic texts of their schedules up to date and in conformity with their national customs tariff.
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Periodically, the HS Committee of the World Customs Organization (WCO) undertakes a review of the HS to take account of changes in technology and patterns in international trade and recommends certain amendments to the HS. The first set of such changes came into force on 1 January 1992 (HS92) and the second, more substantial set on 1 January 1996 (HS96). The Committee on Tariff Concessions established simplified procedures to implement these changes and any future changes in the HS relating to GATT concessions (BISD 39S/300). Eleven GATT contracting parties followed these procedures to introduce the HS92 changes and submitted documentation. For the purpose of implementing HS96 changes on 1 January 1996 and subsequently to undertake Article XXVIII consultations and negotiations, thirty- three Members initially requested a waiver. The waivers were granted in December 1995 (WT/L/124) and have been extended since then for periods of 6 months at a time. Since the waivers were granted initially, a few Members have requested to be added to the list of countries under waiver, while a few other Members have not requested an extension. The latest waiver decision (WT/L/303) grants an extension of the waivers until 31 October 1999. The decision requires Members under waiver to either submit relevant documentation or if special circumstances apply, to request technical assistance from the Secretariat for the completion of such documentation. Column 6 of the table reflects the situation with respect to HS96 changes. HS92 changes have been indicated in column 3 as these changes relate to pre-UR schedules. Following the Uruguay Round, a number of WTO Members submitted rectifications and modifications to UR schedules. The procedures for such rectifications/modifications were adopted by the GATT CONTRACTING PARTIES on 26 March 1980 (BISD 27S/25). The rectifications/modifications which have been notified include concessions made in the context of the Ministerial Declaration on Trade in Information Technology Products (ITA), the Pharmaceutical Understanding (pharma), or reflect the results of bilateral negotiations (distilled spirits). Other notifications include autonomous improvements in concessions, changes pursuant to provisions of WTO Agreements, information on other duties and charges (ODCs) and changes of a technical nature. Column 7 reflects the situation on rectifications and modification of schedules. Rectifications/modifications pertaining to the ITA, the Pharmaceutical Understanding, or the results of bilateral negotiations on distilled spirits and ODCs have been specified; all others have been referred to as “other”. Some of these changes have been certified, while others remain pending (due to reservations, domestic approval procedures etc.). as may be noted from the table, Members are at very different stages with respect to their schedules. Some Members, who are applying the HS, have pre-UR schedules which are in a nomenclature other than the HS. In these cases and in order to ensure consistency between the customs tariff and schedule of concessions, the Member needs to transpose its schedule into the HS using the procedures in BISD 30S/17. Others have pre-UR schedules which have already been transposed into the
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HS, but only into the 1988 or 1992 versions, and the HS96 changes would need to be introduced using the procedures set out in BISD 39S/300. The final objective is for all Members to have a consolidated schedule pursuant to the decision on the “Establishment of Consolidated Loose-Leaf Schedules on Goods” (G/L/138), which has already been referred to in paragraph 1 of this document. These consolidated schedules in loose-leaf format should, ideally, be the basis when further amendments to the HS will be introduced in the year 2002. Column 8 of the table gives an indication of the immediate work that needs to be completed in relation to Members’ schedules. In this connection, it is worth noting that in the past some Members, in doing this work, have combined various steps of the process. For example, some Members chose to transpose their pre-UR schedule into the HS and introduce HS96 changes to this schedule as well as their UR schedule all in one step. Another example is with respect to the introduction of HS96 changes to schedules of concessions. Certain Members submitted consolidated loose-leaf schedules which incorporated HS96 changes rather than just the pages of their loose-leaf schedules affected by HS96 changes which is what is foreseen under the procedures. Of course, while not stated explicitly in each case under column 8, the final objective, as noted before, is to submit consolidated schedules of concessions pursuant to the decision in G/L/138.
WTO BISD 1999 277 Decisions and Reports (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. (other) (7) AR / R S/52 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/Let/292). were 1 (6) HS96 Changes See column (8) See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/30). (reservations raised on the HS96 documentation, presently under waiver (WT/ L /303)). (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP (4) ‑ Uruguay Pre Round Schedule N one N one Schedule annexed to G eneva (1995) Protocol. (3) Number Schedule CXX I X (129) XCV II (97) (64) L X I V + X (2) WTO Member WTO A ngola A ntigua and Barbuda A rgentina* 1 2 3 (1) No
278 WTO BISD 1999 Committee on Market Access (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the transposed pre-U R affect schedule and the MP. ii ii
(ITA) (approved) (approved) was (7) AR / R S/31 (other) (other) (other) Rectifications/ Modifications to Schedules, if any G /SP/1 G /SP/8 G / R S/3 certified ( L et/1954). G /M A /T was certified (WT/Let/248). (6) HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/19 + Corr.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP
iii (4) ‑ Uruguay Pre Round Schedule is being renegotiated under waiver (WT/ L /299) in connection with the implementation of the HS. D ocumentation was circulated in S E C RE T/HS/29, but not yet certified because of reservations. See column (8) Schedule annexed to Second G eneva (1987) Protocol. HS92 changes certified (Let/1793). N one Pre-U R schedule (3) Number Schedule I (1) XCV III (98) L XX (70) + (2) WTO Member WTO A ustralia* Bahrain Bangladesh* 4 5 6 (1) No
WTO BISD 1999 279 Decisions and Reports (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP under B I S D 39S/300. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect ii (other) (approved) (7) AR / R S/49 (ODCs) Rectifications/ Modifications to Schedules, if any G /SP/7 G /M A /T (certification in progress) (6) HS96 Changes See column (8) See column (8) See column (8) (presently under waiver for the introduction of HS96 (WT/ L /303)). D ocumentation was submitted to the Secretariat for verification. See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP MP . iv (4) ‑ Uruguay Pre Round Schedule N one N one Schedule established in Second Certification of Rectifications and Modifications (1964). See column (8) Pre-U R schedule transposed into HS and certified (WT/ L et/204) N one (3) V III (48) Number Schedule V (94) XC I V C (100) X L (84) L XXX I V C I (101) + + (2) + + WTO Member WTO Barbados Belize Benin Bolivia Botswana* 7 8 9 11 10 (1) No
280 WTO BISD 1999 Committee on Market Access (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Consultations with trading partners having raised reservations on HS96 documentation to be concluded. (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/36+ Corr.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/HS/96/14 + 1). R ev. (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP . (4) v ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1994) Protocol N one (3) Number Schedule III (3) C II (102) + (2) WTO Member WTO Brazil* Brunei D arussalam 12 13 (1) No
WTO BISD 1999 281 Decisions and Reports (8) Comments D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP under B I S D 39S/300. First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP under B I S D 39S/300. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect ii. ODCs A pril 1995 (7) Rectifications/ Modifications to Schedules, if any I nformation on submitted in (6) HS96 Changes (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (2/10/1996) to the Marrakesh A Schedules annexed Schedules annexed P MP MP MP (4) ‑ Uruguay Pre Round Schedule N one Schedule established in Second Certification of Rectifications and Modifications (1964). See column (8) Schedule established in Third Certification of Rectifications and Modifications (1967). See column (8) N one (3) V I (46) Number Schedule V (55) V CXXX I X (139) X L L C III (103) X (2) WTO Member WTO Bulgaria* Burkina Faso* Burundi Cameroon* 14 15 16 17 (1) No
282 WTO BISD 1999 Committee on Market Access (8) Comments Consolidated schedule in loose-leaf format to be submitted ( G / L /138). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect
A dd.1 (ITA) was (7) (WT/ L et/8). were certified (other) AR / R S/13 + AR / R S/19 AR / R S/59 Rectifications/ Modifications to Schedules, if any G / R S/24 certified (WT/ L et/16). G/RS/25 was certified (pharma) G /M A /T (pharma) (WT/ L et/270 and 272, respectively). G /M A /T was certified (WT/Let/158). G /M A /T (pharma) (three-month period not yet over) (6) HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/HS96/7 + A dd.1). (certification of changes in progress) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP (4) ‑ Uruguay Pre Round Schedule Schedule annexed to Second G eneva (1987) Protocol. N one N one (3) Number Schedule V (5) V (104) C I V (105) CV A frican (2) WTO Member WTO Canada* Central R epublic* Chad* 18 19 20 (1) No
WTO BISD 1999 283 Decisions and Reports (8) Comments eneva (1993) Protocol (1993) G eneva Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the Schedule annexed affect the to and the MP. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect (other) (7) AR / R S/51 Rectifications/ Modifications to Schedules, if any G /M A /T (reservations were raised) (6) HS96 Changes consolidated schedule See column (8) A in loose-leaf format including HS96 changes is certified (WT/Let/267) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1993) Protocol. See column (8) Schedule annexed to G eneva (1993) Protocol. N one Schedule was renegotiated during the U R . A ll previous concessions replaced by the U R schedule. (3) Number Schedule V II (7) L XXV I (76) CV I (106) L XV III (68) + (2) + + WTO Member WTO Chile Colombia Congo Congo, D emocratic R epublic of the* 21 22 23 24 (1) No
284 WTO BISD 1999 Committee on Market Access (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect ii
. ii
(ITA) (approved) ODCc was A pril 1995 (7) AR / R S/28 (other) (ODCs) Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/Let/196). I nformation on submitted in G / R S/9 certified ( L et/1954). G /SP/6 (6) HS96 Changes consolidated schedule Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/37). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) A in loose-leaf format including HS96 changes is certified (WT/Let/192 + Corr.1). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP . (4) v A dditional ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1994) Protocol Schedule established in Third Certification of Rectifications and Modifications (1967). concessions given in 1979. See column (8) Schedule annexed to G eneva (1993) Protocol. N one (3) Number Schedule XXXV (85) L XXXV LII (52) I X (9) CV II (107) + (2) WTO Member WTO Costa R ica Côte d’ I voire* Cuba* Cyprus* 25 26 27 28 (1) No
WTO BISD 1999 285 Decisions and Reports (8) Comments Consolidated schedule in loose-leaf format to be submitted ( G / L /138). First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect First, procedures for the transposition of pre-U R schedule into HS (B I S D 30S/17) to be completed. Second, HS96 changes to be introduced MP following procedures for the introduction of HS changes (B I S D 39S/300). ii
(ITA) was (approved) (7) AR / R S/54) which (other) (other) AR / R S/40 (ODCs) Rectifications/ Modifications to Schedules, if any G / R S/20 certified (WT/Let/8). G /M A /T was certified (WT/Let/256). G /SP/3 G / R S/26 (reservations were raised). Following consultations a new notification was submitted ( G /M A /T was certified (WT/Let/293). (6) + Corr.1).
HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/5 (certification in progress) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP
vi (4) TT in 1994. TT ‑ Uruguay Pre Round Schedule transposed and circulated ( G / S E C RE T/HS/10) (90-day period not yet over) See column (8) Protocol of A ccession (19/2/1993) I nherited concessions specified in Section D of Schedule X I – France when succeeding to the GA See column (8) N one Pre-U R schedule (3) Number Schedule XC II (92) CXXXV II (137) CV III (108) XX III (23) + + (2) WTO Member WTO Czech R epublic* D jibouti* D ominica D ominican R epublic 29 30 31 32 (1) No
286 WTO BISD 1999 Committee on Market Access (8) A . Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, documentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). (other) (ITA) (7) AR / R S/50/ ev.1 AR / R S/14 AR / R S/45 (see also column 6) Rectifications/ Modifications to Schedules, if any G /M A /T (other) (reservations were raised) G /M A /T (reservations were raised) G /M A /T (awaiting domestic approval.) (6) AR / R S/50/ HS96 Changes See column (8) Submitted a consolidated loose-leaf schedule including HS96 changes ( G /M A /T also column 7) R ev.1)(see (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (16/8/1995) to the Marrakesh A Schedules annexed Schedules annexed P MP MP
vii (4) ‑ Uruguay Pre Round Schedule transposed into HS, and circulated ( G /S E C RE T/HS/1), but not yet certified due to reservations. under waiver Was until 30 June 1995. See column (8) N one Schedule was renegotiated during the U R . A ll previous concessions replaced by the U R Schedule. Pre-U R schedule (3) Number Schedule CXXX III (133) L X III (63) L XXXV II (87) + + (2) + WTO Member WTO E cuador E gypt E l Salvador 33 34 35 (1) No
WTO BISD 1999 287 Decisions and Reports (8) Comments V:6 enlargement enlargement A rticle XX I V:6 negotiations to be completed. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect ii
(ITA) (ITA) (other) was A dd.2 + (approved) (pharma ). (7) rectifications to A dd.3 AR / R S/6 AR / R S/16 AR / R S/30 AR / R S/47 (other) Rectifications/ Modifications to Schedules, if any G /SP/2 G /M A /T was certified (WT/Let/101). G /M A /T was certified (WT/Let/156). G /M A /T (distilled spirits) certified (WT/Let/178). G /M A /T was certified (WT/Let/261). + G / L /65/ R ev.1 Corr 1 + + others – Schedule E C-15 which is not yet certified O (6) HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/3). (reservations were raised on the HS96 documentation, the waiver for introduction of HS96 WT changes to schedules expired on 31 O ctober 1998, an extension was not requested). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP ( E C – 12) MP MP MP (4) TT in 1963 TT ‑ Uruguay Pre Round Schedule E C – 12 Schedule Third annexed to G eneva (1987) Protocol. HS92 changes certified (Let/1793). N one G abon did not recognize existing schedule when succeeding to GA (B I S D 12S/75). (3) (140) V II (47) Number Schedule CX L C I X (109) X L viii (2) + WTO Member WTO E uropean* Communities ( E C – 15) Fiji* G abon 36 37 38 (1) No
288 WTO BISD 1999 Committee on Market Access (8) A . Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes See column (8) See column (8) See column (8) Submitted a consolidated loose-leaf schedule including HS96 changes ( G /S E C RE T/HS96/41). (reservations were raised on the HS96 Was documentation. under waiver until 30 A pril 1999 (WT/ L /281), did not request an extension). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (15/11/1995) to the Marrakesh A Schedules annexed Schedules annexed MP MP P MP . ix (4) ‑ Uruguay Pre Round Schedule N one N one N one Pre-U R schedule transposed into HS and certified (WT/ L et/271) (3) Number Schedule CX (110) CX I (111) CXXV II (127) L XXXV III (88) X + + (2) + WTO Member WTO ambia, The G ambia, G hana G renada G uatemala 39 40 41 42 (1) No
WTO BISD 1999 289 Decisions and Reports (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes See column (8) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) TT in 1994. TT ‑ Uruguay Pre Round Schedule N one I nherited concessions specified in Section C of Schedule X I -France when succeeding to GA See column (8) N one Schedule established in A nnecy 1949 additional Protocol, concessions contained in 1951, Torquay G eneva 1956 and G eneva 1962 Protocols. See column (8) (3) Number Schedule CXXX (130) CXXXV I (136) CX II (112) XXV I (26) X + (2) + WTO Member WTO G uinea Bissau G uinea, R epublic of* G uyana Haiti 43 44 45 46 (1) No
290 WTO BISD 1999 Committee on Market Access (8) Comments D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). Consultations with trading partners having raised reservations on HS96 documentation to be concluded.
(other) (ITA) (ITA) (other)
(7) (other) AR / R S/9 AR / R S/37 AR / R S/21 AR / R S/22 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/Let/171). G /M A /T was certified (WT/Let/252). G /M A /T was certified (WT/Let/160). G / R S/19 was certified (WT/Let/8) G /M A /T was certified (WT/Let/159) (6) HS96 Changes consolidated schedule consolidated schedule (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) A in loose-leaf format including HS96 changes is certified (WT/ L et/76). A in loose-leaf format including HS96 changes is certified (WT/ L et/264). Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ + HS96/38 + Corr.1 A dd.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) ‑ Uruguay Pre Round Schedule Protocol of A ccession (2/3/1994) Schedule annexed to Second G eneva (1987) Protocol. Schedule annexed to G eneva (1993) Protocol. Schedule annexed to G eneva (1992) Protocol. (3) Number Schedule XCV (95) XCV L XXX II (82) L XX I (71) L X II (62) + (2) + WTO Member WTO Honduras Hong Kong, China Hungary* I celand* 47 48 49 50 (1) No
WTO BISD 1999 291 Decisions and Reports (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded.
(ITA) (ITA) A dd.1 (7) ii (other) AR / R S/24 AR / R S/39 was AR / R S/23 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/ L et/181). G /M A /SP/1 and (other) (approved) G / R S/21 (reservations were raised). Following consultations, a new notification G /M A /T submitted and certified (WT/ L et/255). G /M A /T was certified (WT/Let/157). (6) HS96 Changes Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/8 + Corr.1) (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/HS96/33 + Corr.1). (certification in progress) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP . (4) v ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1994) Protocol Schedule annexed to G eneva (1992) Protocol. (3) Number Schedule X II (12) XX I (21) (2) WTO Member WTO I ndia* I ndonesia* 51 52 (1) No
292 WTO BISD 1999 Committee on Market Access (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. HS96 changes to be introduced to pre-U R following schedule and MP procedures under B I S D 39S/300.
(ITA) (7) AR / R S/25 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/ L et/174). (6) A dd.1). HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/26 + (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP (4) schedule x ‑ Uruguay Pre Round Schedule Pre-U R transposed and circulated in S E C RE T/HS/31/ A dd.1 (certification in progress) Pre-U R schedule transposed into HS (WT/ L et/257). (3) Number Schedule X LII (42) L XV I (66) + (2) WTO Member WTO I srael* Jamaica 53 54 (1) No
WTO BISD 1999 293 Decisions and Reports (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect
(other) (ITA)
(7) (pharma) were certified S/10 + Corr.1 AR / R S/10 + Corr.1 AR / R S/12 + Corr.1 AR / R S/55 + AR / R S/57 AR / R S/33 AR / R S/56 + (other) (pharma) Rectifications/ were certified Modifications to Schedules, if any G / R S/6 was certified (Let/1953). G / R S/7 was certified (Let/1953). G /M A /T (pharma) (WT/ L et/138). G /M A /T (ITA) (WT/ L et/138) G /M A /T + 2 Corr.1 (approved) G /M A /T (reservations were raised) G /M A /T was certified (WT/Let/249). G /M A /T 1 ( E nglish only) Corr. (other) (certification in progress) A dd.1+ 2) (6) HS96 Changes consolidated loose-leaf A schedule including HS96 changes is certified (WT/ L et/67). See column (8) Submitted a consolidated schedule in lose-leaf format including HS96 changes ( G /S E C RE T/ + 2 HS96/4 + Corr.1 + R ev.1 Corr.2/ (certification in progress). (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP (4) ‑ Uruguay Pre Round Schedule Schedule annexed to First G eneva (1987) Protocol. HS92 changes circulated in S E C RE T/C/HS/7 (approved). N one Schedule annexed to Second G eneva (1987) Protocol. HS92 changes were certified (Let/1793). (3) Number Schedule XXV III (28) CX III (113) L X (60) (2) WTO Member WTO Japan* Kenya* Korea* 55 56 57 (1) No
294 WTO BISD 1999 Committee on Market Access (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect (ITA) (pharma) S/27 S/27 S/35 (7) R R / / S/58 + Corr.1 AR / R S/58 + Corr.1 AR AR Rectifications/ /T /T Modifications to Schedules, if any A A /M /M G /M A /T (other) (certification in progress) G (WT/Let/177). certified was G (WT/Let/251). certified was (6) HS96 Changes consolidated schedule See column (8) See column (8) A in loose-leaf format including HS96 changes is certified (WT/Let/269). (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (14/10/1998) (14/10/1998) to the Marrakesh A A Schedules annexed Schedules annexed MP P P MP MP (4) ‑ Uruguay Pre Round Schedule N one N one N one N one Schedule circulated in document L /7023. N ot certified. Schedule was also considered in the framework of the U R . (3) Number Schedule V (114) CX I V CX LII (142) CX LIII (143) (115) CXV L XXX I X (89) + + (2) + WTO Member WTO Kuwait Kyrgyz R epublic L atvia, R epublic of* L esotho* Macau 58 59 60 61 62 (1) No
WTO BISD 1999 295 Decisions and Reports (8) Comments First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the pre-U R schedule affect and the MP. Consultations with trading partners having raised reservations on HS96 documentation to be concluded.
(ITA) (7) AR / R S/29 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/Let/176). (6) HS96 Changes See column (8) See column (8) Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/HS96/31 + R ev.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP (4) ‑ Uruguay Pre Round Schedule Schedule established in Second Certification of Rectifications and Modifications (1964). See column (8) Pre-U R schedule transposed into HS and certified (WT/ L et/167). Schedule annexed to G eneva (1993) Protocol. (3) Number Schedule V III (58) LI (51) L XXX I X (39) (2) WTO Member WTO Madagascar* Malawi* Malaysia* 63 64 65 (1) No
296 WTO BISD 1999 Committee on Market Access (8) Comments D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). ii was (approved) (7) (other) (ODCs and (ODCs) Rectifications/
Modifications to Schedules, if any G /SP/4 G / R S/15 certified ( L et/1954) G / R S/23 other) was certified (WT/Let/22) (6) HS96 Changes (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/HS96/39 + R ev.1+2). (Under waiver for the introduction of HS96 changes (WT/ L /303). reservations on However, existing documentation were lifted, so documentation to be certified ). (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP (4) TT on 11/1/93. on 11/1/93. TT ‑ Uruguay Pre Round Schedule N one I nherited concessions specified in Section C of Schedule X I -France when succeeding to GA See column (8) N one (3) Number Schedule CXV I (116) (94) XC I V CXV II (117) X (2) WTO Member WTO Maldives Mali* Malta* 66 67 68 (1) No
WTO BISD 1999 297 Decisions and Reports (8) A . Comments First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect (other) (7) AR / R S/7 Rectifications/ Modifications to Schedules, if any G /M A /T was certified (WT/Let/122). (6) HS96 Changes See column (8) See column (8) (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (18/7/1996) to the Marrakesh A Schedules annexed Schedules annexed MP MP MP P . (4) v ‑ Uruguay Pre Round Schedule Schedule established in Second Certification of Rectifications and Modifications (1964). See column (8) N one Schedule annexed to G eneva (1994) Protocol N one (3) Number Schedule (50) L CXV III (118) L XXV II (77) CXXX I V (134) X (2) WTO Member WTO Mauritania Mauritius* Mexico* Mongolia* 69 70 71 72 (1) No
298 WTO BISD 1999 Committee on Market Access (8) Comments D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes concessions contained affect in the Sixth Certification of Changes to Schedules (1988) and the MP. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) ‑ Uruguay Pre Round Schedule Pre-U R schedule transposed into HS and certified (WT/ L et/168). N one Sixth Certification of Changes to Schedules (1988). See column (8) N one (3) Number Schedule L XXX I (81) CX I X (119) (4) I V XC (90) + + (2) WTO Member WTO Morocco* Mozambique Myanmar* N amibia 73 74 75 76 (1) No
WTO BISD 1999 299 Decisions and Reports (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the transposed pre-U R affect schedule and the MP. First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced to the transposed pre- U R schedule and the MP following procedures for the introduction of HS changes (B I S D 39S/300).
(ITA) (ITA) (ITA) A pril ODCs was (7) AR / R S/44 AR / R S/53 (other) Rectifications/ . Modifications to Schedules, if any ii G / R S/1 certified ( L et/1954). G /M A /T was certified (WT/Let/295). G /M A /T was certified (WT/Let/295). I nformation on submitted on 15 1995 (6) HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS/96/20 + Corr.1) (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP . xi (4) ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1987) Protocol. Currently under waiver (WT/ L /300) for the establishment of a new schedule based on the HS D ocumentation was circulated in G /S E C RE T/ HS/3, but not yet certified because of reservations. See column (8) Schedule established in Third Certification of Rectifications and Modifications (1967). See column (8) (3) Number Schedule X III (13) XX I X (29) LIII (53) + (2) WTO Member WTO N ew Z ealand* N icaragua N iger* 77 78 79 (1) No
300 WTO BISD 1999 Committee on Market Access (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Consultations with trading partners having raised reservations on proposed schedule in HS96 to be concluded.
(ITA) (other)
(7) (other) ii AR / R S/5 AR / R S/15 (other) Rectifications/ Modifications to Schedules, if any G / R S/2 was certified (Let/1954) G /M A /T (reservations were raised) G /M A /T was certified (WT/Let/153). G /M A /SP/2 (approved) (6) HS96 Changes See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/11). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/40). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP A t (4) ‑ Uruguay Pre Round Schedule Schedule contained in Sixth Certification of Changes to Schedules (1988). Schedule annexed to First G eneva (1987) Protocol. HS92 changes certified (Let/1793). R enegotiating its pre-U R schedule in connection with the implementation of the HS. the same time introduced HS96 changes and submitted the totality under the HS96 process (see column 6). (3) Number Schedule X LIII (43) (14) X I V (15) XV (2) WTO Member WTO N igeria* N orway* Pakistan* 80 81 82 (1) No
WTO BISD 1999 301 Decisions and Reports (8) A . Comments D ocumentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes (presently under waiver for the introduction of HS96 changes (WT/ L /303)). See column (8) See column (8) Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/29). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (2/10/1996) (15/11/1995) to the Marrakesh A A Schedules annexed Schedules annexed P P MP MP (4) ‑ Uruguay Pre Round Schedule N one N one Protocol of A ccession (30/6/1993) Schedule was renegotiated during the U R . A ll previous concessions replaced by the U R Schedule. (3) Number Schedule CX LI (141) CXXXV III (138) XC I (91) (35) XXXV + + (2) WTO Member WTO Panama* Papua N ew G uinea Paraguay Peru* 83 84 85 86 (1) No
302 WTO BISD 1999 Committee on Market Access (8) Comments consolidated schedule consolidated schedule A in loose-leaf format to be submitted ( G / L /138). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect A in loose-leaf format to be submitted ( G / L /138).
(ITA) (ITA) (ITA) A dd.1 was was (7) (other) (other) AR / R S/36 AR / R S/32 AR / R S/46 were certified Rectifications/ Modifications to Schedules, if any G / R S/5 + part of S/10 (other) ( L et/1951). Part of G / R S/10 + (other) (reservations were raised) G /M A /T (certification in progress) G /M A /T (awaiting domestic approval.) G / R S/14 certified ( L et/1954). G / R S/27 certified (WT/ L et/8). G /M A /T was certified (WT/Let/260). (6) HS96 Changes list of tariff items list of tariff items list of tariff Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ + 2 HS96/16 + Corr.1 A dd.1). (certification in progress) A by HS96 changes affected is certified (WT/Let/268). See column (8) See column (8) A by HS96 changes affected is certified (WT/Let/265). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (15/11/1995) to the Marrakesh A Schedules annexed Schedules annexed MP MP P MP (4) ‑ Uruguay Pre Round Schedule Schedule annexed to G eneva (1992) Protocol. Schedule contained in Sixth Certification of Changes to Schedules (1988). N one Pre-U R schedule transposed into a consolidated loose- leaf schedule in HS and certified ( L et/1911). (3) Number Schedule XXV (75) L XXV (65) L XV CXXX I (131) L X I (69) + (2) + WTO Member WTO Philippines Poland* Qatar R omania* 87 88 89 90 (1) No
WTO BISD 1999 303 Decisions and Reports (8) A . Comments First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect (7) Rectifications/ Modifications to Schedules, if any (6) HS96 Changes See column (8) See column (8) See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (15/11/1995) to the Marrakesh A Schedules annexed Schedules annexed MP P MP MP (4) ‑ Uruguay Pre Round Schedule Schedule established in Third Certification of Rectifications and Modifications (1967). See column (8) N one N one N one (3) Number Schedule V I (56) L CXXV III (128) CXX I (121) CXX II (122) + + (2) + WTO Member WTO R wanda* Saint Kitts and N evis Saint L ucia Vincent Saint and G renadines 91 92 93 94 (1) No
304 WTO BISD 1999 Committee on Market Access (8) Comments consolidated schedule First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced transposed pre-U R schedule following procedures and MP for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect A in loose-leaf format to be submitted ( G / L /138).
(ITA) (ITA) ODCc . ii (7) AR / R S/20 AR / R S/42 Rectifications/ Modifications to Schedules, if any A pril 1995 I nformation on submitted in G /M A /T was certified (WT/Let/175). G /M A /T was certified (WT/Let/258). (6) HS96 Changes consolidated schedule See column (8) See column (8) A in loose-leaf format including HS96 changes is certified (WT/Let/263). Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/HS96/6 + Corr.1) (certification in progress) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) ‑ Uruguay Pre Round Schedule Schedule established in Second Certification of Rectifications and Modifications (1964). See column (8) N one Schedule annexed to HS G eneva (1989) Protocol. Protocol of A ccession (19/2/1993) (3) Number Schedule X LI (49) CXX (120) L XX III (73) XC III (93) + + (2) WTO Member WTO Senegal* Sierra L eone Singapore Slovak R epublic* 95 96 97 98 (1) No
WTO BISD 1999 305 Decisions and Reports (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect A dditional documentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). (other) was (7) (other) AR / R S/2 Rectifications/ Modifications to Schedules, if any G / R S/18 certified (WT/Let/8). G /M A /T was certified (WT/Let/65). (6) HS96 Changes Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/23 + Corr.1) (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) Preliminary information submitted ( G /S E C RE T/ HS96/15). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (12/9/1994) to the Marrakesh A Schedules annexed Schedules annexed P MP MP (4) ‑ Uruguay Pre Round Schedule N one N one Schedule was renegotiated during the Uruguay R ound. A ll previous concessions replaced by the U R schedule. (3) Number Schedule XCV I (96) CXXXV (135) XV III (18) + (2) A frica* WTO Member WTO Slovenia* Solomon I slands South 99 (1) No 100 101
306 WTO BISD 1999 Committee on Market Access (8) Comments A dditional documentation related to the implementation of HS96 to be submitted pursuant to procedures for the introduction of HS changes (B I S D 39S/300). First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the transposed pre-U R affect schedule and the MP. (ODCs) (other) was (7) ii (other) AR / R S/2 Rectifications/ Modifications to Schedules, if any G / R S/18 certified (WT/Let/8). G /M A /T was certified (WT/Let/65). G /SP/9 and Corr.1 (approved) (6) HS96 Changes Preliminary information submitted ( G /S E C RE T/ HS96/15). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP (4) ‑ Uruguay Pre Round Schedule Schedule was renegotiated during the Uruguay R ound. A ll previous concessions replaced by the U R schedule. Pre-U R schedule is being renegotiated under waiver (WT/ L /301) in connection with the implementation of the HS. D ocumentation was circulated in S E C RE T/HS/26, but not yet certified because of reservations. See column (8) (3) Number Schedule XV III (18) V I (6) (2) A frica* WTO Member WTO South Sri L anka* (1) No 101 102
WTO BISD 1999 307 Decisions and Reports (8) Comments First, pre-U R schedule to be transposed into HS (B I S D 30S/17). Second, HS96 changes to be introduced to the transposed pre- U R schedule and the MP following procedures for the introduction of HS changes (B I S D 39S/300). Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded.
(ITA) (7) (other) AR / R S/38 AR / R S/43 Rectifications/ Modifications to Schedules, if any G / R S/13 (reservations were raised). Following consultations, a new notification G/MA/TAR/ R S/3 was submitted and certified (WT/Let/65). G /M A /T was certified (WT/Let/253). G /M A /T (pharma) was certified (WT/Let/259). (6) HS96 Changes See column (8) See column (8) Submitted a consolidated schedule in loose leaf format including HS96 changes ( G /S E C RE T/ HS96/10). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP . xii (4) ‑ Uruguay Pre Round Schedule HS92 changes certified (Let/1793). Schedule established in Fourth Certification of Changes to Schedules (1979). See column (8) N one Schedule annexed to Second G eneva (1987) Protocol (3) Number Schedule V (74) L XX I V CXX III (123) LI X (59) + + (2) WTO Member WTO Suriname Swaziland* Switzerland* - L iechtenstein (1) No 103 104 105
308 WTO BISD 1999 Committee on Market Access (8) Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect A dd.1 were A dd. 1 (other)
(other) (7) (other) AR / R S/1 AR / R S/8 + AR / R S/34 + Rectifications/ Modifications to Schedules, if any G / R S/8 + 12 certified (Let/1954). G / R S/17 was certified (WT/Let/8) G /M A /T was certified (WT/Let/65). G /M A /T (other) (reservations were raised) G /M A /T (ITA) was certified (WT/Let/250). (6) HS96 Changes See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/17 + R ev.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP MP (4) ‑ Uruguay Pre Round Schedule N one Schedule annexed to G eneva (1988) Protocol. HS92 changes certified ( L et/1793). N one (3) Number Schedule V (124) CXX I V L XX I X (79) (125) CXXV + (2) WTO Member WTO Tanzania Thailand* Togo* (1) No 106 107 108
WTO BISD 1999 309 Decisions and Reports (8) Comments consolidated schedule First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the transposed pre-U R affect schedule and the MP. Consultations with trading partners having raised reservations on HS96 documentation to be concluded. A in loose-leaf format to be submitted ( G / L /138).
(ITA) (other) was (7) (other) S/11 AR / R S/11 AR / R S/26 Rectifications/ Modifications to Schedules, if any G / R S/28 certified (WT/Let/23). G /M A /T was certified (WT/Let/172). G /M A /T was certified (WT/Let/173). (6) HS96 Changes list of tariff items list of tariff See column (8) Submitted a consolidated schedule in loose-leaf format including HS96 changes ( G /S E C RE T/ HS96/25). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) A by HS96 changes affected is certified (WT/Let/266). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP MP
xiii . (4) v ‑ Uruguay Pre Round Schedule transposed into the HS and circulated ( G /S E C RE T/HS/4) but not certified due to reservations. under waiver Was until 30 June 1996. See column (8) Pre-U R schedule Protocol of A ccession (12/3/1990) Schedule annexed to G eneva (1994) Protocol (3) Number Schedule L XV II (67) L XXX III (83) XXV II (27) + (2) WTO Member WTO Trinidad and Trinidad Tobago Tunisia* Turkey* (1) No 111 110 109
310 WTO BISD 1999 Committee on Market Access (8) A . Comments Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the MP. affect Procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the P affect Consultations with trading partners having raised reservations on HS96 documentation to be concluded. (other) were certified (7) (distilled AR / R S/4 AR / R S/17 + AR / R S/18 + AR / R S/48 were certified (WT/ (ITA) (ITA) Rectifications/ Modifications to Schedules, if any G /M A /T (reservations were raised) G /M A /T Corr.1 (WT/ L et/182). G /M A /T 1+ 2 Corr. spirits) L et/182). G /M A /T (pharma) (reservations were raised) (6) HS96 Changes See column (8) See column (8) Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/9). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) (6/2/1996) to the Marrakesh A Schedules annexed Schedules annexed MP P MP (4) ‑ Uruguay Pre Round Schedule N one N one Schedule annexed to G eneva (1988) Protocol. (3) Number Schedule CXXV I (126) CXXX II (132) XX (20) + A rab (2) WTO Member WTO Uganda* United E mirates United States* (1) No 112 113 114
WTO BISD 1999 311 Decisions and Reports (8) Comments Consultations with trading partners having raised reservations on HS96 documentation to be concluded. Consultations with trading partners having raised reservations on HS96 documentation to be concluded. ii was was (approved) (7) (other) (other) (ODCs) Rectifications/ Modifications to Schedules, if any G /SP/5 G / R S/22 certified (WT/ L et/8). G / R S/11 certified (Let/1954). (6) HS96 Changes Submitted a list of tariff Submitted a list of tariff by HS96 items affected changes ( G /S E C RE T/ HS96/28). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) Submitted a consolidated schedule in loose leaf format including HS96 changes ( G /S E C RE T/ HS96/12 + R ev.1). (reservations were raised on the HS96 documentation, presently under waiver (WT/ L /303)). See column (8) (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP . (4) v ‑ Uruguay Pre Round Schedule Schedule was renegotiated during the U R . A ll previous concessions replaced by the U R schedule. Schedule annexed to G eneva (1994) Protocol (3) Number Schedule XXX I (31) L XXXV I (86) + (2) WTO Member WTO Uruguay Venezuela* (1) No 115 116
312 WTO BISD 1999 Committee on Market Access (8) Comments First, consultations with trading partners having raised reservations on proposed pre-U R schedule in HS to be concluded. Second, procedures for the introduction of HS changes (B I S D 39S/300) to be followed if HS96 changes the transposed pre-U R affect schedule and the MP. (7) Rectifications/ Modifications to Schedules, if any O (6) HS96 Changes See column (8) (The waiver for the introduction of HS96 WT changes to schedules expired on 31 O ctober 1998, an extension was not requested). D ocumentation was submitted to the Secretariat for verification. (5) to Protocols of to Protocols Protocol (MP), Protocol Accession (PA) to the Marrakesh Schedules annexed Schedules annexed MP MP
xiv (4) ‑ Uruguay Pre Round Schedule Pre-U R schedule is being renegotiated under waiver (WT/ L /302) in connection with the implementation of the HS. D ocumentation was circulated in G /S E C RE T/ HS/8, but not yet certified because of reservations. See column (8) Schedule annexed to Second G eneva (1987) Protocol. (3) Number Schedule L XXV III (78) (54) LI V (2) WTO Member WTO Z ambia* Z imbabwe* (1) No 117 118
WTO BISD 1999 313 Decisions and Reports of the f. II of its Protocol of A ustria, Schedule XX I V of TT in 1982. TT O Members, which are not members of the HS Convention but which are uatemala in the course of its accession, these are set forth in the HS nomenclature nomenclature HS the in forth set are these accession, its of course the in G uatemala E C of 12. This withdrawal became from effective 1 January 1995. Schedule CX L L XXX of the A ccession (1971). A ccession, 1955. A ccession (13/12/1990). A ccession (6/4/1962). E C through a communication ( L /7614) indicated its intention to withdraw tariff commitments in Schedule XXX II of contracting party to the HS Convention. A applying HS88 or HS92, the work linked to HS96 changes should ideally be done before they introduce their national customs tarif assumed that they apply the HS. The term “reservations” in the plural is used to Members. signal the existence of reservations and does not reflect whether reservationsFormalities concerning certification to be completed by the Secretariat. are from one or more Schedule contained in Protocol of The transposed pre-U R schedule does not include the uniform bound A ccession (3/8/1989). rate contained in Bolivia’s pre-U R schedule found in Part G eneva (1994) Protocol has not entered into force. Schedule was approved, however, Schedule established in Annecy 1949 Protocol, (amended in Fourth 1951 Protocol, at the time of Japanese 1955 in G eneva 1956 and Kennedy (1964-67) R ounds Protocols. and Torquay Fifth Protocols of Rectifications, 1950), additional concessions contained in Protocol of The Finland , Schedule XXX of Sweden and Schedule EC-15 was circulated in G/L/65, but not certified because of reservations. by granted sector agricultural the to relating concessions to regard With in the MP. Protocol of Schedule established Annecy in 1949 Protocol (replaced in Sixth Protocol of Rectifications and Modification, Additional 1957). concessions contained in Japanese Protocol of Schedule established in Kennedy Round 1964-1967 Protocol. Rectifications contained the First Certification of Changes to Schedules, 1969. i nformation is unavailable as to whether the Member applies the HS or not. However, as these Members submitted their U R schedule in the HS, it is
n ot a contracting party to the HS Convention, but applies the HS. For WT those * + X i ii iii iv v vi vii viii ix x xi xii l iechtenstein has no pre-U R schedule. xiii xiv z ambia inherited Schedule XV I from defunct R hodesia/ N yasaland Federation when succeeding to GA
314 WTO BISD 1999 Committee on Market Access
CONSOLIDATED TARIFF SCHEDULES DATABASE.
From the minutes of the meeting of the Committee on Market Access of 22 June 1999 (Abstract from G/MA/M/19) [...]
The Chairman drew the Committee’s attention to document G/MA/63. As indicated in the cover note to the document, the project proposal on the Consolidated Tariff Schedules (CTS) Database was circulated in an informal document at the 27 November 1998 meeting of the Market Access Committee and was approved by the Committee at that meeting. Following the obtention of funding from the United Kingdom, this project was launched recently. In light of these developments, the informal document was re-issued as an official document with the inclusion of an Annex 2 which gave information on the situation of Members’ schedules. This table had been compiled based on the information available to the Secretariat and it was quite possible that some elements might be missing. Therefore comments were welcome. He proposed in this connection that Annex 2 be updated periodically by the Secretariat and that at the time of the next update any omissions could be taken into account. He added that the work on Annex 2 was done on the Secretariat’s own responsibility in conjunction with the CTS project and had no legal implications regarding Members’ rights or obligations. The Committee took note of the statement and agreed to the proposal.
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COMMITTEE ON SUBSIDIES AND COUNTERVAILING MEASURES
INFORMAL GROUP OF EXPERTS ON CALCULATION ISSUES RELATED TO ANNEX IV OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES
Supplemental Report taken note by the Committee on Subsidies and Countervailing Measures on 1-2 November 1999 (G/SCM/W/415/Rev.2/Suppl.1)
1. This supplemental report by the Informal Group of Experts is submitted in response to the SCM Committee’s request at its April 1998 meeting that the Group resume meeting with a view to resolving issues that the Group’s report (G/SCM/ W/415/Rev.2) had identified as outstanding. In this connection, the Group held its eleventh meeting on 5-6 November 1998, and its twelfth meeting on 7 May 1999. 2. The Group members participating in this phase of the Group’s work were: Mr. Robert Arnott (Australia), Mr. Stephen Gospage (EC), Mr. Takuya Igarashi (Japan), Mr. Wieslaw Karsz (Poland), Mr. Ju-Young Lim followed by Mr. Ki-Baek Park (Korea), Mr. Roy A. Malmrose (United States), Mr. Donald Orth (Canada), Ms. Ma Elena Reyna (Mexico), Ms. Vera Thorstensen (Brazil), and Ms. Clarisse Morgan (WTO Secretariat) as Secretary of the Group. 3. The issues that had been identified as outstanding in the Group’s report were: accelerated depreciation, cost/risk of ad hoc loan or credit guarantees, sales denominator for export subsidies, upstream subsidies, equity infusions, and royalty- based financing. In addition, the Group noted that in the United States’ comments to the Committee about the Group’s report (included in document G/SCM/W/416/ Suppl.2), the United States had asked the Group to consider the question of commercial risk, which the United States believed had been insufficiently addressed in the report. Similarly, the Group recalled that in response to one of Canada’s comments on the report, the Group had indicated that it would consider the situation of high-value, low-volume products, and any particular calculation issues that might arise with respect to subsidies on such products. 4. The Group reached consensus on a recommendation regarding ad hoc loan guarantees. The Group did not reach a consensus on any of the other issues discussed. The Group considers that there are no further issues on which consensus is likely to be reached, and therefore considers that it has completed its mandate from the Committee. 5. The Group recalls that as it stated in its first report to the Committee (G/ SCM/W/415/Rev.2), it does not view its recommendations as exhaustive of every potentially relevant issue under Article 6.1(a) and Annex IV. In this regard, the
316 WTO BISD 1999 Committee on Subsidies and Countervailing Measures applicability and usefulness of any of the Group’s recommendations to a particular situation should be assessed on a case-by-case basis. Cost to government of ad hoc loan or credit guarantees (Recommendation 14-Rev., attached) 6. regarding the cost to government of ad hoc loan or credit guarantees, the Group recalled that it had recommended in its first report (Recommendation 14, paragraph 6) that in the case of ad hoc guarantees, a cost to the government should be deemed to arise in the event of a default, in which case the cost would be the full amount of the default coverage provided, less any fee paid for the guarantee. The Group also recalled that some Members had argued that an ad hoc guarantee imposes a cost on the providing government even where there is no default, i.e., the expected cost of providing the guarantee, based on the probability of a default. 7. The Group concluded that the concept of default-related risk���� was������������� relevant in determining the cost to the government from ad hoc guarantees. In particular, the Group recommends that if the fee charged for an ad hoc guarantee is sufficient to cover the default-related risk at the time the guarantee is provided, there would be no cost to the government, either from the provision of the guarantee or from any subsequent default coverage. Conversely, if the fee is insufficient to cover the default-related risk at the time the guarantee is provided, there would be a cost to the government in the amount of the shortfall. The Group recommends that to be sufficient to cover the default-related risk, the fee would need at least to equal the total amount guaranteed (principal plus interest) times the default-related risk expressed as a percentage. 8. For example, if the principal plus interest amount guaranteed was $100,000 and the default-related risk (i.e., the government’s net probable cumulative monetary loss) at the time that the guarantee was provided was 10%, the government would incur no cost in providing the guarantee if the fee was at least $10,000. Even if the beneficiary defaulted, and the government had to cover the default, there would be no cost to the government, because the fees were sufficient to cover the default-related risk as it existed at the time the guarantee was provided. Conversely, continuing the same example, if the fee was $6,000, the cost to the government of providing the guarantee would be $4,000. This cost would not be affected by whether or not the beneficiary defaulted. The Group recommends that any such cost be treated as a grant, and allocated over the life of the guaranteed loan or credit.
Defined for purposes of this report as the government’s net probable cumulative monetary loss on the guaranteed debt, that is, the probable amount (or percentage) of the combined principle and interest over the life of the debt that the government would have to pay on behalf of the beneficiary in the event of a default. This in turn would reflect both the probability of a default occurring (i.e., of a payment being missed) and the likely amount of the guaranteed debt that would eventually be recovered, including the realistic recovery value of any collateral formally held by the government (assuming that the government became responsible for the debt once a default occurred).
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9. The Group recognised that quantifying a risk-based cost to the government would be difficult, due to the difficulty of establishing the probability thata default would occur, and the likely amount that would be recovered with respect to a particular guaranteed debt. The Group discussed at length the most fair and transparent manner for determining the actual risk of default associated with any given guarantee. It was noted that accurately measuring the true risk of any individual ad hoc guarantee would be difficult. In particular, it was pointed out that where a guarantee is provided pursuant to a programme (as opposed to ad hoc), such a programme will operate on the basis of risk pooling. That is, if a programme is operating on a commercially viable basis, guarantees will be made to more- and less- risky participants, in such a way as to allow the guarantee programme as a whole to cover its own costs. Assessments of risk can be made in such a context because comparators (the other participants in the guarantee programme) are available. 10. in the case of an individual ad hoc guarantee, the Group recognised that making an individual risk assessment would be difficult, and for this reason identified some surrogates or proxies that could be used. In particular, as a general approach, risk could be assessed on the basis of a statistical analysis of commercial loans or credits made to borrowers with a similar credit rating or borrowing at similar interest rates to those paid by the borrower in question on non-guaranteed debt. Such an analysis would calculate the total amount defaulted and not recovered on all such loans and credits as a percentage of their combined principal and interest over their lifetimes. Thus, if the combined total principal and interest of the comparable commercial loans and credits amounted to $1,000,000, and defaulted unrecovered principal and interest totalled $100,000, the default-related risk for the guaranteed loan or credit would be estimated at 10 per cent. In this context, the Group noted that some bond rating companies (Moody’s, for example), publish reports concerning default and loss/recovery rates, which might provide a basis for an analysis of this type.����� I����������������������������������������������������n addition, depending on the availability of data, default and recovery information for government-operated loan/credit guarantee programmes in the country in question might be usable as a proxy, if the risk level
For example, the Moody’s report, “Historical Default Rates of Corporate Bond Issuers”, which covers 1920 to the present, updated periodically, and is available on Moody’s website (http://www.moodys.com/ cbi.htm), provides historical rates of default (i.e., instances of missed payments) for senior unsecured debts of corporate bond issuers in all rating categories, over different time horizons. The report also provides information on loss and recovery rates, measured by selling prices per $100 of par value on defaulted debt instruments of differing degrees of security (senior secured bank loans, equipment trusts, senior secured bonds, senior unsecured bonds, subordinated bonds, and junior unsecured bonds) as well as on preferred stock. (The recovery rates thus take into account recovery through liquidation of collateral.) To arrive at an estimate of the percentage probability of loss, the default rate for the appropriate rating category can be multiplied by the loss rate (one minus the recovery rate) for the relevant type of debt. The appropriate rating category would be chosen based on the credit rating of the borrower and the degree of security of the debt in question. For example, if the borrower in question has a Ba rating (which pertains in the Moody’s report to senior unsecured debt), and the guaranteed loan or credit in question is senior secured, the appropriate default probability would be that for Baa, rather than Ba, to take into account the greater degree of security of the guaranteed debt than that of the senior unsecured debt used as the standardised basis for the Moody’s data.
318 WTO BISD 1999 Committee on Subsidies and Countervailing Measures of the ad hoc guarantee appears comparable to that of the guarantees provided under the programme. The interest rate paid by the borrower on non-guaranteed debt also might provide an indication of the default risk of the guaranteed debt. In conjunction with this, and in general, average industry-wide, or finally, country-wide default and loss/recovery information for debt of all kinds also might be usable. 11. The concern was expressed that the use of surrogates could be unpredictable and not fully transparent, and might be inappropriate in individual cases where the actual default-related risk was very small, thus raising questions of fairness. Thus, assessments of default-related risk would need to be made with great care, on the basis of the information (including any objective risk assessment conducted) that was available at the time the guarantees at issue were provided. 12. regarding collateral held by the government in connection with an ad hoc guarantee, it was recognized that the realistic liquidation value of collateralized assets might be difficult to establish, as their book value might not correspond to their market value, and additional costs might be incurred in the liquidation process. This being said, however, it was noted that in practical terms the existence of significant collateral in favour of the government might in most instances fully cover the default-related risk, and thus eliminate any risk-based cost in providing the guarantee. By taking account of the recovery value of any collateral, the recommended methodology allows for this possibility. 13. The Group noted that this recommended methodology for ad hoc guarantees represents a modification of the approach in Recommendation 14, paragraph 6 of the Group’s first report. Recommendation 14, paragraph 6 would in all cases treat the amount of default coverage (less any fees paid) under an ad hoc guarantee as a cost to the government, without taking into account the default risk and the sufficiency of fees and collateral to cover it. As indicated, under the new recommended approach, the occurrence or not of an eventual default would not affect the calculation of the cost to government of providing an ad hoc loan guarantee. The Group also emphasised that in modifying Recommendation 14, it is not revisiting an issue which was already decided in its first report. Rather, the Group is taking account of its conclusions on an outstanding issue, the cost/risk of ad hoc loan or credit guarantees, in order to finalise the text of Recommendation 14. 14. The Group also noted that the recommended risk-based assessment of cost to the government from ad hoc guarantees is generally consistent with the Group’s recommended methodology (Recommendation 14, paragraphs 2-5 of the Group’s first report) for the provision of guarantees under a programme. In particular, that recommendation provides, regarding the provision of guarantees, first that the programme’s long-term viability be assessed, on the basis of the sufficiency of premiums/fees collected to cover defaults and operating expenses. If the programme is viable, an individual event of default would not be deemed to impose a cost to the
WTO BISD 1999 319 Decisions and Reports government. �����������������������������������������������������������������������If the programme is not viable, then whether or not there is a default by a particular beneficiary, a proportionate share of the shortfall of the programme’s overall income to expenses would be allocated to the firm(s) subject to the Article 6.1(a) enquiry.
Accelerated depreciation 15. The Group recalled the limitations, discussed in its first report to the Committee, of the two approaches to accelerated depreciation that it had previously considered. First, treating any tax savings from accelerated depreciation in a given year as a grant could overstate the amount of the cost to government by failing to take account of the possibility that more taxes would be paid in later years. On the other hand the OECD approach, which would calculate the cost to government over the entire depreciation period, might understate that cost as higher taxes might not be paid in later years in practice, if the firm were unprofitable or assets were replaced at the end of the depreciation period. Furthermore, the true amount of the cost to the government could only be known (including by that government itself) after the end of the depreciation period, yet an Article 6.1(a) claim involving accelerated depreciation might be raised at some point during a depreciation period. 16. The Group considered a third possible approach to accelerated depreciation, which in general terms would treat any tax savings from accelerated depreciation as a tax deferral, and then, in accordance with the Group’s recommendation on tax deferrals (Recommendation 12.B), would treat the deferred tax amount as an interest-free loan for the period of accelerated depreciation. In keeping with the Group’s recommendation in its first report on timing and sales denominator issues in the case of tax-related subsidies (paragraph 52 and Recommendation 6.B), the approach discussed would assume that the “loan” was provided in the year following that to which the depreciation expense in question was attributed. A number of issues and problems were discussed concerning this approach, and no consensus was reached on any recommendation regarding accelerated depreciation.
Sales denominator for export sales 17. The Group recalled the difference of views over the appropriate sales denominator for export sales that is reflected in section VI.E, paragraph 67 of its first report. The Group concluded that views had not changed since those earlier discussions, and that therefore there would be no benefit to further discussing this issue.
The Group noted that guarantee programmes might sometimes involve some form of collateral. The Group noted that if this were the case, the effects thereof on a programme’s viability normally would be reflected in its overall financial results as recorded in its financial statements.
320 WTO BISD 1999 Committee on Subsidies and Countervailing Measures
Upstream subsidies 18. The Group considered whether any progress could be made regarding upstream subsidies. The Group concluded that this issue seemed to raise a number of questions that go beyond the mandate of the Group.
Equity infusions 19. The Group discussed whether it would be possible to make any further progress with respect to the cost to government of providing equity where there was no publicly-traded stock, and therefore no market price to use as a comparator. The Group reached no consensus on this issue.
Royalty-based financing 20. The Group discussed, but reached no consensus on, the cost to government of providing royalty-based financing.
Low-volume, high-value products 21. The Group discussed the problem, raised by Canada in document G/ SCM/W/416, of the sales denominator for low-volume, high-value products. Two possible examples mentioned were ocean liners and offshore oil platforms. For such products, a “sale” might be considered to have taken place at the time the contract was signed between producer and purchaser, although the product might physically be delivered only several years thereafter. Assuming that subsidies were involved in any such sale, application of the rule on the sales denominator in paragraphs 2 and 3 of Annex IV might lead to anomalous results. That is, there might be no “sales” during the most recent 12-month period preceding the granting of the subsidies, depending on the timing of the subsidies in relation to the timing of the sale, depending on whether the subsidies were “tied” to the product or not, and depending on the scope of the recipient firm’s operations. Thus, there might be situations in which no clear basis existed for the calculation of ad valorem subsidization, even where subsidies had been received. 22. The Group acknowledged that this was a potential problem that should be identified in its report, although in practice it might be difficult to clearly identify types of products and firms with respect to which this situation could arise. The Group further concluded that the language in paragraphs 2 and 3 of Annex IV might limit the Group’s ability to make any sort of recommendation to address this situation.
Commercial risk 23. The Group considered the question of commercial risk. As an example of the issue, the relationship of commercial risk and the provision of government
WTO BISD 1999 321 Decisions and Reports loans was discussed. In this connection, the Group recalled its recommendation (Recommendation 9) that the cost to government of loans should be determined on the basis of a government borrowing rate for debt with comparable maturity to that of the loan in question. An issue that was posed by the United States, generally reflected in document G/SCM/W/416/Suppl.2, was whether this was sufficient given that certain borrowers posed more of a risk, and thus arguably a higher cost to the government, than others. 24. it was pointed out that the Group’s original recommendation with respect to the government’s cost of providing a loan assumed that no other considerations, in particular provision for bad debts, came into play. Because of the extra risk of certain loans, however, some members of the Group argued that the government should increase the interest rate on those loans, to cover its commensurately higher cost. No consensus was reached on the question of commercial risk.
RECOMMENDATION 14-Rev. Loan/Credit Guarantees 1. it is recognised that guarantees can be provided both to borrowers (as loan guarantees) and to lenders (as credit guarantees). It is also recognised that guarantees can be provided through a guarantee programme, or on an ad hoc basis.
B. GUARANTEE PROGRAMMES 2. a two-part procedure is recommended for determining the cost to the government of loan or credit guarantees provided through a programme. The first part consists of assessing the long-term viability of the guarantee programme as a whole. The second part consists, if the programme is not viable, of attributing to the firm involved in the Article 6.1(a) enquiry the appropriate portion ofthe government’s cost under the programme. 3. To assess the long-term viability of a guarantee programme, it is recommended that the financial statements for the programme for a relatively long period, normally the most recent five years, be examined. If the total fees paid into the programme by participating firms during the period were at least equal to the total amount paid by the government under the programme to cover defaults, plus the costs of operating the programme, the programme would be viable. In this case, there would be no cost to the government, either from the provision of the guarantee or from any event of default coverage. If, however, the total fees paid into the programme by participating firms during the period were less than the total amount paid by the government under the programme to cover defaults, plus the costs of operating the programme, the programme would not be viable. 4. in the second part of the analysis (i.e., attributing the appropriate amount
322 WTO BISD 1999 Committee on Subsidies and Countervailing Measures of government cost under the programme to the relevant firm), it is recommended to first calculate the cost to the government of the programme as a whole. This cost should be calculated as the difference between the total amount of fees actually paid into the programme by all participants (including those not involved in the enquiry) and the total amount of fees that would have been required for the programme to be viable during the relevant period. 5. The next step in the recommended methodology would be to attribute the appropriate portion of this cost to the particular firm involved in the enquiry. This should be calculated by applying to the total cost of the programme that firm’s percentage share of total loan/credit amounts guaranteed under the programme during the relevant period. This subsidy would be deemed to have been provided on the date(s) the fees were paid by that firm.
C. AD HOC GUARANTEES 6. in the case of ad hoc guarantees (i.e., those that clearly are not linked to any guarantee programme), it is recommended that if the fee charged for an ad hoc guarantee is sufficient to cover the default-related risk���� at the time the guarantee is provided, there would be no cost to the government from the provision of the guarantee. Conversely, if the fee is insufficient to cover the default-related risk at the time the guarantee is provided, the cost to the government would be the amount of the shortfall. The Group recommends that to be sufficient to cover the default- related risk, the fee would need at least to equal the total amount guaranteed times the default-related risk expressed as a percentage. 7. For example, if the amount guaranteed (principal plus interest) was $100,000 and the default-related risk at the time the guarantee was provided was 10%, the government would incur no cost in providing the guarantee if the fee was at least $10,000, because the fee would fully cover the default-related risk. Conversely, continuing the same example, if the fee was $6,000, the cost to the government of providing the guarantee would be $4,000. The Group recommends that any such cost be treated as a grant, and allocated over the life of the guaranteed loan or credit. 8. in the view of the Group, ideally the default-related risk used in the calculation should be the actual probable monetary loss in the event of a default on the particular guaranteed loan or credit in question at the time the guarantee was provided, taking into account the realistic recovery value of any assets formally held
Defined as the government’s net probable cumulative monetary loss on the guaranteed debt (that is, the probable amount or percentage of the combined principal and interest over the life of the debt that the government would have to pay on behalf of the beneficiary in the event of a default), taking into account both the risk of default and the probable amount of any recovery following a default, including the realistic recovery value of any collateral formally held by the government.
WTO BISD 1999 323 Decisions and Reports by the government as collateral. Where this is not possible, because the necessary information (i.e., an independent assessment of the probability of default and probable amount of loss/recovery) is not available, some sort of surrogate would be needed. In this regard, the Group notes that a statistical analysis of commercial loans or credits made to borrowers with a similar credit rating, or borrowing at similar interest rates to those paid by the borrower in question on non-guaranteed debt, could be used as a basis. Such an analysis would calculate the total amount defaulted and not recovered on such loans and credits as a percentage of the combined principal and interest over the lifetimes of the loans and credits. In this context, the Group noted that some bond rating companies publish information on historical default rates for different grades of bonds issued around the world, ranging from investment grade down to junk bonds, as well as historical loss/recovery rates for defaulted debt of different levels of security (from senior secured bank loans to junior subordinated �������bonds). I������������������������������������������������f the guaranteed debt could be associated with these rating and debt categories, this information could be used as a proxy for the probable monetary loss on the guaranteed debt. In addition, default and recovery information for government-operated loan/credit guarantee programmes in the country in question might be usable, if the level of risk of the ad hoc guarantee appears comparable to that of the guarantees provided under the programme. The interest rate paid by the borrower on non-guaranteed debt also might provide an indication of the default risk of the guaranteed debt. In conjunction with this, or if none of the previously mentioned surrogates is available, average industry-wide, or finally, country-wide default and loss/recovery information for debt of all kinds might be another possibility. 9. in view of concerns that the use of surrogates could be unpredictable and not fully transparent, and might be inappropriate in individual cases where the actual default-related risk was very small, the Group notes that assessments of default-related risk in the case of ad hoc guarantees would need to be made with particular care, on the basis of the information (including any objective risk assessment conducted) that was available at the time the guarantees at issue were provided.
To the extent that such loss/recovery information is broken out for debt of differing levels of security, it would take into account the recovery value of collateralised assets. If any published information from a bond rating company were used, its specific definitions and parameters would need to be examined carefully to ensure that it was used appropriately.
324 WTO BISD 1999 Committee on Budget, Finance and Administration
COMMITTEE ON BUDGET, FINANCE AND ADMINISTRATION
Abstract of the Report adopted by the General Council on 17 December 1999 (WT/BFA/44)
The Director-General is authorized to make budgetary expenditures of the World Trade Organization for 2000 CHF 125,386,460, and the permanent costs for the Appellate Body and its Secretariat for 2000 CHF 2,310,550 amounting to a total of CHF 127,697,010. This expenditure is to be financed by contributions amounting to CHF 126,600,000, by miscellaneous income estimated at CHF 1,097,010. The contributions of the Members shall be assessed in accordance with the attached scale of contributions. Contributions from Members in respect of the 2000 budget are considered as due and payable in full as at 1 January 2000.
SCALE OF CONTRIBUTION FOR 2000 (Minimum contribution of 0.015%)
MEMBERS % CHF Angola 0.061 77,226 Antigua and Barbuda 0.015 18,990 Argentina 0.456 577,296 Australia 1.302 1,648,332 Austria 1.505 1,905,330 Bahrain 0.076 96,216 Bangladesh 0.099 125,334 Barbados 0.019 24,054 Belgium 2.850 3,608,100 Belize 0.015 18,990 Benin 0.015 18,990 Bolivia 0.025 31,650 Botswana 0.039 49,374 Brazil 1.028 1,301,448 Brunei Darussalam 0.047 59,502 Bulgaria 0.103 130,398 Burkina Faso 0.015 18,990 Burundi 0.015 18,990 Cameroon 0.029 36,714 Canada 3.901 4,938,666
WTO BISD 1999 325 Decisions and Reports
SCALE OF CONTRIBUTION FOR 2000 (Minimum contribution of 0.015%)
MEMBERS % CHF Central African Republic 0.015 18,990 Chad 0.015 18,990 Chile 0.335 424,110 Colombia 0.262 331,692 Congo 0.026 32,916 Costa Rica 0.069 87,354 Côte d’ Ivoire 0.068 86,088 Cuba 0.054 68,364 Cyprus 0.059 74,694 Czech Republic 0.507 641,862 Democratic Republic of the 0.020 25,320 Congo Denmark 1.019 1,290,054 Djibouti 0.015 18,990 Dominica 0.015 18,990 Dominican Republic 0.109 137,994 Ecuador 0.089 112,674 Egypt 0.265 335,490 El Salvador 0.049 62,034 Estonia 0.062 78,492 European Communities 0.000 0 Fiji 0.018 22,788 Finland 0.719 910,254 France 5.807 7,351,662 Gabon 0.037 46,842 Gambia 0.015 18,990 Germany 9.693 12,271,338 Ghana 0.032 40,512 Greece 0.331 419,046 Grenada 0.015 18,990 Guatemala 0.055 69,630 Guinea 0.015 18,990 Guinea-Bissau 0.015 18,990 Guyana 0.015 18,990 Haiti 0.015 18,990 Honduras 0.034 43,044
326 WTO BISD 1999 Committee on Budget, Finance and Administration
SCALE OF CONTRIBUTION FOR 2000 (Minimum contribution of 0.015%)
MEMBERS % CHF Hong Kong, China 3.623 4,586,718 Hungary 0.390 493,740 Iceland 0.041 51,906 India 0.830 1,050,780 Indonesia 0.959 1,214,094 Ireland 0.961 1,216,626 Israel 0.550 696,300 Italy 4.732 5,990,712 Jamaica 0.057 72,162 Japan 7.214 9,132,924 Kenya 0.052 65,832 Korea, Republic of 2.653 3,358,698 Kuwait 0.216 273,456 Kyrgyz Republic 0.015 18,990 Latvia 0.052 65,832 Lesotho 0.015 18,990 Liechtenstein 0.028 35,448 Luxembourg 0.285 360,810 Macau 0.063 79,758 Madagascar 0.015 18,990 Malawi 0.015 18,990 Malaysia 1.476 1,868,616 Maldives 0.015 18,990 Mali 0.015 18,990 Malta 0.051 64,566 Mauritania 0.015 18,990 Mauritius 0.043 54,438 Mexico 1.975 2,500,350 Mongolia 0.015 18,990 Morocco 0.162 205,092 Mozambique 0.015 18,990 Myanmar, Union of 0.015 18,990 Namibia 0.030 37,980 Netherlands, Kingdom of the 3.449 4,366,434 New Zealand 0.291 368,406 Nicaragua 0.017 21,522
WTO BISD 1999 327 Decisions and Reports
SCALE OF CONTRIBUTION FOR 2000 (Minimum contribution of 0.015%)
MEMBERS % CHF Niger 0.015 18,990 Nigeria 0.229 289,914 Norway 0.933 1,181,178 Pakistan 0.197 249,402 Panama 0.133 168,378 Papua New Guinea 0.042 53,172 Paraguay 0.047 59,502 Peru 0.144 182,304 Philippines 0.667 844,422 Poland 0.644 815,304 Portugal 0.604 764,664 Qatar 0.055 69,630 Romania 0.179 226,614 Rwanda 0.015 18,990 St. Kitts and Nevis 0.015 18,990 Saint Lucia 0.015 18,990 St.Vincent and the Grenadines 0.015 18,990 Senegal 0.023 29,118 Sierra Leone 0.015 18,990 Singapore 2.431 3,077,646 Slovak Republic 0.214 270,924 Slovenia 0.178 225,348 Solomon Islands 0.015 18,990 South Africa 0.561 710,226 Spain 2.464 3,119,424 Sri Lanka 0.092 116,472 Suriname 0.015 18,990 Swaziland 0.019 24,054 Sweden 1.549 1,961,034 Switzerland 1.777 2,249,682 Tanzania 0.027 34,182 Thailand 1.138 1,440,708 Togo 0.015 18,990 Trinidad and Tobago 0.032 40,512 Tunisia 0.136 172,176 Turkey 0.754 954,564
328 WTO BISD 1999 Committee on Budget, Finance and Administration
SCALE OF CONTRIBUTION FOR 2000 (Minimum contribution of 0.015%)
MEMBERS % CHF Uganda 0.019 24,054 United Arab Emirates 0.538 681,108 United Kingdom of Great Britain and Northern Ireland 6.035 7,640,310 United States of America 15.717 19,897,722 Uruguay 0.064 81,024 Venezuela 0.331 419,046 Zambia 0.022 27,852
Zimbabwe 0.036 45,576
Total 100.000 126,600,000
WTO BISD 1999 329 Council for Trade in Services
COUNCIL FOR TRADE IN SERVICES
COMMUNICATION FROM MEMBERS WHICH HAVE ACCEPTED THE FIFTH PROTOCOL TO THE GENERAL AGREEMENT ON TRADE IN SERVICES (S/L/67)
Members whose Schedules of Specific Commitments and Lists of Exemptions from Article II of the General Agreement on Trade in Services concerning financial services are annexed to the Fifth Protocol to the General Agreement on Trade in Services (hereinafter referred to as “the Protocol”), and which have accepted the Protocol before 30 January 1999 (hereinafter referred to as “Members having accepted”), have decided on 15 February 1999 that the Protocol shall enter into force on 1 March 1999.
The Members having accepted request that the Council for Trade in Services decide that, in order to allow for acceptance of the Protocol by Members which have not yet accepted, the Protocol shall be open for acceptance until 15 July 1999.
DECISION ON ACCEPTANCE OF THE FIFTH PROTOCOL TO THE GENERAL AGREEMENT ON TRADE IN SERVICES
Adopted by the Council for Trade in Services on 15 February 1999 (S/L/68)
The Council for Trade in Services, Having regard to the Fifth Protocol to the General Agreement on Trade in Services (S/L/45), Having regard to the entry into force of the Protocol on 1 March 1999, pursuant to the Decision by Members which had accepted the Protocol before 30 January 1999 (S/L/67),
Bahrain; Canada; Chile; Colombia; Cyprus; Czech Republic; Ecuador; Egypt; EC and their Member States (Austria; Belgium; Finland; France; Germany; Greece; Ireland; Italy; Portugal; The Kingdom of the Netherlands; Spain, Sweden; and the United Kingdom); Hong Kong, China; Hungary; Iceland; India; Indonesia; Israel; Japan; Republic of Korea; Kuweit; Macau; Malaysia; Malta; Mauritius; Mexico; New Zealand; Norway; Pakistan; Peru; Romania; Senegal; Singapore; Slovak Republic; South Africa; Sri Lanka; Switzerland; Thailand; Tunisia; Turkey; United States; and Venezuela.
330 WTO BISD 1999 Council for Trade in Services
Decides as follows: 1. The Fifth Protocol to the General Agreement on Trade in Services shall be open for acceptance from 15 February until 15 June 1999, 2. For Members which accept the Protocol after 29 January 1999, the Protocol shall enter into force upon acceptance, or on 1 March 1999 if that is later than the date of acceptance, 3. Members shall, until the date of their acceptance of the Protocol, to the fullest extent consistent with their existing legislation, not take measures which would be inconsistent with their schedules annexed to the Protocol.
DECISION ON DOMESTIC REGULATION
Adopted by the Council for Trade in Services on 26 April 1999 (S/L/70)
The Council for Trade in Services, acting pursuant to Article IV of the Agreement establishing the World Trade Organization and Article XXIV of the General Agreement on Trade in Services (GATS), Having regard to paragraph 4 of Article VI of the GATS, Having regard to the Decision on Professional Services adopted by the Council on 1 March 1995 (S/L/3), Having regard to the Decision on Disciplines relating to the Accountancy Sector adopted by the Council on 14 December 1998 (S/L/63), Recognising the importance of domestic regulation in pursuing national policy objectives, Desiring to ensure that measures relating to domestic regulation do not constitute unnecessary barriers to trade in services, Decides as follows, 1. a Working Party on Domestic Regulation shall be established and the Working Party on Professional Services shall cease to exist. 2. in accordance with paragraph 4 of Article VI of the GATS, the Working Party shall develop any necessary disciplines to ensure that measures relating to licensing requirements and procedures, technical standards and qualification requirements and procedures do not constitute unnecessary barriers to trade
WTO BISD 1999 331 Council for Trade in Services in services. This shall also encompass the tasks assigned to the Working Party on Professional Services, including the development of general disciplines for professional services as required by paragraph 2 of the Decision on Disciplines Relating to the Accountancy Sector (S/L/63). 3. In fulfilling its tasks the Working Party shall develop generally applicable disciplines and may develop disciplines as appropriate for individual sectors or groups thereof. 4. The Working Party shall report to the Council with recommendations no later than the conclusion of the forthcoming round of services negotiations.
SECOND DECISION ON NEGOTIATIONS ON EMERGENCY SAFEGUARD MEASURES
Adopted by the Council for Trade in Services on 24 June 1999 (S/L/73)
The Council for Trade in Services, Having regard to the provisions of Article X of the General Agreement on Trade in Services (GATS), Notwithstanding the Decision on Negotiations on Emergency Safeguard Measures adopted by the Council for Trade in Services on 26 November 1997 (S/ L/43), Having regard to the communication from the Chairman of the Working Party on GATS Rules (S/C/W/111), Decides as follows: 1. The first sentence of paragraph 1 of Article X shall continue to apply until 15 December 2000. 2. The results of such negotiations shall enter into effect on a date not later than the date of entry into force of the results of the next mandated round of services negotiations. 3. notwithstanding paragraph 3 of Article X, until the entry into effect of the results of the negotiations mandated under paragraph 1 of Article X, the provisions of paragraph 2 of that Article shall continue to apply.
332 WTO BISD 1999 Council for Trade in Services
DECISION ON THE ACCEPTANCE OF THE FIFTH PROTOCOL
Adopted by the Council for Trade in Services on 21 September 1999 (S/L/76)
The Council for Trade in Services, Having regard to the Fifth Protocol to the General Agreement on Trade in Services (GATS), Notwithstanding the Decision on the Acceptance of the Fifth Protocol to the GATS adopted by the Council on 15 February 1999 (S/L/68), Decides as follows, The Fifth Protocol shall be reopened for acceptance by Costa Rica and Nicaragua from the date of this decision until 30 September 1999. The Protocol shall enter into force for Costa Rica and Nicaragua as from the date of such acceptance.
DECISION ON PROCEDURES FOR THE IMPLEMENTATION OF ARTICLE XXI OF THE GENERAL AGREEMENT ON TRADE IN SERVICES (GATS)
Adopted by the Council for Trade in Services on 19 July 1999 (S/L/79)
The Council for Trade in Services, Having regard to paragraph 5 of Article XXI of the General Agreement on Trade in Services and to the recommendation of the Committee on Specific Commitments adopted at its meeting on 19 July 1999. Decides as follows, To adopt the procedures for the implementation of Article XXI of the General Agreement on Trade in Services contained in document S/CSC/W/21.
WTO BISD 1999 333 Council for Trade in Services
PROCEDURES FOR THE IMPLEMENTATION OF ARTICLE XXI OF THE GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) (MODIFICATION OF SCHEDULES)
Adopted by the Council for Trade in Services on 19 July 1999 (S/L/80) Notification of Modification or Withdrawal 1. a Member intending to modify or withdraw a scheduled commitment in accordance with Article XXI (the “modifying Member”) shall transmit a notification to that effect, no later than three months before the intended date of implementation of such modification or withdrawal, to the Secretariat which will distribute the notification to all other Members in a secret document. The intention by a Member to modify or withdraw scheduled commitments shall be included in the agenda of the next meeting of the Council for Trade in Services. 2. The notification shall include a list of the commitments which it is intended to modify or withdraw. For each such commitment the notification shall indicate whether the intention is to modify or to withdraw it, in whole or in part; the proposed date for implementing such modification or withdrawal; and the exact nature of any proposed modification.
Negotiations on Compensation 3. any Member which considers that its interests under the Agreement may be affected by the proposed modification or withdrawal (“affected Member”) shall communicate its claim in writing to the modifying Member and at the same time notify it to all other Members through the Secretariat. Such claims of interest must be made no later than 45 days after the date of circulation by the Secretariat of the notification referred to in paragraph 1 above. If by that date no Member has submitted a claim that it is an affected Member, the modifying Member shall be free to implement the proposed modification or withdrawal, after completing the certification procedure under paragraphs 20 to 22 and shall submit a notification of the date of such implementation to the Secretariat, for circulation to the Members of the WTO. 4. The modifying Member and any affected Member which has identified itself under paragraph 3 above shall negotiate with a view to reaching agreement within three months following the last date on which such a claim of interest may be made. This period of negotiation may be extended by mutual agreement and the terms of such an agreement, including the period of extension, shall be notified to all other Members through the Secretariat. 5. Upon completion of each negotiation conducted under paragraph 2(a) of Article XXI, the modifying Member shall send to the Secretariat a joint letter signed
334 WTO BISD 1999 Council for Trade in Services by the Members concerned, together with a report concerning the results of the negotiations which shall be initialled by the Members concerned. The Secretariat will distribute the letter and the report to all Members in a secret document. 6. a modifying Member which has reached agreement with all Members that had identified themselves under paragraph 3 above shall, no later than fifteen days after the conclusion of the negotiations, send to the Secretariat a final report on negotiations under Article XXI, which will be distributed to all Members in a secret document. After completing the certification procedure under paragraphs 20 to 22, such a modifying Member will be free to implement the changes agreed upon in the negotiations and specified in the report, and it shall notify the date of implementation to the Secretariat, for circulation to the Members of the WTO. Such changes shall not exceed the modification or withdrawal initially notified and shall include any compensatory adjustment agreed upon in the negotiations.
Arbitration 7. If the modifying Member and a Member that had identified itself under paragraph 3 above do not reach agreement by the end of the period of negotiations referred to in paragraph 4, such an affected Member may request arbitration. Such a request shall be made in writing to the modifying Member and the Secretariat no later than 45 days after the end of that period. 8. If no Member that had identified itself under paragraph 3 above submits a timely arbitration request under paragraph 7, the modifying Member shall be free to implement the proposed modification or withdrawal, after completing the certification procedure under paragraphs 20 to 22. In cases where agreement has been reached with some but not all affected Members and no request for arbitration has been made, the modifying Member shall be free to implement in accordance with the procedures of paragraph 6 above, after completing the certification procedure under paragraphs 20 to 22, the proposed modification or withdrawal with the compensatory adjustments agreed upon in the negotiations, but not exceeding the proposed modification or withdrawal initially notified. The modifying Member shall notify the date of implementation to the Secretariat, for circulation to the Members of the WTO. 9. if an affected Member submits a timely arbitration request under paragraph 7, the modifying Member shall not implement any modification or withdrawal until it has received the arbitration body’s findings and is in conformity with those findings. 10. The appointment of the arbitration body shall be subject to mutual agreement of the parties concerned. If the parties to the arbitration cannot agree on the arbitration body within twenty days from the date of request for the arbitration, the arbitration body shall be appointed at the request of any party by the Director-
WTO BISD 1999 335 Council for Trade in Services
General of the WTO, after consulting the parties, within ten days thereafter. The arbitration body shall consist of three arbitrators, unless the parties agree to a different uneven number. The arbitration body shall be chosen from among persons with relevant legal, economic, financial or technical expertise, including expertise in the agreement, with respect to the matter referred to the arbitration body. Except as the parties otherwise agree, the arbitration body shall not consist of citizens of any of the parties to the arbitration. Where a party to an arbitration is a developing country Member, the arbitration body shall, if the developing country Member so requests, include at least one arbitrator from a developing country Member. 11. The “Rules of conduct for the understanding on rules and procedures governing the settlement of disputes” shall apply. The arbitration body may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter. The arbitration body shall inform the parties to the arbitration of any consultations with experts. There shall be no ex parte communications with the arbitration body concerning matters under consideration by the arbitration body. 12. any affected Member that wishes to enforce a right that it may have to compensation must participate in the arbitration. However, if an affected Member having reached an agreement with the modifying Member under paragraph 4 above were to decide not to participate in the arbitration, it shall nonetheless be deemed to have participated in the arbitration with respect to the modification or withdrawal in question. 13. The arbitration body shall have the following terms of reference unless the parties to the arbitration agree otherwise within ten days from the request for arbitration: “To examine the compensatory adjustments offered by (name of modifying Member) or requested by (affected Member requesting the arbitration) and to find a resulting balance of rights and obligations which maintains a general level of mutually advantageous commitments not less favourable to trade than that provided for in Schedules of specific commitments prior to the negotiations. In such examination, the Arbitration body shall take into account any agreement reached, in negotiations under paragraph 4. above, between the modifying Member and any affected Member”. 14. The arbitration body’s findings shall be communicated to the parties to the arbitration through the Secretariat within three months of the appointment of the arbitration body. 15. When an arbitration has been conducted in accordance with paragraphs 7 through 14 above, the modifying Member shall be free to implement a modification or withdrawal which is in conformity with the findings of the arbitration body after completing the certification procedure under paragraphs 20 to 22, and shall notify
336 WTO BISD 1999 Council for Trade in Services the date of implementation to the Secretariat for circulation to the Members of the WTO together with the findings of the arbitration. 16. If the modifying Member implements its proposed modification or withdrawal and does not comply with the findings of the 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. 17. The affected Member shall notify the Council for Trade in Services of the measures it intends to take in accordance with paragraph 16, one month before exercising its right to take these measures. 18. Modifications or withdrawals implemented in accordance with paragraph 16 shall be terminated if the modifying Member complies with the findings of the arbitration body under paragraph 14. 19. The modifying Member may withdraw at any time its notification under Article XXI:1 of the Agreement and paragraph 1 above, by notice to the Secretariat. Upon receipt of such a withdrawal, Article XXI and these procedures shall cease to apply and the modifying Member shall be obligated to maintain the commitment in question in conformity with its Schedule and Part III of the Agreement.
Formal aspects of the procedures for modification of schedules of commitments 20. Modifications in the authentic texts of Schedules annexed to the GATS which result from action under Article XXI, shall take effect by means of Certification. The draft schedule clearly indicating the details of the modifications shall be communicated to the Secretariat for circulation to all Members. The modifications shall enter into force upon the conclusion of a period of 45days from the date of their circulation or on a later date to be specified by the modifying Member, provided no objection has been raised by a Member on the ground that the draft schedule does not correctly reflect the results of the action under Article XXI and/or that the modification or withdrawal contained in the draft schedule exceed those initially notified. A Member making an objection should to the extent possible identify the specific elements of the modifications which gave rise to that objection. At the end of the 45-day period, if no objection has been raised, the Secretariat shall issue a communication to all Members to the effect that the Certification procedure has been concluded, indicating the date of entry into force of the modifications. 21. Any Member wishing to object shall submit a notification to that effect to the Secretariat for circulation to all Members and shall enter into consultations with the modifying Member with a view to reaching a satisfactory resolution of the matter as soon as possible. When an objection has been notified, the Certification procedure shall be deemed concluded upon the withdrawal of the objection by the
WTO BISD 1999 337 Decisions and Reports objecting Member or the expiry of the period in which objections may be made, whichever comes later. Such a withdrawal shall be communicated to the Secretariat. When more than one objection has been raised, the Certification will be deemed concluded upon the withdrawal of the objections by all objecting Members. The Secretariat shall issue a communication informing all Members of the withdrawal of the objection(s) and the conclusion of the Certification procedure, indicating the date of entry into force of the modifications. 22. if the consultations referred to in paragraph 21 result in any changes to the draft schedule submitted for Certification, the modifying Member shall promptly submit them to the Secretariat for circulation to all Members. This modification shall enter into force provided no objection has been raised by a Member within 15 days from the date of its circulation or on later date to be specified by the modifying Member, on the grounds referred to in paragraph 20. A Member making an objection should to the extent possible identify the specific elements of the modification which gave rise to that objection. If no objection is raised by the end of the 15-day period, the Secretariat shall issue a communication to all Members to the effect that the Certification procedure has been concluded, indicating the date of entry into force of the modifications. If an objection has been raised, the procedure described in paragraph 21 shall apply.
General Provisions 23. in the application of these procedures Members shall take full account of the special situations of individual developing countries, in particular the least developed countries. 24. Following the lapse of three years from entry into force of these Procedures, the Council for Trade in Services shall, at the request of any Member, review the operation of these Procedures. In such a review, the Council for Trade in Services may agree to amend any of the provisions of the Procedures, including those relating to arbitration.
338 WTO BISD 1999 Waivers
WAIVERS
WAIVERS UNDER ARTICLE IX OF THE WTO AGREEMENT
Country Type Decision of Expiry Document
Bangladesh Implementation of the 15 June 31 October WT/L/299 Harmonized Commodity 1999 1999 WT/L/336 Description and Coding 4 November 30 April System - Extensions of Time- 1999 2000 Limit
Nicaragua Implementation of the 15 June 31 October WT/L/300 Harmonized Commodity 1999 1999 WT/L/334 Description and Coding 4 November 30 April System - Extensions of Time- 1999 2000 Limit
Sri Lanka Implementation of the 15 June 31 October WT/L/301 Harmonized Commodity 1999 1999 WT/L/335 Description and Coding 4 November 30 April System - Extensions of Time- 1999 2000 Limit
Zambia Renegotiation of Schedule 15 June 31 October WT/L/302 - Extensions of Time-Limit 1999 1999 WT/L/337 4 November 30 April 1999 2000
Maldives Introduction of Harmonized 15 June 31 October WT/L/303 System changes into 1999 1999 WTO Schedules of Tariff Concessions on 1 January 1996
WTO BISD 1999 339 Waivers
Country Type Decision of Expiry Document
Argentina, Australia, Introduction of Harmonized 15 June 31 October WT/L/303 Bolivia, Brazil, System changes into 1999 1999 Brunei Darussalam, WTO Schedules of Tariff Bulgaria, Costa Rica, Concessions on 1 January Egypt, El Salvador, 1996 - Extension of Time- Limit Honduras, Iceland, India, Israel, Malaysia, Malta, Mexico, Morocco, New Zealand, Norway, Pakistan, Panama, Paraguay, Slovenia, South Africa, Switzerland, Thailand, Tunisia, United States, Uruguay, Venezuela
Argentina, Australia, Introduction of Harmonized 4 November 30 April WT/L/338 Bolivia, Brazil, System changes into 1999 2000 Brunei Darussalam, WTO Schedules of Tariff Bulgaria, Costa Rica, Concessions on 1 January Egypt, El Salvador, 1996 - Extension of Time- Limit Honduras, Iceland, India, Israel, Malaysia, Maldives, Mexico, Morocco, New Zealand, Norway, Pakistan, Panama, Paraguay, Slovenia, Switzerland, Thailand, Tunisia, Uruguay, Venezuela
Developing Countries Preferential Tariff Treatment 15 June 30 June WT/L/304 For Least-Developed 1999 2009 Countries
Peru Agreement on 15 June 1 April 2000 WT/L/307 Implementation of Article VII 1999 of GATT 1994
340 WTO BISD 1999 Decisions and Reports not Included
DECISIONS AND REPORTS NOT INCLUDED
General Council Annual report (1999) WT/GC/28 and Add.1
Dispute Settlement Body Annual report (1999) WT/DSB/16 and Add.1
Trade Policy Review Body Annual report (1999) WT/TPR/69 Overview of Developments in the International Trading Environment annual Report by the Director-General WT/TPR/OV/5 and Corr.1 Reviews - Argentina WT/TPR/M/47 - Bolivia WT/TPR/M/57 - Egypt WT/TPR/M/55 - Guinea WT/TPR/M/54 - Israel WT/TPR/M/58 - Nicaragua WT/TPR/M/61 - Papua New Guinea WT/TPR/M/62 - Philippines WT/TPR/M/59 - Romania WT/TPR/M/60 - Thailand WT/TPR/M/63 - Togo WT/TPR/M/48 - United States WT/TPR/M/56
Council for Trade in Goods Annual report (1999) G/L/337 Status Report by the Council for Trade in Goods on Trade Facilitation G/L/333 Work Programme on Electronic Commerce Progress Report to the General Council WT/GC/24
Committee on Agriculture Annual report (1999) G/L/322 Member’s Participation in the Normal Growth in the World Trade of Agricultural Products article 18.5 of the Agreement on Agriculture g/AGW/32/Rev.2 and Corr.1 Implementation of the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net-Food Importing developing Countries g/AG/W/42/Rev.2
WTO BISD 1999 341 Decisions and Reports not Included
Committee on Anti-Dumping Practices Annual report (1999) g/L/340 and Corr.1
Committee on Customs Valuation Annual report (1999) G/L/323
Committee on Import Licensing Annual report (1999) G/L/336
Committee on Market Access Annual report (1999) G/L/331
Committee on Rules of Origin Annual report (1999) G/L/326
Committee on Safeguards Annual report (1999) G/L/338
Committee on Sanitary and Phytosanitary Measures Annual report (1999) G/L/315 Review of the Operation and Implementation of the SPS Agreement – Report of the Committee G g/SPS/12 Procedure to Monitor the Process of International Harmonization – First Annual Report G/SPS/13 Decision to Extend the Provisional Procedure to Monitor the Process of International Harmonization G g/SPS/14
Committee on Subsidies and Countervailing Measures Annual report (1999) g/L/341 and Corr.1
Committee on Technical Barriers to Trade Annual report (1999) G/L/327 Decisions and Recommendations adopted by the Committee on Technical Barriers to Trade since January 1995 g/TBT/1/Rev.6
Committee on Trade-Related Investment Measures Annual report (1999) G/L/319
Textiles Monitoring Body Annual report (1999) G/L/318
342 WTO BISD 1999 Decisions and Reports not Included
Working Party on Preshipment Inspection Annual report (1999) G/L/300
Working Party on State Trading Enterprises Annual report (1999) G/L/335
Independent entity established under Article 4 of the Agreement on Preshipment Inspection Annual report (1999) G/L/330
Bodies established under the auspices of the Council for Trade in Goods:
Committee of Participants on the Expansion of Trade in Information Technology Products Annual report (1999) G/L/332
Committee on Balance-of-Payments Restrictions Annual report (1999) WT/BOP/R/47 Consultations - Bangladesh WT/BOP/R/46 and Add.1 - Romania WT/BOP/R/45 - Slovak Republic WT/BOP/R/48
Committee on Budget, Finance and Administration Annual report (1999) WT/BFA/43 Reports WT/BFA/39,40,44
Committee on Regional Trade Agreements Annual report (1999) WT/REG/8
Committee on Trade and Development Annual report (1999) WT/COMTD/22 Work Programme on Electronic Commerce Progress Report to the General Council WT/COMTD/19
Committee on Trade and Environment Annual report (1999) WT/CTE/4
Council for Trade in Services Annual report (1999) S/C/10 Work Programme on Electronic Commerce Progress Report to the General Council S/L/74
WTO BISD 1999 343 Decisions and Reports not Included
Committee on Specific Commitments Annual report (1999) S/CSC/4
Committee on Trade in Financial Services Annual report (1999) S/FIN/4
Working Party on GATS rules Annual report (1999) S/WPGR/4
Working Party on Domestic Regulation Annual report (1999) S/WPDR/1
Council for Trade-Related Aspects of Intellectual Property Rights Annual report (1999) IP/C/19 Work Programme on Electronic Commerce Progress Report to the General Council IP/C/18
Working Group on the Relationship between Trade and Investment Annual report (1999) WT/WGTI/3
Working Group on the Interaction between Trade and Competition Policy Annual report (1999) WT/WGTCP/3
Working Group on Transparency in Government Procurement Annual report (1999) WT/WGTGP/3
Selected Documents Coherence in Global Economic Policy-Making: WTO Cooperation with the IMF and the World Bank report (2000) by the Director-General WT/TF/COH/S/3
Committees and Councils under the Plurilateral Trade Agreements
Committee on Government Procurement Annual report (1999) GPA/30
Committee on Trade in Civil Aircraft Annual report (1999) WT/L/340 and Corr.1
344 WTO BISD 1999 Index
index
Page Accession Bulgaria 1996/50,95 Congo, Republic of the extension of Time-Limit for Acceptance 1997/7 Ecuador 1995/15,56 Estonia 1999/13,70 Georgia 1999/71,141 Grenada See General Council - Finalization of Negotiations on Schedules on Goods and Services Jordan 1999/142,230 Kyrgyz Republic 1998/17,96 Latvia 1998/97,149 Mongolia 1996/97,120 Panama 1996/121 extension of Time-Limit for Acceptance 1997/7 Papua New Guinea See also General Council - Finalization of Negotiations on Schedules on Goods and Services Extension of Time-Limit for Acceptance 1996/159,160 Qatar See General Council - Finalization of Negotiations on Schedules on Goods and Services St Kitts and Nevis See General Council - Finalization of Negotiations on Schedules on Goods and Services United Arab Emirates 1996/18,160 Protocols of Accession Bulgaria 1996/13 Ecuador 1995/4 Estonia 1999/5 Georgia 1999/7 Grenada 1995/6 Jordan 1999/10 Kyrgyz Republic 1998/5 Latvia 1998/7 Mongolia 1996/14 Panama 1996/16 Papua New Guinea 1995/7
WTO BISD 1999 345 Index
Qatar 1995/9 St Kitts and Nevis 1995/11 United Arab Emirates 1996/18
Administrative Matters Conditions of service applicable to the staff of the WTO Secretariat 1997/40, 1998/156 WTO Secretariat and senior management structure 1997/39
Agreements with the Swiss Authorities Agreement between the WTO and the Swiss Confederation 1995/59 Headquarters Agreement 1995/59
Agriculture See Committee on Agriculture and also General Council
Anti-Dumping See Committee on Anti-Dumping Practices
Appellate Body Composition 1995/111 Establishment 1995/107 Working procedures for Appellate Review 1996/162,1997/9
Appointment of Officers to WTO bodies Guidelines 1995/95
Balance-of-Payments Restrictions See Committee on Balance-of-Payments Restrictions and also General Council
Budget, Finance and Administration See Committee on Budget, Finance and Administration and also General Council
Civil Aircraft See under Plurilateral Trade Agreements
WTO panels and Appellate Body reports, as well as arbitration awards, can be found in the Dispute Settlement Reports DSR series co-published by the WTO and Cambridge University Press.
346 WTO BISD 1999 Index
Committee of Participants on the Expansion of Trade in Information Technology Products Rules of procedures for meetings of the Committee 1997/181
Committee on Agriculture Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least -Developed and Net Food-Importing Developing Countries Preparatory Work Programme 1995/117 Reports 1996/264 WTO Lists of NFIDCs 1995/118, 1996/262 Notification Requirements and Formats 1995/121 Organization of work and working procedures 1995/118 Rules of Procedure 1996/261 Report 1996 1996/269 Terms of reference - see General Council
Committee on Anti-Dumping Practices Minimum Information to be Provided under Article 16.4 of the Anti-Dumping Agreement 1995/150 Recommendation Concerning the Timing of the Notifications under article 5.5 1998/184 Rules of Procedure 1996/274 Semi-Annual Reports - Guidelines 1995/145
Committee on Balance-of-Payments Restrictions Rules of procedure 1996/410 Terms of reference - see General Council
Committee on Budget, Finance and Administration Financial Arrangements for the scales of contributions to the budget Abstract of report of 1995 1995/191 Abstract of report of 1996 1996/411 Abstract of report of 1997 1997/184 Abstract of report of 1998 1998/159 Abstract of report of 1999 1999/325 Terms of reference - see General Council
Committee on Customs Valuation Rules of Procedure 1996/282
WTO BISD 1999 347 Index
Committee on Import Licensing Rules of Procedure 1996/284
Committee on Market Access Consolidated Tariff Schedules Database 1999/267 Dissemination of the Integrated Database 1999/254 Rules of Procedure 1996/286 Statement by the Chairman of the Committee relating to the Consolidated Tariff Schedules Database 1999/315 Terms of reference - see General Council
Committee on Regional Trade Agreements Rules of Procedure 1996/416
Committee on Rules of Origin Notification Procedures 1995/151 Rules of Procedure 1996/288
Committee on Safeguards Formats for Certain Notifications under the Agreement on Safeguards 1996/297 Information to be Notified to the Committee Where a Safeguard Investigation is Terminated with no Safeguard Measure Imposed 1996/301 Notifications Article 11.2 of the Agreement on Safeguard Measures Exception under Article11.2 1995/155 Article 12.1(a) of the Agreement on Safeguards on initiation of an investigation and the reasons for it 1995/157 Article 12.7 of the Agreement on Safeguards of Measures subject to the prohibition and elimination of certain measures under Article 11.1 of Agreement on Safeguards 1995/154 Laws, Regulations and Administrative Procedures Relating to Safeguard Measures 1995/152 Pre-existing Article XIX of GATT 1994 Measures 1995/153 Rules of Procedure 1996/290
Committee on Sanitary and Phytosanitary Measures Agreement between the WTO and the Office International des Épizooties 1997/53 Procedure to monitor the process of international harmonization 1997/50
348 WTO BISD 1999 Index
Committee on Specific Commitments Terms of Reference See under Council for Trade in Services - Specific Commitments
Committee on Subsidies and Countervailing Measures Format for notifications under Article 8.3 of the Agreement 1998/185 Format for notifications under Article 27.11 of the Agreement 1998/191 Format for notifications under Article 27.13 of the Agreement 1998/190 Format for updates of notifications under Article 8.3 of the agreement 1997/59 Minimum information to be provided under Article 25.11 of the Agreement 1995/163 Permanent Group of Experts - Election 1995/164, 1996/310 Procedures for arbitration under Article 8.5 of the Agreement 1998/191 Questionnaire format for subsidy notification under Article 25 of the Agreement 1995/166 Report by the Informal Group of Experts to the Committee 1998/198 Rules of Procedure 1996/303 Semi-Annual Reports - Guidelines 1995/159 Supplemental Report of the Informal Group of Experts on Calculation Issues Related to Annex IV of the Agreement 1999/316
Committee on Technical Barriers to Trade Rules of Procedure 1996/311
Committee on Trade and Development Implementation modalities to be observed by the Secretariat in its administration of technical cooperation activities 1997/189 Report of the High-Level Meeting on Integrated Initiatives for least-Developed Countries’ Trade Development 1997/194 Rules of Procedure 1996/418 Terms of reference - see General Council WTO Technical Co-operation - Guidelines 1996/420 Least-Developed Countries See also Ministerial Conferences Establishment of the Sub-Committee 1995/195
Committee on Trade and Environment Establishment of the Committee - See General Council
WTO BISD 1999 349 Index
Committee on Trade-Related Investment Measures Notifications Article 5.5 of the TRIMS Agreement 1995/168 Article 6.2 of the TRIMS Agreement 1996/322 Report 1996 1996/323 Rules of Procedure 1996/321
Conciliation See under Appellate Body as well as Dispute Settlement Body
Council for Trade in Goods Ad-personam status of TMB Members 1997/44 Establishment of a Loose-Leaf Schedule 1996/257 Harmonized Commodity Description and Coding System Geneva (1995) Protocol to GATT 1994 1995/3 Illustrative List of Relationships between Governments and State-Trading Enterprises 1999/248 Implementation of the Ministerial Declaration on Trade in information Technology Products 1997/44 Major Review of the Agreement on Textiles and Cloting in the First Stage of the Integration Process 1998/163 Notifications Procedures for Quantitative Restrictions 1995/114 Questionnaire on State Trading 1998/177 Reverse Notification of Non-Tariff Measures 1995/116 Rules of Procedure 1996/255
Council for Trade in Services See also Uruguay Round - Documents relevant to the application of certain provisions of the General Agreement on Trade in Services Basic Telecommunications 1996/397 Commitments 1996/395 Communication from Members which have accepted the Fifth Protocol to the GATS 1999/330 Decision on Acceptance of the Fifth Protocol to the GATS 1999/330 Decision on Disciplines Relating to the Accountancy Sector 1998/246 Decision on Domestic Regulation 1999/331 Decision on Procedures for the Implementation of Article XXI of the GATS 1999/333 Disciplines on Domestic Regulation in the Accountancy Sector 1998/246 Dispute Settlement Procedures 1995/170 Enquiry and Contact Points
350 WTO BISD 1999 Index
See under Notifications Environment 1995/171 Financial Services Application of the Second Annex 1995/175 Commitments 1995/176,1997/216 Decision on Negotiations 1997/214 Second Decision on Financial Services 1995/177 Second Protocol to GATS See under Council for Trade in Services - Protocols to GATS Guidelines for Mutual Recognition Agreements or Arrangements in the Accountancy Sector 1997/206 Institutional Arrangements 1995/169 Issues relating to the scope of the GATS 1995/179 Maritime Transport Services - Decision 1996/396 Movement of Natural Persons Decision 1995/176 Decision on Movement of Natural Persons Commitments 1995/177 Third Protocol to GATS See under Council for Trade in Services - Protocols to GATS Negotiations on Emergency Safeguards Measures 1997/214 Notifications Establishment of Enquiry and Contact Points 1996/396 Guidelines 1995/172 Procedures for the Implementation of Article XXI of the GATS - Modification of Schedules 1999/334 Professional Services 1995/170 Protocols to the General Agreement on Trade in Services Fifth Protocol to the GATS acceptance-Decision 1999/333 adoption-Decision 1997/215, 1998/9 Procès-verbal of rectification 1998/10 Fourth Protocol to the GATS acceptance-Decision 1997/217 Protocol 1997/4 Second Protocol to the GATS (Financial Services) Acceptance - Decision 1996/397 Decision 1995/178 Protocol 1995/13 Third Protocol to the GATS (Movement of Natural Persons) Acceptance - Decision 1996/397 Protocol 1995/14 Rules of Procedure 1996/394
WTO BISD 1999 351 Index
Second Decision of the Acceptance of the Second, Third and Fourth Protocols 1998/245 Second Decision on Negotiations on Emergency Safeguards Measures 1999/332 Specific Commitments Terms of Reference for the Committee on Specific Commitments 1995/178
Council for Trade-Related Aspects of Intellectual Property Rights Calculation of renewable periods of ten years under the provisions of the appendix to the Berne Convention as incorporated by reference into the TRIPS Agreement 1998/251 Enforcement - Check-list 1995/186 Implementation Obligations relating to Article 6ter of the Paris Convention (1967) 1995/190 Notifications Laws and Regulations Relating to Articles 3, 4 and 5 of the TRIPS Agreement 1997/218 Procedures under Article 63.2 of the TRIPS Agreement 1995/183,185 Priority rights and the application of Article 6ter of the Paris convention as incorporated into the TRIPS Agreement 1997/220 Report 1996 1996/401 Rules of Procedure 1996/399
Countervailing Measures See Committee on Subsidies and Countervailing Measures
Customs Valuation See Committee on Customs Valuation
Dairy See Plurilateral Trade Agreements
Decision-Making Procedures under Articles IX and XII of the WTO Agreement See General Council
Development See Committee on Trade and Development
352 WTO BISD 1999 Index
Dispute Settlement Body See also Appellate Body Adoption of the Agenda 1999/235 Appointement of Appellate Body Members 1999/242 Competence to review the legal validity of a request to authorize the suspension of concessions or other obligations 1999/236 Extension for the application of the Rules of Conduct 1999/238 Relationship between Articles 21.5 and 22 of the DSU 1999/237 Review of the Dispute Settlement Understanding 1999/240 Rules of Conduct 1996/243 Rules of Procedure 1996/242 Terms of Office of Appellate Body Members 1997/42 Time-periods for appeal expiring in the month of August 1999/239
Environment See Committee on Trade and Environment
Establishment of the WTO Transfer of Assets, Liabilities, Records, Staff and Functions from the Interim Commission for the International Trade Organization and the GATT to the World Trade Organization 1995/57
General Council See under Uruguay Round - Preparatory Committee for the World Trade Organization - Report to the WTO See also Relations with International Intergovernmental Organizations, Relations with Non-Governmental Organizations Annual Overview of WTO Activities 1995/99 Appointment of Officers - Guidelines 1995/95 Appointment of the next Director-General 1999/234 Committee on Trade and Environment Establishment 1995/90 Committee on Regional Trade Agreement Establishment 1996/183 Terms of Reference 1996/183 Decision-Making Procedures under Articles IX and XII of the WTO Agreement 1995/90 Extension of the Deadline for the Review of the Dispute Settlement Understanding 1998/153
WTO panels and Appellate Body reports, as well as arbitration awards, can be found in the Dispute Settlement Reports DSR series co-published by the WTO and Cambridge University Press.
WTO BISD 1999 353 Index
Finalization of Negotiations on Schedules on Goods and Services Decision 1995/91 Grenada 1995/92 Papua New Guinea 1995/93 Qatar 1995/94 St Kitts and Nevis 1995/95 Procedures for the circulation and derestriction of WTO documents Review of the Dispute Settlement Understanding 1999/231 Rules of Procedure for Sessions of the Ministerial Conference and Meetings of the General Council 1996/219 Supply of Information to the Integrated Data Base for Personal Computers 1997/37 Termination of the Decision of the Contracting Parties to the GATT 1947 Relating to Import Licensing Procedures 1998/155 Terms of Reference of Subsidiary Bodies - Decisions Committee on Agriculture 1995/101 Committee on Balance-of-Payments Restrictions 1995/101 Committee on Budget, Finance and Administration 1995/102 Committee on Market Access 1995/103 Committee on Trade and Development 1995/104 Textiles Monitoring Body - Composition 1995/105, 1997/37 Work of the Working Group on the Interaction between Trade and Competition Policy 1998/154 Work of the Working Group on the Interaction between Trade and investment 1998/154 Work Programme on Electronic Commerce 1998/151 Working Party on Preshipment Inspection See under Preshipment Inspection
Goods See Council for Trade in Goods
Government Procurement See Plurilateral Trade Agreements
Harmonized Commodity Description and Coding System See under Council for Trade in Goods and also Waivers
Import Licensing See Committee on Import Licensing
Information Technology Products See Ministerial Conferences - First Session - Singapore
354 WTO BISD 1999 Index
Intellectual Property See Council for Trade-Related Aspects of Intellectual Property Rights
International Dairy Council See Plurilateral Trade Agreements
International Meat Council See Plurilateral Trade Agreements
Investment See Committee on Trade-Related Investment Measures
Least-Developed Countries See under Committee on Trade and Development and also under Ministerial Conferences
Legal Instruments Certifications of Modifications and Rectifications of Schedules of Concessions to GATT 1994 1996/20, 1997/5, 1998/11,1999/12 Harmonized Commodity Description and Coding System See under Council for Trade in Goods Marrakesh Agreement Establishing the WTO Marrakesh Protocol to GATT 1994 1996/9 Procès-Verbal - Marrakesh Protocol to the GATT 1994 1996/7 Procès-Verbal of Rectification 1996/3 Procès-Verbal of Rectification - Agreement on Implementation of article VII of the GATT 1997/3 Procès-Verbal of Rectification - Agreement on Textiles and Clothing 1996/4 Procès-Verbal of Rectification of Certified Copies 1996/5 Procès-Verbal of Rectification relating to the Protocol of accession of Georgia 1999/9 Procès-Verbal of Rectification - Trade in Pharmaceutical Products 1996/12 Procès-Verbal Relating to GATS 1996/10 Protocols of Accession See Accessions - Protocols of Accession Protocols to the GATS See under Council for Trade in Services
Market Access See Committee on Market Access and also General Council
WTO BISD 1999 355 Index
Members 1995 1995/xv 1996 1996/xv 1997 1997/xiii 1998 1998/xi 1999 1999/xi
Ministerial Conferences First Session - Singapore Comprehensive and Integrated WTO Plan of Action for the Least-Developed Countries 1996/32 Ministerial Declaration on Trade in Information Technology Products 1996/35 Singapore Ministerial Declaration 1996/23
Second Session - Geneva Declaration on Electronic Commerce 1998/16 Geneva Ministerial Declaration 1998/13
Modifications and Rectifications See Legal Instruments - Certifications on Modifications and Rectifications
Notification Obligations and Procedures See also under each WTO body Working Group on Notification Obligations and Procedures - report 1996/334
Officers of WTO Bodies 1995 1995/1 1996 1996/2 1997 1997/1 1998 1998/1 1999 1999/2
Panels See footnote
Plurilateral Trade Agreements Committee on Government Procurement Accessions
WTO panels and Appellate Body reports, as well as arbitration awards, can be found in the Dispute Settlement Reports DSR series co-published by the WTO and Cambridge University Press
356 WTO BISD 1999 Index
Accession to the Agreement on Government Procurement (1994) 1996/432 Accession of - Hong Kong 1996/469 - the Kingdom of the Netherlands with respect to Aruba 1996/448 - Liechtenstein 1996/452 - Singapore 1996/461 Interim Procedure on the Circulation of Documents 1996/435 Interim Procedure on the Derestriction of Documents 1996/435 Modalities for Notifying Threshold Figures in National Currencies 1996/434 Participation of Observers in the Committee on Government Procurement (1994) 1996/432 Procedures for the Notification of National Implementing Legislation 1996/436 Report 1996 1996/426 Uniform Classification Systems 1996/438 Committee on Trade in Civil Aircraft Annual report (1996) 1996/478 Interim Committee on Government Procurement Report 1995/202 International Dairy Council Annual report (1996) 1996/480 Deletion of the International Dairy Agreement from Annex 4 of the WTO Agreement 1997/36 Suspension of the Application of the Annex on certain Mill Products and the functioning of the Committee on Certain Milk Products 1995/201 Termination of the International Dairy Agreement Decision 1997/223 International Meat Council Annual report (1996) 1996/481 Deletion of the International Bovine Meat Agreement from Annex 4 of the WTO Agreement 1997/36 Termination of the International Bovine Meat Agreement Decision 1997/224
Preshipment Inspection Report of the Independent Entity Established under Article 4 of the Agreement on Preshipment Inspection to the Council for Trade in Goods 1996/393 Working Party on Preshipment Inspection - Report on Preshipment Inspection 1997/175
WTO BISD 1999 357 Index
Relations with international intergovernmental organizations Agreement between the World Intellectual Property Organization and the World Trade Organization 1995/78 Agreement between the WTO and the IMF 1996/184 Agreement between the WTO and the World Bank 1996/184 Relations Between the WTO and the United Nations 1995/82
Relations with non-governmental organizations Guidelines for Arrangements 1996/240
Rules of Origin See Committee on Rules of Origin
Safeguards See Committee on Safeguards
Scales of contributions to the budget See Committee on Budget, Finance and Administration - Financial arrangements for the scales of contributions to the budget
Services See Council for Trade in Services and also Uruguay Round
Sub-Committee on Least-Developed Countries See under Committee on Trade and Development
Subsidies See Committee on Subsidies and Countervailing Measures
Textiles Monitoring Body Composition - see General Council Comprehensive Report on the TMB to the Council for Trade in Goods on Implementation of the Agreement on Textiles and Clothing 1997/68 Working Procedures 1996/329
Trade and Development See Committee on Trade and Development and also General Council
Trade and Environment See Committee on Trade and Environment
358 WTO BISD 1999 Index
Trade in Goods See Council for Trade in Goods
Trade Policy Review Body Appraisal of the Operation of the Trade Policy Review Mechanism - Report to Ministers 1999/243 Rules of Procedure 1996/252
Trade in Services See Council for Trade in Services
Trade-Related Aspects of Intellectual Property Rights See Council for Trade-Related Aspects of Intellectual Property Rights
Trade-Related Investment Measures See Committee on Trade-Related Investment Measures
Uruguay Round Documents relevant to the application of certain provisions of the General Agreement on Trade in Services Applicability of GATS to Tax Measures 1995/248 Issues relating to the Scope of the GATS 1995/245,248 Scheduling of Initial Commitments in Trade in Services 1995/229 Scheduling of Subsidies and Taxes at the Sub-Central Level 1995/254 Statement by the Chairman of the Group of Negotiations on Services 1995/249 Status of Branches as Services Suppliers - Article XXXIV of GATS 1995/243 Taxation Issues Relating to Article XIV(d) of GATS 1995/245 Preparatory Committee for the World Trade Organization Report to the WTO 1995/208
Waivers Harmonized Commodity System Description and Coding System Implementation 1995/199, 1996/423,1997/221, 1998/252,1999/339 Introduction of Harmonized System 1996 Changes into WTO Schedules of Tariff Concessions 1995/200, 1996/423,1997/222, 1998/252,1999/339 Renegotiation of Schedules 1996/423,1997/221, 1998/252, 1999/339
WTO BISD 1999 359 Index
Other waivers: Canada CARIBCAN - Extension of Time-Limit 1996/423 Cuba Article XV:6 of GATT 1994 - Extension of Time-Limit 1996/423 developint Countries Preferential Tariff Treatment for Least-Developed Countries 1999/340 European Communities Fourth ACP-EEC Convention of Lomé - Extension of Time-Limit 1996/423 France Trading Arrangements with Morocco - Extensions of Time-Limit 1996/423,1997/222 - Extension of waiver 1998/253 Hungary Agreement on Agriculture 1997/222 Peru Agreement on Implementation of Article VII 1999/340 South Africa Base dates under Article I:4 - Extension of Time-Limit 1996/423 United States ANDEAN Trade Preference Act - Extension of Time-Limit 1996/423 Caribbean Basin Recovery Act - Renewal of Waiver 1995/200 Former Trust Territory of the Pacific Islands - Extension of Time-Limit 1996/423 Import of Automotive Products - Extension of Time-Limit 1996/423 Zimbabwe Base dates under Article I:4 - Extension of Time-Limit 1996/423 Waivers in force as of 1 January 1995 1995/196 Waivers in force as of 1 January 1996 1996/423 Waivers in force as of 1 January 1997 1997/221 Waivers in force as of 1 January 1998 1998/252 Waivers in force as of 1 January 1999 1999/339
360 WTO BISD 1999